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International Journal of Trend in Scientific Research and Development (IJTSRD)

International Open Access Journal | www.ijtsrd.com

ISSN No: 2456 - 6470 | Conference Issue – ICDEBI-2018


ICDEBI
INTERNATIONAL CONCONFERENCE
FERENCE ON DIGITAL ECONOMY AND
ITS
TS IMPACT ON BUSINESS AND INDUSTRY
Organised By: V. P. Institute of Management Studies & Research, Sangli

Digitalization in Banking Sector


Mrs
Mrs. Bhagyashree N. Deshpande
Assistant Professor
Professor, Management Department (Commerce)
Tilak Maharashtra Vidyapeeth, Pune
Pune, Maharashtra, India

ABSTRACT
The role of digitalization in the banking sector has financial services providedd by the banks. The paper
altered customer’s preferences and demands
demands. discusses about the impact of digital technology over
financial position with respect to the Indian economy
The main purpose of the study is to know the impact and cultural.
of digitations in context to e-banking
banking services.
Traditionally the relationship between the bank and its KEYWORDS: Banking Sectors, New innovations,
innovations
customers has been on a one-to-one process
process. Digitalization and Demonetization,
Demonetization Challenge to
Digitalization, Recent Trends in Banking
The government of India has been curiously taking
various steps to bring to technological advancements INTRODUCTION
in the banking sector in India. Introduction of debit ‘Digital’ is the new concept in the banking sector,
cards, credit cards, NEFT, RTGS, Jan Dhanyojana, with banks all around the world is shifting towards
White label ATMs, mobile banking, intern
internet banking digitalization. Banks of all sized and across all regions
and many other major initiatives to enhance banking are making huge investments in digital initiatives in
in India have great responses from the consumer’s order to maintain a competitive edge and deliver the
end. maximum to its customers. Digitalization leads to data
analytics and intelligence, which helps banks comes
These diversified digital products help the get closer to customers.
organizations (service providers) to improve their firm
performance and to remain competitive in the market. The financial development in Indian banking industry
They also assist in increasing market share to grow occurred after the he nationalization of 14 major
their profitability and improve financial position and scheduled banks in July, 1969 and 6 in April, 1980. In
performance. the 1990s, The future of Indian Bank looks exciting
but also transformative. India's banking sector could
They all observe that despite rapid technological become the fifth largest banking sector in the world
advancement in DFS during the last ten years, Digital by 2020 and the third largest by 2025. Indian banks
Financial Services the factor affecting firm’s used technology based solutions to raise revenue
performance didn’t get the reasonable attention in generation, increasing customer experience, optimize
academic literature and profitability. cost structure and manage organization risk. However,
there is a wide change in the technology
Evolving new technologies like app banking, mobile applicapability and
d capability across different banking
wallets etc. more people are accessing and using industry.

@ IJTSRD | Available Online @ www.ijtsrd.com | Conference Issue: ICDEBI-2018 | Oct 2018 Page: 80
International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 | IF: 4.101

New Innovations:
There has been new way for innovation in the video source. There are many types of authentication
financial sector in recent years as banks realize the for banks and payment firms to consider though, and
need of digital technologies such as mobile, analytics e-commerce
commerce firm Alibaba believes that payments
and telepresence to meet fast-changing
changing demands from could
uld be made with a smile. HSBC is the first bank
customers. Following are the some new innovations in who adopts the facial recognition technology.
banking sectors:
3. In-car apps :
1. Biometrics Technology : Spanish financial institution Caixa Bank has created
Biometric technology by which a person can be the first mobile banking app that can be accessed
uniquely identified by evaluating one or more while driving, using voice control functionality.
function The
distinguishing
guishing biological traits. Biometric technology used by CaixaBank app, called Línea
authentication includes fingerprints; hand, DNA, Abierta BASIC. Drivers can make balance enquiries
retina, ear and face features. Biometrics systems could and transfers, as well as locate nearby branches and
end the need of PIN code and password. According to ATMs, by speaking into their Android device.
the BBC, Hongkong and Shanghai Banking
Corporation (HSBC) are launching voice and touch 4. Smart Watches :
recognition security services in the UK. Barclays also Banking transactions can be done on smart watch-be
upped security in 2014 – offering finger scanning for it an Android Wear or Samsung Gear. It‘s not only
authentication of large transactions. global financial institutions and banks like Scotia
bank, Deutsche Bank that have developed apps for
2. Facial recognition Technology : smart watches that run on all major mobile operating
A facial recognition system is a new computer systems. But some Indian private sector banks like
application
plication capable of identifying or verifying a ICICI, AXIS, HDFC banks have introduced smart
person from a digital image or a video frame from a watches apps.

@ IJTSRD | Available Online @ www.ijtsrd.com | Conference Issue: ICDEBI-2018 | Oct 2018 Page: 81
International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470
2456 | IF: 4.101
Table 1: Smart watch apps launched by Indian 9. Oculus Rift :
banks Rift is advanced display technology combined with its
Name of the Name of the precise, low-latency
latency constellation tracking system
bank smart watch app enables the sensation of presence. The US bank has
HDFC bank Watch Banking been testing the use of Oculus Rift virtual reality
ICICI bank iWear headsets at its Digital Labs in San Francisco, offering
Source: compiled from different websites customers the ability to “virtually” enter a branch and
speak to a teller face to face.
5. Google Glass Technology:
Spain, Banco Sabadell in became one of the first 10. Crypto currencies :
banks to create retail Google app that allowed users to A crypto currency is a medium of exchange like
locate the nearest ATM, check account balances, and normal currencies designed for the purpose of
use video conferencing for technical support. Spainish exchanging
ing digital information. A crypto-currency
crypto is
financial firm, Caixa Bank has also already developed a digital currency created through encryption
a Google Glass app. It works by super imposing techniques. Bit coin is the most famous. South
directions to the nearest branch onto the Glass screen, Africa‘s central bank is ―openǁ to crypto-currencies
crypto
providing information such distance and phone and block chain, according to new statements from its
number of the nearest branch, all of which is accessed governor. According to a recent media report, the
through the voice recognition system. banks that are opening crypto currencies include
Deutsche Bank, BNY Mellon, Banco Santander and
6. Robotics : UBS.
Bank of Tokyo-Mitsubishi
Mitsubishi UFJ took a first step
toward employing nonhuman Staff, with the 11. Artificial intelligence (AI) :
introduction of a customer service humanoid robot at Artificial intelligence is an area of computer science
its flagship Tokyo outlet. The robots can answer basic that emphasizes the creation n of intelligent machines
customer servicee questions in 19 languages, as well as that work and act like humans. Computers can
analysing customers facial expressions and behaviour. perform activities like speech recognition, Problem
Country's leading private sector lender ICICI Bank solving with AI. Learning and Planning and Swiss
has implemented robotics software. Over 200 banking giant UBS entered into a commercial
software robots are now performing more than ten agreement with software vendor Sqreem, which w
lakh transactions per day for the bank which crunches huge volumes of information about a clients
comprises 10% of its total transactions. behaviour to offer them detailed, personalised in
format
7. Augmented Reality(AR) apps :
Augmented Reality (AR) is the method of enhancing Digitalization and Demonetization
and improving your view of the real world using Digitalization transition through Digital India
different technologies. It is the integration of digital Programme aims to provide the most needed thrust to
information with the user's environment in real time. the nine pillars of growth areas, namely Broadband
Australian Bank announced the release of an Highways, Universal Access to Mobile Connectivity,
augmented reality app for mobile devices. Public Internet Access Programme, e-Governance:
e
Commonwealth Bank of Australia and St. George
Bank Australia also adopted this technology. Reforming Government through Technology, e-Kranti
e
- Electronic Delivery of Services, Information for All,
8. Beacon technology : Electronics
ctronics Manufacturing, IT for Jobs and Early
Bluetooth Beacons installed at banks to integrate Harvest Programmes. Every pillar has its own
physical and mobile channels, to create a new type of importance, complexities in implementation and is a
interaction and effective communication and to propellant for the overall growth of the country.
deliver to the customers a positive and personal 1. Broadband Highways: It covers 3 components
experience. Barclays is one of the first banks to using broadband for all rural,
ral, broadband for all urban
all this technologies. and National information infrastructures.

@ IJTSRD | Available Online @ www.ijtsrd.com | Conference Issue: ICDEBI-2018 | Oct 2018 Page: 82
International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470
2456 | IF: 4.101
2. Universal Access to Mobile Connectivity: there are 44 Mission Mode Projects under e- e
It focuses on network penetration and filling the Kranti, which are at various stages of
gaps in connectivity in the world. implementation. (Includes
Includes Income Tax,
3. Public Internet Access Programme: Agriculture, Land records, Banking, Gram
To provide Common Services Centres (CSCs) and Panchayats and Post office etc.)
Post Offices as multi-service
service centres. 6. Information for All:
4. e-Governance: Online hosting of information & documents to
Reforming Government through Technology: facilitate open and easy access to information for
Government Process Reengineering using IT to citizens
izens to use digitalization in the country.
simplify and make the government processes more 7. Electronics Manufacturing:
efficient it is a critical for transform
transformation to make It focuses on promoting electronics manufacturing
the delivery of government services more in the country with the target of NET ZERO
effective across various government domains and Imports by 2020 as a striking demonstration of
therefore needs to be implemented by all intent.
Ministries. 8. IT for Jobs :
5. e-Kranti : IT focuses on providing ing training to the youth in
Electronic Delivery of Services: The Government the skills required for availing employment
approved the National e-Governance Governance Plan opportunities in the IT/ITES sector in the country.
(NeGP), comprising of 31 Mission Mode Projects 9. Early Harvest Programmes: It consists of those
(MMPs) and 8 components. e--Kranti is an projects which are to be implemented within short
essential pillar of the Digital India initiative and timeline.

Challenge to Digitalization:

@ IJTSRD | Available Online @ www.ijtsrd.com | Conference Issue: ICDEBI-2018 | Oct 2018 Page: 83
International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 | IF: 4.101
Recent Trends in Banking: who wants to make payment to another person. can
1. Automatic Teller Machine (ATM) (ATM):- Automatic approach his bank and make cash payment or give
Teller Machine is the most popular devise in India, authorization to transfer funds directly from his own
which enables the customers, can withdraw their account to the bank account of the beneficiary.
money 24 hours a day 7 days week. ATM allows Complete details such as the receiver's name, bank
customer who has an ATM card to perform routine account number, account type (savings or current
banking transactions without interacting with a human account), bank name, city, branch name etc. should be
teller. In addition to cash withdrawal, ATMs can be furnished to the bank at the time of requesting for
used for payment of utility bills, fu funds transfer such transfers so that the amount reaches the
between accounts, deposit of cheques and cash into beneficiaries' account correctly and faster. RBI is the
accounts, balance enquiry. service provider of EFT.

5. Real Time Gross Settlement (RTGS) :- Real


Time Gross Settlement System, introduced in India
since March, 2004, is a system through which
electronics instructions can be given by banks to
transfer funds from their account to the account
accou of
another bank. The RTGS system is operated by the
RBI and provides a means of efficient and faster
2. Tele Banking: - Tele Banking facilitates the
funds transfer among banks facilitating their financial
customer to do entire non-cash
cash related banking on
operations. As the name suggests, funds transfer
telephone. Under this devise Automatic Voice
between banks takes place on a 'Real Time' basis.basi
Recorder is used for simpler queries and transactions.
Therefore, money can reach the beneficiary and the
For complicated queries and transactions, manned
beneficiary's bank has the responsibility to credit the
phone terminals are used in Tele Banking.
beneficiary's account within two hours of the
transaction mode.
3. Electronic Clearing Service (ECS)
(ECS):- Electronic
Clearing Service is retail payment systems that can be
6. Point of Sale Terminal: - Point of Sale Terminal
used to make bulk payments/receipts of a similar
is a computer terminal that is i linked online to the
nature especially where each individual payment is of
computerized customer information files in a bank
relatively smaller amount. This facility is meant for
and magnetically encoded plastic transaction card that
companies and government departments to receive
identifies the customer to the computer. During a
large volumes of payments rather than for funds
transaction, the customer's account is debited and the
transfers by individuals in ECS.
retailer's account is credited
redited by the computer for the
amount of purchase.
4. Electronics Funds Transfer (EFT) :- Electronic
Funds Transfer (EFT) is a system where by anyone

@ IJTSRD | Available Online @ www.ijtsrd.com | Conference Issue: ICDEBI-2018 | Oct 2018 Page: 84
International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 | IF: 4.101
We have highlighted above some of the new emerging REFERENCES:
trends. Now I highlight the opportunities’ that new 1. A. Surendra Kumar, Dr. D.
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2319
Conclusion:
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4. Network Readiness Index 2016
parallel economy.
www.weforum.org
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reach to the people. paper series
10. www.scientificamerican.com
By this we can reach on a conclusion that the new
technology needs to harnessed well and for this it is 11. www.thediplomat.com/2016/12/indias-
www.thediplomat.com/2016/12/indias
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it and get benefits from it. 12. www.rbi.org.in

@ IJTSRD | Available Online @ www.ijtsrd.com | Conference Issue: ICDEBI-2018 | Oct 2018 Page: 85

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