The document discusses the impact of technology on banking. It explains how technology has revolutionized every core banking function such as supervision, regulation, currency management, and financial stability. It highlights how the widespread adoption of technology has made banks interested in utilizing it. Some key technologies discussed include ATMs, core banking solutions, electronic banking, mobile banking, internet banking, ECS, RTGS, e-cheques, POS, telebanking, and EDI. The document also covers challenges in implementing these technologies and the implications of IT in banking.

1. AXIS BANK
MANIPAL UNIVERSITY
BANGALORE CAMPUS

2. Trends and
Technology in
Banking

3. The Technology Revolution
• The impact of technology on the real &
financial world around the central banks
– E-governance
– Choice of Channels , Confidence and
Convenience to the end-user
– Efficiency
– Facilitating growth of products and services

4. Technology and Banks
So why are banks interested?
– The widespread adoption of technology .
– The impact of technology on every single
core central banking function
– Supervision and Regulation
– Currency Management
– Monetary & Financial Stability
– The potential technology offers to central banks
for more effective processes and functions.

5. Technology and Banking
The Quintessence Nature of Banking harmonizes
closely with Technology -
Mass transaction & items processing
–
–
–
–
Pervasive branch network
Global Operations
Complex credit calculations
Innovative Risk Management

6. Regulation and Supervision –
The Challenge
• Technology has …
– opened up new markets, products, services,
delivery channels .
– opened up a market for “risks” – derivatives.
– thrown up the challenge of financing tech firms &
IT innovation.

7. IT in Banking
• Technology that holds the key to the future
success of Indian Banking. The
significance of technology is greatly felt in
the financial sector in view of the
competitive advantage for banks resulting
in efficient customer service.

8. IT in Banking
Why there is need for IT in Banking?
•
•
•
•
•
To handle huge volume of transaction with ease.
To introduce innovative new services
To bring cost effectiveness in handling payments
To complete operation with great speed
To provide better customer services by obtaining multi
services from one counter itself.
• To make ease of inter-branch reconciliation.
• To ensure data accuracy and reduce frauds.

9. Increasing Interconnectivity
• Stand Alone Computer System
Best suited for the decision-making process, which involves processing and analysis of
data.
• Multi-user System
All information is kept and processed at the main central machine and various terminals
are attached to the main computer. Most of the banking system are developed using the
centralized computing concept.
• Branch-level Computerization
The concept of LAN is becoming popular for branch computerization in banks.
Customer interface is at the maximum at the branch level . The emphasis on online
transaction processing at the branch level.
• Total Branch Automation
All the customers and business transactions are done with the help of computers.

10. Ease of Payments
•
•
•
•
•
•
•
•
•
•
•
Automated Teller Machines(ATMs)
Core Banking Solution(CBS)
Electronic Banking(E-Banking)
Electronic money(E-money)
Electronic Cheque(E-cheque)
Debit Card
Credit Card
Mobile Banking
Tele Banking
Internet Banking
EFT, NEFT, RTGS, ECS

11. ECS-Electronic Clearance
Service
• an alternative method of effecting bulk payment
Products where you can use it for
transactions
General Concept:
Transaction:
•Facilitates automatic money
Single USER source
transfer from user’s bank
(Banks, companies,
account to a third party.
Govt. Dept(s))
Systematic Investment Plans in mutual Funds
Premium payment of insurance policies
Multiple Destination
Payment of home loan A/c Holders
(Customers/Investors)
Income Tax Refund
•After the ECS is authorized
Utility bill payment
by the user by RBI(15
Managed,the banks pays centres) and other banks
directly to the third party on
RBI(21 by SBI and 29 by others)
his behalf.
Advantages: (1) Timely Payment
(2) Be sure of refund
on behalf of

12. RTGS-Real Time Gross Settlement
System
Payment Request
FEATURES:
RTGS Working
No bundling up of transactions, RTGS
concept
Outward
2. No
Rejection (PI) netting
3. No deferral of final settlement
1.
RTGS
Inward
LI
Yes
Q
Queue
U
Member
I HOST
Bank
D
SYSTEM
I
T
Y
No
Payment Request
Queue
Funds (PI)
Success
Available
PI
Banking Easy CBS
Payment Request
Member
IFTP/RT
Bank
GS
BENEFITS:
Sender 1. full value of individual transaction
Settlement
Sender Settlement
Participant interface (PI) - RTGS Client Notification
for the participating
Notification
Submit
2. Real time immediate value transfer
banks
Delay
Now
RTGS
IFTP - Inter-bank Funds Transfer Processor
IAS - Integrated Accounting System
Inward
CFMS - Centralised Funds ManagementReturn
System
INFINET - Indian FInance NETwork
Participant Payment
Payment
Participant
Enquiry Payment
RTGS
Outward
Return
Participant Payment

13. E-payment Services: ECheque
Payment Transaction Sequence in E- Cheque System:
• E-cheques are another form of electronic
tokens
•Advantages: (1) eliminates the need for customer education that
To accommodate multiple entities
prefer (2) Electronic on credit or through some
to pay cheques are much faster.
(3) Guarantee that the cheque would be honored.
mechanism other than cash.
--No offline entering of accounts to get account head statements.
--Consumers able to keep track of all their expenses.

14. ATM-Automated Teller
Machine
H/W Block Diagram:
• Electronic telecommunications device that
Components involved in an ATM Working
Related Devices:
enables the clients of a financial institution
(1) Interactive kiosk
TECHNOLOGIES USED WITH ATM:
(2) Talking ATM
to Conferencing
(1) Video perform financial transactions without
(3) Scrip Cash Dispenser
(2) Biometrics
the need for a cashier,(4) Teller Assist Unit
human clerk or
(3) Cheque/ Cash Acceptance
bank teller.
(4) Bar Code Scanning
(5)
(6)
(7)
(8)
(9)
On Demand Printing of items
Dispensing additional media
Coordinating mobile phones
Customer Specific Advertising
Integrated non-banking equipments
Related Issues:
(1) Physical Security
(2) Transactional secrecy and integrity
(3) Customer Identity integrity
(4) Device operation integrity
(5) Customer Security
• automated banking machine (ABM),
cash machine, cashpoint,
cashline

15. POS (Point Of Sale)
POS is a computer terminal for tansaction.
Contains costumer information in a bank
database.
During transaction customer account
debited and retailer credited.

16. TELE BANKING
 Facilitates customer to do non-cash related
banking on telephone.
 Automatic voice recorder used for simpler
queries and transaction.
 Manned phone terminal for complicated
queries.
 Easy for customer to operate from their
place.

17. EDI (ELECTRONIC DATA
INTERCHANGE)
EDI is the electronics exchange of
business document.
Universally accepted format between
trading partners.
Transmission of financial information and
payment in electronic format.

18. EFT (Electronic Fund
Transfer)
Transfer of fund from own account to
receiver account.
Complete details of customer is needed.
RBI is the service provider of EFT.

19. IMPLICATION OF IT IN
BANKING



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ANYWHERE , ANYPLACE AND ANYTIME BANKING
TIMELESS AD PLACELESS BANKING
CONVENIENCE BANKING
DISMANTLING OF PHYSICAL STRUCTURE
GOODBYE TO TRADITIONAL INSTRUMENTS AND INVITATION TO
NEW INSTRUMENTS
 DISAPPEARANCE OF CONVENTIONAL RISK AND ARRIVAL OF NEW
RISKS
 LEADING TO CURRENCY-LESS MONETARY SYSTEM

20. CHALLENGES IN
IMPLEMENTATION
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•
•
•
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Choice of right channel
IT investment on ROI
Penetration of IT in rural areas
Technological Obsolescence
Security concerns

21. With the help Of
FireWall & IPS
WELLDOCUMENTED
SECURITY
NETWORK
SECURITY
INTERNAL
SECURITY
By Honest
Employee &
Camera in
Branches

22. Information Technology Act 2000
Whoops…What a
Relief. Thanks to
Information
Technology Act-2000
Legal
Recognition of
Electronic
Documents
Justice
Dispensation
Legal
Systems
Recognition of Offenses and
for Cyber crime
Digital
Contraventions
including Cyber
Signatures
Terrorism and
Data Protection

23. BEYOND CORE BANKING
1.Increased adoption of e-payments and
mobile banking.
2.Focus towards systems and processes .
3.Cost and profitability management.
4.Internal effectiveness and efficiency.
5.Vision of a comprehensive infrastructure.
6.Training and techniques.
7.Standards and expectations.

24. ROLE OF IT AS A
BUSINESS TRANSFORMER
•
•
•
•
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Defining fundamental infrastructure goals
Chief information officers (CIOs)
IT fits into one of three broad categories:1. UTILITY
2. PROTECTOR
• 3.
PERFORMER

25. CONCLUSION
• Future for banking sector is going to make
rapid straights in near future.