Digital banking

2. CONTENTS
 Introduction to digital banking
 Digitization, digitalization and digital transformation
 Definition of Digital banking
 Channels of Digital Banking
 Automated Teller Machine
 Input devices and Output devices of ATM
 ATM networking
 Working process of ATM

3. Introduction to Digital Banking
 The term “digital banking”, just like any new buzzword,
means different things to different stakeholders in a
service organization.
 For customers, it can mean myriad of new services and
products resulting in a pleasurable buying/spending
experience.

4. Continued
 For the decision-making team in the organization, it could
mean setting up of state-of-the-art ICT infrastructure
coupled with a good dose of analytics in order to provide
an excellent customer experience, which is a precursor to
having sustained and profitable customer relationships.

5. Continued
 For the regulator or third party, it could mean the ability to
provide accurate and reliable information on the fly.
 To start with, let us distinguish between the
terms “digitization” and “digitalization”.
 The term “digitize” describes the process by
which any form of data is converted into a digital format.

6. Continued
For example: converting an analog audio signal into its
digital form, Converting credit records and applications
into a soft copy, usually into a database, etc.
 In a broader business context, “analytics” can be
considered as further digitizing the information into new
knowledge or insights in order to make a decision.

7. Continued
 The term “digital” is typically used to refer to the storage
of data in the form of digital signals represented using the
numbers 1 and 0.
 Here, the term refers to information and the format in
which it is stored, such as digital music, digital customer
records, etc.

8. Continued
 The term “digitalization” goes beyond simply
digitization.
 In this sense, books don't simply become eBooks, but a
complete interactive and multimedia experience; business
processes give way to online dialogues between parties
that were not previously connected directly.

10. Continued
 Thus, an organization in order to become digital might
focus on the automation of processes to make it more
efficient.
 A company focusing on digitalization might aim to realize
more effective outcomes from those processes by
improving the customer engagement.

11. Digital Banking Definition
1. “Digital Banking—a new concept in the area of electronic
banking, aims to enrich standard online and mobile
banking services by integrating digital technologies, for
example strategic analytics tools, social media
interactions, innovative payment solutions, mobile
technology and focus on user experience.”

12. Digital Banking Definition
2. “Digital Banking is the application of technology to
ensure seamless end-to-end (STP in the 'old‘ jargon)
processing of banking transactions/ operations; initiated
by the client, ensuring maximum utility to the client in
terms of availability, usefulness and cost; to the bank in
terms of reduced operating costs, zero errors and enhanced
services.”
-Institute for Development and Research
in Banking Technology (IDBRT)

13. Continued
 However, any definition of digital banking is only centred
around enhanced customer service and user experience
based on their engagement, expectations and experience,
which can be captured in a variety of datasets resulting in
a huge repository which is akin to a digital super highway.

14. Channels of Digital Banking
 ATM
 Mobile banking
 Internet banking
 Cards
 Cash deposit machines
 Cash recyclers
 Prepaid instruments
 Point of sale terminals
 Kiosks
 Mobile wallets

15. Automated Teller Machine (ATM)
 What is an Automated Teller Machine (ATM)?
An ATM is a computerised machine that provides
customers of banks the facility of accessing their accounts
for dispensing cash and to carry out other financial & non-
financial transactions without the need to visit the bank
branch.
– Reserve Bank of India (RBI)

16. Continued
 It is an electronic device that is used by only bank
customers to process account transactions.
 The users access their accounts through a special type of
plastic card that is encoded with user information on a
magnetic strip.
 The strip contains an identification code that is transmitted
to the bank’s central computer by modem.

17. Continued
 The users insert the card into ATMs to access the account
and process their account transactions. The automated
teller machine was invented by john Shepherd-Barron in
the year of 1960.

18.  The automated teller machine consists of mainly two input
devices and four output devices that are;
Input Devices:
 Card reader
 Keypad
Output Devices:
 Speaker
 Display Screen
 Receipt Printer
 Cash Depositor

19. Input Devices of ATM
Card Reader:
 The card reader is an input device that reads data from a
card.
 The card reader is part of the identification of your
particular account number and the magnetic strip on the
backside of the ATM card is used for connection with the
card reader.
 The card is swiped or pressed on the card reader which
captures your account information i.e. the data from the
card is passed on the host processor (server).

20. Continued
 The host processor thus uses this data to get the
information from the cardholders.

21. Input Devices of ATM
 Keypad:
 The card is recognized after the machine asks further
details like your identification number, withdrawal, and
your balance inquiry.
 Each card has a unique PIN so that there is little chance
for some else to withdraw money from your account.
 There are separate laws to protect the PIN code while
sending it to the host processor.

22. Continued
 The PIN is mostly sent in encrypted form. The keyboard
contains many keys and is interfaced to the processor.

23. Output devices of ATM
 Speaker:
The speaker provides audio feedback when a particular
key is pressed.
 Display Screen:
The display screen displays the transaction information.
Each step of withdrawal is shown by the display screen. A
CRT screen or LCD screen is used by most of the ATMs.

24. Display Screen
 Receipt Printer:
The receipt printer prints all the details recording your
withdrawal, date and time, and the amount of withdrawal
and also shows the balance of your account in the receipt.
 Cash Dispenser:
 The cash dispenser is the heart of the ATM. From this
portion, the user can collect the money.
 This is a central system of the ATM from where the
required money is obtained.

25. Continued
The cash dispenser must count each bill and give the
required amount.
If in some cases the money is folded, it will be moved to
another section and becomes the reject bit.
 All these actions are carried out by high precision sensors.
A complete record of each transaction is kept by the ATM
with the help of an RTC device.

26. ATM Networking:
 The internet service provider (ISP) also plays an important
role in the ATMs.
 This provides communication between ATM and host
processors.
 When the transaction is made, the details are input by the
cardholder.
 This information is passed on to the host processor by the
ATM. The host processor checks these details with an
authorized bank. If the details are matched, the host
processor sends the approval code to the machine so that
the cash can be transferred.

27. ATM Networking

28. Steps to Withdraw Money from
ATM
Step 1
• Insert ATM card
Step 2
• Select Language
Step 3
• Enter 4-Digit ATM Pin

29. Continued
Step 4
• Select the type of Transaction
Step 5
• Select the Type of Account
Step 6
• Enter the withdrawal amount

30. Continued
Step 7
• Collect the Cash
Step 8
• Take a printed receipt , if needed