It Applications in Banking Sector

IT APPLICATIONS IN
BANKING SECTOR
BY ANSH JAIN, SWATI AGGARWAL, SVASTIK JAIN
INTRODUCTION
o Information technology in banking sector refers to the use of sophisticated
information and communication technologies together with computer science to
enable banks to offer better services to its customers in a secure, reliable and
affordable manner and sustain competitive advantage over other banks
o Financial sector in general and banking industry in particular is the largest spender
and beneficiary from information technology
o With the use of technology there had been an increase in penetration, productivity
and efficiency
o Computers in the banking sector have enhanced customer service and productivity
regarding account management, while streamlining back-office activities
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TECHNOLOGY DEVELOPMENTS IN INDIAN BANKING
MICR
Standard
cheque
encoder
3
RECENT IT DEVICES TO KEEP UP WITH TREND
1. Electronic Payment and Settlement System- These instruments

could be used in place of cash. The inter bank cheques could be
realized through clearing house system.
2. MICR Technology-These are machine readable codes added at the
bottom of every cheque leaf which helped in bank and branch-wise
sorting of cheques for smooth delivery to the respective banks on
whom they are drawn.
3. ECS-It is very useful in case of bulk transfers from one account to
many accounts or vice-versa. The beneficiary has to maintain an
account with the one of the bank at ECS Centre.
4
MOST COMMONLY USED METHODS OF PAYMENT
UPI NEFT RTGS

Is a mobile interface Is a country wide Is the continuous
where people can make electronic transfer process of settling
instant funds transfer which allows the easy payments on an
between accounts in and hassle-free transfer individual order basis
different banks on the of money from one without netting debits
basis of virtual address bank account to another with credits across the
without mentioning the bank account books of a central bank.
bank account. Once completed, real-
time gross settlement
payments are final and
irrevocable
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5,100,000,000,000$
That’s a lot of money
2.5 BILLION users

And a lot of users
78%
Online transaction success rate
6
VARIOUS PARTIES INVOLVES IN BANKING
INDIVIDUAL MERCHANT
S S
BANKS
7
1. TO THE INDIVIDUALS
o E-banking provides 24 hours, all days service to the customers for

cash withdrawal from any branch. no matter wherever the customer
is in this world, on line banking is used to get the services.
o Customer can also make some permitted transactions from their
office or house or while traveling via mobile phone.
o Customers can receive relevant and detailed information in seconds,
rather than days or weeks.
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2. TO THE MERCHANTS
o Assured immediate settlement and payment to the various purchase of

goods and services and payment can be arranged for various purposes
through card transactions made by the traders.
o Providing various services to the businessmen at par with the
international standards with low transaction cost.
o Avoid all the cost and risk problems involved in handling cash
o Development of global and local clients’ base can be possible with the
development of the IT in Banking.
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3. TO THE BANKS
o E-banking provides competitive advantage with unlimited network

to the banks.
o Online banking – an effectiveness medium of promotion of various
schemes of the bank, and indeed acts as a marketing tool.
o By connecting ATM and PO terminals, risk of over-drawl of cash
can be eliminated in case of ATM credit and debit cards.
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CHALLENGES
1. Security Risk 2. Financial Literacy

External threats such as hacking, Lack of knowledge amongst people
sniffing and spoofing expose banks to use e-banking facilities is the
to security risks. major constraint in India.
3. Fear Factor 4. Training

The fear of losing money in the Lack of adequate knowledge and
online transaction is a barrier to skills is a major deterrent for
usage of e-banking. employees to deal with the
innovative and changing
technologies in banks.
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A WAY FORWARD
o Business Analytics and Artificial Intelligence (AI) has a potential to

bring a major change.
o Many private banks are planning to deploy Robots for customer
service, investment advisory and credit-approval process to improve the
services and be cost effective in the long run.
o Digital Banking will be the most preferred form of banking in the
coming years.
12
THANK YOU
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IT APPLICATIONS IN

1. Electronic Payment and Settlement System- These instruments

UPI NEFT RTGS

2.5 BILLION users

o E-banking provides 24 hours, all days service to the customers for

o Assured immediate settlement and payment to the various purchase of

o E-banking provides competitive advantage with unlimited network

1. Security Risk 2. Financial Literacy

3. Fear Factor 4. Training

o Business Analytics and Artificial Intelligence (AI) has a potential to

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