EXECUTIVE SUMMARY

With the number of competitors increasing in the banking industry, an approach is to determine the benefit of automation to the industry. In order to achieve this objective the following methodology was adopted by me 1. Study of Automation Channels and the current trends in the banking industry. 2. Drawing up a questionnaire in context to advanced technology, interviews etc. 3. Views of various bankers about the automation channels. Automation techniques are an integral part of banking industry and its scope and benefits to the Industry. The banking industry is a growing industry in India. With the study of various automation channels within the industry more customer value can be created. This is a research project, which aims to study the automation channels within the banking industry in India. In an effort to do so I have studied the current trends in India and future prospects of technology in the banking Industry through secondary data analysis and views of the bankers through primary data analysis. 1. Current automation channels used in the industry. 2. Impact of the technological changes on this industry. 3. Various Services offered by the bank. Study of automation channels used in the industry, through secondary data collected from web sites. Views of the bankers about the automation channels in the industry collected through primary data viz. questionnaires.
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This project is based on the views of the technology adopted by the bank & its impact on banks. As more technology based services are provided, the demand from customers will keep increasing and banks investments in technology will go on increasing and proper utilization of these investments is essential for banks to ensure that the systems deployed are fully integrated with their operations. Hence Automation in banking Industry is an upcoming Task

INTRODUCTION: INFORMATION TECHNOLOGY

Information technology (IT) is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics based combination of computing and telecommunications. IT (information technology) is a term that encompasses all forms of technology used to create, store, exchange, and use information in its various forms (business data, voice conversations, still images, motion pictures, multimedia presentations, and other forms, including those not yet conceived). It's a convenient term for including both telephony and computer technology in the same word. It is the technology that is driving what has often been called "the information revolution."IT is the area of managing technology and spans wide variety of areas that include but are not limited to things such as processes, computer software, information systems, computer hardware, programming languages, and data constructs. In short, anything that renders data, information or perceived knowledge in any visual format whatsoever, via any multimedia distribution mechanism, is considered part of the domain space known as Information Technology (IT). IT provides businesses with four sets of core services to help execute the business strategy. These four core services are broken into business process automation, providing information, connecting with customers, and productivity tools. IT professionals perform a variety of functions (IT Disciplines /Competencies) that ranges from installing applications to designing complex computer networks and information databases. A few of the duties that IT professionals perform may include data management, networking, engineering computer hardware, database and software design, as well as management and administration of entire systems. Information technology is starting to spread further than the conventional personal computer and network technologies, and more into integrations of other
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technologies such as the use of cell phones, televisions, automobiles, and more, which is increasing the demand for such jobs.

TECHNOLOGY in Banking
Many of the largest and most successful banks in the world emerged from the technical changes that they are able to recognize at an early stage. Indias banking sector has a long way to go before it can compete globally. Situation is especially maintained in the late introduction of ICT in India banks. Our information technology is designed to compete with information technology in the world, and when we are in the area very quickly, it can be difficult for us to benefit from liberalization. Bank with the right technology to provide timely information to increase productivity and thus see a competitive advantage. Compete in the economy, which has been opened, it is certainly the Indian banks to comply with the latest technology and adapt to its surroundings. Except that the banks need much improved use of technology to customer-friendly, efficient and competitive in the current authorities and businesses, they also need the technology to newer products and newer forms of service and the increasingly dynamic global environment to offer. Information technology allows banks to build new systems, which bite the needs of many customers that cannot be considered today.

Evolution of Banking Automation

The Rangarajan Committee report in early 1980s was the first step towards computerization of banks. Banks started exploring the idea of 'Total Bank Automation (TBA)'. Although titled 'Total Bank Automation,' TBA was in most cases confined to branch automation. It was only in the early 1990s that banks started thinking about tying-up disparate branches together to facilitate information sharing. At the same time, private banks entered the banking arena with radically different strategies. Given the huge IT budgets at their disposal and with almost no legacy IT equipment to worry about; private banks hastened the adoption of technology. The philosophy for private banks was very clear: to provide a whole new range of financial products and services at minimal costs. And technology made this possible. The improved connectivity and falling costs offered by leased lines

and VSATs provided a booster to inter-branch automation.

Waves of change
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The first wave in banking technology began with the use of Advanced Ledger Posting Machines (ALPM) in the 1980s. The RBI advised all banks to go in for massive computerization at the branch level.

With the second wave of development in late 1980s came Total Bank Automation (TBA). This automated both the front-end and back-end operations within the same branch. TBA comprised of total automation of a particular branch with its own database. In the third wave, the new private sector banks entered the field. These banks opted for a different model of having a single centralized database instead of having multiple databases for all their branches. The fourth wave started with the evolution of the ATM delivery channel. This was the first stage of empowerment of the customer for his own transactions. Traditionally, banking players relied extensively on their reach to effectively put emerging banks out of competition. This forced new banks develop strategies that could help them reach out to end-customers cost effectively. The solution came in the form of a delivery channel known as Automated Teller Machines or ATMs, as they are more popularly known. This turned out to be one of the biggest growth drivers for private banks in India. And when new private banks started installing ATMs across the length and breadth of the country, customers started flocking in droves. A case in point
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is ICICI Bank. During the liberalization of the banking sector, ICICI Bank, which did not have a huge national network, realized that it could use IT to enhance its value-added offerings. HDFC Bank is the other big player from the banking industry, which has aggressively used ATMs to its advantage. Though HDFC Bank has around half the number of ATMs as compared to ICICI Bank; its ATMs are among the highest transacting ones in the world

Various Automation Channels Used in Banking Industry:

Automation is key Automation is the basic thing that banks need to have in place. It involves a combination of centralized networks, operations, and a core banking application. Automation enables banks to offer 24x7x365 service using lesser manpower. No doubt, innovations like telebanking and automated teller machines (ATMs) have considerably put customers at ease in the recent past. But with net banking the customer will be able to transact with the help of a mouse and his visits to the neighborhood bank will become a thing of the past. With Computerization and networking of bank branches in the country, most banks today are in a position to capture and consolidate financial data about a customer. Financial data is typically a summary of the loans granted savings and fixed account sheld by the customer, credit card facilities availed. More so, their IT systems also record operational data, such as the number of times a customer has visited the bank branch in the last month, the number of ATM transactions he has undertaken in the same time period. Private and foreign banks also analyze each customers financial behaviour, in terms of average balances maintained, number of
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cheques used each month, number of cheques dishonoured and many other things such as regular payment of loan installments, credit card payments and so on

The logical question is how do banks benefit from this data?

They first determine the profitability of each customer to the bank. Also, this data helps them to select customers for profitable cross-sell opportunities. Most banks these days have a proxy profit and loss statement for each customer, which records the revenue the bank earns from each customer and the money the bank spends in servicing the customer. Revenue is in the form of interest income on loans such as home/auto/personal loans and fee income which bank earns from a customer when it sells insurance policies, foreign exchange; etc the other side of the profitability statement shows the transaction cost the bank is incurring to service you. For instance, each branch visit, vis--vis an ATM visit of a customer is 3 times more expensive for the bank. Hence each time you visit the branch to withdraw money instead of the ATM, you are costing the bank thrice the amount of money. Similarly, for the other channels such as internet, phone and mobile, the cost of servicing the customer is significantly lower for the bank. Summary of the statement shows the bank the amount of profits it is earning from each customer. Consequently, it is obvious that the bank prefers the more profitable customers. While the loss-making ones are either gradually upgraded to better levels or are weeded out of the banks business through disincentives

VARIOUS AUTOMATION IN BANKING ARE:

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 ATM INTERNET BANKING PHONE BANKING MOBILE BANKING SMART CARD DEBIT CARD E-CHEQUE

ATM

(AUTOMATED

TELLER

MACHINE)
Introduction 10 years ago, an ATM was a novelty in Indian bank branches. But with the entry of aggressive private sector banks, ATMs have mushroomed in the urban Indian landscape. With ATMs now a part of everyday life, access to funds has to be ensured anytime, anywhere, by most banks if they are to survive the dog-eat-dog competition in the banking sector. Users visit their ATM center on an average of two times per week. Office (40%) happens to be the most favored place to access Internet for banking purpose. Home comes close second and Cyber caf in third place. ATM in the close vicinity to the office is the most preferred place among users for banking. While ATMs do help banks to attract customers, there is also one more critical aspect to considerthe immense cost savings from which a bank can benefit due to a transaction taking place over an
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ATM vis--vis a branch. Typically, it costs a bank close to Rs.50 per transaction if conducted in a branch. The same if done through an ATM costs about Rs. 15. A look at the volume of ATM transactions conducted reflects the level of success of this delivery channel. From standing in a queue for hours on end to withdraw paltry sums, we have reached a stage where we hardly need to know where our bank is located. A welcome relief for those of us who had to start a morning on a bad note, courtesy of the pompous officer at the bank counters. Another group that has benefited immensely from progress on this front is frequent travelers. From having to carry wads of notes stuffed into a wallet ready to burst at the seams all that the traveler now needs is a small piece of plastic that can be used to withdraw money from almost any corner of the country, if not the world. While today each and every bank touts The customer is King mantra, it was a quite a different story not so long ago. A customer had to adjust their schedule to the bank and very rarely was it the other way around. A person in a city like Mumbai usually had to wait for a weekend to deposit a cheque, because by the time he reached home, the bank would have closed. Today, while the timings of banks have not changed drasticallybanks have become more customer-friendly. Now, power has shifted into the hands of the customer.The ATM industry is an evolving one, which has seen radical and business-changing events occur frequently in its first three decades. Banking in India has come a long way thanks to a combination of factors like increasing consumer awareness, technological advancement, as well as the growing financial muscle of our populace. One such innovation is the Automated Teller Machine (ATM), todays most preferred mode of delivery
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channel in all FIs. Banks like ICICI Bank, UTI Bank and HDFC Bank all deploy ATMs aggressively and have seen their customer base swell. Subsequently, even PSU banks have followed suit with an increasing numbers of ATMs

Increasing pressure to cut costs, coupled with changing customer expectations and competitive pressures forced most banks to look at IT deployment as a part of a comprehensive strategy rather than fragmented investments.A combination of regulatory and competitive issues have led to the increasing importance of banking automation Banks are focused on three areas: meet customer's service expectations, cut costs, and manage competition. For this banks are exploring new financial products and service options that would help them grow without losing existing customers. And any new financial product or service that a bank offers will be intrinsically related to technology. The new generation banks showed the way and others had no option but to follow the tech infusion to retain and attract profitable customers Customers today consider services and facilities such as Internet, ATM, phone and mobile banking an essential part of the banking experience. This calls for channel aggregation, which would be possible only through complete automation.

ATM cum DEBIT CARD

Prior ATM cards were been used to access only ATM transactions, but nowadays the banks are offering facilities of Debit card with ATMA Debit
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card is a card that has direct access to your bank account. The bank issues the card. Whenever you use your debit card, your bank account is debited immediately. Unlike credit cards, you don't enjoy any credit period and therefore the debit card does not have minimum income eligibility criteria. Two types of debit card transactions
1.

A Direct debit card allows only "on-line" transactions. An immediate electronic transfer of money from your bank account to the merchant's account. This requires you to enter your PIN or Personal Identification Number at the store's terminal. The system then checks your account for sufficient funds to cover the purchase. These are typically the cards that come with the "Maestro" logo, from MasterCard.

2.

A 'Deferred' debit card looks similar to a credit card, but is not a credit card. It bears a Visa or MasterCard logo, and can be used wherever your card's brand name is displayed. This card allows "off-line" and "on-line" transactions. Off-line purchases are where the shopkeeper's terminal scans your card and creates a debit against your account. You are not required to enter your PIN at the store's terminal. Most off-line transactions are verified immediately to see whether there is enough money in your account. Off-line debit cards usually carry the 'Electron' logo, from Visa. Example HDFC Bank issues Electron debit cards in more than 15 cities around the country.

Salient features
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It is a combination of a Cheque an ATM card. Therefore, there are no fees for using the ATM for cash withdrawal, or as a debit card for purchase.

A Debit card is more affordable than a credit card. You just use your bank account for all your transactions.

Currently, there are only two issuers in India - Citibank and HDFC bank.

No credit period. Your bank account is debited immediately. No credit check is required to get a Debit card. Spending is limited to your bank balance

Benefits
Free with your Bank Account: Obtaining a debit card is easy. If you qualify to open a bank account, you usually get a debit card, if your bank offers the service. No background check: When you are applying for a debit card, the bank does not need to look into your credit history. All you need is the documentation to open a bank account, and money in your bank when you use your debit card.

Convenience:

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A Debit card frees you from carrying a lot of cash or a cheque book. In case, you are an international traveller, you don't need to stock up on Traveller's Cheque or cash. You can use your debit card to withdraw cash from over500, 000 ATMs around the world in over 100 countries. You can withdraw in the local currency of the country you are in; limited only by the money you have back home in your account, and your Business Travel Quota (BTQ) limit availability. Fair Exchange: If you return merchandise or cancel services paid for with a Debit card, the transaction is treated as if it were made with cash or a check. Customers usually get cash back for off-line purchases; for on-line transactions, the amount is credited to your account

INTERNET BANKING
The other important delivery channel, from a banks perspective, is Internet banking. Consumers in today's fast paced technology driven world expect access to information regardless of the time or place. In a borderless world spinning on the axis of the Internet, Internet Banking assumes a special and sophisticated significance. With Internet Banking, your bank travels with you around the world. You have on-line, real-time access. We call it 24*7*.365 banking. Internet Banking is a service offered by banks that enables their customers, easy and secure access to their accounts via computer with an internet connection. One can have access to account information from anywhere in the world anytime. Future belongs to
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technology. Cheaper delivery points like Internet and telebanking will improve their shares. ATM banking costs 80% while Internet and telebanking costs only 15% compared to normal banking transactions. Internet banking for the retail segment is a recent phenomenon that has generated a lot of interest among the banks in India. Private and foreign banks have been the prime movers in the area while public sector banks are also beginning to latch on to the bandwagon Prime driver for any bank to offer services online is to offer 24 X 7 availability and convenience to its customers. Beyond that, cost reduction is another major reason. It is estimated that cost to the bank per transaction done over Internet is nearly one eight of that done through branch banking. It is clear that Internet banking is here to stay and will be a major channel to acquire and service customers. With the facility of being able to execute a host of banking transactions at one's own convenience, one is no longer restricted to branch timings. Internet banking is provided at no extra costs by banks. The kind of transaction that one can carry out using internet banking largely depends on the bank providing the service. Some of the transactions are: Allows new account application for deposits and loans. Provides with a summary of all your bank accounts.

Allows transaction tracking which enables retrieval of transaction details based on cheque number, transaction amount, and date and so on.

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Provides viewing demat transaction and holding statement (if one have a demat account with the bank) Change Customer profile. (I.e. the customer can update their mailing address and all your communication from bank will go to their new address.)

Allows transfer funds between ones accounts including loan payments.

Offers payment of utility bills such as (telephone, mobile, electricity, insurance premium, credit card, etc.) online. Allows electronic submission of request for a cheque-book, stop payment instruction, opening a fixed deposit, etc.

Request for a Demand Draft. TDS Inquiry

Customer Support
In the long run Bank can save money by not paying for tellers or for managing branches in fact the Internet will provide the bank with an almost paperless system. Then the bank can reach a whole new market, as there are no geographic boundaries with the Internet. Banks provide a highly secure environment for carrying out the banking activities on the internet. It removes the traditional geographical barriers as it could reach out to customers of different countries/legal jurisdiction. It has added a new dimension to different kinds of risks traditionally associated with banking, heightening some of them and throwing new risk control challenges. It poses a strategic risk of loss of business to those banks who do not respond in time to this new technology, being the Efficient and cost effective delivery.
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Online banking commands finances, deposits, payments, balances etc whenever ones feel like, through PC without taking the pain of visiting the bank, physically. One can make financial transfers sitting at home or at your office, just by logging into the site of the bank. Net banking does not require any software installation on your computer. As long as you have an Internet account and a 'secure connection' you can access your account from anywhere, anytime." Net banking provides both the Bank and the customers an opportunity to re-evaluate their relationships and move to a new paradigm of faceless banking."

PHONE BANKING
Telephone Banking has quickly become as common in banking as branches and ATM's. In todays competitive banking environment consumers expect banks to offer the convenience of at-home telephone banking; and, if one bank doesnt offer it, someone else will. Through Phone banking the following transaction can be accessed. Check your account balance. Check the last 5 transactions in your account. Enquire on the cheque status. Request for a cheque book / Account statement. Enquire on your fixed deposits / TDS. Open a Fixed deposit. Request for Demand Draft / Managers Cheque. Transfer funds amongst your linked accounts.

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E-Age Advantages
Security When Phone Banking facilities are used, transactions are completely secure. When an account is opened, a unique Telephone Identification Number (TIN) is given, which is completely confidential. Choose any language A language can be chosen between English and Hindi for guidance through the Interactive Voice Response (IVR) menu of services, at the time of calling the bank. Account details/balance enquiry Can get up-to-the-second details of Savings or Current Accounts and Fixed Deposits & can also get details of the last five transactions (on the IVR), which would be read out at the touch of a button. Cheque status inquiries Phone Banking can be used to check on the status of cheques issued or deposited from anywhere in India. Stop payment requests Stop payment of a cheque, 24 hours a day. Can have the facility to stop a single cheque or a series of cheques. Talk to a Phone Banker Can talk to a Phone Banker for all the financial transactions and for any other account related details over the phone. Can also give instructions to change ones correspondence address or get information about the latest products.

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MOBILE BANKING
In today's business environment, with so many deadlines to fulfill, appointments to meet and meetings to attend, we are hard pressed for time. Don't we wish we could do all your activities while traveling from one meeting to another? Now one can access bank account and conduct a host of banking transactions and inquiries through our Mobile Banking service. Also can check balance, stop a cheque payment, or even pay utility bills. Mobile Banking service gives an account information and real-time transaction capabilities from the mobile phones at a true" anywhere, anytime, anyhow" convenience. All this through SMS or WAP SMS Banking brings your bank accounts to your fingertips. It works Short Messaging Service (SMS) technology. With SMS we can perform a wide range of query-based transactions from our mobile phone, without even making a call. Mobile Banking on regular mobile phones can be conducted with normal SMS codes: Example: FOR HDFC BANK) Get your balance details (HDFCBAL) b) Request a cheque book (HDFCCHQ) But still ATMs remain the most successful delivery channel followed by telephone banking and internet banking. With drastic fall in cell phone tariff and emergence of seamless connectivity between fixed and mobile lines, mobile banking is set to emerge as one of the cost-effective delivery channels in near future. Toll-free-numbers would also gain popularity as an important delivery channel. Although banks abroad are using call centre as a delivery channel for some time, banks in India have just begun to exploit it as an effective non-branch delivery channel. The bankers will have to take a
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comprehensive view about their delivery channels. Till now delivery channels were viewed in terms of cost and technology. Delivery channels were devised focusing mainly on time and place advantage to the customers. However, with the continuing advances in wireless technology, flexibility in delivery channel device would be the forte of banks. The modes of delivery like ATM, telebanking and Internet banking not only offer convenience to customers, but also reduce the overhead costs of operations significantly for banks by reducing the need for maintenance of records, books of accounts, etc. in the traditional format.

E-CHEQUE:
An e-Cheque is the electronic version or representation of paper cheque.

The Information and Legal Framework on the E-Cheque is the same as that of the paper cheques.

It can now be used in place of paper cheques to do any and all remote transactions.

An E-cheque work the same way a cheque does, the cheque writer "writes" the e-Cheque using one of many types of electronic devices and "gives" the e-Cheque to the payee electronically. The payee "deposits" the Electronic Cheque receives credit, and the payee's bank "clears" the e-Cheque to the paying bank. The paying bank validates the e-Cheque and then "charges" the check writer's account for the check

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INITIAL SLOW GROWTH OF ATMs

Although the first ATM installed in India was in late eighties. The real boost in the ATM services came in the wake of the economic reform process. The banking sector reforms allowed for more competition in the market and to gain a competitive edge the banks started to look for new ways to differentiate. The reform process also brought to the fore a new generation of banks, namely the private banks and more and more foreign banks started opening their shops in India. These developments in the industry provided reasons to the banks to increase reach, gain competitive edge and respond to growing customer awareness. First there were Rigid bank union restrictions on deployment; there was no government regulation restricting the deployment of ATMs by banks but it was an indirect control whereby the Indian Bank Unions determined the number of ATMs deployed by the bank hence putting a constraint on the growth of ATM services. Second there were extremely high tariffs on the hardware import: Earlier the duties on the ATMs were 150 to 200 percent. With the levels of duties as high the feasibility and viability of putting ATM outlets also became an issue for the banks. However the most important factor for the slow growth was the Lack of sophisticated computer technology that hindered the progression of processing networks. Most government banks are still on distributed databases and the move toward complete automation has been slow.

BENEFITS & PITFALLS OF AUTOMATION CHANNELS For Banks:

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Price- In the long run a bank can save on money by not paying for tellers or
for managing branches. Plus, it's cheaper to make transactions over the Internet.

Customer Base- The Internet allows banks to reach a whole new marketand a well off one too, because there are no geographic boundaries with the Internet. The Internet also provides a level playing field for small banks who want to add to their customer base.

Efficiency- Banks can become more efficient than they already are by
providing Internet access for their customers. The Internet provides the bank with an almost paper less system.

Customer Service and Satisfaction- Banking on the Internet not only

allow the customer to have a full range of services available to them but it also allows them some services not offered at any of the branches. The person does not have to go to a branch where that service may or may not be offer. A person can print of information, forms, and applications via the Internet and be able to search for information efficiently instead of waiting in line and asking a teller. With more better and faster options a bank will surely be able to create better customer relations and satisfaction. Image- A bank seems more state of the art to a customer if they offer Internet access. A person may not want to use Internet banking but having the service available gives a person the feeling that their bank is on the cutting image.

For Customers:
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Bill Pay: Bill Pay is a service offered through Internet banking that allows
the customer to set up bill payments to just about anyone. Customer can select the person or company whom he wants to make a payment and Bill Pay will withdraw the money from his account and send the payee a paper check or an electronic payment

Other Important Facilities: E- banking gives customer the control over

nearly every aspect of managing his bank accounts. Besides the Customers can, Buy and Sell Securities, Check Stock Market Information, Check Currency Rates, Check Balances, See which checks are cleared, Transfer Money, View Transaction History and avoid going to an actual bank. The best benefit is that Internet banking is free. At many banks the customer doesn't have to maintain a required minimum balance. The second big benefit is better interest rates for the customer.

PITFALLS
But in spite of all the positive signals, there are problems galore, which if not setright, can come in the way of ATM growth rates in India. One is the familiar infrastructure problem. Other problems are issues like obtaining many different permissions from different authorities like the municipal authorities, building society permission, permission for locating VSATs on top of a building, obtaining permission from the local telecom provider, etc. The rapid deployment of ATMs earlier was because of the fact that there was no permission required from the Reserve Bank of India. But today this is mandatory. Industry experts point out that this was done because there were a lot of banks, which set up ATMs without adequate funds. The RBI wanted to check the status of banks before allowing them to set up ATMs.
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First there were Rigid bank union restrictions on deployment; there was no government regulation restricting the deployment of ATMs by banks but the it was an indirect control whereby the Indian Bank Unions determined the number of ATMs deployed by the bank hence putting a constraint on the growth of ATM services. Second there were extremely high tariffs on the hardware import: Earlier the duties on the ATMs were 150 to 200 percent. With the levels of duties as high the feasibility and viability of putting ATM outlets also became an issue for the banks. Although Internet banking has made its advent in the Indian Banking Scenario, the pace of its acceptance is not exciting. Internet itself is out of reach for the potential consumers of Net banking services. In the course of time when ISPs come up with sufficient bandwidth at a reasonable price, then only we can expect a smooth acceptance of Internet Banking. While Internet banking is a potential and powerful delivery channel, it has failed to make a significant impact due to a variety of reasons However the most important factor for the slow growth was the Lack of sophisticated computer technology that hindered the progression of processing networks. Most government banks are still on distributed databases and the move toward complete automation has been slow. One of the problems faced by Net banking in India is lack of customers having PC and Internet access and above all security is a huge issue which is restraining the customers from doing their banking on the Net. In spite of facing several such limitations, it is heartening to see that many co-operative and rural banks have taken the technology plunge and are able to offer the latest services to customers at affordable budgets.
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Frauds and ATM

ATM Fraud has been with us since we first started using them. Although it is not considered one of the major frauds, it could have devastating effects on the victims thereof. A victim can loose an entire months salary or hard earned savings money. The most important fact to remember is that criminals can only access your bank account via an ATM if they are in possession of your ATM bankcard and your secret pin number. It is therefore up to you to protect yourself against ATM fraud.ATM cards that function as debit cards are particularly vulnerable to fraud because they are used in "point of sale" transactions that require only a signature rather than a PIN to verify withdrawals. These cards withdraw money from a customer's account at the time of sale and deposit the funds into a merchant's account. Techniques used to carry out ATM crime Card swapping Where a customers ATM card is swapped for another card without their knowledge whilst undertaking an ATM transaction. Card jamming Where an ATM machine card reader is deliberately tampered with so that a customers card will be held in the card reader and cannot be removed from the machine by the customer. The criminal removes the card once the customer has departed. Vandalism Where an ATM machine is deliberately damaged and/or the card reader is jammed preventing the customers card from being inserted.
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 Physical attacks Where an ATM machine is physically attacked with the intention of removing the cash content. Mugging Where a client is physically attacked whilst in the process of conducting a transaction at an ATM machine.

FUTURE OF AUTOMATION CHANNELS

Market analysts believe that the growth in the installed base of ATMs, which was primarily driven by private sector banks, will be driven by Indian PSU banks in the next year. The retail-banking scene is getting hotter by the day with banks going all out to increase access points. This is great news for ATM majors like NCR India and HMA Diebold, which are fighting aggressively to increase market shares. As part of its strategy in offering innovative services, NCR is talking to the Railways in Mumbai for deploying an ATM, which could be used to dispense railway tickets. The focus is on letting the customer use the ATM as a medium which can be used for non-cash transactions like payment of bills, insurance payments, printing of statements or accessing the Internet. The key idea is to get the customer used to these channels and then migrate him to different low cost channels like the Internet. For example, a customer using a Web-enabled ATM would be more likely to go in for, say, a service like Internet banking. Also, from the banks point of view this would be more cost effective as a transaction over the Internet would be minimal cost to the bank per transaction.NCR is also looking at offering solutions that can bundle the ATM with the smartcard. For example, the value of a Petrocard (a smart
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card with stored value used inpetrol stations) would double if the Petrocard user has the option of topping up the pre-paid value of the card via an ATM. This option would give the customer better flexibility.The trend now is to use the ATM as a tool to acquire new customers and retain them by providing a range of services. Banks are slowly waking up to the ATMs potential as a serious marketing tool. They are also earning sizeable revenues by using ATMs to advertise products from other companies. A few banks are offering utility bill payment facilities on their machines too. Apart from that, a variety of services ranging from railway card/season tickets and cinema tickets to dispensing of mobile phone smart cards are being thought of as a part of the strategy to attract customers and earn extra revenue. This could be the future of ATMs, where more non-cash transactions will be done. Some banks are even toying with the idea of selling movie tickets through ATMs. For example, the SBI ATM at CST railway station in Mumbai dispenses season tickets too. Another unique strategy from NCR is the installation of local language ATMs which are available in almost all Indian languages. In rural areas for example, some farmers are extremely rich but do not have access to ATMs. How do banks reach out to such people? The answer is in the form of intelligent ATMs. Besides, an illiterate person would not be able to use an ATM, whichever language it displays. The answer is an ATM that offers an audio aid, which has clear instructions on how to withdraw cash in the language he speaks.We are seeing two distinct trendsstate-run banks are installing ATMs to ensure that they do not lose customers, and to cut costs, while private and foreign-owned banks are using it to acquire customers. This does not mean that the cost-factor is not relevant to the latter. Again, of the installed ATM base, nearly 70 percent is accounted for by private and
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foreign players. We also see that state-run entities have more of onsite ATMs. ATMs have evolved from only basic cash dispensing solutions to one which can provide value added services. The future of ATMs will be touchscreen kiosks, payment of bills, and smart cards bundled in with ATMs. Consumers in this age of financial self-empowerment expect continuous access to their money and account information. In these changing times ATMs are in a position to cater the demand for cash availability and are finding growing acceptability in the Indian mentality. This changing scenario gives a lot of scope for the proliferation of ATM services in India. The future of ATMs in India is fantastic. In fact, within a few years, the country will be flooded by ATMs. And, with e-commerce expected to boom in the next few years, banks will play an increasingly important role. But for that to happen, banks will have to transform themselves to serve customers in a better way. They will have to re-invent themselves so that better services can be offered at all levels. Thus, ATM, telephone and Internet banking are set to become the key drivers of growth for banks . In future a bank's ATM would function like a kiosk delivering more of non-cash transactions, thereby simultaneously reducing the fixed and operating cost of ATM. ATMs, the Internet, call centers, instant messaging, mobile phones, and wireless-enabled handhelds are giving people round-the-clock access to cash, retail goods and services. In this age of accessibility, people no longer need to visit their bank to retrieve their moneyit comes to them. Financial service sector organizations are competing with one another to deliver to their customers the most sophisticated access points to funds. Among all the
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delivery channels used by banks today, ATMs remain the most successful, followed by telephone banking and Internet banking. But the biggest potential could lie in mobile banking. With cell phone tariffs falling and increased bandwidth, the potential for banking player to tap this channel is enormous. The future delivery channel will have various mobile portals using technologies such as GPRS (General Packet Radio Service). The customer would prefer to do banking transactions not only anytime, anywhere, but also through any device. With the current rate of evolution in the wireless industry, the mobile channel is poised to become the de-facto banking channel within the next three years.One more delivery channel, which will increase in the future, is the deployment of call centers. For instance, looking at the cost effectiveness of call centers. As a delivery channel gains ground, it can be used to sell products of other vendors too. Analysts believe that as banks discover the marketing power of ATMs, one would see a trend where ATMs would be used to deliver products of other vendors as well .The next five years will see a marked shift, wherein customers will show a preference for non- branch delivery channels. Research indicates that globally, 80 percent of cash withdrawals occur on ATMs; the emphasis is now shifting towards adding new services at these touch points. ATMs thus become an ideal banking unit of a bank, as acceptor as well as dispenser. As per the survey over the last three months across nine major cities in India came up with some startling figures. The potential banking consumer population in India is around 300 million. The number of ATMs required to service this population would be a whopping 200,000, at the minimum. At present we have a paltry 5,000 ATMs countrywide. To be very precise, an ATM will have to be installed for every 1,489cards issued. In order to break even, the number of transactions per
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ATM would have to be 203 every day and the customer would have to make a minimum of four transactions per month on an ATM. The potential for the ATM industry in India thus remains largely untapped so far.

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FINDINGS: OVERVIEW OF BANK The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment. HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four
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core values - Operational Excellence, Customer Focus, Product Leadership and People.

TECHNOLOGY IN HDFC BANK

HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches have online connectivity, which enables the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs). The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank. The Bank's business is supported by scalable and robust systems which ensure that our clients always get the finest services we offer. The Bank has prioritised its engagement in technology and the internet as one of its key goals and has already made significant progress in webenabling its core businesses. In each of its businesses, the Bank has succeeded in leveraging its market position, expertise and technology to create a competitive advantage and build market share. HDFC Bank has over 2950 ATMs in India. HDFC Bank also has over 1770 branches in India spread across 33 states and union territories. This HDFC Bank ATM Locator will help you find the exact location of HDFC Bank ATMs in India along with proper address and location.
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HDFC BANK has the unique mobile banking service that is ngpay through which one can access banking service, book movie tickets, book travel tickets and also do shopping There are many benefits of it. They are:

Link to a full suite of MobileBanking and payment services Enjoy a one-stop solution Send flowers and gifts, purchase books and much more

HDFC BANK also provides:

InstaAlerts - SMS & Email MobileBanking through browser MobileBanking App for iPhone MobileBanking App for BlackBerry MobileBanking App for Android MobileBanking App for Nokia MobileBanking Credit Card Information SMSBanking PhoneBanking

With HDFC Bank's Prepaid Mobile Recharge service you skip the hassles of recharging your phone. Now you can easily and conveniently recharge at your nearest HDFC Bank ATM.

HDFC BANK also provides online services:

Credit Cards Online Email Statements NetBanking Loan Accounts Online

CONCLUSION
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In this prevailing scenario, a number of banks have adopted a new deployment strategy of infrastructure outsourcing, to lower the cost of service channels. As a result, other banks too will need to align their new technologies with their reinvented business models. The required changes at both the business and technology levels are enormous. In a highly competitive retail banking market, early adopters are profiting from increased efficiencies. Even though there are certain limitations, it is heartening to see that many co-operative and rural banks have taken the technology plunge and are able to offer the latest services to customers at affordable budgets. As we move inexorably into the future, the banking sector is poised to scale new heights, adopt advanced technologies and rise to new levels. The banker of the future will look to technology as a tool to provide better quality and service to customers, while banking technology will be increasingly sourced from trusted technology service providers to the banking sector. What has been achieved so far is only a modest beginning and many more industry wide projects are in the offing. In addition, banks are yet to complete major technological up-gradation of their systems. They are yet to see the real benefits of the technology. However, the implications of large-scale technological usage are paramount for a robust and proven disaster capability. When banks depend on technology for their day-to-day business, the complexity and risks of technology have to be understood and sufficient backup plan put in place to ensure continued customer service. In addition, as more technology based services are provided, the demand from customers will keep increasing and banks would thereby end up in a technology war.

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Bibliography

www.hdfcbank.com www.ask.com

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Questionnaire: 1. Does customer prefer to use to come for direct banking or they use automated services? 2. Are customers satisfied with the new automated services? 3. What is ngpay ? 4. Are there separate ques for the senior citizens? 5. What is netsafe? 6. What is instapay? 7. What is direct pay?
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