Role of Technology In Banking

A Project Submitted to

University of Mumbai for Partial completion of

the degree of

Bachelor in Commerce (Banking and Insurance)

Under the Faculty of Commerce

By

Miss. Harshada Bhaskar Thorat

Seat No:
Roll No: 33124

Name of the Guiding

Teacher Ms. Susan M. Abraham

RAV’S
Laxmichand Golwala College of Commerce and
Economics.
M.G.ROAD, Ghatkopar (East), Mumbai-400077
2019 -- 2020

1
 R.A.V’S Laxmichand Golwala College of Commmerce and Economics

M.G. Road Ghatkopar (East).Mumbai – 400077

CERTIFICATE

This is to certify Ms / Mr. Harshada Bhaskar Thorat has worked and duly completed
her/his Project work for the degree of bachelor in Commerce (Banking and Insurance)
Under the faculty of Commerce In the subject of Third Year B.com Semester VI and
her/his project is entitled. “ Role of Technology in Banking” under my supervision

I further certify that the entire work has done by the learner under my guidance and that
no part of it has been submitted previously for any degree or Diploma of anyUniversity.

It is her/his own work and facts reported by her/his personal findings and investigations.

Name and signature of guiding

Teacher Ms. Susan M. Abraham

----------------------------------- ---------------------------------

External Examiner Internal Examiner

Seal of the college

Date :

2
 Declaration

I the undersigned Miss/Mr. Harshada Bhaskar Thorat here by, declare that the
work embodied in this project work titled “Role of Technology in Banking” forms my
own contribution to the research work carried out under the guidance of Ms. Susan M.
Abraham is a result of my own research work and has not been previously submitted to
and other University for any other university

Wherever reference has been made to previous works of others. It has been
clearly indicated as such and include in the bibliography

I here by further that that all information works of this document has been
obtained and presented in accordance with academic rules and ethical conduct.

Miss. Harshada Bhaskar Thorat

Seat No:

Certified by :

Ms. Susan M. Abraham

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 Acknowledgment

To list who all have helped me is difficult because they are so numerous
And the depth is so enormous

I would like to acknowledge the following as being idealistic channels and

Fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to di this project.

I would like to thank my Principal, Vijay K. Mahida for Providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Coordinator Miss. Susan M.

Abraham, for her Moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Ms. Susan M. Abraham,
Whose guidance and care made the project successful.

I would like to thank my College Library. For having provided various

reference books and related to my project.

I would like to thank each and every person who directly or indirectly me in the
completion of the project especially my Friends and Peers who supported me throughout
my project.

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 Abstract

In the world of banking and finance nothing stands still. The biggest change of all
is in the, scope of the business of banking. Banking in its traditional from is concerned
with the acceptance of deposits from the customers, the lending of surplus of deposited
money to suitable customers who wish to borrow and transmission of funds. Apart from
traditional business, banks now days provide a wide range of services to satisfy the
financial and non financial needs of all types of customers from the smallest account
holder to the largest company and in some cases of non customers. The range of
services offered differs from bank to bank depending mainly on the type and size of the
bank.

Technology has been one of the most important factors for the development of
mankind. Information and communication technology is the major advent in the field of
technology which is used for access, process, storage and dissemination of
information electronically. Banking industry is fast growing with the use of technology in
the from of ATMs, on-line banking, Telephone banking, Mobile banking etc., plastic
card is one of the banking products that cater to the needs of retail segment has seen
its number grow in geometric progression in recent years. This growth has been
strongly supported by the development of in the field of technology, without which this
could not have been possible of course it will change our lifestyle in coming years.

Signature of the Students

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 Index

Chapter.No Name to the title chapter Page.No

1 Intrduction 1-9
1.1 Role of Technology 9-15
1.2 Advantages of Technology 15-18
1.3 E-Banking Risk Concerns 18-22
1.4 Role of RBI in computerization of banks in India 22-25
1.5 Introduction to banking and banking services 25-30
1.6 Indian banking structure 30-39
2 Research Methodology 40
2.1 Problem Statement 41
2.2 Observation 41-42
2.3 Predication 42
2.4 Principles of Banking 42-43
2.5 Objective of the study 43
3 Literature Review 44
3.1 Banking Technology 45-46
3.2 Banking technology in Indian banking 46-48
3.2.1 Effectiveness of information disclosure 48-49
3.2.2 Quantitative evaluation of banks web sites 49-50
3.3.3 Impact of information technology on the performance of 51-54
the bank
3.3 Impact of technology in the cost and profit efficiency of 54-63
banking
4 Data Analysis, Interpretation and Presentation 64-71
5 Conclusion and Suggestions 72-78
6 Bibliography 79-80
7 Appendix 81-83

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 Chapter 1

Introduction

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 The term “Banking Technology” 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. Banking Technology also subsumes the activity of using advanced
computer algorithms in unraveling the patterns of customer behavior by sifting through customer
details such as demographic, psychographic and transactional data. This activity also known data
mining, helps banks achieve their business objectives by solving various marketing problems
such as customer segmentation, customer scoring, target marketing, market-basket analysis,
cross-sell, up-sell, customer retention by modeling churn etc. Successful use of data mininghelps
banks achieve significant increase in profits and thereby retain sustainable advantage over their
competitors. From theoretical perspective, Banking Technology is not a single, stand-alone
discipline, but a confluence of several disparate fields such as finance (subsuming risk
management), information technology, communication technology, computer science and
marketing science. Figure 1 depicts the constituents of Banking Technology. From the functional
perspective, Banking Technology has three important dimensions. They are as follows: (i) The
use of appropriate hardware for conducting business and servicing the customers through various
delivery channels and payments systems and the associated software constitutes one dimension
of Banking Technology. The use of computer networks, security algorithms in its transactions,
use of ATM and credit cards, Internet banking, telebanking and mobile banking are all covered
by this dimension. The advances made in information and communication technologies take care
of this dimension. (ii) On the other hand, the use of advanced computer science algorithms to
solve several interesting marketing related problems such as customer segmentation, customer
scoring, target marketing, market-basket analysis, cross-sell, up-sell and customer retention etc.
faced by the banks to reap profits and outperform their competitors constitutes the second
dimension of Banking Technology. This dimension covers the implementation of a data
warehouse for banks and conducting data mining studies on customer data. (iii) Moreover, banks
cannot ignore the risks that arise in conducting business with other banks and servicing their
customers, for otherwise, their very existence would be at stake. Thus, the quantification,
measurement, mitigation and management of all the kinds of risks that banks face constitutes the
third important dimension of Banking Technology. This dimension covers the process of
measuring and managing credit risk, market risk and operational risk. Thus, in a nutshell, in the
word ‘Banking Technology’, ‘banking’ refers to the economic, financial, commercial and

8
management aspects of banking while ‘technology’ refers to the information and communication
technologies, computer science and risk quantification and measurement aspects.

Figure 1.
Different constituents of banking technology

1.1 ROLE OFTECHNOLOGY

Information Technology has basically been used under two different avenues in Banking. One is
Communication and Connectivity and other is Business Process Reengineering. Information
technology enables sophisticated product development, better market infrastructure,
implementation of reliable techniques for control of risks and helps the financial intermediaries
to reach geographically distant and diversified markets.

In view of this, technology has changed the contours of three major functions performed by
banks, i.e., access to liquidity, transformation of assets and monitoring of risks. Further,
Information technology and the communication networking systems have a crucial bearing on
the efficiency of money, capital and foreign exchange markets. Internet has significantly
influenced delivery channels of the banks. Internet has emerged asan important medium for
delivery of banking products & services. Detailed guidelines of RBI for Internet Banking has
prepared the necessary ground for growth of Internet Banking inIndia.

9
The Information Technology Act, 2000 has given legal recognition to creation, trans-mission and
retention of an electronic (or magnetic) data to be treated as valid proof in a court of law, except
in those areas, which continue to be governed by the provisions of the Negotiable Instruments
Act, 1881.

As stated in RBI’s Annual Monetary and Credit Policy 2002-2003: “To reap the full benefits of
such electronic message transfers, it is necessary that banks bestow sufficient attention on the
computerization and networking of the branches situated at commercially important centres on a
time-bound basis. Intra-city and intra-bank networking would facilitate in addressing the “last
mile” problem which would in turn result in quick and efficient funds transfers across the
country”.

TECHNOLOGY PRODUCTS IN A BANKING SECTOR:

Net Banking

Credit Card Online

Instant Alerts

MobileBanking

e-Monies Electronic Fund Transfer

Online Payment of Excise & Service Tax

Phone Banking

Bill Payment

Shopping

Ticket Booking

Railway Ticket Booking through SMS

Prepaid Mobile Recharge

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Smart Money Order

Card to Card Funds Transfer

Funds Transfer (eCheques)

Anywhere Banking

Internet Banking

Mobile Banking

Bank @ Home “Express Delivery”

USE OF Technology in Banks to:

Have your paycheck deposited directly into your bank or credit union checking account.

Withdraw money from your checking account from an ATM machine with a personal
identification number (PIN), at your convenience, day or night.

Instruct your bank or credit union to automatically pay certain monthly bills from your account,
such as your auto loan or your mortgage payment.

Have the bank or credit union transfer funds each month from your checking account to your
mutual fund account.

Have your government social security benefits check or your tax refund deposited directly into
your checking account. Buy groceries, gasoline and other purchases at the point-of-sale, using a
check card rather than cash, credit or a personal check.

Use a smart card with a prepaid amount of money embedded in it for use instead of cash at a pay
phone, expressway road toll, or on college campuses at the library’s photocopy machine or
bookstores.

Use your computer and personal finance software to coordinate your total personal financial
management process, integrating data and activities related to your income, spending, saving,
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investing, recordkeeping, bill-paying and taxes, along with basic financial analysis and decision
making.

TECHNOLOGY IS USED THROUGH:

INTERNET BANKING:

Internet Banking lets you handle many banking transactions via your personal computer. For
instance, you may use your computer to view your account balance, request transfers between
accounts, and pay bills electronically.

Internet banking system and method in which a personal computer is connected by a network
service provider directly to a host computer system of a bank such that customer service requests
can be processed automatically without need for intervention by customer service
representatives. The system is capable of distinguishing between those customer service requests
which are capable of automated fulfillment and those requests which require handling by a
customer service representative. The system is integrated with the host computer system of the
bank so that the remote banking customer can access other automated services of the bank. The
method of the invention includes the steps of inputting a customer banking request from amonga
menu of banking requests at a remote personnel computer; transmitting the banking requests to a
host computer over a network; receiving the request at the host computer; identifying the type of
customer banking request received; automatic logging of the service request, comparing the
received request to a stored table of request types, each of the request types having an attribute to
indicate whether the request type is capable of being fulfilled by a customer service
representative or by an automated system; and, depending upon the attribute, directing the
request either to a queue for handling by a customer service representative or to a queue for
processing by an automated system.

AUTOMATED TELLER MACHINES (ATM):

An unattended electronic machine in a public place, connected to a data system andrelated

equipment and activated by a bank customer to obtain cash withdrawals and other banking
services. Also called automatic teller machine, cash machine; Also called moneymachine.

An automated teller machine or automatic teller machine (ATM) is an electronic computerized

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telecommunications device that allows a financial institution’s customers to directly use a secure
method of communication to access their bank accounts, order or make cash withdrawals (or
cash advances using a credit card) and check their account balances without the need for a
human bank teller (or cashier in the UK). Many ATMs also allow people to deposit cash or
cheques, transfer money between their bank accounts, top up their mobile phones’ pre-paid
accounts or even buy postage stamps.

On most modern ATMs, the customer identifies him or herself by inserting a plastic card with a
magnetic stripe or a plastic smartcard with a chip, that contains his or her account number. The
customer then verifies their identity by entering a passcode, often referred to as a PIN (Personal
Identification Number) of four or more digits. Upon successful entry of the PIN, the customer
may perform a transaction.

If the number is entered incorrectly several times in a row (usually three attempts per card
insertion), some ATMs will attempt retain the card as a security precaution to prevent an
unauthorised user from discovering the PIN by guesswork. Captured cards are often destroyed if
the ATM owner is not the card issuing bank, as non-customer’s identities cannot be reliably
confirmed.

The Indian market today has approximately more than 17,000 ATM’s.

TELE BANKING:

Undertaking a host of banking related services including financial transactions from the
convenience of customers chosen place anywhere across the GLOBE and any time of date and
night has now been made possible by introducing on-line Telebanking services. By dialing the
given Telebanking number through a landline or a mobile from anywhere, the customer can
access his account and by following the user-friendly menu, entire banking can be done through
Interactive Voice Response (IVR) system. With sufficient numbers of hunting lines made
available, customer call will hardly fail. The system is bi-lingual and has following facilities
offered

Automatic balance voice out for the default account.

Balance inquiry and transaction inquiry in all

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Inquiry of all term deposit account

Statement of account by Fax, e-mail or ordinary mail.

Cheque book request

Stop payment which is on-line and instantaneous

Transfer of funds with CBS which is automatic and instantaneous

Utility Bill Payments

Renewal of term deposit which is automatic and instantaneous

Voice out of last five transactions.

SMART CARD:

A smart card usually contains an embedded 8-bit microprocessor (a kind of computer chip). The
microprocessor is under a contact pad on one side of the card. Think of the microprocessor as
replacing the usual magnetic stripe present on a credit card or debit card.

The microprocessor on the smart card is there for security. The host computer and card reader
actually “talk” to the microprocessor. The microprocessor enforces access to the data on the card.

The chips in these cards are capable of many kinds of transactions. For example, a person could
make purchases from their credit account, debit account or from a stored account value that’s
reload able. The enhanced memory and processing capacity of the smart card is many times that
of traditional magnetic-stripe cards and can accommodate several different applications on a
single card. It can also hold identification information, which means no more shuffling through
cards in the wallet to find the right one — the Smart Card will be the only one needed.

Smart cards can also be used with a smart card reader attachment to a personal computer to
authenticate a user.

Smart cards are much more popular in Europe than in the U.S. In Europe the health insurance

14
and banking industries use smart cards extensively. Every German citizen has a smart card for
health insurance. Even though smart cards have been around in their modern form for at least a
decade, they are just starting to take off in the U.S.

DEBIT CARD:

Debit cards are also known as check cards. Debit cards look like credit cards or ATM(automated
teller machine) cards, but operate like cash or a personal check. Debit cards are different from
credit cards. While a credit card is a way to “pay later,” a debit card is a way to “pay now.”
When you use a debit card, your money is quickly deducted from your checking or savings
account. Debit cards are accepted at many locations, including grocery stores, retail stores,
gasoline stations, and restaurants. You can use your card anywhere merchants display your
card’s brand name or logo. They offer an alternative to carrying a checkbook or cash.

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
cheque’s.

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” .

1.2 ADVANTAGES OF TECHNOLOGY:

From both customer and banking perspectives it shows that the Internet is a convenience tool
available whenever and wherever customers need it. It is also found that the Internet has
improved the factors in service quality like responsiveness, communication and access. It is
concluded that the Internet has an important and positive effect on customer perceived banking
services and the service quality has been improved since the Internet has been used in banking
sector.

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It’s generally secure. But make sure that the website you’re using has a valid security certificate.
This lets you know that the site is protected from cyber-thieves looking to steal your personal
and financial information.

It gives twenty-four-hour access. When the neighborhood bank closes, you can still access your
account and make transactions online. It’s a very convenient alternative for those that can’t get to
the bank during normal hours because of their work schedule, health or any other reason. It
allows us to access our account from virtually anywhere. If we’re on a business trip or
vacationing away from home, we can still keep a watchful on our money and financial
transactions – regardless of our location.

Conducting business online is generally faster than going to the bank. Long teller lines can be
time-consuming, especially on a Pay Day. But online, there are no lines to contend with. You can
access your account instantly and at your leisure.

Many features and services are typically available online. For example, with just a few clicks
you can apply for loans, check the progress of your investments, review interest rates and gather
other important information that may be spread out over several different brochures in the local
bank.

Technology has opened up new markets, new products, new services and efficient delivery
channels for the banking industry. Online electronics banking, mobile banking and internet
banking are just a few examples.

Information Technology has also provided banking industry with the wherewithal to deal with
the challenges the new economy poses. Information technology has been the cornerstone of
recent financial sector reforms aimed at increasing the speed and reliability of financial
operations and of initiatives to strengthen the banking sector.

The IT revolution has set the stage for unprecedented increase in financial activity across the
globe. The progress of technology and the development of worldwide networks have
significantly reduced the cost and time of global funds transfer.

It is information technology which enables banks in meeting such high expectations of the

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customers who are more demanding and are also more techno-savvy compared to their
counterparts of the yester years. They demand instant, anytime and anywhere banking facilities.

IT has been providing solutions to banks to take care of their accounting and back office
requirements. This has, however, now given way to large scale usage in services aimed at the
customer of the banks. IT also facilitates the introduction of new delivery channels–in the form
of Automated Teller Machines, Net Banking, Mobile Banking and the like.

Use of de-mat account and online trading enables a person to buy and sell shares any time. The
share trading companies and AMC’s can give improved and faster service with help of
technology.

There are many useful features and services available online besides for the usual transactions.
For example, you can apply for credit cards, manage investments, and pay bills through your
online account portal. You can also perform more mundane tasks such as ordering new checks,
requesting additional deposit slips, or reporting a lost or stolen debit card.

Certainly the above mentioned advantages if technology have improved the quality of service in
a banking and financial sector.

For Banks:

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 by using technology.

Customer Base- The technology allows banks to reach a whole new market- and a well off one
too, because there are no geographic boundaries with the help of 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. With the use of technology the banks almost become 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

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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 surly 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, e-banking, telebanking. A person may not want to use these but having the service
available gives a person the feeling that their bank is on the cutting image.

For Customers:

Bill Pay: Bill Pay is a service offered through Internet banking, e-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.

1.3 E-BANKING RISK CONCERNS:

As with any new technology new problems arefaced.

Customer support – banks will have to create a whole new customer relations department to help
customers. Banks have to make sure that the customers receive assistance quickly if they need
help. Any major problems or disastrous can destroy the banks reputation quickly an easily. By
showing the customer that the Internet is reliable you are able to get the customer to trust online
banking more and more.

Laws – While Internet banking does not have national or state boundaries, the law does.
Companies will have to make sure that they have software in place software market, creating a
monopoly.

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Security: customer always worries about their protection and security or accuracy. There is
always a question whether or not something took place.

Other challenges: lack of knowledge from customers end, sit changes by the banks, etc

INFORMATION TECHNOLOGY: A GLOBAL PERSPECTIVE

The advent of Internet has initiated an electronic revolution in the global banking sector. The
dynamic and flexible nature of this communication channel as well as its ubiquitous reach has
helped in leveraging a variety of banking activities. New banking intermediaries offering entirely
new types of banking services have emerged as a result of innovative e-business models. The
Internet has emerged as one of the major distribution channels of banking products and services,
for the banks in US and in the European countries.

Initially, banks promoted their core capabilities i.e., products, services and advice through
Internet. Then, they entered the e-commerce market as providers/distributors of their own
products and services. More recently, due to advances in Internet security and the advent of
relevant protocols, banks have discovered that they can play their primary role as financial
intermediates and facilitators of complete commercial transactions via electronic networks
especially through the Internet. Some banks have chosen a route of establishing a direct web
presence while others have opted for either being an owner of financial services centric
electronic marketplace or being participants of a non-financial services centric electronic
marketplace.

The trend towards electronic delivery of banking products and services is occurring partly as a
result of consumer demand and partly because of the increasing competitive environment in the
global banking industry. The Internet has changed the customer’s behaviors who are demanding
more customized products/services at a lower price. Moreover, new competition from pure
online banks has put the profitability of even established brick and mortar banks under pressure.
However, very few banks have been successful in developing effective strategies for fully
exploiting the opportunities offered by the Internet. For traditional banks to define what niche
markets to serve and decide what products/services to offer there is a need for a clear andconcise
Internet commercestrategy. Banking transactions had already started taking place through the
Internet way back in 1995. The Introduction of technology promised an ideal platform for

19
commercial exchange, helping banks to achieve new levels of efficiency in financial transactions
by strengthening customer relationship, promoting price discovery and spend aggregation and
increasing the reach.
Electronic finance offered considerable opportunities for banks to expand their client base and
rationalize their business while the customers received value in the form of savings in time and
money.

Global E-banking industry is covered by the following four sections:

E-banking Scenario: It discusses the actual state, prospects, and issues related to E-banking in
Asia with a focus on India, US and Europe. It also deals with the impact of E-banking on the
banking industry structure.

E-banking Strategies: It reveals the key strategies that banks must implement to derive maximum
value through the online channel. It also brings guidance for those banks, which are planning to
build online businesses.

E-banking Transactions: It discusses how Internet has radically transformed banking

transactions. The section focuses on cross border transactions, B2B transactions, electronic bill
payment and presentment and mobile payments. In spite of all the hype, E-banking has been a
non-starter in several countries.

E-banking Trends: It discusses the innovation of new technologies in banks.

E-BANKING SCENARIO:

The banking industry is expected to be a leading player in E-business. While the banks in
developed countries are working primarily via Internet as non-branch banks, banks in the
developing countries use the Internet as an information delivery tool to improve relationship with
customers.

In early 2001, approximately 60 percent of E-business in UK was concentrated in the financial

services sector, and with the expected 10-fold increase of the British E-business market by 2005,
the share of the financial services will further increase. Around one fifth of Finish and Swedish
bank customers are banking online, while in US, according to UNCTAD, online banking is

20
growing at an annual rate of 60 percent and the number of online accounts has approximately
reached 15 million by 2006.

In Asia, the major factor restricting growth of E-banking is security, in spite of several countries
being well connected via Internet. Access to high-quality E-banking products is an issue as well.
Majority of the banks in Asia are just offering basic services compared with those of developed
countries. Still, E-banking seems to have a future in Asia. It is considered that E-banking will
succeed if the basic features, especially bill payment, are handled well. Bill payment was the
most popular feature, cited by 40 percent of respondents of the survey. However, providing this
service would be difficult for banks in Asia because it requires a high level of security and
involves arranging transactions with a variety of players.

In 2001, over 50 percent of the banks in the US were offering E-banking services. However,
large banks appeared to have a clear advantage over small banks in the range of services they
offered. Some banks in US were targeting their Internet strategies towards business customers.
Apart from affecting the way customers received banking services; E-banking was expected to
influence the banking industry structure. The economics of E-banking was expected to favor
large banks because of economies of scale and scope, and the ability to advertise heavily.
Moreover, E-banking offered entry and expansion opportunities that small banks traditionally
lacked.

In Europe, the Internet is accelerating the reconfiguration of the banking industry into three
separate businesses: production, distribution and advice. This reconfiguration is beingfurther
driven by the Technology, due to the combined impactof:

The emergence of new and more focused businessmodels

New technological capabilities that reduces the banking relationship and transaction costs.

High degree of uncertainty over the impact that new entrants will have on current business
models. Though E-banking in Europe is still in the evolutionary stage, it is very clear that it is
having a significant impact on traditional banking activities. Unlike in the US, though large
banks in the Europe have a competitive edge due to their ability to invest heavily in new
technologies, they are still not ready to embrace E-banking. Hence, medium-sized banks and

21
start-ups have an important role to play on the E-banking front if they can take concrete
measures quickly and effectively.

1.4 ROLE OF RBI IN COMPUTERIZATION OF BANKS IN INDIA:

Computerization became popular in the western countries right from the Sixties. Main Frames
were extensively used both by the Public Institutions and Major Private Organizations. In the
Seventies Mini Computer became popular and Personal Computers in early Eighties, followed
by introduction of several software products in high level language and simultaneous
advancement in networking technology. This enabled the use of personal computers extensively
in offices & commercial organisations for processing different kinds of data.

However in India organized Trade Unions were against introduction of computers in Public
Offices. Computerization was restricted to major scientific research organizations and Technical
Institutes and defense organizations. Indian Railways first accepted computerization for
operational efficiency.

The Electronics Corporation of India Ltd. was set up in 1967 with the objective of research &
development in the fields of Electronic Communication, Control, instrumentation, automation
and Information Technology. CMC Ltd (Computer Maintenance Corporation of India Ltd.) was
established in 1976 to look after maintenance operations of Main Frame Computers installed in
several organizations in India, to serve the gap, when IBM left India, due to the directive of the
then Central Government.

In the Private Sector the first major venture was TCS (Tata Consultancy Services) which started
functioning from 1968. In the year 1980 a few batch-mates of IIT Delhi pioneered the effort to
start a major education centre in India to impart training in Information Technology and their
efforts resulted in the setting up of NIIT in 1981. Aptech Computer Education was established in
1986 following the experiment of NIIT. Before large scale computerization, computer education
became popular in India and coveted by bright students, when several Engineering Colleges and
Technical Institutes introducing Post Graduate Degree courses in Computer Engineering. The
booming hardware and software industry in the West attracted Indian students and many of them
migrated for better opportunities to the U.S.A. and settled there. We have today the paradox of
India being one of the major powers possessing diverse talents in fields of software development,
22
but at the same time, we are still a decade back to the using computerized service extensively in
the country and bringing the facility to the realms of the common man.

Rapid development of business and industry brought manual operations of data, a saturation
point. This acted as a overload on the growing banking operations. Government owned banks in
general found the “house-keeping” unmanageable. Several heads of accounts in particular inter-
bank clearing and inter-branch reconciliation of accounts went totally out of control.

Low productivity pushed cost of wages high and employees realized that unless they agreed for
computerization further improvement in their wage structure was not possible.

In the year 1993, the Employees’ Unions of Banks signed an agreement with Bank Managements
under the auspices of Indian Banks’ Association (IBA). This agreement was a major break
through in the introduction of computerized applications and development of communication
networks in Banks.

The first initiatives in the area of bank computerization, however, stemmed out of the landmark
report of the two committees headed by the former Governor of the Reserve Bank of India and
currently Governor of Andhra Pradesh, His Excellency, Dr.C.Rangarajan. Both the reports had
strongly recommended computerization of banking operations at various levels and suggested
appropriate architecture.

In the ‘seventies, there was a four-fold increase in the number of branches, five-fold increase in
advances and a six-fold increase in deposits’. Mechanization was seen as the best solution to the
“problems inherent in the manual system of operations, their adverse impact on customer
services and the grave dangers to banks in the context of increasing incidence of frauds. The
first of these Committees, viz. the Committee on the Mechanization of the Banking

The introduction of information technology in the commercial banking sector of

developing countries: voices from Sudan

Author(s):
Mohamed Osman Shereif Mahdi (Dhofar University, Salalah, Sultanate of Oman)

...Show all authors

23
Abstract:
Purpose
– This article sets out to draw on new empirical research to illustrate how the process
of technological change is shaped by a combination of contextual elements that relate
to the political and social history of Sudan. The developments in infrastructure,
relationships with economically powerful industrialized countries, and the attitudes
and perceptions of key decision makers arediscussed

Design/methodology/approach
– Primary data were collected from fieldwork conducted in Sudan for six months,
and this was combined with secondary data that were collected from several
conventional sources. The design adopted a dual methodological approach that
comprised a combination of quantitative and qualitative techniques. This article
draws mainly on the qualitative data set, although a summary is provided of some of
the main results from the questionnairesurvey.

Findings
– The findings highlight the need for bank general managers and IT managers to
collaborate in the establishment of IT strategies and in ensuring that there are
sufficient staff and budgetary resources for successful implementation.There is also a
need to develop comprehensive banking policies in Sudan in order to support the replacement
of traditional manual methods of banking with more advanced computer‐based systems.
Managing this process is not simply a technical issue, but a complex socio‐political challenge
that requires management sensitivity to the context within which change is taking place.

Research limitations/implications
– Fieldwork in Sudan was constrained by both time and limited financial resources,
and further frustrated by a number of unanticipated access difficulties. Some of the
survey findings may have been affected by missing data, and some of the interview
data may have been affected by translation from Arabic into English. However, the
multi‐strategy research employed in this study did prove effective in generating
usefuldata.
24
 Originality/value
– In the case of developing countries, the data sets and literature available are in
short supply, and as such the findings contribute to this limited knowledge base in
presenting new empirical evidence and analysis. The study highlights the importance
of three broad categories – social‐political context, business economic and
technological environment, and the historical and cultural climate of Sudan and the
banking industry – in shaping the uptake and introduction of new technology in the
Sudanese bankingindustry.

Keywords:
Communication technologies, Banking, Developing countries,
Changemanagement, Sudan

Type:
Research paper

Publisher:
Emerald Group Publishing Limited

Copyright:
© Emerald Group Publishing Limited 2007
Published by Emerald Group Publishing Limited

Citation:
Mohamed Osman Shereif Mahdi, Patrick Dawson, (2007) "The introduction of
information technology in the commercial banking sector of developing countries:
voices from Sudan", Information Technology & People, Vol. 20 Issue: 2, pp.184-
204, https://doi.org/10.1108/09593840710758077

1.5 AN INTRODUCTION TO BANKING AND BANKING SERVICES

A bank is a financial institution that provides banking and other financial services to their
customers. A bank is generally understood as an institution which provides fundamental banking
25
services such as accepting deposits and providing loans. There are also nonbanking institutions
that provide certain banking services without meeting the legal definition of a bank. Banks are a
subset of the financial services industry.
A banking system also referred as a system provided by the bank which offers cash
management services for customers, reporting the transactions of their accounts and portfolios,
throughout the day. The banking system in India should not only be hassle free but it should be
able to meet the new challenges posed by the technology and any other external and internal
factors. For the past three decades, India’s banking system has several outstanding achievements
to its credit. The Banks are the main participants of the financial system in India. The Banking
sector offers several facilities and opportunities to their customers.
All the banks safeguards the money and valuables and provide loans, credit, and
payment services, such as checking accounts, money orders, and cashier’s cheques.
The banks also offer investment and insurance products. As a variety of some of the
traditional distinctions between banks, insurance companies, and the securities firms
have diminished. In spite deposits and lending funds from these deposits. History of
banking in of these changes, banks continue to maintain and perform their primary role
is accepting India There are three different phases in history models for cooperation and
integration among finance industries have emerged, of banking in India.
Pre-Nationalization Era.
Nationalization Stage.
Post Liberalization Era.

Pre-Nationalization Era:

In India the business of banking and credit was practices even in very early times. The
remittance of money through Hundies, an indigenous credit instrument, was very popular. The
hundies were issued by bankers known as Shroffs, Sahukars, Shahus or Mahajans in different
parts of the country.The modern type of banking, however, was developed by the Agency
Houses of Calcutta and Bombay after the establishment of Rule by the East India Company in
18th and 19th centuries. During the early part of the 19th Century, ht volume of foreign trade
was relatively small. Later on as the trade expanded, the need for banks of the European type
was felt and the government of the East India Company took interest in having its own bank. The

26
government of Bengal took the initiative and the first presidency bank, the Bank of Calcutta
(Bank of Bengal) was established in 180. In 1840, the Bank of Bombay and IN 1843, the Bank
of Madras was also set up. These three banks also known as “Presidency Bank”.
The Presidency Banks had their branches in important trading centers but mostly lacked
in uniformity in their operational policies. In 1899, the Government proposed to amalgamate
these three banks in to one so that it could also function as a Central Bank, but the Presidency
Banks did not favour the idea. However, the conditions obtaining during world war period
(1914- 1918) emphasized the need for a unified banking institution, as a result of which the
Imperial Bank was set up in1921. The Imperial Bank of India acted like a Central bank and as a
banker for other banks. The RBI (Reserve Bank of India) was established in 1935 as the Central
Bank of the Country. In 1949, the Banking Regulation act was passed and the RBI was
nationalized and acquired extensive regulatory powers over the commercial banks. In 1950, the
Indian Banking system comprised of the RBI, the Imperial Bank of India, Cooperative banks,
Exchange banks and Indian Joint Stock banks.

Nationalization Stages:

After Independence, in 1951, the All India Rural Credit survey, committee of Direction with
Shri. A. D. Gorwala as Chairman recommended amalgamation of the Imperial Bank of India and
ten others banks into a newly established bank called the State Bank of India (SBI). The
Government of India accepted the recommendations of the committee and introduced the State
Bank of India bill in the Lok Sabha on 16thApril 1955 and it was passed by Parliament and got
the president’s assent on 8th May 1955. The Act came into force on 1st July 1955, and the
Imperial Bank of India was nationalized in 1955 as the State Bank of India. The main objective
of establishing SBI by nationalizing the Imperial Bank of India was “to extend banking facilities
on a large scale more particularly in the rural and semi-urban areas and to diverse other public
purposes.” In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight state-
associated banks were taken over by the SBI as its subsidiaries. Name of the Bank Subsidiary
with effect from
1. State Bank of Hyderabad 1st October1959
2. State Bank of Bikaner 1st January1960
3. State Bank of Jaipur 1st January1960

27
4. State Bank of Saurashtra 1st May1960
5. State Bank of Patiala 1st April1960
6. State Bank of Mysore 1st March1960
7. State Bank of Indore 1st January1968
8 . State Bank of Travancore 1st January 1960 39 With effect from 1st January 1963, the State
Bank of Bikaner and State Bank of Jaipur with head office located at Jaipur.

Thus, seven subsidiary banks State Bank of India formed the SBI Group. The SBI Group
under statutory obligations was required to open new offices in rural and semi-urban areas and
modern banking was taken to these unbanked remote areas. On 19th July 1969, then the Prime
Minister, Mrs. Indira Gandhi announced the nationalization of 14 major scheduled Commercial
Banks each having deposits worth Rs. 50 crore and above. This was a turning point in the history
of commercial banking in India. Later the Government Nationalized six more commercial
private sector banks with deposit liability of not less than Rs. 200 crores on 15th April 1980, viz.
Andhra Bank.
Corporation Bank. New Bank of India.
Oriental Bank of Commerce.
Punjab and Sind Bank.
Vijaya Bank. In 1969, the Lead Bank Scheme was introduced to extend banking
facilities to every corner of the country.
Later in 1975, Regional Rural Banks were set up to supplement the activities of the
commercial banks and to especially meet the credit needs of the weaker sections of the rural
society. Nationalization of banks paved way for retail banking and as a result there has been an
alt round growth in the branch network, the deposit mobilization, credit disposals and of course
employment. 40 The first year after nationalization witnessed the total growth in the agricultural
loans and the loans made to SSI by 87% and 48% respectively. The overall growth in the
deposits and the advances indicates the improvement that has taken place in the banking habits
of the people in the rural and semi-urban areas where the branch network has spread. Such credit
expansion enabled the banks to achieve the goals of nationalization, it was however, achieved at
the coast of profitability of the banks.

Post-Liberalization Era—Thrust on Quality and Profitability:

28
 By the beginning of 1990, the social banking goals set for the banking industry made
most of the public sector resulted in the presumption that there was no need to look at the
fundamental financial strength of this bank. Consequently they remained undercapitalized.
Revamping this structure of the banking industry was of extreme importance, as the health of the
financial sector in particular and the economy was a whole would be reflected by its
performance.
The need for restructuring the banking industry was felt greater with the initiation of the
real sector reform process in 1992. The reforms have enhanced the opportunities and challenges
for the real sector making them operate in a borderless global market place. However, toharness
the benefits of globalization, there should be an efficient financial sector to support the
structural reforms taking place in the real economy.
Hence, along with the reforms of the real sector, the banking sector reformation was also
addressed. The route causes for the lacklustre performance of banks, formed the elements of the
banking sector reforms. Some of the factors that led to the dismal performance of banks were.
Regulated interest rate structure.
Lack of focus on profitability.
Lack of transparency in the bank’s balance sheet.
Lack of competition.
Excessive regulation on organization structure and managerial resource.
Excessive support from government.

Against this background, the financial sector reforms were initiated to bring about a
paradigm shift in the banking industry, by addressing the factors for its dismal performance.
In this context, the recommendations made by a high level committee on financial sector,
chaired by M. Narasimham, laid the foundation for the banking sector reforms. These reforms
tried to enhance the viability and efficiency of the banking sector. The Narasimham Committee
suggested that there should be functional autonomy, flexibility in operations, dilution of banking
strangulations, reduction in reserve requirements and adequate financial infrastructure in termsof
supervision, audit and technology. The committee further advocated introduction of prudential
forms, transparency in operations and improvement in productivity, only aimed at liberalizing
the regulatory framework, but also to keep them in time with international standards. The
emphasis shifted to efficient and prudential banking linked to better customer care and customer

29
services.

Classification of Banking Industry in India:

Indian banking industry has been divided into two parts, organized and unorganized
sectors. The organized sector consists of Reserve Bank of India, Commercial Banks and Co-
operative Banks, and Specialized Financial Institutions (IDBI, ICICI, IFC etc). The 28
unorganized sector, which is not homogeneous, is largely made up of money lenders and
indigenous bankers

1.6 Indian Banking Structure

43 Need for Banks Before the establishment of banks, the financial activities were
handled by money lenders and individuals. At that time the interest rates were very high. Again
there were no security of public savings and no uniformity regarding loans. So as to overcome
such problems the organized banking sector was established, which was fully regulated by the
government. The organized banking sector works within the financial system to provide loans,
accept deposits and provide other services to their customers. The following functions of the
bank explain the need of the bank and its importance:

To provide the security to the savings of customers.

To control the supply of money and credit
To encourage public confidence in the working of the financial system, increase savings
speedily and efficiently.
To avoid focus of financial powers in the hands of a few individuals and institutions.
To set equal norms and conditions (i.e. rate of interest, period of lending etc) to all types
of customers.

Banking services:

Banking services are regarded as one of the important service. Banks provide financial
services to the customers. Due to the rising competition and liberalization the banking industry

30
has become the buyer’s market. Banks need to create and develop the services which can satisfy
the consumer needs. Customer satisfaction is a very important construct in today’s market and it
is directly influenced by service quality as per earliest studies. Therefore, the present research
work has been carried out to analyze the rural customers’ attitude towards public sector banks.
Banking in India is so convenient and hassle free that one (individual, groups or whatever the
case may be) can easily process transactions as and when required. The most common services
offered by banks in India are as follows.
Bank accounts: It is the most common service of the banking sector. An individual can
open a bank account which can be either savings, current or term deposits.
Loans: You can approach all banks for different kinds of loans. It can be a home loan,
car loan, personal loan, loan against shares and educational loans.
Money Transfer: Banks can transfer money from one corner of the globe to the other by
issuing demand drafts, money orders or cheques
Credit and debit cards: Most banks offer credit cards to their customers which can be
used to purchase products and services, or borrow money.
Lockers: Most banks have safe deposit lockers which can be used by the customers for
storing valuables, like important documents or jewellery.

Public sector banks :

The term public sector banks are used commonly in India. This refers to banks that have
their shares listed in the stock exchanges NSE and BSE and also the government of India holds
majority stake in these banks. They can also be termed as government owned banks. Ex: State
bank of India. The public sector banks hold over 75% of total assets of the banking industry,
with the private and foreign banks holding 18.2% and 6.5% respectively.

Recent trends in Indian banking sector:

Today, we are having a fairly well developed banking system with different classes of
banks – public sector banks, foreign banks, private sector banks – both old and new generation,
regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head
of the system.

31
 In the banking field, there has been an unprecedented growth and diversification of
banking industry has been so stupendous that it has no parallel in the annals of banking anywhere
in the world. During the last 41 years since 1969, tremendous changes have taken place in the
banking industry. The banks have shed their traditional functions and have been innovating,
improving and coming out with new types of the services to cater to the emerging needs of their
customers.
Massive branch expansion in the rural and underdeveloped areas, mobilisation of savings
and diversification of credit facilities to the either to neglected areas like small scale industrial
sector, agricultural and other preferred areas like export sector etc. have resulted in the widening
and deepening of the financial infrastructure and transferred the fundamental character of class
banking into mass banking.
There has been considerable innovation and diversification in the business of major
commercial banks. Some of them have engaged in the areas of consumer credit, credit cards,
merchant banking, leasing, mutual funds etc. A few banks have already set up subsidiaries for
merchant banking, leasing and mutual funds and many more are in the process of doing so. Some
banks have commenced factoring business.
The major challenges faced by banks today are as to how to cope with competitive forces
and strengthen their balance sheet. Today, banks are groaning with burden of NPA’s. It is rightly
felt that these contaminated debts, if not recovered, will eat into the very vitals of the banks.
Another major anxiety before the banking industry is the high transaction cost of carrying Non
Performing Assets in their books. The resolution of the NPA problem requires greater
accountability on the part of the corporate, greater disclosure in the case of defaults, an efficient
credit information sharing system and an appropriate legal framework pertaining to the banking
system so that court procedures can be streamlined and actual recoveries made within an
acceptable time frame. The banking industry cannot afford to sustain itself with such high levels
of NPA’s thus, “lend, but lent for a purpose and with a purpose ought to be the slogan for
salvation.”
The Indian banks are subject to tremendous pressures to perform as otherwise their very
survival would be at stake. Information technology (IT) plays an important role in the banking
sector as it would not only ensure smooth passage of interrelated 46 transactions over the electric
medium but will also facilitate complex financial product innovation and product development.
The application of IT and e-banking is becoming the order of the day with the banking system

32
heading towards virtual banking. As an extreme case of e-banking World Wide Banking (WWB)
on the pattern of World Wide Web (WWW) can be visualised. That means all banks would be
interlinked and individual bank identity, as far as the customer is concerned, does not exist.
There is no need to have large number of physical bank branches, extension counters. There is
no need of person-to-person physical interaction or dealings. Customers would be able to do all
their banking operations sitting in their offices or homes and operating through internet. This
would be the case of banking reaching the customers.

Why is Customer Service Important?

Changing customer expectations: Today the customer is more demanding and more
sophisticated than he or she was thirty years ago.
The increased importance of customer service: With changing customer expectations,
competitors are seeing customer service as a competitive weapon with which they differentiate
their products and services.
The need for a relationship strategy: To ensure that a customer service strategy that
will create a value preposition for customers should be formulated implemented and controlled.
It is necessary to give it a central role and not one that is subsumed in the various elements of the
marketing mix.
The customer is the kingpin in growth organizations like commercial banks. Only those
institutions which work according to his dictates will flourish. Quality, Consistency and
Durability at low price are the final expectations of a customer. Quality will have to be
unambiguous, of world class quality. Quality cannot be of minimum acceptable standards.
Customer responsiveness must be quick and also competent. Speed, performance and cost will
be the new values “mantra” for success.

The ten key areas of customer’s services to be attended timely and regularly are:

Submission of statement of A/Cs to customers Updating of savings pass books.

Teller system efficiency.
Cleanliness and Upkeep of premises.
Credit for institution cheques/land bills.

33
 Advance intimation to customers for rewards of Term Deposits Receipts on
maturity. Advance for Debit/credit to accounts.
Punctuality of staff. Handling of complaint register.
Maintain a complaint register.

Customer’s dissatisfaction in the banking industry is neither recent nor unknown. This is
mainly due to delays in handling transactions across the counter in collections, update of
passbooks supply of statements of accounts, etc.
Failure to provide prompt and efficient customer service is likely to lead to reduction in
the number of customers and they may have to face closure. To event such situation the
following improvements in the customer services may be carried out:

Personal relations of the bank employee with customers will improve customer
satisfaction. 1 service with smile should be the motto of every bank employee.
Rapid customer services should be provided through automation of work and
simplification of procedures.
ATM’s may be introduced in all the branches of the banks, based upon the volume of
transactions. This shall facilitate non-stop banking.
Credit Cards Services, Debit Card Services, which should be provided to the customers,
must a link service with all the banks and branches if possible to facilitate the customer and the
business organizations.
E-mail service made freely available at all banking centres.
Foreign Exchange transactions are to be extended to all the branches to facilitatetrade
andindustries.
All the customers are not homogenous in their needs. Hence need based schemes may
beintroduced.
Totally deregulated interest rate structure should be there.
The banking staff must be trained to understand the customer’s psychology, so they may
provide customer service in a qualified manner.
Educating the customers will increases better utilisation of banking services.

Customer service strategies in banking sector:

34
 Today, banking sector is seen as a catalyst in economic growth of a country and, lot is
expected from the banking fraternity. The recognition of banking, as a tool for all inclusive
growth by economists, financial planners, reformist etc has made it an important sector in the
Government’s planning of economic growth. The banking sector in India is therefore witnessing
tremendous changes because of political, social and economic changes that are taking place
domestically and internationally.
The concept of banking, which was earlier restricted to accepting of deposits from public
for the purpose of, has also undergone sea change. Today the banking sector is seen as a vehicle
for all inclusive economic growth, social responsibility and equivdistribution of national
resources.
Today banks are wooing existing customers, prospective customers by offering new
facilities, products, and services in order to retain/increase their base in market. The way the
banking has changed, so has the customer changed. The customer of today is not what he was
yesterday. Today the customer is more knowledgeable, demanding, analytical and aware of his
rights. It is therefore a challenging task before the banking sector to revisit their entire working
modules, up gradation of skills, technology, and policies so that they are competent to withstand
the international competitive environment in future.
All customers from different backgrounds have different expectations. Unless the service
standards fit to each person’s expectations, he will not be satisfied. Therefore one has to
understand each type of customer thoroughly to be able to provide customer specific services

Human resources:

Any organization’s success or failure is the result of success or failure of its employees
collectively. Here the employee doesn’t mean only the staff working down the ladder, but also
includes people right up to the top. All the functions in an organization are undertaken by
humans, whether it is selection of staff, development of product, making software, formulating

policies, devising systems, procedures, defining processes, delivery channels, undertaking

market studies etc. Humans may be assisted by the technology for arriving at the decisions. In all
the functions enumerated above, different departments do the work separately but the same are
ultimately linked to each other to achieve the corporate goal. It is just like gears though rotating
independently, move the entire structure in the desired direction. If any gear malfunctions, it
35
brings the entire process to halt. Thus the human beings working in an organization are very
important. Handling of humans by humans is a very complex jobalso.
The job requirements of HRD are to select, train, develop, deploy, and motivate the
human resources in the organization so as to get optimum results for the organization.

Products/services:

Banks do not provide physical goods to its customers. The products which a bank offers
are mostly financial products and along with these products also provide other services which are
not financial in nature, like safe deposit vaults, Locker facilities etc. In financial products there
are basically two types of activities, namely deposit procurement and its deployment profitably.
These two activities constitute more than 80% of banking business in all the banks. two types of
activities, namely deposit procurement and its deployment profitably. These two activities
constitute more than 80% of banking business in all the banks.

Deposits:

Basic structure of deposit is to attract the customer by offering interest on funds or some
facility in lieu of interest. However depending upon the needs of different set of customers
various types of deposit schemes are formulated. For example, savings bank accounts are for
those who want short term savings with liquidity and to make regular deposits and withdrawals
etc. Term deposits are for those who want to invest for longer duration having surplus funds not
needed immediately. Some may want savings to grow gradually by contributing smaller amounts
at set intervals. The ultimate goal of depositor is to keep his money safely in the bank and be able
to use when needed. Likewise there are various combinations of deposit schemes based on
liquidity, returns and safety.

Advances:

Banks, in a similar way deploy deposits by lending to those who need it at a cost in the
shape of interest. Here again the products differ depending upon the need of the customer. It may
be overdraft facility, working capital finance, term loan, etc for business or personal needs.

36
 products/ services:

Apart from deposit and advances, banks offer various other facilities/services to their
clients, like remittances, investment services, fund management, financial advisory services, tax
collections, bill payment services etc. to earn fee based incomes.

The flexibility of banks to adopt changing needs and expectation of customers and bring
out products/ services to suit customers is an important area in banking services. A robust
Research and Development department which can effectively and efficiently bring out newer
products/ services based on market feel and futurist visualization of customer preferences is an
important aspect in banking services.

Processes.

Today’s customer is short of time and feels uncomfortable when the process involved in
getting the product or service is lengthy and cumbersome. The customer wants very simple
processes to get his work done. The processes for any product or service should be at the
minimum and at one go. Frequent back references and repeated 51 information and excessive
documentation dissatisfy the customer. The processes devised for getting the services should be
very customer friendly, easy to understand and complete. The forms, applications, documents
should be simple, easy to understand with proper column and space to write. Sometimes it is
observed that the space provided for writing is very small. The quality of paper, the font size
and the language should be proper.

Delivery channels.

Customer satisfaction is also dependent upon the delivery channels used by banks in
providing the services. Today’s customer wants effortless, efficient, secure, simple and
dependable channels of delivery, whether it is through humans or technology driven channels.
To quote an example, suppose a customer uses internet banking and made a third party payment.
He would like to know what happened to his payment instructions. He should be able to trackthe
payment on line till it reaches the beneficiaries account. If this facility is not available, he may
37
not be comfortable with the internet banking. Another thing mostly observed in Public sector
banks is that their websites are not updated regularly and navigation is very tardy. The forms/
applications are scanned and cannot be filled on line. The information/ forms etc. are outdated
and not properlytagged.

Customer feedback and complaints.

Feedback from customers is of immense help in formulating products, fine tune services
and plug the loopholes. However most of the time, feed backs are generally not available and
public sector banks are normally not enthused about taking feedback on their services. Rather
wherever a customer gives his feedback (read complaint), it is not taken in right spirit by the
bank/ concerned staff. Instead of looking into the real cause an effort is made to provide alibis or
blame the staff. It may be possible that that the procedure itself is the cause of complaint or it is
because of reasons which are not under control of the branch.

Customers may be of three types. One type of customer never complains and continues
the relationship. Second type of customer does not complain but changes the 52 bank silently and
third type of customer complains. First and second type of customers does not give an
opportunity to bank to improve upon its services. Third type of customer however gives
opportunity to the bank to improve the service though he may not be preferred over the other two
types of customers.

Today no bank is willing to accept complaints from the customers and normally effort is
made to somehow get the complaint withdrawn or resolved without analyzing why the complaint
has originated. It becomes very difficult for field level staff to get the complaint redressed when
the cause or reason of complaint is not because of them. However they are made to beg the
customer to give satisfaction letter.

Each complaint when made may be because of so many factors, not necessarily the fault
of the person or branch against which it is made. It may be due to system lapse, procedural
deficiency, inapt technology, poor in-house work allocation, work flow module etc. Sometimes
the complaints are frivolous and made to harass the person concerned. Though in customer

38
oriented markets, customer is always right but care should be taken that the staff is also protected
from frivolous complainants. Each complaint of the customer should be properly analyzed,
assessed.

39
 Chapter 2

RESEARCH METHODOLOGY

40
INTRODUCTION TO STUDY

Banking and technology are two sides of a coin. They both coincide with each other.
Technologyis now mandatory in every field and its use in our day to day life is increasing E-
banking facilityis boon to both bank as well as their customers, for that reason we need to curb
the malpracticesin e-banking and help banks to overcome these risks.There is also a need to
make customers aware about such malpractices and help them toovercome these risks, also to
change their perception from traditional to modern bankingservices. The main problem
associated with e banking service is the security concerns faced
by both the banks and their customers. The security concerns like TROJAN, MALWARE,PHISI
NG, HACKING, etc, lead to hindrances in development of e-banking services

2.1 PROBLEM STATEMENT

The main problem associated with e banking services are thesecurity concerns faced by boththe
banks and their customers. The security concerns like TROJAN, MALWARE, andPHISING,
HACKING, etc, lead to hindrances in development of e-banking services.
The problem also concerns about checking the satisfaction level of E-BANKING
CUSTOMERSAT KOTAK BANK.

2.2 OBSERVATIONS:

1. Branchless banking can dramatically reduce the cost of delivering financial

services to poor people.

2. Branchless banking channels are used mainly for payments, not for savings credit.

3. Few poor and unbanked people have begun using branchless banking for financial services.

4. Financial services providers view agent networks as key to achieving their business strategy.

41
5. Most mobile banking projects to extend market reach have been led by mobile operators.

2.3 PREDICTIONS

1. Poor people will use mobile banking more than rich people.

2. Providers will manage the operational risks of using Agents, and

customers will tolerateliquidity shortfalls.

3. Shared agent networks will be the key to massively expanding access

tofinance through branchlessbanking.

4. Mobile banking will be used by large numbers of poor, currently unnerved

people in aboutthree years, as a result of competitive marketentry.

Basel committee on banking supervision, (may2001), has carried out a researchon “risk management
principles for electronicbanking, “electronicbanking groupinitiativesand white papers”.Banking
organizations have been delivering electronic services to consumer‟s and Business foryears.
Electronic funds transfer, including small payments and corporate cash managementsystems, as well
as publicly accessible automated machines for currencywithdrawal and retailaccount management,
are global fixtures. This study explains a clear need for more work in thearea of e-banking risk
management and that mission was entrusted to a working group comprisedof bank supervisors and
central banks, the Electronic Banking Group (EBG), which was formedin November1999.

2.4 Principles of ebanking:

1. Effective management oversight of e-bankingactivities.

2. Establishment of a comprehensive security controlprocess.
3. Comprehensive due diligence and management oversight process for
outsourcing relationshipsand other third-partydependencies.
4. Authentication of e-bankingcustomers.
5. Non-repudiation and accountability for e-bankingtransactions
6. Appropriate measures to ensure segregation ofduties.
42
7. Proper authorization controls within e-banking systems, databases andapplications.
8. Data integrity of e-banking transactions, records, andinformation.
9. Establishment of clear audit trails for e-bankingtransactions.
10. Confidentiality of key bankinformation.
11. Appropriate disclosures for e-bankingservices.
12. Privacy of customerinformation.
13. Capacity, business continuity and contingency planning to ensure availability of e
bankingsystems andservices.
14. Incident responseplanning.

2.5 OBJECTIVE OF THE STUDY

To study and to make e-banking users aware various e- banking risks like
Phishing,identity theft, frauds of plastic money, Trojan, malware etc.

To study the reasons for the limited use of e-banking services

To create Awareness among customers towards e-banking services.

43
 Chapter 3

REVIEW OF LITERATURE

44
INTRODUCTION

The purpose of this chapter is to briefly review selected streams of major academic
research relevant to technology in banking, performance evaluation and various tools
available for analysis. An attempt is made to review the earlier studies carried out
abroad and India. This literature review presents, the Banking technology definition
and its characteristics in section one. Developments of banking Technology in Indian
banking industry and its significance is dealt in section two of literature review .
Different types of technological impact are studied from the literature and presented in
the third section. Profit and cost efficiency literature are presented in the last section.

3.1 BANKING TECHNOLOGY

Vadlamani Ravi (2007) defines the term “banking technology” 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.

Reserve Bank of India (2004): The three categories of IT investment – hardware, software
and IT services - comprise the following investments on:

1. Computer Hardware (HA): which includes spending on commercial systems (including

central processing unit and basic peripherals, such as data storage devices,
terminals,memory, and peripherals), single-user systems (workstations and personal
computers), data communications (local area network hardware, wide area network
hardware, analog modems, digitalaccess);

2. Software (SO): which includes spending on packaged software, application

solutions software, application tools, systems infrastructure software;

3. Services (SE): spending on consulting services, implementation services, operational

services, training and education, support services. 2 Sivakumaran (2005), believes that
adoption of technology has led to the following benefits: greater productivity, profitability, and
efficiency; faster service and customer satisfaction; convenience and flexibility; 24x7
45
operations; andspace and cost savings.3 Berger (2003), the usage of information technology (IT)xx
broadly referring to computers and peripheral equipment, has seen tremendous growth in service
industries in the recent past. The most obvious example is perhaps the banking industry, where through
the introduction of IT related products in internet banking, electronic payments, security investments,
information exchanges, banks now can provide more diverse services to customers with less manpower.

4 Willcocks (1994), Information systems/information technology investment may be described

as any acquisition of software or hardware which is expected to expand or increase the business
benefits of an organization’s information systems and render long-term benefits5 .

3.2 BANKING TECHNOLOGY IN INDIAN BANKING

The Indian banking sector consists of the Reserve Bank of India (RBI), which is the central bank,
commercial banks and co-operative banks. Commercial banks are of two types – scheduled,
which are subject to statutory requirements and non-scheduled, which are not. Scheduled banks
can be further classified into public sector banks [comprising of the State bank of India, its seven
associates, other nationalised banks and the Regional Rural Banks (RRBs)] and private sector
banks, which can be either domestic or foreign. The Indian Banking Industry hasundergone
tremendous growth since nationalization of 14 banks in the year 1969. There has an almost eight
times increase in the bank branches from about 8000 during 1969 to more than 60,000 belonging
to 289 commercial banks, of which 66 banks are in private sector.

It was the result of two successive Committees on Computerization (Rangarajan

Committee) that set the tone for computerization in India. While the first committee drew the
blue print in 1983-84 for the mechanization and computerization in banking industry, the second
committee set up in 1989 paved the way for integrated use of telecommunications and computers
for applying technogical breakthroughs in banking sector.

Narasimham Committee (1991): The banking industry has introduced various new
customer services and products using IT. The banking industry has gone through many changes
as a result of the introduction of IT. In fact, the structure of the industry is continuously changing
because of rapid development of IT . Banks are the backbone of the economy of the country.
Implementation of information technology and communication networking has brought revolution in the
functioning of the banks and the financial institutions. The status of automation in the banks in India is not
uniform. There are banks functioning for decades, having a sizable number of branch networks in the rural and
semi-urban centers. Compared to this, there are banks which are generally regional in character and not having
a large number of branches in the country. In the recent past a few private sector banks have been established

46
with the latest technology. Foreign banks located at major commercial centers of the country also transact their
business in a computerized environment. The level and extent of automation in the banks are generally vary
because of their history, work culture and policies/strategies adopted by their management in branch expansion
and investment in technology.

Rangarajan Committee (1989) :

IT came into picture as early as in the 1980’s in Banking Technology through the
Rangarajan committee recommendations. It involves many phases.

First phase : Accounting process and back office functions

Second phase : Automate the front office as well as the back office function

Third phase : Networking concept and centralized operation

Fourth phase : ATM and mobile banking and internet banking Fifth phase : “inter-bank”
connectivity .7

Bernardo Bátiz-

Lazo and Douglas Wood (2001) argued that outstanding IT-based innovations are
considered and grouped into four distinct periods: early adoption (1864-1945),specific
application (1945-1965), emergence (1965-1980) and diffusion (1980-1995) and two dimensions
of technological progress in retail banking. These dimensions describe the nature of change
brought about by technological innovation externally (product or service offerings) and
internally (operational function) to bankingorganizations.

Jarunee Wonglimpiyarat (2006) is concerned with the technological learning and

capabilities of Thai banking. The results show that the use of technology in the mass automation
regime is carried through to the smart automation regime, showing that the technological
change in the banking sector is not revolutionary but evolutionary.

Costas Lapavitsas And Paulo L. Dos Santos (2008), argued technological innovation has
contributed to recent changes in the conduct and character of banking, but its impact has been
contradictory. First, money-dealing transactions have become cheaper, but investment costs have
increased and a broader range of services had to be provided. The cost efficiency of banks has
not improved.

47
 According to the World Bank (2003) report on ICT and the Millennium Development
Goals, information technology reduces transaction costs per customer and enables banksto
provide small loans and services to a larger number of ruralcustomers.

3.2.1 Effectiveness of Information Disclosure:

In India not many studies have been conducted on internet disclosure levels. There are
numerous papers that sought to study the process of internet disclosure internationally. These
studies investigated the nature and extent of disclosure on corporate websites.
According to Cucuzza and Cherian (2001) E-Business tools are providing new ways to
communicate vast quantities of information, in an environment where information flows
continuously and without hindrance. Another difference is the release of company information
on third party websites, where no financial reporting may be present on a company’s primary
website. It is an attempt to examine the effectiveness of information disclosure of Indian public
sector banks on their websites.
Pirchegger and wagenhofer (1999) compared the disclosure scores of the Austrian
companies with German companies and found that Austrian larger companies disclosed more.13
Marshon (2003) found that internet reporting was well established among leading Japanese
companies.14 Balwinder Singh and Pooja Malhota (2004) identified banks were not making full
utilization of internet to disclose information to stakeholders.15 Accounting organizations and
standard setters are also paying attention to the rapid growth of dissemination of accounting
formation on the internet. The International Accounting Standards Committee (IASC)
commissioned a discussion paper for business reporting on the internet . This IASC report
provided a survey of web-based financial reporting practices of the 660 public corporations in
22 countries. The study concluded that a significant number of companies in many countries use
the web for communication of business performance to stakeholders.16 Petrarick and Gillett
(1996) reported that 69% of fortune 150 companies in the USA had websites with 81% of them
disclosing some financial information.
Grove (1997) coined the term ‘inflection point’ which he defined as “a change in
business environment that has the potential to alter the way a company operates”. According to
King (2001) the Internet is an inflection point that has an impact that has not yet been fully
determined. He also pointed out that the most important effects on cost management practices
have been in the areas of information communication and transaction processing. This would
48
imply that companies which are using the internet for accounting and financial information
presentation may see additional benefits over additional costs by providing financial reports on a
website.

3.2.2 Quantitative Evaluation of Banks’ Web Sites

A review of the recent literature on web site assessment reveals some attempts to measure
web site quality (Selz and Schubert, 1997; Liu, et al, 1997; Ho, 1997, Evans and King, 1999;
Palmer, 2002). In spite of the fact that some researchers have attempted to find out the various
methods for evaluating business web sites (Boyd, 2002; Merwe and Bekker, 2003), there exists
subjectivity and need for theoretical justification in the selection of evaluation factors/criteria.
Most of the previous approaches have focused either on basis content management or a specific
set of website outcomes.
The web site Quality Evaluation Method (QEM) proposed by Olsina et al. (1999)20 can
be considered as one of the main approaches and this study analysed the main factors such as
functionality (global search, navigability and content relevancy), usability (site map, address
directory), efficiency and site reliability. However, the application of more number of factors
raised problems while computing. Thus, better evaluation can be done by using only a few but
highly relevant factors/attributes/criteria.

Murray (1997) found that merely counting hits on a web page is not an accurate
measurement of quality or success of a website.The presence and advantages of more links to the
website was highlighted by Miranda et al (2004). Some studies have revealed that there is
significant correlation between website download speed and web user satisfaction (Muylle et al,
1998; Hoffman and Novak, 1996). Few studies have identified the factors used to quantify the
content quality of the websites (Young and Benamati, 2000; Buenadicha et al., 2001; Miranda
and Banegil, 2004).
Charumathi and Surulivel (2008) developed a Bank Disclosure Attribute Index (BADI)
and used the same to examine the effectiveness of information disclosure of Indian public sector
banks on their website. The information disclosure attributes were categorized into four
categories, viz., general attribute, financial attribute, investor attribute and corporate governance
attribute.23 Trying to avoid the main weaknesses of previous models, Buenadicha et al. (2001)
developed a new Website Assessment Index (WAI) that can be employed to compare the current

49
use of the internet by different organizations. This index had four categories of factors such as
accessibility, navigability, speed and content quality.
Charumathi and surulivel (2009), evaluate the websites of public sector banks by using WAI and found that the

3.2.3 Impact of Information technology on the performance of the bank:

Cron and Sobol (1983) examined the relationship between computerization and several
measures of overall firm performance based on a sample of 138 medical wholesalers. Using
correlation analysis, the results showed that computerization was related to overall performance.
Non-users tended to be small firms with about average overall performance. On the other hand,
firms owning computers and making extensive use of them in a variety of ways tended to be
either very high or low performers.
Bender (1986) surveyed 132 life insurance companies in 1983 to investigate the financial
impact of IT on firms in this industry. Organizational performance was measured in terms of the
ratio of total operating expense to total premium income. The IT impact was represented by the
ratio of information-processing expense to total general expense (IPE/EXP ratio). The results
revealed that an appropriate level of investment in IT could have a positive impact on total
expense. A range in the IPE/EXP ratio of 15% to 25% seemed to produce optimum results in the
life insurance industry. Contrarily, a company that had an IPE/EXP ratio of less than 15% was
mostly likely not sufficiently automated to combat the escalation costs of doing business.
Alpar and Kim (1990) utilized 424-759 U. S. banks during 1979-1986 to analyze the
impact of IT on economic performance. Applying cost function approach they found that IT was
able to reduce operating costs, increase capital expenditures of banks, save personnel costs,
reduce demand deposits, and increase time deposits.
Strassman (1990) investigated the relationship between IT and return on investment in a
sample of 38 service sector firms using correlation analysis. He found that some top performers
invested heavily in IT, while some did not. He concluded that there was no correlation between
spending for computers, profits and productivity.
Weill (1992) studied 33 medium and small-scaled valve manufacturing companies to
explore the relationship between the IT investments and organizational performance using
hierarchical regression. Although transactional IT investment was found to be strongly related to
superior organizational performance, there was no evidence that strategic IT investment, on a

50
long-term basis, would increase or decrease organizational performance. However, the results
implied that strategic IT investment was beneficial to relatively poor performing firms in the
short run.
Mahmood and Mann (1993) utilized canonical correlation analysis to explore the
organizational impact of IT investment of 100 U. S. listed companies. The results indicated that
economic performance measures such as sales by employee, return on sales, sales by total assets,
return on investment, and market to book value were affected by IT investment measures such as
IT budget as percentage of revenue, percentage of IT budget spent on training of employees,
number of PCs per employee, and IT value as a percentage of revenue. The organizational
performance measure growth in revenue and IT investment measure percentage of IT budget
spent on staff were not significantly related to other measures and therefore were not indicated to
be useful for investigating possible effects of IT investment on organizational economic
performance.
Loveman (1994) utilized OLS regression to assess the productivity impact of IT based
on a sample of 60 manufacturing firms during 1978-1984. The results showed that during the
five-year period, the contribution of IT investment to the output of manufacturing firms was
nearly zero. There existed no sufficient evidence to support the benefit of IT from productivity
enhancement.
Berndt and Morrison (1995) explored relationships between industry performance
measures and investments in high-tech office and IT capital for two-digit manufacturing
industries during 1968-1986. They found limited evidence of a positive relationship between
profitability and the share of hightech capital in the total physical capital stock (OF/K). Theyalso
found that increases in OF/K were negatively correlated with multi-factor productivity and
tended to be labor-using. Furthermore, they found some evidence that industries with a higher
proportion of high-tech capital had higher measures of economic performance, although within
industries increasing OF/K did not appear to improve economicperformance.
Kivijarvi and Saarinen (1995) used a sample of 36 Finnish firms to probe the
relationship between IT investments and of firm financial performance. Utilizing regression
analysis, the results demonstrated that IT investments had no direct relationship with financial
performance. However, IT investments were able to improve firm performance in the long term.
Brynjolfsson and Hitt (1996) used 367 large firms during 1987-1991 as a sample to
study the benefits of information systems (IS) spending. The results indicated that IS spending

51
had made a substantial and statistically significant contribution to firm output. It was also found
that the gross marginal product (MP) for computer capital was at least as large as the MP of other
types of capital investment and that IS labor spending generated at least as much output as
spending on non-IS labor and expenses.
Hitt and Brynjolfsson (1996) applied OLS regression and iterated seemingly unrelated
regression (ITSUR) to explore the business value of IT based on a sample of 370 large firms.
The findings indicated that IT had increased productivity and created substantial value for
consumers. However, they did not find evidence that these benefits had resulted in supranormal
business profitability.
Mitra and Chaya (1996) used a sample of over 400 large and mediumsized U.S.
corporations to analyze the performance impact of IT investment. They found that higher IT
investments were associated with lower average production costs, lower average total costs, and
higher average overhead costs. They also found that larger companies spent more on IT as a
percentage of their revenues than smaller companies. However, they did not find any evidence
that IT reduced labor costs in organizations.

Byrd and Marshall (1997) investigated the relationship between IT investment and
organizational performance using a sample of 350 public companies during 1989-1991.
Applying correlation analysis, they found that the number of PCs and terminals as a percentage
of employees was significantly and positively related to sales by employee. The value of
supercomputers, mainframes, and minicomputers as well as the percentage of IT budget spent on
IT staff were significantly and negatively associated with the sales by employee. The IT budget
as a percentage of revenue was significantly and negatively associated with sales by total assets.
The percentage of IT budget spent on IT staff training was not related to any performance
variable.
Devaraj and Kohli (2000) examined monthly data collected from 8 hospitals over a
recent three-year time period to study the relationship between IT and performance. Applying
correlation analysis, the results support for the relationship between IT and performance that is
observed after certain time lags. Such a relationship may not be evident in cross-sectional data
analyses. Also, results indicated support for the impact of technology contingent on business
process reengineering practiced by hospitals.
Sircar, Turnbow and Bordoloi (2000) explored the relationship between firm
performance and IT investments based on a sample of 624 firms. They used canonical

52
correlation analyses as a research method and found that IT investments had a strong positive
relationship with sales, assets, and equity, but not with net income. Spending on IS staff andstaff
training was positively correlated with firm performance, even more so than computercapital.
Osei-Bryson and Ko (2004) employed the same data set used by Brynjolfsson and Hitt
(1996) to explore the relationship between IT investments and firm performance using regression
analysis. The results exhibited that depending on the conditions that applied, an unbiased
observer could either conclude that investments in IT had a positive statistically significant effect
on productivity, or that there was a ‘productivity’ paradox. This suggested that the relationship
between IT investments and organizational performance is much more complex than that found
in some other studies.
Ham, Kim and Joeng (2005) examined the effect of IT applications on performance
based on a sample consisted of 13 five-star hotels and 8 four-star hotels in Korea. Using
hypothesis test, the results supported the relationship between IT usage and the performance of
lodging operations. Furthermore, they found that front-office applications, restaurant and
banquet management systems, and guest-related interface applications significantlyand
positively affected performance of lodging operations; however, guest related interface
applications were notsignificant.
Andersen and Foss (2005) investigated the role and effects of information and
communication technology in multinational enterprises. They suggested that the attendant cost–
benefit tradeoff could be influenced by computer-mediated communication. Based on a sample
of 88 organizations in the computer products industries, they found that multinationality in itself
did not guarantee a higher level of strategic opportunity. Instead, use of information technology
to facilitate communication among managers across functional and geographical boundaries
enhanced coordination of multinational activities in the development of strategic opportunity,
which in turn was associated with superior performance.
Elena Beccalli (2003) studied the influence of IT (in terms of hardware, software and IT
services) on the performance of banks and found that there is an insignificant positive correlation
and the existence of a productivity paradox.
Sangjoon jun (2006) explored the nexus between the information technology (IT)
investment of Korean banks using panel data and found that large banks comparatively improve
their returns.
Alpar and Kim (1990) concluded that key ratios could be particularly misleading after

53
studying key ratios and cost function.
Brynjolfsson and Hitt (1996) caution that these findings do not account for the
economic theory of equilibrium which implies that increased IT spending does not imply
increased profitability.
Dober (1994) identified organizations are becoming increasingly competitive in seeking
to implement the effective use of IT.
Baba Prasad, Patrick T. Harkery (1997) examines the effect of IT investment on both
productivity and profitability in the retail banking sector in the United States. This paper
concludes that additional investment in IT capital may have no real benefits and may be more of
a strategic necessity to stay a firm’s management processes and IT strategy links, which could
vary significantly across organizations.
Lee and Menon (2000) used DEA and Cobb-Douglas cost function approach to analyze
the financial data on the hospitals during 1976-1994. They found that hospitals that were
characterized by high technical efficiency also used a greater amount of IT capital than firms
that exhibited low technical efficiency and that a group of hospitals exhibiting high technical
efficiency also exhibited low allocative efficiency, indicating that, while processes might have
been efficient, resource allocation and budgeting between various categories of capital and labor
had not been efficient. Moreover, they found that IT even with the competition.
Strassmann (1990) reports disappointing evidence in several studies. In particular, he
found that there was no correlation between IT and return on investment in a sample of 38
service sector firms. He concludes that "there is no relation between spending for computers,
profits and productivity".

3.3 Impact of Technology in the Cost and profit Efficiency of Banking.

Rai et al. (1997) employed Cobb-Douglas cost function approach to probe the
relationship between IT investment and business performance based on a sample of 497 firms
during 1994. The results suggested that IT investments could make a positive contribution to
firm output and labor productivity. However, various measures of IT investment did not appear
to have a positive relationship with administrative productivity. Furthermore, IT was likely to
improve organizational efficiency, its effect on administrative productivity and business
performance might depend on such othe quality of labor had a negative contribution to

54
productivity and that non-IT capital had a greater contribution to productivity than IT capital.
Shao and Lin (2001) investigated the relationship between IT investments and technical
efficiency of 370 large U.S. firms during 1988-1992. Using both Cobb-Douglas and Translog
cost functions and hypothesis test, the results indicated that IT had a significantly positive effect
on technical efficiency and, hence, contributed to the productivity growth in organizations.68
Simon H. Kwan (2004) investigated the cost efficiency of commercial banks in Hong Kong
using the stochastic frontier approach and he found that the average X-efficiency of Hong Kong
banks was about 16 to 30 percent of observed total costs.
Namchul Shin (2006) identified the importance of business value of IT in relation to
strategic firm performance to reduce the cost of coordinating business resources across multiple
markets.

William C. Hunter, Stephen G. Timme (1991), after examining technological change,

its relationship to firm size, and its impact on the efficient scale of output and product mix for
large U.S. commercia1 banks, suggested that technological change can lower the real costs by
about 1% per year.
Costas Lapavitsas and Paulo L. Dos Santos (2008), argued money-dealing
transactions have become cheaper, but investment costs have increased. According to the World
Bank (2003) report on ICT and the Millennium Development Goals, IT reduces transactioncosts
per customer and enables banks to provide small loans and services to a larger number of rural
customers.72
Shirley J. Ho and Sushanta K. Mallick(2008) believed that IT can improve bank’s
performance in two ways viz., IT can reduce operational cost (cost effect), and facilitate
transactions among customers within the same network (network effect).
Baker and Berenblum (1996), identified investment in IT is one of the major factors
determining the success or failure of organizations.75 Morrison and Berndt (1990) concluded
that additional IT investments contributed negatively to productivity, arguing that “estimated
marginal benefits of investment in IT are less than the estimated marginal costs”.
Kaparakis, Miller and Noulas (1994) examined the cost efficiency of 5,548 American
banks with assets of over $50 million. In their study negative correlation was found between
efficiency and the bank’s size. They also found a positive and significant correlation between X-
efficiency and the ratio of capital to total assets, i.e., better-capitalized banks tend to be more
efficient. Finally, a negative correlation was found between cost efficiency and the bank’s credit

55
risk, which is measured by the ratio of lost debts to total credit.
The stochastic frontier or composed error framework was first introduced in Meeusen
and vanden Broeck (1977) and Aigner, Lovell and Schmidt (1977) and has been used in many
empirical applications. In particular, stochastic frontier models have been applied in studies of
production and cost efficiency in the banking sector. All these empirical studies used the
sampling theory (classical) methods of inference.
Simon H. Kwan (2004) investigate the cost efficiency of commercial banks in Hong
Kong using the stochastic frontier approach and he found that the average X-efficiency of Hong
Kong banks was about 16 to 30 percent of observed total costs. Cost efficiency was found to
decline over time, indicating that Hong Kong banks were operating closer to the cost frontier
than before, consistent with technological innovations in the banking industry.
Jeffrey A. Clark; Thomas F. Siems (2007) investigate the importance of including
aggregate measures of off-balance-sheet (OBS) activities. The results indicate cost X-efficiency
estimates increase with the inclusion of the OBS measure. Profit X-efficiency estimates are
largely unaffected. Further, the composition of banks' OBS activities appears to help explain
inter bank differences in cost and profit X-efficiency estimates.
Altinkemer, Kemal, Ozdemir, Zafer (2006) investigate whether the reengineering
efforts of companies to leverage potential benefits of using Information Technology (IT) in their
business processes improve their productivity and overall firm performance. He employ standard
variables for measuring firm productivity and performance, including labour productivity, return
on assets, return on equity, inventory turnover, profit margin, asset utilization, and Tobin’s q. He
show that (i) firms’ performances remain unaffected during the implementation period of the
reengineering projects, and (ii) on average, returns to reengineering seem to accrue two to three
years after the end of implementation period.
Claudia Girardone, Philip Molyneux And Edward P. M. Gardenerx (2004), study
Italian banks’ cost efficiency by employing a Fourier-flexible stochastic cost frontier in order to
measure X-efficiencies and economies of scale. The results show that mean X-inefficiencies
range between 13 and 15 per cent of total costs and they tend to decrease over time for all bank
sizes. Economies of scale appear present and significant.
Laurent Weill (2009) provide new evidence about the consistency of efficiency frontier
methods on European banking samples.He measure the cost efficiency of banks from five
European countries (France, Germany, Italy, Spain, Switzerland) with three approaches:

56
stochastic frontier approach, distribution-free approach, data envelopment analysis. conclude
there are some similarities in particularly between parametric approaches. Several techniques
have been suggested in the literature to measure banking efficiency, based either on econometric
techniques (stochastic frontier approach (SFA), distribution-free approach (DFA), thick frontier
approach (TFA)) or linear programming tools (data envelopment analysis (DEA), free disposal
hull (FDH)). He concluded that parametric techniques provide consistent results according to
efficiency means and rankings. For the definition of inputs and outputs, we adopt the
intermediation approach proposed by Sealey and Lindley (1977) which assumes that the bank
collects deposits to transform them, using labor and capital, in loans by opposition to the
production approach which views thebank as using labor and capital to produce deposits
andloans.
Two outputs are included: Y1 = loans, Y2 = investment assets. The inputs, whose prices
are used to estimate the cost frontier, include labor, physical capital and borrowed funds.
Altunbas et al. (2000) As data on the number of employees are not available, the price
of labor, w1, is measured by the ratio of personnel expenses on total assets, following The price
of physical capital, w2, is defined as the ratio of other non-interest expenses on fixed assets. The
price of borrowed funds, w3, is measured by the ratio of paid interests on all funding. Total costs
are the sum of personnel expenses, other non-interest expenses and paid interests.

Name

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Akshay Mukund jadhav

Vaibhav sharad)adha •

Suraj padwaI

Rajes h Taisdale

Sanketaunil parade

Saurabh

57
vishal mahadik

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Svapnil

sex

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58
Dccupatfon
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Student
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60
Status of usages

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61
Which attribute of the bank do you value the most?

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T.°chnolcoy .°assy

62
63
 Chapter 4

Data ANALYSIS, Interpretation and Presentation

In this section, you will assume the role of an Educational Venture Analyst to:

1. Learn about the SWOTanalysis;

2. Make use of the SWOT analysis to audit a venture of your choice in personalizedlearning,
3. Discuss your thoughts on whether or not it would be viable for your school, district, business
or yourself to invest in the select personalized learning venture,and
4. Contribute to your peers’ posts.

What is a SWOT analysis?

The SWOT analysis is useful in identifying issues that would allow the company performing the
analysis to plan for its future objectives and goals.

According to MarketingTeacher.com(n.d.):
SWOT analysis is a tool for auditing an organization and its environment. SWOT analysis is the
first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths,
weaknesses, opportunities, and threats.
According to Wikipedia(2012) on SWOT Analysis:
 Strengths: characteristics of the business, or project team that give it an
advantageover others
 Weaknesses (or Limitations): are characteristics that place the team at a disadvantage
relative toothers

64
  Opportunities: external chances to improve performance (e.g. make greater profits) in
theenvironment
 Threats: external elements in the environment that could cause trouble for the business
orproject
Example: SWOT Analysis – Knewton
Strengths:

 Knewton’s technology can be integrated into any third-party learningsolutions.

 The technology builds on data gathered across all of itsnetworks.
 Knewton provides clients with service, content, and infrastructure to
facilitateadaptive learning.
Weaknesses:

 The required technology (i.e., Internet) to access Knewton’s Adaptive

LearningPlatform may not be available in allareas.
Opportunities:

 The partnership with Pearson Education and Wiley opens doors to the
globalmarketplace. Threats:

 There is competition with companies that make use of usage data to

recommendlearning content.
 There is competition with in-serviceteachers.
Hereis another example of using the SWOT analysis to examine a venture which offers
personalized learning products.

Activities:

Activity Six: SWOT Analysis – Please choose a venture specialized in personalized learning and
conduct a SWOT analysis from the perspective of an EVA. The venture can be selected from one
of the examples provided elsewhere on this blog or one that you know about and would like to
share with the class.

Activity Seven: Discussion – As an EVA, please discuss your thoughts on whether or not it
65
would be viable for your school, district, business or yourself to invest in the venture selected for
the SWOT analysis and explain why.

DATA ANALYSIS & INTERPRETATION

Data Analysis and presentation of the data in quantitative research is usually more
unsophisticated based on the fact that statistical measurements are being used. Tables and
charts are used for the presentation of the data and the report can be structured around these
exhibits. While in qualitative research, it seems to be more difficult. When analyzing qualitative
information, the researcher engages in an in-depth investigation and subjectively interprets the
data, in order to explain much of the variation in the field of study.

In this study researcher has selected two banks i.e. SBI from public sector and HDFC from
private sector bank of Rajkot district of Gujarat State. In order to examine the views of
customers regarding Online Banking Services provided by the banks, two types of structured
questionnaire were designed for collection of the primary data. The questionnaire was prepared
for

I) The bank‟s customers; who are Users of Online Banking Services,

II) The bank‟s customers; who are Non – Users of online banking services. Data has been
collected from customers who were users and non – users of electronic banking. Thus in
accordance with the study the data collected was interpreted and analyzed which include: to
establish the relationship between technology and service quality in banking industry and to
determine the factors that lead to customer preference of different electronic banking channels.

I) Questionnaire for Users of Online Banking Services

The present study seeks to identify the extent of preferences of E-Banking over
traditional banking among service class. The research design is exploratory in nature. The
research has been conducted on various class people. For the selection of the sample,
convenient sampling method was
adopted and an attempt has been made to include all the age groups and gender within the
various classes. Questionnaire was used to collect primary data from respondents.
The questionnaire was structured type and contained questions relating to different
66
dimensions of E-banking preferences among service class such as level of usage, factors
influencing the usage of E - banking services, benefits accruing to the users of E-banking
services, problems encountered. An attempt was also made to elicit reasons for its non-usage
with a structured questionnaire. The sample size for Users of Online Banking Services is
restricted to 300 respondents. Out of them 135 customers of SBI and 165 customers of HDFC
Bank are randomly selected.

II) Questionnaire for Non - Users of Online Banking Services

In fact, effective use of online banking services is essential in today‟s advanced era to
save time and money. To study the adoption aspect of Online Banking Services, it was decided
to collect information and views from the Non-Users of Online Banking Services. While for Non
– Users the sample size is restricted to 50. These customers were met personally to get
acquainted with their view-points related to need, uses, internet connectivity, security of Online
Banking Services, their general 82 | P a g e impression & training status regarding Online
Banking Services and their suggestions regarding any technological advancement in Online
Banking Services etc. This enabled the researcher to get the mixed perceptions of the two
groups in the usage of various electronicchannels.

(I) Analysis of Questionnaire for Users of Online Banking Services In this study
researcher has selected 300 respondents. Out of them 135 customers of SBI and 165
customers of HDFC Bank who are actively using OnlineServices.

Data Analytics in Banking

 Posted byDeena Zaidion October 7, 2017 at6:00pm

 ViewBlog

Banking is getting branch-less, contemporary and digital at a very fast pace. As banks compete
to gain competitive advantage, the need for managing big data and analytics becomes more
relevant. Big Data has transformed the way traditional banks worked in the past and has been
very helpful in informing decision-making. Through associated big data tools, banks can gain
greater visibility into customers’ behaviors, assess the probability of risk and help small
businesses. Big Data combines various data sources like the company, its channel partners,
customers, suppliers, social media and even external data suppliers. Typically, the data
67
collected in banks is so complex that it is beyond the ability of any traditional data software
tool to manage it. Analytical tools solve this issue of storing, managing and analyzing complex
and large data. With its increased accuracy and efficiency, banks are starting to realize Big
Data’s value and are slowly adapting to this new change. For example, Wells Fargo has been
able to cut the time spent on reshaping data and now uses that time to analyze it.

Improved Customer Relations

Banks have moved from traditional to digital banking and are trying to gain a larger customer
base by widely advertising new ways to bank with them. A bank’s customer base can be
voluminous and gets more complicated with a number of different financial products that the
bank sells. These include mortgages, car loans, home loans and other financial products.
Traditionally, when a bank tries to sell its products to its customers, it completely ignores the fact
that the product may be irrelevant to the customer. In modern banking, it has become important
for banks to remain updated on the preferences of their customers.

Big Data helps banks create relevant databases that could potentially be of value. The transition
can help a bank shift from traditionally structured datasets that hold little value to more
appropriate ones. By successfully accumulating Big Data, a bank can understand its customers’
habits and lifestyles. Through social media and integrating data from online and offline channels,
banks can gain more knowledge about what kind of financial products are appropriate for their
customers. Big Data and customer analytics can help maximize the value of available customer
data by combining transactional, behavioral and social data.This leads to higher customer
satisfaction since the banking experience for clients will be more customized and relevant than it
was previously.
Banks can also become more efficient and save time by targeting the right customers with the
right kind of product. Banks can use Big Data technologies for not only improving the
customer’s experience but by creating an environment where they can tactfully make quick
alterations in case a customer shifts their habits and/or lifestyle. By keeping track of deviationsin
demand, banks can get more organized. Big Data analytics allows banks to look at the past
buying behavior, demographics and sentiment analysis through social media in real time. All this
helps improve the customer experience and gains the loyalty of the client. Big Data Analytics

68
also helps banks limit customer attrition so that an early identification can save banks from
suffering huge losses, even if it comes at a certain cost. The world’s largest bank, Wells Fargo
has invested millions of dollars in Big Data in order to enhance customer experience and
mitigate risk. With over 70 million customers and 8700+ locations, it aims to understand the
customer journey and make data-driven decisions.

Internal Controls and Risk Management

Risk management remains a high priority across banks since banks are going through rigorous
regulatory requirements. A risk is best assessed with more information in hand and Big Datacan
help in efficiently managing such risks. As banks become more diversified with their products
and expand globally, the risks associated with their activities also increases.According to
Economist Intelligence Unit Survey in 2014, markets are so interconnected and volatile,
(especially during an economic downturn) that information can travel within seconds andcreate
a market disruption. With strict compliance and regulatory framework, banks need to document
each swap trade it does. Big Data helps in implementing this key provision of the Dodd-Frank
Act by using a ‘deal monitoring system based on a new generation of datatechnology.’

In a survey conducted by Ernst and Young, Big Data has made its way into ‘compliance, internal
audit and fraud-risk management related publications’ and 72% of respondents firmly believe
that Big Data technologies can address the issue of fraud management. Small data sets can
overlook rare events where any kind of fraud occurs especially if the event is infrequent. But
through Big Data technologies, banks can keep track of the smallest of rare discrepancies by
using predictive analytics.

The integration of advanced technologies can help banks reduce credit risk and help them make
better decisions based on thousands of risk variables. IBM’s big data and analytics platform
enable the banks to manage credit risk and avoid situations of default. Real-time fraud detection
through data and analytics tools can help prevent credit and liquidity risk as it could keep a close
supervision on borrowers in order to predict a loan default. Analytics solutions can help in
making informed decisions that are entirely based on risk analysis and transparency. High-risk
accounts can be detected using big data and a good example of that was seen by Bank of
America. The Corporate Investment Group (CIG) is responsible for calculating the probability of
69
default (PD) on 9.5 million mortgages which helped Bank of America forecast losses arising
from loan defaults. The bank was also able to increase its efficiency through reduction in loan
default calculation from 96 hours to just 4 hours.

Helps Small Businesses

Small businesses have been an important part of economic growth in the US. Small businesses
have partnered with banks to take advantage of big data. By doing so, small businesses get a
clear insight of the potential competition they face in the marketplace. Big data tools like
SizeUp(used by Wells Fargo) help small businesses compare the salaries of their employees in
their industry. This competitive intelligence tool helps small businesses make smarter decisions
on their next advertising campaign and where the maximum value can be achieved. Smart Data
helps small business owners determine whether their business is under performing or
outperforming in the industry. Hence, through big data, banks can expand their services and gain
a broader clientele base.

Challenges and Opportunities

Banks have realized that big data technologies will help them not only perform better but will
help strengthen their defenses against high-tech attackers. While most banks are adopting new
technologies, many still remain in the experimental stage. According to a customer survey
by Capgemini and EFMA in 2013 in North America, 60% of financial institutions felt that Big
Data could be a competitive advantage, but only 37% had practical experience in managing Big
Data and still others remain in their initial phase of experimenting with customer analytics.

While adapting big data remains a matter of choice for many, alarming mega-breaches have
lowered the effectiveness of Big Data and analytics. Issues of customer privacy have also been a
concern. Due to rising security breaches, banks need to apply new approaches, risk rules and
strong defense mechanisms on a much larger scale than the current ones. The biggest challenge
in applying Big Data technologies is that the smallest oversight in the organization can lead to
the loss of volumes of customer data and this digital disruption can have adverse effects. Any
security breach comes with a huge cost to banks, which in turn affects their reputation and
customer relations.

70
Data and analytics tools should be used with due diligence and efficacy by the appropriate team
of information security professionals. For example, in February 2014, Wells Fargo hired
Charles Thomas after creating the new position of a “Chief Data Officer” to supervise the data
strategy. Other banks like Citigroup and HSBC are looking to create similar positions to
capture, crunch and analyze hidden data that could be very valuable through Big Data. With an
increase in fraudulent and cyber crimes, Big Data and analytics should be looked at as more of a
compulsion than an option for banks.

71
 Chapter 5

Conclusions and Suggestions

1. Suggestions

On the basis of study of finding the following conclusion and suggestions are given:

1. The present business environment for banking is highly volatile and uncertain. It is

highly competitive and every bank is finding difficult to service grow, stabilize and excel in

banking business. Further, for better performance management must keep watch on the

emerging trends in business environment. The proper and timely strategies are to be adopted to

improve efficiency of the wholeorganisation

2. Competition is faced from public, private, foreign and cooperative banks. They have

adopted the strategy for effective workings are use of advance technology and changes in

working procedure. No doubt performance has been improved but manpower is notmaintained

and utilized properly. For improvement in human resources, special focus should be given on

selection, training, motivate career opportunities or employeesetc.

3. Manpower is considered as the most important resource but it is day to day dealing

efforts are found for the sufficient efforts are not found for improvement of competenciesand

motivation of employees. It is suggest that in this direction strong steps are to betaken.

4. Bank management is interested for performance of employees on paper. When

72
questions come for implementation and monetary terms the half hearted efforts are put. There is

need to change the mind set of management further and tune them as per the need of thehour.

5. Performance management functions are available on papers but actually these

functions are not performed or performed partially. The effectiveness of performance

management is below expectation. Performance management functions should be assigned

toa separate cell under HR Head so that effectiveness of it wouldimprove.

6. The awareness regarding benefits of performance management to banks is not very

high. There is a scope for improvement. The awareness regarding this should be

createdfurther through discussion, circulars and lectures byexperts.

7. The employees’ productivity in average is not high in banks. There is a lot of scope

for further improvement and awareness about it should be created through discussion,meeting

and guidance on job among employees working on different jobs andlevels.

8. Management of banks is interested for productivity improvement. This is half

ofthe way. A big gap is found between actual position and expectations. Willingness to

should the responsibility for productivity improvement is partly missing. Top level

management involvement and support can boost the efforts in rightdirection.

9. Performance appraisal planning and methods used are rightly available onpapers.

Regularly appraisals are not carried out properly. The improper appraisal is creating problemsfor

further actions. Head of HR Department should look into this, take help of experts and

implement the performance appraisal strongly. A lot of irregularities would beovercome.

73
 10. The bankers are aware about the factors affecting productivity improvement. In

private and foreign banks the factors affecting are managed properly but in public and

cooperative banks the situation is of average. These factors are to be management

withoutany lapse so that productivity can beimproved.

11. Due to higher productivity the profitability of banks specially private andforeign

banks is increasing whereas public and cooperative banks are lagging behind. No doubt in

average total profit amount has increased but output per employee did not increase.

12. The time taken for banking transaction is in average is more. More waiting time is

involved. Mainly the waiting time in public banks and ICICI bank out of private banks ismore

than other banks. Especially management of public bank should focus on prompt response and

reducing waitingtime.

13. After visit to banks the customers feel normal. In public banks its slightly lower than

foreign and private banks. There is a scope for development to make customers happy. The

management should carry out the work study and work measurement to cut down unwanted

activities and time taken for performing banking jobs. The reduction in cost time and efforts should be

the objectives.

14. Attention paid to customers and interest taken in jobs by employee is of average

level management should focus to motivate employees to take more interest in jobs

andproper attention to give to customers while dealing particularly public and

cooperativebanks.
74
 2. Conclusion

We are in the era of globalization and the business environment is very turbulent. It is

changing drastically. In present environment nothing is permanent except changes. Changes are

likely to take place but with different pace at different time. External environmental factors like

social, cultural, economic, legal, government policies, technology and competition are

uncontrollable. Due to these, it has become very difficult to carry out the business activities

effectively and efficiently. It is an uphill task to stabilize, grow and excel in the business

performance. In this situation, the need for higher level of knowledge and skills are needed.

Every organization whether big or small, is using manpower, machine, money and materials. To

carry out its tasks these are needed and without these the tasks cannot be completed. In present

scenario under liberalization, privatization and globalization the companies are facing stiff

competition. It has become very difficult to survive, grow, stabilize and excel in the business.

The companies performing better and before others are taking the lead in business. To do so the

skilled and motivated employees are strongly needed. They can give more output per person.

Their performance can be measured with the help of labour productivity concept. The labour

efficiency can be measured with the help of productivity concept. Nowadays, it is concerned of

everybody to utilize the labour force properly so the output can be increased. This contributes in

progress of employees, employers and the nation as a whole. Higher level of labour productivity

satisfies employers and employees psychologically. It gives a great impact on performance of

people and progress of business. Banks play very important role in the economic life of the

nation. The health of the economy is closely related to the soundness of its banking system.

75
Although banks create no new wealth but their borrowing, lending and related activities facilitate

the process of production, distribution, exchange and consumption of wealth. In this way they

become very effective partners in the process of economic development. Today, modern banks

are very useful for the utilization of the resources of the country. The banks are mobilizing the

savings of the people for the investment purposes. The savings are encouraged and saving rate

increases. If there would be no banks then a great portion of a capital of the country would

remain idle. At present the Indian financial system consists of public, private, cooperative,

development and foreign banks. Reserve Bank of India is the central controlling authority for all

banks in India. This study is relating to labour or human resource and its productivity in banking

sector in India. Further, the relation of labour productivity and its impact on business

performance of bank will be studied. It can be summarized that this study scope will include the

areas of productivity, labour productivity, impact on performance and progress of banking sector

in India. The main objectives of this research study are to understand the concept of human

resource or employees, performance management, appraisal, productivity, employees’

behaviour, strategy for improving the productivity and performance, impacts on banking

performance and profitability. Further to find out the practices adopted, difficulties faced in

implementation of performance management functions, productivity measurement and suggest

ways for further improvement in performance and productivity of bank employees. Research

methodology explains the method of conducting research and shows the logical sequences of the

steps involved in research. Research methodology includes the identification of problems,

objectives of the study, sources of data, data collection methods, type of research, universe for

study, sampling, data analysis and testing of data. These steps are arranged in logical sequence.

To carry out the research study the following limitations have been faced are:
76
 (a) Availability of secondary data from banks may bedifficult.

(b) Employees may avoid or hesitate to give relevantdata.

(c) Management may not like to share their views on thetopic.

(d) Time, cost and location factors may causedifficulties.

(e) Sample size may not be exact representative of the universe. However

sincereefforts will be put to overcome the expectedlimitations.

Every organization performs its task with the help of resources as men, machine,

materials and money. Except manpower other resources are non-living but manpower is a live

and generating resource. Manpower utilizes other resources and gives output. If manpower is

not available then other resources are useless and cannot produce anything. Out of all the

factors of production manpower has the highest priority and is the most significant factor of

production and plays a pivotal role in areas of productivity and quality. The human resource

is critical and difficult to manage. It is because human behaviour is highly unpredictable. It

differs not only from individual to individual but often on the part of same individual at

different points of time. In spite of biological and cultural similarities, human beings not only

differ in their appearance but also in their capabilities based on their background, training and

experience. Human resource or a person at work is the most important component of the

undertaking. This will have great impact on the total production, sales, profit, progress and

market position of the company in the market. Various factors like skills, training, motivation,

77
dedication, welfare, management policies, fringe benefits, salary and packages, promotion,

communication etc. are responsible to encourage the people to work sincerely and give their

best output.

78
 Chapter 6

Bibliography

References

Ambler, C.A., and T.L. Mesenbourgh 1992 EDI-Reporting Standard for the Future.
Washington, D.C.: U.S. Department of Commerce.

Angeloni, C., C. Cottarelli, and A. Levy 1992 Cross-border Deposits and Monetary
Aggregates in the Transition. (March) Temi di Discussione No. 163, Banca d'Italia.

Bank for International Settlements 1986 Recent Innovations in International Banking. Basle,
Switzerland: Bank for International Settlements.

1988 Guide to the BIS Statistics on International Banking. Basle, Switzerland: Bank for
InternationalSettlements.

1989 International Interest Linkages and Monetary Policy. Basle, Switzerland: Bank for
InternationalSettlements.

1992a International Banking and Financial Market Developments. Basle, Switzerland: Bank for
InternationalSettlements.

1992bRecentDevelopmentsinInternationalInterbankRelations.Basle,Switzerland:Bank for
InternationalSettlements.

1994a International Banking and Financial Market Developments. Basle, Switzerland:Bank for
InternationalSettlements.

1994b Macroeconomic and Monetary Policy Issues Raised by the Growth of Derivatives
Markets. Basle, Switzerland: Bank for International Settlements.

1994c Public Disclosure of Market and Credit Risks by Financial Intermediaries . Basle,
Switzerland: Bank for International Settlements.

See also works listed in Figures 2-2 (pp. 50-51), B-1 (pp. 182-185), and B-2 (p. 185).

1995 Issues of Measurement Related to Market Size and Macroprudential Risks in Derivatives
Markets. Basle, Switzerland: Bank for International Settlements.
Bank of England 1990 Bank of England Quarterly Bulletin 30(August):352-361. London:
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The Bank of England.

Basle Committee on Payment and Settlement Systems 1992 Delivery Versus Payment in
Securities Settlement Systems. (September) Basle, Switzerland: Basle Committee on
Payment and Settlement Systems.

Bergsten, C.F., T. Horst, and T.H. Moran 1978 American Multinationals and American
Interests. Washington, D.C.: The Brookings Institution.

Bierman, Jr., H., L.T. Johnson, and D.S. Peterson 1991 Hedge Accounting: An Exploratory
Study of the Underlying Issues . Research Report. Norwalk, Conn.: Financial Accounting
Foundation.

Bloomstron, M., R.E. Lipsey, and K. Kulchycky 1988 U.S. and Swedish direct investment
exports. In R.E. Baldwin, ed., Trade Policy Issues and Empirical Analysis. Chicago: University
of Chicago Press.

Branscomb, L.M. 1991 The changing global economy. The Bridge (Spring):21-33.
Washington, D.C.: National Academy of Engineering.

Bryant, R.C. 1980 Money and Monetary Policy in Interdependent Nations. Washington, D.C.:
The Brookings Institution.

1983 Money and monetary policy. The Brookings Review (Spring) 1(3):6-12.

8
 Chapter 7

Appendix

The Role Of Technology In Banking

Q.1] Name

Ans

Q.2]
Sex
o Male
o Female
o

Q.3]
Qualification

o SSC
o HSC
o Gradute
o PostGradute
o PHD

Q.4] Occuption

o Sudtent
o Professional
o Business
o Salaried
o Other

8
Q.5] Your Annual Income(Tick Anyone)

o 0-50000
o 50000-100000
o 100000-200000
o 200000-300000
o 300000-400000
o 00000-500000
o Above 5Lacs.

Q.6] Status Of Usages

o 1-5Years
o 5-10Years
o 10-15Years
o Above 15years

Q.7] Which category of the bank do you consider as most technologically advanced?

o Public SectorBank
o Private SectorBank

Q.8] Which attribute of the bank do you value the most?

o Technologyused
o Trust
o Type of thebank

8
Q.9] Which facto promotes you to use the new technique in banking?
o Costeffectiveness
o Ease ofuse
o Technologyeassy
o Other
o

Q.10] How familiar are you with computer usages level of your bank?

o No knowledge ofcomputer
o Beginner
o Averageknowledge
o Expert
o Other