TECHNOLOGICAL

DEVELOPMENTS IN BANKING
SECTOR

SUDHAKARA
SUNIL KUMAR.V
SUHAS..M
SURESH.A
SURESH.S
SWATHI

09/05/2012

CONTENTS

INTRODUCTION

E-BANKING

CORE BANKING

MOBILE BANKING

AUTOMATED TELLER
MACHINE(ATMS)

The technological development of modern banking

can be traced, in some ways, back to 1960, when
Charles Sanford joined Bankers Trust. He rose up the
ranks to become chairman and chief executive in the
late 1980s. During his tenure, which lasted until
1996, the bank pioneered a number of practices that
would later become common in the industry,
including the development of new ways of banking
practices including check encoders, check scanners,
currency counters, currency discriminators, check
strippers.
After post 80's,banking sector witnessed many other
technological developments such as use of
computers, ATM's and cellphone and cloud
computing.

 Combination

of the two terms

1.Electronic technology and
2.Banking
Process by which a customer performs
banking transaction electronically.

 To

provide services in users own environment for

convenience and accessibility.
To reduce risk of handling cash.
To provide a system that delivers an efficient
financial services at low-cost to the customers.

Electronic Funds Transfer (EFT)

Automated Teller Machines (ATM)
Point of Sales (PoS)
Electronic Data Interchange (EDI)
Credit Cards
Debit Cards
Smart Cards
Digital Cash

BENEFITS TO BANK
1.Unlimited Network.
2.Lesser chance of fraud and
misappropriation.
3.Better profitability.
4.Better Customer
Relationship.

BENEFITS

TO
CUSTOMERS
1.Any where Banking.
2.Any time banking.
3.Saves cost and time.

Connectivity problems.

Cyber

crime.
Computer Literacy is Essential.
High cost of technology.
Personal contact not possible.

Finland was the first country in the world

to have taken in E-banking. In India, it
was ICICI Bank which E-banking as
early as 1997 under the brand name
Infinity

ICICI s profit to equity holders registered a

growth of 21% percent in 2001.
Citibank claims that its project Suvidha, which
started off in Bangalore in early in 1998, has
encouraged customers to interact with
electronically, using telephones, the Internet,
and ATMs.

The Vice President of Global Trust Bank, P.C.

Narayan says,
An electronic transaction costs as much
as 65% less than a physical one. ATMs have
definitely emerged as the new business
model for the banks and the way banking has
been conducted. I think it is one of the
remarkable things that has happened to
Indian Banking Industry.

A Reserve Bank of India (RBI) committee has

come out with the road map for electronic
banking and has sought legislation on EFT
systems to facilitate multiple payment
systems for banks and financial institutions.
The RBI has been gearing up to upgrading
itself as a regulator and supervisor of the
technologically dominated financial system

Several initiatives taken by the Government of

India as well as the RBI have facilitated the
development of E-banking in India. The
Govt. of India enacted the IT Act, 2000 with
effect from Oct.17,2000, which provides
recognition to electronic transactions and
other means of electronic commerce.

The potential of E-banking is huge. With

the increase in connectivity, the number of
users will explode, says K.V. Kamat, the CEO
of ICICI Bank.
The strategy for banks is to provide valueadded services to products to customers
utilizing the Internet extensively.

Web based banking service or E-Banking, the

latest generation of banking transactions, has
opened up new window of opportunity to the
banks and existing financial institutions.
Since its evolution in 90th decade, it is having
unprecedented growth.

Core banking is a general term used to describe the

services provided by a group of networked bank
branches. Bank customers may access their funds
and other simple transactions from any of the
member branch offices. CORE stands for "centralized
online real-time environment".
Core Banking Solution (CBS) is networking of
branches, which enables Customers to operate their
accounts, and avail banking services from any branch
of the Bank on CBS network, regardless of where he
maintains his account. The customer is no more the
customer of a Branch. He becomes the Banks
Customer. Thus CBS is a step towards enhancing
customer convenience through Anywhere and
Anytime Banking.

Finacle core banking solution offers an unlimited

palette of features for banks to design and
deploy products for varying market segments.
The product bundling capabilities of the solution
offer a wide range of possibilities for banks to
create products with innovative features. The
facilities provided for differential pricing, channel
rules and customization through Finacle Studio
the scripting engine, empower banks to
continuously innovate and extend their suite of
products, across segments.

Finacle core banking solution supports

business event automation and process
orchestration, thus eliminating manual tasks
and reducing process time. The elimination of
error and data redundancies also results in
increased branch productivity. Straight
Through Processing (STP) abilities enhance
reduction in turnaround and processing time,
increasing output and enabling speedy
completion of tasks.

The CIF and CRM capabilities in Finacle offer

a unified view of the customer across the
entire solution and across multiple back-end
applications, enabling the bank to view the
customer from a completely informed angle.
This empowers banks to effectively manage
customer relationships and aggressively
explore cross-sell opportunities.

The Service Oriented Architecture (SOA)

enables the IT team at the bank to effect
changes without touching the base code,
ensuring lesser vendor dependency and faster
adaptability to changing business conditions.

Substantial reduction of operation costs

Easier introduction of new products
Faster customer service
Integration of all products and services, leading
to improved risk management
Mitigation of Operational Risk
Real-time transaction processing
Scaling up of operations
Availability of e-trade options to bank customers
Efficient and easy transactions which can be
conducted 24/7

1).Excessive reliance on technology

2). Any failure in computer systems can cause
entire network to go down.
3). If Data is not protected properly and if
proper care is not taken , hackers can gain
access to the sensitive data.

Mobile

Banking refers to provision and availment of

banking- and financial services with the help of mobile
telecommunication devices.
Mobile

banking (also known as M-Banking, mbanking)

is a term used for performing balance checks, account
transactions, payments, credit applications and other
banking transactions through a mobile device such as
a mobile phone

SMS (Short messaging service)

GPRS (General Packet Radio Service)

USSD (Unstructured Supplementary Service Data)

Account information
Mini-statements and checking of account history
Alerts on account activity or passing of set thresholds
Mutual funds / equity statements
Insurance policy management
Pension plan management
Status on cheque, stop payment on cheque
Ordering cheque books
Balance checking in the account
Recent transactions
Due date of payment (functionality for stop, change and deleting of payments)
PIN provision, Change of PIN and reminder over the Internet
Blocking of (lost, stolen) cards
Payments, deposits, withdrawals, and transfers
Domestic and international fund transfers
Mobile recharging
Commercial payment processing
Bill payment processing
Peer to Peer payments

Customer Benefits

Usually Secure, Convenient and easy method of

payment

Anywhere anytime payment

Banks

Additional channel for customer payments

Use of existing Infrastructure

Value added service to customers

Risk of Illegal access by hackers.

Transaction needs signal strength. It might
not work in remote geographical regions
M-Banking Is not as flexible, as done through
computer means
Device used by the customer may not be
compatible to the M-banking Application

It is a computerized telecommunication
device that provides of a financial
institution with access to financial
transaction in a public space without the
need for a cashier , human clerk or bank
teller.

It is a card issued by a bank , credit

union or building society that can be
used at an ATM for deposits ,
withdrawals , account information or
other kind of transactions , often
through interbank networks.

The idea of self-service in retail banking

leads to the development of an ATM machine
The simultaneous efforts in Japan , Sweden ,
U.K. been credited in developing the first
cash dispenser machine
The first ATM called Bankograph was installed
in Barkleys bank in north London U.K. on
27th June 1967

CPU
(to control the user interface and transaction devices)
Magnetic card reader
(to identify the customer)
DISPLAY
(used by user for transactions)
FUNCTION KEY OR TOUCH SCREEN
(used to select various aspects of transaction)
RECORD PRINTER
(to provide user the record of their transactions)
VAULT
(to store the parts of machine requiring restricted
transaction)
HOUSING
(for aesthetics and to assign signage)

Today ATMs are been used globally

The number of ATMs using currently are
about 1.8 million
Globally they are divided into seven regions
ATMS are fastly using in CANADA , USA ,
EUROPE, JAPAN
But yet to reach high number in the near east
or africa

1)U have access to the cash in your bank account

whenever u needed
2)For instance, u are in stores that doesnt take checks
and credit cards but it has an atm you can withdraw
the money for your purpose.
3)You can travel anywhere without cash
4)If you have ever faced a need of money,then you can
probably access on atm machine
5) these saves time
6) they operate 24hours
7) these use pin for security thus they are safe
8) Checking recent or past bank statements
9) Checking how much money is remaining in the
account.

1)they are not safe since they are located outside the bank
hall
2)if one forgets the pin number he or she will not be able to
withdraw money from their accounts
3) if one makes mistakes three times in entering the pin
number the card will be swallowed down the machine
and it takes time to retrieve it
4) If the bank card is stolen and the number ascertained, an
unauthorized person can easily access the account.
5) Machine may not recognize your Credit card
6) May be no ATMs near by
7) If someone watches or hacks an ATM machine your details
May be taken
8) If problem with credit card you can not withdraw your
money