Technology and Banking

By Swati Panwar MBA II Sem College of Engineering and Technology

Technology and Banking

The Quintessence Nature of Banking harmonizes closely with Technology
Tasks Common to Both Bankin g Information Storage Processing Transmission Technolo gy

Innovative "isk #anagement Comple Credit Calc!lations

Global Operations

Pervasive Branch Network #ass Transaction $ Items Processing

g n i k n a B

d n a

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y g o l o n h

Benefits of Technology
Increased operational efficiency, profitability & productivity Superior customer service Multi-channel, real-time transaction processing Better cross-selling ability Improved management and accountability Efficient !" and risk management

%oc!s aspects of Commercial Banking now are&

B)N,-S B.SIN+SS
Core Banking 'CBS( +lectronic Banking )ny Branch Banking )T#s #IS $ Intranet POS Card

/O)NS $ #ISC0 S+"1IC+S

Terminals and Cash dispenser

Corporate Network "isk #anagem ent

N IS I )"

C"#

#anage ment *oc!ment #anagem ent "eso!rce #anagem ent

B)N,-S B.SIN+SS

%inancial Technology Infrastr!ct!re

*ata Center to host servers for& CBS )T#2%inancial Switch Internet Banking *32*#2C"#2#IS etc0 Back4office )pplication +4mail Servers5 Internet Server5 +nterprise4wide Network $ Networking +6!ipment Sec!rity Systems Systems at Branches2"O27O2CO *epts0 S!pporting Systems *isaster "ecovery Site $ B!siness Contin!ity

Technology A Differentiator
Technology is indeed a differentiator not only in terms of competitive advantage, but also in terms of administrative and back-end processes#$ But#due to rapid technology deployment in Indian banking sector, the %haves& and %have-nots& gap is all set to narro' (uickly$

How Long a Differentiator?

Then#$can technology be enough of a differentiator) "ny ne' technology or technology-enabled process can act as a differentiator or a competitive edge for some level of time$ "fter that time, the technology still has to be adopted as a %necessity& and as a cost of doing business Thanks to shortening technology life cycles, it 'ould be short sighted to assume that technology 'ould be a long term differentiator#

For Long-Term Differentiation

Elements of Technology as a Differentiator

Scalabilit y& *le+ibilit y

Efficient utilisation, mgmt

!rocess enabling

,tility to custom er

Suppo rt Skills

Issues with

ustomers

ot only employees, there are problems for customers too 'hen a ne' technology arrives# The ma-or challenges .
/omfort levels Security and trust issues /onvenience factor 0etting rid of myths Migration from e+isting to ne' systems /hanging the habits

!"# Terminal and

ash Dis$enser

!1S Terminal /onnected to /ash dispenser

+lectron ic Banking

)T#

Branch :

Branc h Branch ; Bankin g

8ead Office Branch <

Branch 9

Branch n Branch >

Branch =

Technology Ac%uisition
Inappropriate technology purchases can be the root of all problems# The Bank management has to2
0ive thought to the utili3ation rate "void %knee--erk& reactions 4%they have done it# I should also do it&5 Be impartial in technology decisions 4%I like that technology#I 'ant it&5 ,nderstand 'here the solution 'ill fit " 6 'here it 'on7t8 "ssess the strengths & 'eakness of solution "nd seek ans'er to %are 'e ready for it)&

0oal definition Integrating business & technology goals Solution features 9endor selection Business process reengineering /hange management

*ifferentiation is attained not achieved ?!st thro!gh technology5 it is gained in the way the technology is selected5 implemented and !tilised

Technology %or S!stained *ifferentiati on

Efficient utilisation /ustomer utility Technology Management Support functions Maintenance Back-ups and 6isaster :ecovery Scalability & fle+ibility ;earning & evolution

&egulation and #u$er'ision The hallenge

Challenge of Technology:
New markets, products, ser ices, deli ery channels !pened up a market for "risks# deri ati es Challenge of financing tech firms $ %T inno ation all ha e implications for the sta&ility of &anks and of the economy

The !pportunity
'egulators ha e new tools (ocus of all recent financial sector reforms )mergence of non*intrusi e, focused super ision +ith a iew to pre ent frauds and distur&ances to financial sta&ility

Technology and Banking #u$er'ision

T8+ "BI "+SPONS+ 1ffsite Supervision & Monitoring 1SM1S /1SM1S 4 on banking *inancial /ompanies < 6evelopment *inancial Institutions5 ,B6 Soft /redit Information Bureau 4" -oint venture bet'een =ousing 6evelopment *inance /orporation ;td$, State Bank of India, Trans ,nion International Inc$ $ 6un & Bradstreet Information Services India !vt$ ;td$5

urrency (anagement and Technology "$$ortunities )alore

Currency ,anagement * a formida&le task in %ndia gi en

the geographical size, the olume and alue of notes and coins in circulation, preference for cash and currency handling practices ...&ut technology offers immense opportunities to impro e performance

'B%/s The Clean Note 0olicy 123334

)sta&lishment of 5 state of the art currency presses Technology dri en anti counterfeit measures 67 fully automated Currency 8erification $ 0rocessing 9ystems 52 9hredding and Bri:uetting ,achines

&BI and
The "BI website

ustomer #er'ice*+,-

*issemination of information #!ltiple *elivery Channels Coin $ Note *ispensing #achines %or the general p!blic Interactive 1oice "esponse System %or banks and financial instit!tions 3eb server %or government c!stomers On the anvil@0 ) sec!red web server S%#S2email based comm!nication with

&BI and

ustomer #er'ice...+/-

Improvements in payment and settlement systems #IC" Clearing +nabling faster clearing of che6!es Che6!e Tr!ncation $ +4Che6!es On the drawing board +CS2+%T +nabling TA: settlement of o!r e6!ities market National +%T +nabling TAB settlement of all c!stomer f!nds transfer transactions

The future will be not be more of the same we need to be ready..

Thank >ou