A

PROJECT REPORT
ON
“Role of Modern Technology in Banking”
(With special reference to HDFC Bank)

A Project Submitted to
University of Mumbai for partial completion of the degree of
Master of Commerce
Under the Faculty of Commerce
By

Namadev Bhagwan Chandrabhaga Ghadigaonkar

Roll No. : 12
Sem : III

UNDER THE GUIDANCE OF

Prof. Pankaj P. Sarawade

People’s Education Society’s

Siddharth College of Commerce & Economics
Anand Bhavan, Dr. D.N.Road, Fort
Mumbai – 400 001

December 2023

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 People’s Education Society’s
Siddharth College of Commerce & Economics
Anand Bhavan, Dr. D.N.Road, Fort Mumbai – 400 001

CERTIFICATE

This is to certify that the study presented by Mr. Namadev Bhagwan

Chandrabhaga Ghadigaonkar in part completion of the degree of Master in
Commerce, under the Faculty of Commerce, in the subject of Research Project Work
and his project is entitled “Role of Modern Technology in Banking” (With
special reference to HDFC Bank) has been done under my supervision.

I further certify that the entire work has been done by the learner under my guidance
and To the best of my knowledge, this project is in the nature of original work that has
not been submitted for any Degree or Diploma of this University or any other
University.
It is his own work and facts reported by his personal findings and investigations

Prof. Pankaj P. Sarawade Dr. U.M.Maske Dr. U.M.Maske

Guiding Teacher Co-ordinator Principal

University Examiner

Date of submissions :
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 DECLARATION BY LEARNER

I the undersigned Mr. Namadev Bhagwan Chandrabhaga Ghadigaonkar here by

Declare that the work embodied in this project titled “Role of Modern
Technology in Banking” (With special reference to HDFC Bank) forms my
owned contribution to the research work carried out under the guidance of Prof.
Pankaj P. Sarawade and result of my own research work and has not been previously
submitted to any other University for any other Degree / Diploma to this or any other
University.

Whereever reference has been made to previous work of others, it has been clearly
indicated as such and included in the bibliography

I, hereby further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of the learner

Certified by

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 ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and supported
me during the completion of project.

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

fresh dimensions in the completion of this project.

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

chance to do this project.

I would like to thanks my Principal Dr. U.M Maske for providing the
necessary facilities for completion of this project.

I take opportunity to thank our Co-ordinator Dr U.M.maske for this moral

support and guidance.

I would like to take this opportunity as privilege to express my deep senseof

gratitude to Professor Pankaj P. Sarawade, for their continuous encouragement,
invaluable guidance and help for completing & making it successful to the present
research work. They have been a source of inspiration to me. I am indebted to them
for initiating me in the field of research project work.

I would like to thank my College library, for having provided various

reference books and magazines to my project.

Lastly, I also would like to extend my heartfelt thanks to each and every
person who directly or indirectly helped me in the completion of the project,
especially my family members who supported me throughout my project without
whom this project would have been a distant reality.

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 TABLE OF CONTENTS

Sr. No. Page

Particulars
No.
1. Executive Summary 6
2. Introduction 7-10
3. Structure of The Organized Banking Sector In India 10-11
4. Objectives of Study 11-12
5. Literature Review 12-15
6. Hypothesis 15
7. Scope of Study 16
8. Limitation of Study 17
9. Research Methodology, Research Design 18
10. Data Analysis and Interpretation 19-23
11. Latest Trend In Banking Sector 24-42
12. Changes in Normal Services 42-44
13. Top 8 Banking Technology Trends in 2024
45-48

14. Negative Impact of Technology 49-53

15. Case Study 54-56
16. Advantages of Modern Technology In Banking 56-61
17. Disadvantages of Modern Technology In Banking 61-64
18. Future of Indian banking sector with advance IT solution 64-67
19. Modern banking versus traditional banking 68-73
20. Findings of the Study 74
21. Suggestions and Recommendation 75
22. Conclusion 76
23. Bibliography 77-78
24. Annexure 79-81

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 1. EXECUTIVE SUMMARY

Technology is a very dynamic force. It is changing the competitive landscape of the

financial services and banking industry and is influencing the way their products and
services are sold and delivered. There has been a tremendous change in the banking
sector and these changes include phone banking, online banking, ATM, Mutual funds
etc. There was a time when banks used to perform only the basic functions but today
the scenario is not the same. There is an increasing competition in this field and banks
are aiming to offer more and more products and services to their customers. This
change has led to convenience and customers are at ease. This change is possible
because of the trust which the people have in banks. Indeed technological and
regulatory changes have had such an impact on the banking industry that a good case
can be made for saying that they are the most important changes to have occurred in
the industry, apart from ones that are directly due to the changing nature of society
itself. The precise nature of the impact technology has had on the banking industry
since the early 1980’s is difficult to assess, because the intimacy of the relationship
between the industry and its technology means that it is impossible to separate the
two.

In the organizational context, innovation may be linked to performance and growth

through improvements in efficiency, productivity, quality, competitive positioning,
market share, etc. All organizations can innovate, including for example hospitals,
universities, and local governments. Over the last three decades the role of banking in
the process of financial intermediation has been undergoing a profound
transformation, owing to changes in the global financial system. It is now clear that a
thriving and vibrant banking system requires a well developed financial structure with
multiple intermediaries operating in markets with different risk profiles. Taking the
banking industry to the heights of international excellence will require a combination
of new technologies, better processes of credit and risk appraisal, treasury
management, product diversification, internal control and external regulations and not
the least, human resources. Fortunately, we have a comparative advantage in almost
all these areas. Our professionals are at the forefront of technological change and
financial developments all over the world. It is time to harness these resources for
development of Indian banking in the new century. 6

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 2. INTRODUCTION
A bank is an institution that provides financial service, particularly taking deposits
and extending credit. Currently the term bank is generally understood as an institution
that holds a banking license. Banking licenses are granted by bank regulatory
authorities and provide rights to conduct the most fundamental banking services such
as accepting deposits and making loans. There are also financial institutions that
provide certain banking services without meeting the legal definition of a bank, a so
called non-banking financial company.
The word bank is derived from the Italian banca, which is derived from German
language and means bench. The terms bankrupt and "broke" are similarly derived
from bancarottas, which refers to an out-of-business bank, having its bench physically
broken. Money lenders in Northern Italy originally did business in open areas, or big
open rooms, with each lender working from his own bench or table. Traditionally, a
bank generates profits from transaction fees on financial services and from the interest
it charges for lending. In recent history, with historically low interest rates limiting
banks' ability to earn money by lending deposited funds, much of a bank's income is
provided by overdraft fees and riskier investments.

NATIONALISATION
The RBI was nationalised on January 1, 1949 in terms of the Reserve Bank of India
(Transfer to Public Ownership) Act, 1948 By the 1960s, the Indian banking industry
had become an important tool to facilitate the development of the Indian economy. At
the same time, it had emerged as a large employer, and a debate had ensued about the
possibility to nationalise the banking industry. Indira Gandhi, the-then Prime Minister
of India expressed the intention of the Government of India in the annual conference
of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalisation." The paper was received with positive enthusiasm. Thereafter, her
move was swift and sudden, and the Government of India issued an ordinance and
nationalised the 14 largest commercial banks with effect from the midnight of July 19,
1969.
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Jaya Prakash Narayan, a national leader of India, described the step as a "masterstroke
of political sagacity." Within two weeks of the issue of the ordinance, the Parliament
passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August 1969. A second dose of nationalization
of 6 more commercial banks followed in 1980. The stated reason for the
nationalization was to give the government more control of credit delivery. With the
second does of nationalization, the Government of India controlled around 91% of the
banking business of India. Later on, in the year 1993, the government merged New
Bank of India with Punjab National Bank. It was the only merger between
nationalized banks and resulted in the reduction of the number of nationalised banks
from 20 to 19. After this, until the1990s, the nationalised banks grew at a pace of
around 4%, closer to the average growth rate of the Indian economy.

LIBERALISATION
In the early 1990s, the then Narsimha Rao government embarked on a policy of
liberalization, licensing a small number of private banks. These came to be known as
New Generation tech-savvy banks, and included Global Trust Bank (the first of such
new generation banks to be set up), which later amalgamated with Oriental Bank of
Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This
move, along with the rapid growth in the economy of India, revitalized the banking
sector in India, which has seen rapid growth with strong contribution from all the
three sectors of banks, namely, government banks, private banks and foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in
the norms for Foreign Direct Investment, where all Foreign Investors in banks may be
given voting rights which could exceed the present cap of 10%,at present it has gone
up to 74%with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%; Lend at 6%;Go home at 4) of
functioning. The new wave ushered in a modern outlook and tech-savvy methods of
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working for traditional banks. All this led to the retail boom in India. People not just
demanded more from their banks but also received more. Currently (2007), banking in
India is generally fairly mature in terms of supply, product range and reach-even
though reach in rural India still remains a challenge for the private sector and foreign
banks. In terms of quality of assets and capital adequacy, Indian banks are considered
to have clean, strong and transparent balance sheets relative to other banks in
comparable economies in its region. The Reserve Bank of India is an autonomous
body, with minimal pressure from the government.
The stated policy of the Bank on the Indian Rupee is to manage volatility but without
any fixed exchange rate-and this has mostly been true. With the growth in the Indian
economy expected to be strong for quite some time-especially in its services sector-
the demand for banking services, especially retail banking, mortgages and investment
services are expected to be strong. One may also expect M & As, takeovers, and asset
sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase
its stake in Kotak Mahindra Bank (a private sector bank) to 10%.
This is the first time an investor has been allowed to hold more than 5% in a private
sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in
the private sector banks would need to be vetted by them. In recent years critics have
charged that the non-government owned banks are too aggressive in their loan
recovery efforts in connection with housing, vehicle and personal loans. There are
press reports that the banks' loan recovery efforts have driven defaulting borrowers to
suicide.

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BANKING IN INDIA

3. Structure Of The Organized Banking Sector In India

Banking in India originated in the last decades of the 18thcentury. The first banks
were The General Bank of India which started in 1786, and the Bank of Hindustan,
both of which are now defunct. The oldest bank in existence in India is the State Bank
of India, which originated in the Bank of Calcutta in June 1806, which almost
immediately became the Bank of Bengal. The partition of India in 1947 adversely
impacted the economies of Punjab and West Bengal, paralyzing banking activities for
months. India’s independence marked the end of a regime of the Laissezfairefor the
Indian banking. The Government of India initiated measures to play an active role in
the economic life of the nation, and the Industrial Policy Resolution adopted by the
government in 1948 envisaged a mixed economy. This resulted into greater
involvement of the state in different segments of the economy including banking and
finance. The major steps to regulate banking included-

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• In 1948, the Reserve Bank of India, India's central banking authority, was
nationalized, and it became an institution owned by the Government of India.

• In 1949, the Banking Regulation Act was enacted which empowered the
Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."

• The Banking Regulation Act also provided that no new bank or branch of an
existing bank could be opened without a license from the RBI, and no two banks
could have common directors. However, despite these provisions, control and
regulations, banks in India except the State Bank of India, continued to be owned and
operated by private persons. This changed with the nationalization of major banks in
India on 19 July 1969.

4. OBJECTIVE OF THE STUDY

The information system is paramount concern to the banks in today’s business
environment. Technology has brought a complete paradigm shift in the functioning of
banks and delivery of banking services. Gone are the days when every banking
transaction required a visit to the bank branch. Today, most of the transactions can be
done from the home and customers need not visit the bank branch for anything.
Technology is no longer an enabler, but a business driver. The growth of the internet,
mobiles and communication technology has added a different dimension to banking.
The change has been very productive for banks bringing in an increase in productivity
and operational efficiency to be more competitive. Better risk management due to
centralization of information and real time availability of critical data for decision
making. With the help of this initial information the followings are some of the
objective of the study.

 To study the Information Technology in view of research study.

 Primary objective of the study is to know the perception of people towards use of
Technology.

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 To study the feedback of the past transaction system
 To study the existing transaction system.
 To study the work culture of customer, employee and management.
 To study the benefits of technology.
 To study the service provided by the system in view of customer relation.
 To study the view of management, employee and customers review.
 To understand the need of modern banking services.
 To know the impact of technological banking services.
 To aware the importance with respect to modern banking services.
 To realize the benefits of modern banking services.
 To study on collected data and information by applying various methods.
 To study the feedback of implemented technology.

5. LITERERATURE REVIEW

Information Technology (IT) is very powerful in today’s world, and financial

institutions are the backbone of the Indian economy. Indian Banking Industry today is
in the midst of an IT revolution. Nearly, all the nationalized banks in India are going
for information technology based solutions. The application of IT in Banks has
reduced the scope of traditional or conventional banking with manual operations.
Nowadays banks have moved from disbursed to a centralized environment, which
shows the impact of IT on banks. Banks are using new tools and techniques to find
out their customers need and offer them tailor made products and services. The impact
of automation in banking sector is difficult to measure.

The technological development in the banking sector began with the use of Advanced
Ledger Posting Machines (ALPM) in the 1980s and nowadays banks are using core
banking solution (CBS) for providing better services to their customers. Over the
years several studies have been conducted both at the industry and academic level to
examine the impact of IT on banking productivity and profitability.

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Dos et al. (1993): Studied statistical correlation between IT spending and
performance measures such as profitability or stock’s value. It is found that there is an
insignificant correlation between IT spending and profitability measures, implying
thereby that IT spending is unproductive.

Brynjolfsson and Hitt (1996): However, cautioned that these findings do not account
for the economic theory of equilibrium which implies that increased IT spending does
not imply increased profitability. More recent firm level studies, however, point a
more positive picture of IT contributions towards productivity. These findings raise
several questions about mis-measurement of output by not accounting for improved
variety and quality and about whether IT benefits are seen at the firm level or at the
industry level. Such issues have been discussed in detail by Brynjolfsson 1993 and to
a lesser extent by Brynjolfsson and Hitt 1996.

The study conducted by Gotlieb, and Denny (1993) is one of the studies that deals
with the impact of IT on banking productivity per se. Computerization is one of the
factors which improves the efficiency of the banking transactions. They concluded
that higher performance levels have been achieved without corresponding increase in
the number of employees. Also, it has been possible for Public Sector Banks and Old
Private Banks to improve their productivity and efficiency by using IT.

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

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Head (IT), Federal Bank, “The new generation banks showed the way and others had
no option but to follow the techinfusion to retain and attract profitable customers."The
improved connectivity and falling costs offered by leased lines and VSATs provided a
booster to inter-branch autmation.Confirms Naresh Wadhwa, Vice President-West,
Cisco Systems(India), "With the improved services and lowered costs of service
providers such as Dot and VSNL, it became more feasible for banks to network their
branches. This gave banks an impetus to network all the branches and set up
centralized databases. With these developments it became possible for operations
such as MIS to be truly automated and centralized." With centralized infrastructure
and numerous connectivity options, banks started exploring multiple delivery
channels like ATM, Net-banking, mobile banking, and Tele banking thus driving
down cost per transaction.

Balasubramanya S.(2002): In his study analyzed that the automation in the banking
sector has come a long way starting with the Rangarajan Committee report on the
banking sector reforms during the eighties, followed by reports of the Narasimhan
Committee in the nineties. With over 65,000 branches of the banks (public, private
and the cooperative sector) in the country, the author found that the percentage of
branches covered by automation was very low. Though many banks had claimed that
more than70% business has been automated due to the enforcement of RBI
guidelines, in reality It was much lower, as many functions in each branch were still
done manually or with partial automation. Hence, there was a significant amount of
automation work to be achieved in the banking sector.

Jadhav Anil (2004): Described various channels of e-banking services such as ATM,
Telephone banking (Tele-banking), Mobile banking, Internet banking and its features.
The focus is also given on e-banking opportunities, challenges and security aspects
while performing the banking transactions on the internet. Comparison of public,
private, foreign and co-operative banks and barriers to the growth of e-banking in
India are also discussed. Finally the paper discusses an overview of the major private
sector banks such as ICICI, HDFC, IDBI, UTI & GTB banks which provides e-
banking services.

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Ananthakrishnan G. (2005): Described customer’s services in the banks. The
discriminating customer’s expectations have begun to change in terms of quality and
service. With the advent of computers and ATMs, the gap between the customers and
the banking personnel is widening.

6. HYPOTHESIS
The said research study is carried out with the following hypothesis in view:

H-1 In early days, technology is playing very important role in economic

development of India.

H-2 Recent years, In order to remain competitive, Banks are increasing using
technology mode for providing services.

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 7. SCOPE OF STUDY

In the present scenario major economical and technical changes are undergoing in
industrial and financial revolution through the new information-processing
technology. Especially in finance sector it has a significant role for overall
development. After identifying the subject (research area) and referring the relevant
literatures, it has been found that in most of the literature, the information
technologies have a wide application area. However, in finance sector major changes
have been made. Due to these drastic changes we have chosen to do the study on
urban cooperative bank system. After completing step by step procedure for
automation process, now it is required to take the review of the system.

People used information technological tools to manage and process the information.
Atomization process use in the financial sector for transaction system. This type of
working methodology is used in the financial Institute since long years. The Urban
Co-operative bank sector is mostly related to all classes of people like businessmen,
industry, agriculture, labor, small entrepreneurs, workers etc. It has been changing
complete culture and working methodology. Therefore, it has a wide scope to study
the existing modern transaction system in the financial sector mainly in urban
cooperative bank system. For that purpose we are going to utilize software
engineering model based techniques for theoretical evaluation of atomization process.

In the literature survey it has been found that the software engineering technology has
monopoly for the development of software product and it is observed that such
technology is not used for study purpose in any other different field. So why not this
technology be tested on the external field application intentionally for this study? It
requires framework, structure, plan and controlling parameters for research field.
Such type of theory and planning is available in the software engineering subject.
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 8. LIMITATION OF STUDY
 Time allotted for making project is very limited. As study is restricted only to a
specific area.

 Study allotted has a page constraint. The information required for in-depth study is
not possible.

 Due to lack of work experience, there is a disadvantage for making a project as there
is no in-depth practical information of the subject. If there would be work experience,
the project would have been of practical information.

 The data provided by the staff can’t be held true as 100% correct.

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 9. Research Methodology, Research Design
It describes the data collection method, the sampling plan, the tools of investigation,
planning and testing of questionnaire and the limitations of the study. The study
requires the data to be collected from two different sources i.e. the primary source and
the secondary source.
The primary data is collected with the help of structured questioners which is being
modified & reliable and the secondary data through the various journals, newspapers
and websites.

Data Source:
(a) Primary Data: Primary data was collected by means of questionnaires.
(b) Secondary Data: Secondary data collected by referring to various books,
newspapers, magazines, journals and internet (details in bibliography).

Research Design
Present study enquired and brought forward the results concerning the set objectives
specified before which relates to description of the state of affairs as a result it clearly
states that it was a descriptive study, which included fact finding enquiries of different
kinds.

Sampling Unit
The sampling unit is an individual who is having account in Public and Private Sector
Banks.

Sampling Procedure
Due to the time and resource constraints the convenience sampling technique was
used. The individuals were selected according to convenience to fill the
questionnaires.

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 10. Data Analysis and Interpretation

Question 1 Which bank do you have an account?

Private sector bank 23 41.8%

Public sector bank 20 36.4%
Co- Operative 6 10.9%
bank
All Above Three 6 10.9%

Finding: We studied that out of 55 Peoples 23 peoples are using Private Sector bank,
20 peoples are using Public Sector bank & 6 peoples are using Co- Operative bank &
rest of 6 are using all three sector banks.

Question 2 What kind of banking do you prefer?

Traditional 7 12.7%
Online 22 40%
Both 26 47.3%

Finding: We Studied that out of 55 Peoples 7 peoples are using Traditional Banking,
22 peoples are using Online Banking & rest of 26 peoples are using both the banking.

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Question 3 Do you think Technology banking is useful?

Yes 50 90.9%
No 3 5.5%
Can’t say 2 3.6%

Finding: We studied that out of 55 Peoples 50 peoples are thinking Traditional

Banking is useful. Whereas 3 Peoples are given no response & 2 Peoples are not
justify whether it is useful or not.

Question 4 How frequently do you use banking technology services?

Weekly 20 36.4%
Monthly 10 18.2%
Regularly 21 38.2%
Rarely 4 7.3%

Finding: We studied that out of 55 Peoples 20 peoples are using technology services
in weekly basis. 10 Peoples are using monthly basis, 21 Peoples says that they are
using daily basis & 4 peoples are using in rarely case.,

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Question 5 Do you think Technology in banking is better than traditional banking?

Yes 44 80%
No 4 7.3%
Can’t say 7 12.7%

Finding: We studied that out of 55 Peoples 44 peoples are saying technology in

banking is better than traditional banking. 4 Peoples are saying traditional banking is
better & 7 peoples can’t justify whether it is better or not.

Question 6Do
Doyou feeltechnology
youfeel technologyininbanking
bankinghas a growthpotential
hasa growth India?
potentialin in India?

Yes 50
No 4
Can’t Say 1
Finding: We studied that out of 55 Peoples 50 peoples are fees that technology in
banking has a growth potential in India. 4 peoples are fees that technology in banking
has a growth potential in India & 1 people can’t justify that technology in banking has
a growth potential in India.

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Question 7 What type of transaction do you make in online banking?

Check balances 9 16.4%

Make payments 19 34.5%
Transfer funds 22 40%
Other 5 9.1%

Finding: We studied that out of 55 Peoples 9 peoples are using technology for their
checking bank balances. 19 peoples are using technology for making the payments &
22 peoples are using technology for transfer the fund to another account & rest of 5
peoples are using for other transactions.

Question 8 Do you feel your account is completely secured in technology banking?

Yes 28 50.9%
No 9 16.4%
Can’t Say 18 32.7%

Finding: We studied that out of 55 Peoples 28 peoples are feels that account is
completely secured in technology banking. 9 peoples are feels that account is not
secured in technology banking. 18 peoples are can’t says that account is secured or
not in technology banking

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Question 9 Are you happy with the services of technology provided by your bank?

Completely 30 54.5%
Partially 18 32.7%
Fairly 5 9.1%
Not at all 2 3.6%

Finding: We studied that out of 55 peoples 30 peoples are completely happy with the
services of technology provided by bank. 18 peoples are partially happy with the
services of technology provided by bank. 5 peoples are fairly happy with the services
of technology provided by bank. 2 peoples are not happy with the services of
technology provided by bank.

Question 10 How frequently do you use the following banking services per month?

ATM 28 50.9%
Internet Banking 21 38.2%
Tele Phone 1 1.8%
banking
Mobile banking 5 9.1%

Finding: We studied that out of 55 peoples 28 peoples are using ATM services per
month. 21 peoples are using Internet banking services per month. Only 1 people are
using Telephone Banking Services per month & Only 5 peoples are using Mobile
Banking Services per month

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 11. Latest Trend In Banking Sector
Banks today have moved towards universal banking. Banks today include investment
services in addition to services related to savings and loans.

1. Universal Banking :
The concept of universal banking refers to the provision of most or all
financial services under a single, largely unified banking structure. Financial
activities may include:
 Intermediation
 Trading of financial instruments, foreign exchange, and their derivatives
 Underwriting new debt and equity issues
 Brokerage
 Corporate advisory services, including mergers and acquisitions advice
 Investment management
 Insurance
 Holding equity of non-financial firms in the bank’s portfolio.

2. Electronic Banking :
In the wake of recent developments in information and communication technologies,
majority of banking operations have been computerized by most of the commercial
banks, both in the private and the public sectors especially in the last ten years and the
process still on for extension and up gradation of computerization of banks in India.
The computerization is done for front-office operations involving interface with
customers as well as back office operations involving internal housekeeping
(accounting and books balancing), external accounting and settlement with other
branches and banks/institutions.
Electronic banking provides a bouquet of new channels like internet banking,
telephone banking, ATM banking which are different from the traditional ‘brick and
mortar’ branch banking and which have made possible ‘anywhere and anytime
banking’ and contributed to speed, accuracy and confidentiality of customers’

24
transactions while enhancing customers convenience. Funds transfer; cheques
clearing and collection of bills of exchange are also done electronically with accuracy,
speed and safety. Internal housekeeping is done accurately and much faster through
programmed packages/software at the branch and also at centralized platforms
involving several branches of a region or zone.

3. Globalization Of Banking :
In addition to universal banking and electronic banking, globalization has emerged as
a prime mover in the Indian banking system. This has come about as a result of the
policy of liberalization and opening up of banking and other sectors pursued after
1991 in India. Foreign banks that wish to set up their offices/branches in India have
been granted licenses by RBI on liberal and on reciprocal basis.
Their business in India has increased manifold, due to scores of Multinational
Corporations setting up their manufacturing/trading bases in India and also due to
India’s increased foreign trade. Similarly, Indian banks are also opening their
offices/branches abroad, particularly in countries whose banks have opened offices in
India.

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Banks Have Now Changed Their Approach Towards Technology, Products and
the Services offered by them.

Technology Development
Banks have started using the latest technology to keep up with the competition. The
advancement in the technology has helped the banks to reduce the workload. There
are so many activities, which are taken over by machines. Employees are no more
loaded with paper work.
With the advancement of technology and the birth of competition, banks are in the
race of becoming the best in the country. With an eye upon customer satisfaction
policy they are providing best of the best services with the minimum hazards.

Products and services

1. Phone Banking:
Banking now a day’s is a phone call away. Pick up the phone to access a host of Bank
services, day or night. Telephone banking is a service provided by a bank or
other financial institution, that enables customers to perform a range of financial
transactions over the telephone, without the need to visit a bank branch or automated
teller machine. Telephone banking times are usually longer than branch opening
times, and some financial institutions offer the service on a 24-hour basis.

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Advantages of Mobile Banking:
 Anytime Banking:
Mobile Banking gives you the privilege of anytime and anywhere banking.
One can do most of the banking transaction after banking hours from
anywhere, irrespective of whether you are travelling in bus or auto. Whereas
this ease will not be possible if you are connected to a PC or Lap top,
especially when travelling. Mobile Banking is Free The service provided by
bank is free of charge, there is no limit for number of times you can access
your account. Various banking services provided include Account Balance
Inquiry Credit/Debit Alerts, Bill Payment Alerts, Transaction History, Fund
Transfer Facilities, Minimum Balance Alerts etc can be accessed from your
mobile.
 Wireless Communication:
The invention of mobile phones is of vital importance. It helps the
transmission of voice using wireless technologies.

 Saves Time and Energy:

A telephone serves us like an honest servant in all the fields. It saves our
valuable time and energy to great extent. Mobile banking is available round
the clock 24/7/365 and is easy and convenient mode for mobile users in the
rural area Mobile banking is cost effective and banks offer this service at very
low cost to the customer.

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Disadvantages of Mobile Banking:
 Compatibility:
Mobile banking is not available on every device. Some banks do not provide
mobile banking at all. Others require you to use a custom mobile banking application
only available on the most popular smart phones, such as the Apple i-Phone and RIM
Blackberry. Third-party mobile banking software is not always supported. If you do
not own a smart phone, the types of mobile banking you can do are usually limited.

 Security:
Though the security threat is less than internet banking Mobile banking has to
security issues. One of the great threat to mobile banking is “smishing” which
similar to phishing. In smishingusers receive fake message asking for their
bank details. Many users have fallen to this trap. Mobile Banking is not
available on all mobile phone. Some time it requires you to install application
on your phone to use the mobile banking features which is available on high
end Smartphone.

2. Online Banking:
Online banking (or Internet banking) is a term used for performing transactions,
payments etc. over the Internet through a bank, credit union or building society's
secure website. This allows customers to do their banking outside of bank hours and
from anywhere where Internet access is available. In most cases a web browser such
as Internet Explorer or Mozilla Firefox is utilized and any normal Internet connection
is suitable. No special software or hardware is usually needed.

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Features
Online banking usually offers such features as:
 Bank statements, with the possibility to import data in a personal finance
program such as Quicken or Microsoft Money.
 Electronic bill payment.
 Funds transfer between a customer's own checking and savings accounts, or to
another customer's account.
 Investment purchase or sale.
 Loan applications and transactions, such as repayments.
 Account aggregation to allow the customers to monitor all of their accounts in
one place whether they are with their main bank or with other institutions.
There are a growing number of banks that operate exclusively online. Because these
online banks have low costs compared to traditional banks they can offer high interest
rates.
Security
Protection through single password authentication, as is the case in most secure
Internet shopping sites, is not considered secure enough for personal online banking
applications in some countries. Online banking user interfaces are secure sites
(generally employing the https protocol) and traffic of all information - including the
password - is encrypted, making it next to impossible for a third party to obtain or
modify information after it is sent.

Fraud
Some customers avoid online banking, as they perceive it as being too vulnerable to
fraud. The security measures employed by most banks are never 100% safe, but in
practice the number of fraud victims due to online banking is very small. Indeed,
conventional banking practices may be more prone to abuse by fraudsters than online
banking. Credit card fraud, signature forgery and identity theft are far more
widespread "offline" crimes than malicious hacking. Bank transactions are generally

29
traceable and criminal penalties for bank fraud are high. Online banking can be more
insecure if users are careless, gullible or computer illiterate.

Advantages Of Online Banking:

 Convenience: Unlike your corner bank, online banking sites never close;
they're available 24 hours a day, seven days a week and they're only a mouse
click away.
 Ubiquity: If you're out of state or even out of the country when a money
problem arises, you can log on instantly to your online bank and take care of
business, 24/7.
 Transaction speed: Online bank sites generally execute and confirm
transactions at or quicker than ATM processing speeds
 Efficiency: You can access and manage all of your bank accounts, including
IRAs, CDs, even securities, from one secure site.
 Effectiveness: Many online banking sites now offer sophisticated tools,
including account aggregation, stock quotes, rate alerts and portfolio
managing programs to help you manage all of your assets more effectively.
Most are also compatible with money managing programs such as Quicken
and Microsoft Money.

Disadvantages of Online Banking:

 Start-up may take time: In order to register for your bank's online program,
you will probably have to provide ID and sign a form at a bank branch. If you
and your spouse wish to view and manage your assets together online, one of
you may have to sign a durable power of attorney before the bank will display
all of your holdings together.

30
  Learning curve: Banking sites can be difficult to navigate at first. Plan to
invest some time and/or read the tutorials in order to become comfortable in
your virtual lobby.
 Bank site changes: Even the largest banks periodically upgrade their online
programs, adding new features in unfamiliar places. In some cases, you may
have to re-enter account information.
 The trust thing: For many people, the biggest hurdle to online banking is
learning to trust it. Did my transaction go through? Did I push the transfer
button once or twice? Best bet: always print the transaction receipt and keep it
with your bank records until it shows up on your personal site and/or your
bank statement.

3. Electronic Fund Transfers (ETFs):

Electronic funds transfer (EFT) is the electronic exchange or transfer of money from
one account to another, either within a single financial institution or across multiple
institutions, through computer-based systems.
The term covers a number of different concepts:
Cardholder initiated transactions, where a cardholder makes use of a payment card
 Direct deposit payroll payments for a business to its employees, possibly via a
payroll service bureau
 Direct debit payments, sometimes called electronic checks, for which a
business debits the consumer's bank accounts for payment for goods or
services.
 Electronic bill payment in online banking, which may be delivered by EFT or
paper check.
 Transactions involving stored value of electronic money, possibly in a private
currency.
 Wire transfer via an international banking network (carries a higher fee in
North America and in Poland)
 Electronic Benefit Transfer

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Advantages of Electronic Payment System
 Time Savings: Money transfer between virtual accounts usually takes a few
minutes, while a wire transfer or a postal one may take several days. Also, you
will not waste your time waiting in lines at a bank or post office.
 Expenses Control. Even if someone is eager to bring his disbursements under
control, it is necessary to be patient enough to write down all the petty
expenses, which often takes a large part of the total amount of disbursements.
The virtual account contains the history of all transactions indicating the store
and the amount you spent. And you can check it anytime you want. This
advantage of electronic payment system is pretty important in this case.
 Reduced Risk of Loss and Theft: You cannot forget your virtual wallet
somewhere and it cannot be taken away by robbers. Although in cyberspace
there are many scammers, in one of the previous articles we described in
detail how to make your e-currency account secure.

 Low Commissions. If you pay for internet service provider or a mobile

account replenishment through the UPT (unattended payment terminal), you
will encounter high fees. As for the electronic payment system: a fee of this
kind of operations consists of 1% of the total amount, and this is a
considerable advantage.
 User-Friendly: Usually every service is designed to reach the widest possible
audience, so it has the intuitively understandable user interface. In addition,
there is always the opportunity to submit a question to a support team, which
often works 24/7. Anyway you can always get an answer using the forums on
the subject.
 Convenience. All the transfers can be performed at anytime, anywhere. It's
enough to have an access to the Internet.

32
Disadvantages of Electronic Payment System
 Restrictions. Each payment system has its limits regarding the maximum
amount in the account, the number of transactions per day and the amount of
output.
 The risk of being hacked. If you follow the security rules the threat is
minimal, it can be compared to the risk of something like a robbery. The
worse situation when the system of processing company has been broken,
because it leads to the leak of personal data on cards and its owners. Even if
the electronic payment system does not launch plastic cards, it can be involved
in scandals regarding the Identity theft.
 The problem of transferring money between different payment systems.
Usually the majority of electronic payment systems do not cooperate with
each other. In this case, you have to use the services of e-currency exchange,
and it can be time-consuming if you still do not have a trusted service for this
purpose. Our article on how to choose the best e-currency exchanger greatly
facilitates the search process.
 The lack of anonymity. The information about all the transactions, including
the amount, time and recipient are stored in the database of the payment
system. And it means the intelligence agency has an access to this information.

 The necessity of Internet access. If Internet connection fails, you cannot get
to your online account.

4. Electronic Clearing Services (ECS)

It is a mode of electronic funds transfer from one bank account to another bank
account using the services of a Clearing House. This is normally for bulk transfers
from one account to many accounts or vice-versa. This can be used both for making
payments like distribution of dividend, interest, salary, pension, etc. by institutions or
for collection of amounts for purposes such as payments to utility companies like
telephone, electricity, or charges such as house tax, water tax, etc or for loan
instalments of financial institutions/banks or regular investments of persons.

33
Types of ECS
There are two types of ECS
ECS (Credit): ECS (Credit) is used for affording credit to a large number of
beneficiaries by raising a single debit to an account, such as dividend, interest or
salary payment.
ECS (Debit): ECS (Debit) is used for raising debits to a number of accounts of
consumers/ account holders for crediting a particular institution.
Working of ECS
ECS payments can be initiated by any institution (called ECS user) who have to make
bulk or repetitive payments to a number of beneficiaries. They can initiate the
transactions after registering themselves with an approved clearing house. ECS users
have also to obtain the consent as also the account particulars of the beneficiary for
participating the ECS clearings.
Advantages of Electronic Clearing Services
 Freedom from paper handling and the resultant disadvantages of handling,
presenting and monitoring paper instruments presented in clearing. Ease of
processing and return for the destination bank branches.
 Smooth process of reconciliation for the sponsor banks.
 Cost effective.
 Since payment is deducted automatically from the bank account on a specific
date chances of defaults on the part of party making payment is nil unless the
party does not has sufficient balance in the bank account.

5. Real Time Gross Settlement System (RTGS):

The RTGS system implemented by the Reserve Bank has been in operation for
more than four years. The system has also stabilized over the years and has
been witnessing increased coverage in terms of bank branches and transaction
volume. The volume of RTGS (Real Time Gross Settlement System )
transactions is increasing rapidly. RTGS settled 1.94 million transactions in
the month of March 2009 as against 0.72 million transactions in March 2008.
Customer transactions settling in RTGS presently constitute 89 percent of total
RTGS transactions and are growing.
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  It is reiterated that in a Straight through Processing (STP) environment,
standardization is very much necessary and uniformity in message format is a
pre requisite for the success of STP.
 RTGS Customers have been complaining that there is no uniformity on
information provided to the customer in the pass books / account statements
by different banks. Some banks merely indicate `RTGS credit’ without details
while other banks are giving sender's bank account number or UTR number of
the transactions etc. RBI has therefore, advised that-
a) A bank customer receiving RTGS credit shall be provided with the name of
the remitter in his account statements / pass book.
b) A bank customer sending a RTGS remittance shall be provided with the
name of the beneficiary in his account statements / pass book.
The banks are free to provide any additional information as they deem
necessary / useful.

6. ATM:
An automated teller machine or automatic teller machine (ATM) (also called
cash machine, cash point, ATM Scrip to Cash machine, "hole in the wall",
"bank machine" or "ABM", "auto teller") is an electronic computerized
telecommunications device that allows a bank's customers to directly use a
secure method of communication to access their bank accounts, order or make
cash withdrawals and check their account balances without the need for a
human bank teller (or cashier in the UK). Some ATMs allow withdrawals
funded by clerical staff in retail merchant locations. The clerical staffs are not
considered bank tellers. 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.

The ATM industry is an evolving one which has seen radical and business-changing
events occur frequently in its first three decades. Here's our attempt to look into the
crystal ball of ATMs of the future, with the help of some of the most forward-thinking
minds involved in ATMs.
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 7. Credit Cards:
A credit card system is a type of retail transaction settlement and credit system,
named after the small plastic card issued to users of the system. A credit card is
different from a debit card in which, during every transaction, the money from the
user’s account is removed. But in case of credit card, issuer lends money to the
consumer (or the user). It is also different from a charge card (though this name is
sometimes used by the public to describe credit cards), that require the balance to be
paid in full each month. In contrast, a credit card allows the consumer to 'revolve'
their balance, at the cost of having interest charged.

Advantages of Credit Cards

 Convenience– Credit Cards are very convenient in the sense that you don’t
need a wad of money to purchase something. You don’t need to make sure
that you have enough money, count it and then buy it. You don’t need to have
enough wealth to buy something. You just need to pull out your card, swipe it
and the thing is yours.
 Allows Online Purchases and Sales – Credit Cards have become an essential
part of our internet economy and e-commerce as things can be bought online
only through credit cards .It’s not possible to pay by cash over the Internet so
Credit Cards are essential if you buy things online.
 Gives Rewards/Cash Back in some Cases – Credit Cards give rewards for
high usage such are airline tickets and other goods. You generally get some
points for each time you use a credit card. These points are accumulated and in
the end you can buy something with those points.
 Free Credit for a Limited Period – Credit Cards have a time period between
billing and paying your bill in which the credit card does not charge you an

36
 interest. This interest free period is a benefit of the credit card as you save on
the interest.
 Allows a Large Purchase in case of Emergency – Credit Cards allow you to
pay for an emergency when you don’t have enough money. In case of a
medical problem where you need to pay something immediately a credit card
can be very useful.
 Foreign Currency Transactions Ease – Credit Cards can be used in foreign
countries without converting your money into foreign currency. Though this
involves some cost, it is more convenient.
 Protection in case of Theft or Loss of Credit Cards – Credit Cards have
24/7 help lines where you can report the loss or theft of your credit card. This
allows the credit card to be blocked so that someone else cannot use your
credit card.

Disadvantages of Credit Cards

 High Interest Rates - Credit Cards carry the highest interest rates of all the
different types of loans and mortgages. They also charge you a lot of fines for
delaying payments on your credit cards.
 Debt Traps - Credit Cards are dangerous for people who have less self control
or are shopping freaks. It allows you to wrack up debt easily as you don’t need
to apply for a loan. You can have multiple credit cards and carry huge debt.
You can be stuck in a debt trap if your monthly earnings can’t cover the
interest payments on your credit card debt. Many people get bankrupt and
have their life destroyed through credit cards.
 Complex Fines and Fees -Credit Cards have complex fines and fees which
make it very difficult for a normal person to understand. They have late
payments and fines plus they also charge tax. They can add a variety of fees
such as fees for withdrawing cash with your credit card etc.

37
  Promotes Spending over Saving - Credit Cards make it easy to spend and
harder to save. This proves to be deleterious in the long run.

8. Debit Cards:
A debit card is a card which physically resembles a credit card, and, like a credit card,
is used as an alternative to cash when making purchases. However, when purchases
are made with a debit card, the funds are withdrawn directly from the purchaser's
current/checking or savings account at a bank or credit union.
Advantages of Debit Card
 Easy to obtain. Once you open an account most institutions will issue you a
debit card upon request.
 Convenience. Purchases can be made using a chip-enabled terminal or by
swiping the card rather than filling out a paper check.
 Safety. You don't have to carry cash or a check book.
 Readily accepted. When out of town (or out of the country), debit cards are
usually widely accepted (make sure to tell your financial institution you’re
leaving your city; to not have an interruption in service).
 Your Pin Protects You
Debit cards are protected by a four digit pin number that you set yourself. This
pin is needed to make almost any purchase with your debit card. This gives
you a great deal of protection against theft. These cards can also be cancelled
very easily and quickly, so if you lose it, you can prevent anyone from being
able to do any damage.
 Anyone Can Have One
The only thing that you must have to have a debit card is have a bank account.
Anyone can open a bank account with a small minimum deposit. This makes
debit cards much different than credit cards, because approval for a credit card
largely depends on your credit score and payment histories. None of these
things are taken into account when getting a debit card.

38
  Strong Budgeting Tool
One of the best things about a debit card is that you cannot spend more money
than you have, which means you cannot go into debt. This helps you to only
spend the money that you have to spend because you cannot accumulate new
debt, like with credit cards.

Disadvantages of Debit Cards

 No grace period. Unlike a credit card, a debit card uses funds directly from
your checking account. A credit card allows you to borrow funds on credit,
leaving disposable cash in your account.
 Check book balancing. Balancing your account may be difficult unless you
record every debit card transaction.
 Fees. Using your debit card for ATM transactions may be costly if the ATM is
not affiliated with your institution.
 Your Credit Score Isn’t Helped
A person’s credit score impacts them for their entire life, whether it be
negative or positive. With a debit card, you do not impact your credit score at
all, which means that you cannot build it up. Having a higher credit score
gives you lower interest rates and increased lines of credit.
 Fees Galore
When you have a debit card, fees are likely a part of your life as well. Banks
inflict a wide variety of different fees to debit card holders, which can add up
very fast. Some of these include monthly use charges, major overage fees, and
transaction fees or limits.
 Instant Money Means Instant Risk
If someone got a hold of your debit card, they would be able to take money
directly from your bank account. With a credit card, the charges are much
easier to dispute, and they do not interfere with your direct lines of income the
way that debit cards do.

39
  Merchant Blocks
Depending on where you are using your debit card, or what you are buying,
the merchant can put a “hold” on your money. For example, if you are filling
your tank up with gas, the gas station will likely put a hold up to 100 dollars
on your card, this is because they want to ensure that you have the funds to
pay for the gas before you pump it. The bank can take up to 48 hours to free
this money up again.

9. Smart Cards:
With the use of credit cards, we may avail of credit facility on our purchase of
goods or services from approved sales outlets. A smart card enables the
cardholder to perform various other banking functions apart from credit
purchases. For an example, with, smart cards, we can draw cash from ATMs;
we can verify entries in our accounts, etc. This is possible because the card has
an integrated circuit with microprocessor chip embedded in the card for
identification purposes. The card can also perform calculations and maintain
records. The credit card customers are typically extended an unsecured credit
for at least 30 days. Beyond this period, the bank charges interest on
outstanding bills. However, some cardholders may prefer to pay off their dues
before the free credit period. Such cardholders are called convenience users.
10. Bill Payments:
Save time and money with payment services offered by banks. It's easy to pay your
bills with their help. Some banks have agreements with over 600 companies for
payment services. Payments can be made easily and conveniently over the internet, on
the phone, at any branch or by using an ATM.
What can you pay through a Bank?
1. Bills -Access nearly 600 companies with their services.
2. Utilities -An easy way to manage household expenses.

40
3. Income Tax - Pay income tax through a Bank's ATM network.

How do you pay?

Invoices from more than 100 companies can be paid by internet banking. Payments
can also be scheduled for future dates.
At the branch - bills can be paid at the branch counter service or you can take
advantage of the convenient Express Deposit Box service kept by some banks.
Over the phone - just call the Phone Banking Centre.
ATM Bill Payment - all you need to do is select "other services" on the machines and
have your bills handy.

11. Online Government Tax Payment:

An online government tax payment and filing service is available seven days a week,
24 hours a day, using a financial institution's Internet site. It enables participating
financial institution customers to electronically submit RST return cards and
payments via the Internet. This service is currently offered by many financial
institutions to customers who have an account with them.
Benefits of Online Tax Payments
 Convenience and Reliability - available 24 hours/day and 7 days/week.
 Avoid late payment of taxes by post-dating your payments.
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  Less paperwork - no cheques or remittance forms required.

12. International Banking:

Indian banks have extended their activities beyond the national boundaries. The
extension may take place in the form of borrowings as well as lending and it may take
place through official or private or commercial channel. In the process of
internationalization, the domestic financial institutions participate in foreign financial
markets and the foreign institutions participate in domestic market to a significant
extent. In other words, the domestic and foreign financial markets get integrated and
interlinked and the supply and demand curves of funds assume a different character.
In India, foreign exchange dealings of banks are 6 to 7 times, sometimes, 50 times,
their merchant base. Day to day foreign exchange transaction in India are handled by
scheduled commercial banks who are authorized and licensed dealers in foreign
exchange.

12. Changes in Normal Services

1. Opening Accounts:
A savings, current or fixed account now opens up a world of new products and
services - giving the customer’s access to your funds 24 hours a day, 7 days a
week. With a savings or current account in place you can choose a ATM or
Debit Card for everyday access to your funds.

2. Loans:
No matter what you need, there is a loan or a line of credit to give you the
borrowing power you want.

3. Branches:
You don’t have to travel far to enjoy a Bank’s fast and efficient service. With
the most extensive branch networks, officers are always close by to offer you
banking products and services that match your needs.

42
The branches of a bank are connected to their computer mainframe via our state-of-
the-art electronic network. This means a customer gets consistent service with fast
and efficient transactions at any branch. Certainly, it is true that, in general, customers
use bank branches less and less. Many customers visit their bank only once a month
or, even much less, while some hardly bother going into the branch at all. Yet, while
the demand for branches is certainly reducing all the time, this does not mean that
branch banking is necessarily fated to disappear entirely, any more than the increasing
proliferation of mobile telephones mean that landline telephone will disappear
completely.

It is possible though not certain that, just as there will always be people who need to
use telephone (apart from anything else, people may have lost or mislaid their mobile
telephones or may have left them at home), there will always be people who need to
visit their branch. Furthermore, branches remain comparatively popular to
organizations with corporate accounts (including small businesses), mainly because
businesses like to be able to discuss things in person with a banker in a branch. Also,
some older people (including some older, wealthier people) like to be able to ‘pop in’
to their branch. There is a need for some good research about why this is: if it is
simply that older people are less adept with new style technology than younger ones,
then, of course, in time, by a natural process, the need for branches will start to erode.
However, if, as may well be the case, older people inherently feel more comfortable
with being able to do their banking at a physical branch, this may limit the extent to
which banks can afford to get rid of branches entirely, especially branches that cater
to wealthy customers.

43
Here I Have Taken Example Of One Of The Fast Growing Bank In Technology.
COMPANY PROFILE
HDFC BANK

Housing Development Finance Corporation Limited, popularly known as HDFC Bank

was incorporated in the year 1994. Headquartered in Mumbai, HDFC was founded by
Hasmukhbhai Parekh.
Among all the private sector banks, HDFC was the first to receive approval from
Reserve Bank of India to set up a bank and started its operations in the year 1995. It
provides various products like Insurance, Credit cards, Loans, Forex services,
Premium Banking, Private Banking etc.
HDFC Bank operates in a highly automated environment in terms of information
technology and communication systems. All the bank’s branches have online
connectivity, which enables the bank to offer speedy funds transfer facilities to its
customers. Multi-branch access is also provided to retail customers through the
branch network and Automated Teller Machines (ATMs).
The Bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world class bank.
In terms of core banking software, the Corporate Banking business is supported by
Flex cube, while the Retail Banking business by Finware, both from i-flex Solutions
Ltd. The systems are open, saleable and web-enabled.

The Bank has prioritised its engagement in technology and the internet as one of its
key goals and has already made significant progress in web-enabling its core
businesses. In each of its businesses, the Bank has succeeded in leveraging its market
position, expertise and technology to create a competitive advantage and build market
share.
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 13. Top 8 Banking Technology Trends in 2024
The banking industry is undergoing a transformation since the pandemic and
to make sure your business process is going in sync with current trends and
technologies, it’s important to have an eye on these trends as each trend has
an capability to shift the banking landscape.

And no matter what industry you belong to, technology is highly disruptive.
Technology can be a double-edged sword, on one side where it is
transforming the business process, while on the other side it can be
technically difficult for banking leaders to implement these technologies
without any expert guidance.

Hence before implementing any technology trends in banking operations it’s

vital to understand customer interest, and product specifications, and
maintain digital trust.

Let’s deep dive into the top technology trends in the banking industry and
how it can transform the present banking operations.

1.

1. Agile & Adaptive Banking

To be adaptive and agile, the banking industry must be

competitive along with being able to offer new services to its
customers at great speed and efficiency. According
to Gartner, around 80% of traditional banking organizations
will cease to exist. Instead of the traditional banking model,
agile and adaptive banking focus on a product-centric model
that addresses the following concern easily-

 Identify the financial-related frauds

 Maintain the pressure connected with regulatory and
compliance
 Handle financial planning and loan request approval

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2. Hyperautomated Banking

RPA and hyperautomation in the banking market are expected

to see a sharp rise and it is expected to reach USD 4980.65
million by 2029. In 2023 hyperautomation is now being called
upon to increase the pace of banking operations.
Using RPA and hyperautomation in the banking process
enterprises can free up their banking staff to more repetitive
and complex processes like fraud detection, and money
laundering and give them the responsibility for core banking
tasks. That’s not all, as per the Deloitte report, 80% of
banking customers have interacted with at least one RPA tool
in the last 12 months. Hence we can conclude that the RPA
tool along with hyperautomation has a bright future for the
banking industry

3. Open Banking

Open banking is another technology trend that delivers a

myriad of opportunities for the banking industry. This
technology has shown a sharp rise in its adoption due to the
increased use of online platforms for transactions.

Source- Polaris Market Research

Open banking gives several benefits to banking industries, it-

 Creates API infrastructure for easy data sharing

 Promotes API governance architecture for compliance
and security
 Implements Data Policies to improve the efficiency of
banking services provision

With easy data sharing and compliance policies, open banking

promotes better customer experience and better process
efficiency.

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 4. Artificial Intelligence and Machine Learning

AI and Machine Learning are two buzzwords and it continues

to be the banking industry’s favorites since the pandemic. This
is the reason, multiple banking leaders are implementing or
planning to implement AI in their banking process. As per the
reports around 56% of banking leaders have implemented AI
for risk management.
Source- Insider Intelligence
And the key driving factor behind the high growth of AI in
banking industry is-

To get better operational efficiency

1. Enhance personalization in service provision

2. Emergence of new products and services

5. Generative AI

Source- https://www.insiderintelligence.com/content/state-
of-banking-5-charts
The best use of generative AI in banking operations could be in
fraud detection, offering personalized customer service,
enhancing virtual assistance capability and wealth
management. With the inevitable change in technology
adoption and rising customer expectations, it’s time for the
banking industry to be familiar with these technology
capabilities and identify where these technologies can be
implemented for better process efficiency.

6. Cloud and Digitalization

According to the report, the global cloud and finance

market is expected to reach a value of Us$91.67 billion by
2027. Migration of banking processes into the cloud comes
with multiple advantages-

 Cost reduction linked to the use of physical data centers

 Faster and better access to data with lower downtime
 Enhanced data security with transparency

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 All in all, bringing the banking process to the cloud is a way to
make it secure, efficient, transparent, and effective. With cloud
computing advancing globally, there is a lot more in the future
to create better data management systems for banking services.

7. Cybersecurity

The IT infrastructure of the banking industry stores and

processes vast amounts of confidential customer and
transaction data, making it an attractive target for
cybercriminals. To address this issue, startups are offering
tailored cybersecurity solutions and data compliance
management services for banking systems. These solutions
help banks to secure their sensitive data by implementing
security protocols.

The use of data encryption tools further reduces the risk of data
breaches. AI-powered fraud detection is also employed to
identify and prevent suspicious activities, such as identity theft
and phishing scams. Additionally, banks utilize anti-hacking
software to prevent unauthorized access to their networks.
These features enable banks to improve their threat detection
and response capabilities.

8. Banking of Things

IoT technology is increasingly being integrated into the

banking industry to enhance data collection efficiency. This
automation facilitates the acquisition of data, streamlines
processes such as KYC and lending, and enables real-time
event response.

For instance, smart automated teller machines (ATMs)

equipped with IoT capabilities send notifications for low cash
levels and malfunctions, ensuring timely maintenance.
Additionally, IoT-enabled digital wallets are embedded in
mobile phones and smartwatches to allow customers to make
purchases conveniently. Furthermore, IoT devices transmit
customer-specific data in real time, enabling banks to identify
fraudulent activities and prevent losses.

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 14. NEGATIVE IMPACT OF TECHNOLOGY
Though there are many advantages of technology, but nothing comes without
disadvantages and everything has its pros and cons; same is with internet banking. It
also has some disadvantages which must be taken care of. The disadvantages of
online banking include the following:

Online Banking:
 Understanding the usage of internet banking might be difficult for a beginner
at the first go. Though there are some sites which offer a demo on how to
access online accounts, but not all banks offer this facility. So, a person who is
new might face some difficulty.
 You cannot have access to online banking if you don’t have an internet
connection; thus without the availability of internet access, it may not be
useful.
 Security of transactions is a big issue. Your account information might get
hacked by unauthorized people over the internet.
 Password security is a must. After receiving your password, do change it and
memorize it otherwise your account may be misused by someone who gets to
know your password inadvertently.
 You cannot use it, in cases the bank’s server is down.
 Another issue is that sometimes it becomes difficult to note whether your
transaction was successful or not. It may be due to the loss of net connectivity
in between, or due to a slow connection, or the bank’s server is down.

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Internet Banking:
It's easy to see the benefits of Internet banking. It's easy, convenient and, unlike a
bank's physical location, the Internet doesn't abide by any business hours. Further, you
can make instant transfers between accounts, pay bills electronically to save postage,
and you can access your bank account from anywhere, as long as you have an Internet
connection. But despite all the pros associated with online banking, there are some
disadvantages and risks associated with it as well.

 Internet Connection: Not everyone enjoys the luxury of having a stable and
fast Internet connection at home. Aside from having a personal computer or
laptop, having stable Internet access at home is a basic prerequisite to
performing electronic banking. Of course, people can always use a public
computer with Internet access; however, the security of public computers is
always a concern.
 Computer Know-How: Conducting a successful electronic banking
transaction, like paying bills online, requires basic computer skills and
knowing your way around the Internet. Being computer-literate is not common
to everyone-especially seniors who might not have grown up using computers-
and this is a major disadvantage to electronic banking.
 Delayed Statements: When performing online banking there is not a standard
at which payments made will show up on your online bank statements; they
might show up two to three days later, depending upon the bank. When
banking in person, you can generally get the exact status of your bank account.
 Security Concerns: One of the biggest disadvantages of doing electronic
banking is the question of security. With the prevalence of key loggers,
phishing emails, Trojans and other online threats, it is natural for people to be
concerned with the security of their identity, funds and electronic banking
transactions. Using antivirus and similar programs is not full-proof. People
worry that their bank accounts can be hacked and accessed without their
knowledge or that the funds they transfer may not reach the intended
recipients.
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 Although it is rare nowadays with enhanced security measures, these threats
still exist.
 Loss of Human Touch: Some people still value talking and interacting with
bank tellers, managers and other bank clients. Electronic banking takes the
majority of these "human interactions" away, leaving the banking experience
as a very hands-off, impersonal process.

Security Risks:
Most banks make sure that their websites are secure, but no bank website is immune
from cybercrime and hacking. Hackers target bank websites to swipe account
information. Not only can identity theft put you out of hundreds, perhaps even
thousands, of dollars, but it can take time to correct the damage, and it's estimated that
only 25 percent of cybercrimes are resolved. So even though your bank may claim
that its site is secure, you should always proceed with caution, especially if you're
banking from your mobile phone.

ATM:
One disadvantage of Internet banking relates to withdrawing money. While most
businesses accept debit and credit cards, people still like to have cash on them too.
Hence, you can't withdraw cash over the Internet so you still have to visit your bank's
physical location, or eat service fees by withdrawing money at an ATM that's not
associated with your bank. This becomes even more challenging if you belong to an
online-only bank, as you may be forced to withdraw cash through snail mail or paying
ATM fees at every withdrawal.

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Deposit Limitations:
It's likely that your pay check is directly deposited into your bank account, saving you
a trip to the bank. But there are still times when you'll have to make a deposit to your
account. Although many banks have released mobile apps that allow you to scan a
photo of your check for automatic deposit, this feature is beneficial only for people
who own smart phones. Those who don't must visit their bank's physical location to
deposit money or send the deposit in via snail mail for online-only banks.

Customer Service:
Although online banks have implemented chatting features and offer customer service
numbers for those with questions and inquiries, it still doesn't compare to the
customer service you'll receive by banking at a physical bank location. For instance, if
you are onsite, you can meet with employees and receive information on important
topics such as financing, credit card rates and types of loans all in addition to standard
banking.

Drawbacks of Technology In Banking:

Though technology has best owed us with heaps of benefits but it has a flipside to it
as well. They are as follows.
 Personal Relationship With The Bank Is Not Established: The traditional
brick and mortar bank interacts with the customer developing a mutual bond.
Acquainting with the professionals working in the bank in your area can be
beneficial during the time you apply for a loan or if you require any special
service. They might help you to deal with the issues of service charges or
cutting down on the fees. In case of business loans, especially this bond will
help you to get the required capital.
 Issues with Transactions: When you have to deal with a complex transaction,
it is better to sit and resolve it face to face. International transactions also have
many concerns that need to be looked after. It is advisable that in these cases

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 you should sit and consult with your bank official to resolve the issues.
Making them online might lead to link failure hampering the mode of transfer.
 Security Issues: Identity theft is an issue to consider these days. If robust
encryption software is not in place then all your confidential account
information will be available in the web posing serious threats to your
finances.

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 15. CASE STUDY

1. Mumbai Police Salary Accounts With Axis Bank Hacked

Article Date: Mumbai June 15, 2013

At least 15 personnel of the city police have found their Axis Bank salary
accounts hacked into and the money withdrawn, it appears, from ATMs in Greece.
The matter has been considered serious enough for the state's director-general of
police to discuss with Axis; a team led by a deputy commissioner of the force is
probing. Axis has set up a team, too. A case has been registered at the Colaba Police
station. In all, 37 accounts have been found hacked. The total amount debited
fraudulently is Rs 15.47 lakh, of which Rs 2.5 lakh is from the salary accounts of 15
Mumbai policemen.
"Axis Bank has assured return of the money to the police personnel through the
insurance scheme," a city police official told Business Standard.
Axis' spokesperson said: "A small number of our customers' accounts (less than 50)
have been impacted through transactions at compromised ATMs in Mumbai,
belonging to multiple banks. We have reversed the impact in all such customers'
accounts with immediate effect, to ensure they are not inconvenienced. We are
undertaking a full investigation into the incident and are working closely with law
enforcement officials in this regard. We wish to assure our customers that Axis
Bank stands committed to protecting their interests and that we have the necessary
systems to ensure the same."
Cyber expert Vijay Mukhi said it was a case of cloning, wherein the hackers
succeeded in copying the magnetic stripe placed on the back of an ATM card and also
the PIN. "The hacker must have sold it to somebody who has withdrawn the money
from Greece," he added.Mukhi suggested ATMs be upgraded to the use of chip-based
cards, which cannot be cloned. Further, banks should focus on location tracking.

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 2. Rs 1 Crore Stolen From Executive's Bank Account:

Article Date: Mumbai Feb2, 2013

Ankur Korane was at his office in Mulund on Thursday morning when his mobile
began buzzing with texts. The first message at 9.15am declared that Rs 12 lakh had
been transferred out electronically from his bank account a transaction he knew
nothing of. The next text informed of a transfer of Rs 5 lakh, the third of a debit of Rs
15 lakh. By 10am, Korane had received 12 such texts. Within mere 45 minutes, Rs 1
crore was stolen from his account.
A director in a cosmetic company, 29-year-old Korane has filed a complaint with
Mulund police about the fraudulent transactions. A first information report has been
registered for cheating and impersonation under sections of the Information
Technology Act and the Indian Penal Code.
"The money was transferred in 12 transactions from the victim's bank account,
Mulund branch, using Real Time Gross Settlement system," said additional
commissioner of police (east region) Quaiser Khalid. In each transaction, the money
was sent to a different account in the country. The Mulund police admitted that they
are so far in the dark on how the crime was perpetrated, though they suspect that
Korane's e-banking details such as username and password were stolen and used for
the fraud. The case, they said, will be transferred to the cyber crime cell and the
economic offences wing of the Mumbai police.
In his complaint, Korane alleged that when he "contacted the bank to freeze further
transactions from my account, it asked that he first submit a police FIR". Still shaken
on Friday, Korane refused to discuss the crime's details, only saying that he is
"running around the police station, helping cops in their probe".
The police have directed the bank to provide the details of the 12 accounts where Rs 1
crore was directed. "We have also ordered a halt on transactions from Korane's
account to protect the Rs 60 lakh that remains there and was not siphoned off during
the fraudulent transactions," said senior inspector Jivajirao Jadhav.

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A bank spokesperson told Times Of India: "Investigations are currently being
conducted by the concerned authorities. The bank is extending all necessary
cooperation."

When informed about the crime, cyber expert Vijay Mukhi explained that a bank
account can be hacked in various ways. A user's online banking username and
password can fall "into wrong hands if stored on a computer, a cell phone or scribbled
on a piece of paper". “Hackers send out viruses to steal passwords from computers.
They also dispatch spam emails, which ask for banking passwords," Mukhi said.

16. Advantages of Modern Technology In Banking

Modern technology has revolutionized the banking industry, providing numerous

benefits to both banks and customers. According to a Forbes Advisor study,

approximately 78% of Americans prefer banking via a mobile app or website to

banking in person 1. Here are some of the primary benefits of digital banking:

Convenience: Digital banking allows customers to perform banking transactions and

access banking services remotely, without having to visit a physical

branch. Customers can access their accounts at any time, from any location, and

perform a wide range of transactions, such as checking account balances, transferring

funds, paying bills, and applying for loans 1.

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Features: Many banks’ mobile and online experiences offer just as many features as

banking in person—if not more. For instance, many mobile banking apps let you

deposit checks remotely. At the same time, you can check your balance, transfer

funds, and set up a notification to alert you if you overdraft your account—all without

the need to visit a branch 1.

Security: Digital banking is more secure than traditional banking methods. Electronic

transactions are more secure (you aren’t carrying cash), they’re more sanitary (you

aren’t touching cash), and you can track your transaction electronically 1.

Efficiency: Digital banking is much more efficient than traditional banking

methods. It allows for much better management of your financial resources 1.

Improved Customer Service: Digital banking has improved customer service by

providing faster and more efficient services. It has also reduced the need for

customers to visit a physical branch, which saves time and money 2.

Operational Efficiency: Modernizing technology has become a perpetual challenge

for banks. However, when banks fully or partially succeed in modernizing their

technology systems, they have realized numerous benefits, ranging from operational

efficiency to a better customer experience, to reduced operational risk and greater

speed and flexibility 3.

Overall, modern technology has transformed the banking industry, making it more

convenient, efficient, and secure for customers.

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Improved Efficiency: Modern technology has enabled banks to automate many of

their processes, reducing the need for manual intervention. This has led to faster

processing times, fewer errors, and lower costs1.

Enhanced Security: With the advent of modern technology, banks have been able to

implement more robust security measures to protect their customers’ data and

transactions. This includes biometric authentication, two-factor authentication, and

encryption2.

Increased Accessibility: Modern technology has made banking services more

accessible to people who live in remote areas or have mobility issues. Customers can

now access their accounts and perform transactions from anywhere, at any time, using

their smartphones or computers3.

Improved Customer Experience: Modern technology has enabled banks to offer

personalized services to their customers, such as customized alerts, tailored product

recommendations, and 24/7 customer support1.

Cost Savings: By automating many of their processes, banks have been able to reduce

their operational costs, which has led to lower fees and better interest rates for

customers2.

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These are just a few of the many advantages of modern technology in banking.

Overall, modern technology has transformed the banking industry, making it more

efficient, secure, and accessible for customers.

Certainly! Here is a case study on the role of modern technology in

banking, specifically HDFC Bank. HDFC Bank has recently announced

that it is setting up a Digital Factory and an Enterprise Factory to roll-out

new digital products and services in the future and augment its IT

Infrastructure. The Digital and Enterprise factories will be pivoted on

APIs, data and cloud. The dual approach of building the Digital Factory

along with an Enterprise Factory is part of the bank’s technology

transformation agenda to run and transform the bank. The bank proposes

to strengthen capabilities for the Digital and the Enterprise factories by

hiring up to 500 people over the next two years, from diverse

backgrounds such as data analytics, AI, ML, Design Thinking, Cloud and

DevOps. The Digital Factory will build new business and new solutions

riding on new tech stacks/applications and high resiliency and monitoring

capabilities. This will be backed by the ability to support large volume

growth and plan for upgrading technologies. The bank is also developing

future-ready IP technologies and moving to a native cloud architecture in

collaboration with niche technology companies, fintech and large IT

companies. Ensuring reliability, availability, scalability and security will

be at the core of the Digital Factory’s endeavours. The Enterprise Factory

will upgrade legacy infrastructure, decouple existing systems and build its

own capabilities by embracing open-source to build resilience and scale

Modern technology has revolutionized the banking industry in many

ways. One such example is the case of Regions Bank1, which aimed to

modernize banking, innovate, and offer customers a better lending

experience. Working with Deloitte, the bank’s leaders set out to create a

single lending platform to improve customer experience, digitize the

workforce, and streamline the way work gets done1. The bank selected

the nCino operating system as the central component to make its lending

operations more integrated and responsive. They also selected Deloitte as

the integrator who would help build these improvements not only into the

bank’s technology but also into its culture1. The bank began to roll out

capabilities like mobile OCR scanning of financial documents, a

customer-friendly portal, and a greater reliance on predictive

analytics1. The benefits of the digital and business transformation include

consistent data and a single source of truth for banking associates, a

balance of personal in-branch relationships and convenient mobile and

online connectivity for customers, predictive analytics and dynamic

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workflow to help lending professionals see the big picture and bring more

attractive offerings to customers, efficient, logical system design that

promotes employee engagement and retention, and ready access to

information that lends speed and accuracy to compliance and reporting1.

Another study2 highlights the role of emerging technologies such as

Artificial Intelligence, Machine Learning, Big data Analytics, IoT, Cloud

Computing, etc. in bringing digital revolution in banking industries. The

paper aims to find out the applications of above mentioned technologies

in banks.

17. Disadvantages of Modern Technology In Banking

The emergence of the internet has opened a wide variety of avenues and

information to the common man, which he can access from a comfortable

home setting. Along with the facilities, like shopping, booking tickets, etc.,

the internet has also become a mode for banking. Online banking was

introduced a very long time ago, and since then, there has been no looking

back. Now, one does not have to wait in a long line at the bank or at some

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shopping center or boutique. Online banking gives a person facilities to view

account statements, make money transfers from one account to the other,

and also to pay bills like electricity, phone, etc. The best thing about online

banking is that it is fast and is available to a person in any part of the world,

anytime he or she needs it

In today’s busy world, when people do not have much time even for

personal work, online banking appears as a boon. People who use online

banking services believe that as their accounts can be accessed by user name

and password that only they know, their money is in safe hands. Whatever

information they need about their bank account is only a click away.

However, like all good things, even online banking has certain negativeness.

Downsides of E-banking

Lack of Trust
The reason that not many people have started using e-banking is because

they do not trust the services of the bank through the net. Some human

beings prefer to trust others like them and may have some difficulty in

trusting a machine, especially in the matters of money. They may always

have a doubt about whether their money is safe, while being processed

through e-banking.

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Online Fraud
A few cases of forgery have been reported in online banking. There are

some fraud or proxy websites, which can hack information (user name and

password) entered by a person for some transaction, and later misuse it. In

such cases, people lose their money without knowledge, and by the time

they get the bill, huge loses may have been incurred.

Time Constraint
Another disadvantage of e-banking is that it may take some time to get the

internet account started, as it requires a lot of paperwork. Some people avoid

using e-banking services, because they find it difficult to understand how it

works. Also, the fact that a wrong click can cause monetary losses may be a

deterrent. E-banking can also pose a problem, if the network is down in

one’s area. This may cause difficulty, if the person has to do an important

transaction.

Service
One very common disadvantage of online banking is when a person has

some problem or query. In a normal bank, if one faces some problem, one

can go to some employee of the bank to solve it. However, in the case of e-

banking, one will find oneself making endless calls to the customer service

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department. There have been cases, where the person is put on hold or has

been passed around from one person to another.

Although, e-banking has certain downsides, one can avail of its customer-

friendly services, if one is a little careful. One should never give away one’s

password to any unknown person and to make the experience of e-banking a

smooth process, one must use sites that are familiar and reliable.

18. Future of Indian Banking Sector wit

Advance IT Solutions
The Indian banking sector is at the forefront of a new era characterized

by technological innovation, evolving customer expectations, and

disruptive opportunities. To successfully navigate this rapidly changing

landscape, banks must harness the transformative power of advanced

IT solutions. In fact, Indian companies are projected to invest a

substantial amount of $108.05 billion in IT solutions in 2023,

showcasing their strong commitment to leveraging new technologies

and enhancing operations and customer service to unprecedented

levels.

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Artificial intelligence (AI), blockchain technology, cloud computing,

user-centric mobile banking apps, and fortified cybersecurity measures

are key areas where banks are investing to drive growth. AI-powered

chatbots, for instance, are revolutionizing customer support by

providing round-the-clock assistance, freeing up human employees for

more complex tasks. This not only enhances operational efficiency but

also delivers a personalized customer experience that fosters

satisfaction and loyalty. According to a survey by Gartner,

conversational AI will reduce contact center agent labor costs by $80

billion by 2026.

The transformative changes sweeping through the Indian banking

sector require a proactive response to the challenges and opportunities
at hand. Advanced IT solutions emerge as the driving force behind this
response, offering banks the means to overcome obstacles, meet
customer expectations, and unlock new possibilities.

The Role of Advanced ICT Solutions

The adoption of AI, blockchain, and cloud computing solutions plays a

pivotal role in driving the technological advancement of the banking
sector. These cutting-edge technologies enable banks to streamline
processes, automate tasks, gain valuable insights, and provide
personalized experiences to customers. By leveraging these solutions,
banks can enhance efficiency, improve risk management, and deliver
tailored services that meet the diverse needs of their customers.

The adoption of advanced ICT solutions plays a pivotal role in driving

the technological advancement of the banking sector. These solutions
encompass a range of offerings that cater to the mission-critical needs
of the BFSI industry. Let’s explore some of these offerings that
empower banks to enhance efficiency, agility, and customer-centricity.

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Connectivity: Establishing reliable and high-speed connectivity is
paramount for banks to ensure seamless operations. This includes the
deployment of dedicated lease lines (such as HAI LL) that provide
secure and robust network connectivity, enabling banks to transmit
data swiftly and securely.

Cloud Interconnect: With the increasing adoption of cloud

computing, banks require secure and efficient access to cloud services.
Cloud Interconnect solutions facilitate direct and secure connections
between banks’ IT infrastructure and cloud platforms, enabling
seamless data transfer and access to cloud resources.

SDWAN (Software-Defined Wide Area Network): SDWAN

solutions offer banks the flexibility to optimize network performance
and manage multiple locations efficiently. By leveraging software-
defined networking, banks can dynamically allocate bandwidth,
prioritize critical applications, and enhance network security.

Digital Infrastructure: To support the growing digital demands of

the banking sector, robust digital infrastructure is essential. This
includes servers, storage solutions, and other digital infrastructure
components that enable banks to process and store vast amounts of
data securely and efficiently.

Infrastructure as a Service (IaaS): Banks can leverage both on-

premise and cloud-based Infrastructure as a Service offering to scale
their IT infrastructure rapidly and cost-effectively. This empowers
banks to focus on their core competencies and innovation while relying
on third-party providers to manage and maintain their infrastructure.

Cybersecurity Services: The banking sector faces increasing

cybersecurity threats, making robust cybersecurity solutions
imperative. Banks can benefit from a comprehensive suite of
cybersecurity services that encompass threat detection, vulnerability
assessment, incident response, and proactive security measures to
safeguard their critical systems and customer data.

Surveillance and Managed Data Center Services: Banks require

state-of-the-art surveillance solutions to ensure the security and
integrity of their data centers. Managed Data Center services offer
banks the expertise and support to efficiently manage their data center
operations, ensuring high availability, scalability, and reliability.

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A Commitment to Customer-Centricity and Technological
Empowerment

By placing the customer at the center of their operations, banks can

deliver personalized experiences, anticipate customer needs, and build
lasting relationships. This requires leveraging advanced technologies,
such as artificial intelligence, data analytics, and machine learning, to
gain actionable insights and create tailored solutions. In this era of
digital transformation, banks need to partner with innovative
technology providers that can help them navigate the complexities of
this journey. Through strategic collaborations with industry experts,
banks can access cutting-edge solutions, harness the power of data,
and drive operational efficiency. This commitment to customer-
centricity and technological empowerment enables banks to meet
evolving customer expectations, deliver seamless digital experiences,
and foster a culture of innovation. It empowers them to adapt to
market dynamics, stay ahead of the competition, and build a
sustainable future in the banking landscape.

Strategic Partnership with ICT players

The forward-thinking investments in advanced IT solutions, coupled

with strategic partnerships, place the Indian banking sector at the
forefront of innovation. Collaborating with innovative ICT players,
banks gain access to cutting-edge solutions and expertise that enable
them to stay ahead of the competition and navigate the complexities of
the digital landscape. These collaborations foster a culture of
innovation, driving operational excellence, and empowering banks to
deliver seamless digital experiences to their customers.

Together, banks and technology partners forge a path of

transformation, bringing the vision of a technologically empowered and
customer-centric banking sector to life. The future of banking in India
holds immense potential, and the banks that proactively adapt to the
changing landscape will be the ones to thrive. With collaboration
between banks and ICT leaders, innovation becomes the driving force
behind sustainable growth, creating a resilient banking ecosystem that
meets the evolving needs of customers in the digital era.

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 19. Modern banking versus traditional banking

Banking has evolved significantly over the last few decades, with many

of today’s fintechs choosing a digital-only, modern-banking approach

over the traditional brick-and-mortar-led strategy.

The embrace of digital has been largely welcomed by consumers, who

increasingly favor online touchpoints for everyday activities such as

checking their account balances or transferring money.

While the collective thought process may be that customers no longer

value what traditional, in-person banking has to offer,

experts from Deloitte and other financial institutions believe branches will

remain relevant long into the future. While it’s true that branch use

is declining, customers who are applying for banking and lending products

are more likely to do so face-to-face. Call-center demand has also

increased in over 76% of financial institutions since the pandemic began.

Leaders at financial institutions may be feeling the pressure to dedicate

their organization to one approach or the other in order to deliver the best

results for their customers and banking teams.

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But luckily, financial institutions don’t have to choose between the

two — they can adopt modern-banking development that is digital-first

and incorporates the most powerful benefits of a traditional strategy.

Traditional banking elements to include in a

modern approach

Financial institutions operating with a mostly traditional model have

maintained their system for a reason — in large part, it works. Buoyed by

decades of experience, these institutions continue to offer stability for

long-standing customers, especially those wanting to make regular cash

deposits or from an older generation. Here are three key traditional

banking elements that can drive value for financial institutions looking to

adopt a digital-first strategy:

Interpersonal connection

Traditional financial institutions pride themselves on the human touch.

They offer the in-person channels that have historically helped build

strong customer relationships and loyalty. When it comes to interpersonal

connections, traditional institutions also benefit from legacy and scale.

They have access to a significant amount of customer-provided

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information, which enables them to provide more personalized customer

service, as long as they use it effectively and responsibly.

Trust

Another key edge incumbent banks have over digital-only modern

banking organizations is trust. EY’s global consumer banking

study found that customers of traditional banks are more confident that

their data is protected, feel more empowered, and like the ability to reach

their financial institution via a branch, if needed.

Reassurance

Customers value in-person interactions for services that are more

complex. Thirty-five percent of boomers and one-third of millennials said

they prefer to visit a branch to receive financial advice.

The top benefits of digital banking

Without the restraints of legacy technology and processes, digital-first

firms are nimble and agile with the ability to take products to market

faster and more cost effectively. Here are three key aspects of digital

banking that can help both traditional and more-modern institutions

succeed:

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 1. Speed

Digital solutions that leverage automation can improve efficiency

and eliminate many of the bottlenecks and paper-based processes

rife in traditional banking. The faster, seamless experience of

modern banking can help improve the customer experience.

2. Convenience

Around-the-clock access to digital channels gives customers the

ability to bank at a time and a place that suits them. Table-stake

digital banking features include quick and seamless onboarding and

advanced access and security.

3. ROI

Faster processes, with less need for heavy lifting by bank

employees, free up time to deal with more customers more

efficiently.

How digital lending fits into both traditional and modern banking

Digital lending is one of the many offerings both modern and more

traditional institutions can use to achieve scalable success. An end-to-end

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lending software platform offers advantages for the financial institution

and its employees that translate to real value for customers, no matter if

it’s a credit union with physical locations, an online-only bank, or

anything in between. Benefits include:

Shorter loan-life cycles

Digital lending includes a shorter loan-life cycle from origination to close

— thanks to automatic aggregation and verification of customer data and

documents. In addition to seeing a reduction in the back-and-forth of

traditional manual processes, banks and credit unions can build upon

customer trust by securely storing sensitive customer data.

Personalized approaches to lending

Using a digital platform gives any institution the ability to tailor each

lending product to an individual customer’s journey while offering them

additional financial resources and step-by-step guidance throughout the

life of their loans.

More meaningful customer connections

Automatic processes help improve overall operational efficiency for

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employees, freeing them up for more face-to-face interactions. This gives

employees the opportunity to become valued advisors invested in

customers’ continued financial health while building upon the trust of the

institution.

Using a digital solution for a simpler, more intuitive lending process

helps boost customer satisfaction and loyalty in the long run.

Modern banking vs traditional banking: How Blend combines the two

Physical branches aren’t going away anytime soon, and in-person

interactions will remain valuable for customers long into the future.

That’s why Blend supports the best of modern and traditional banking in

a single cloud-based platform.

We give financial institutions the tools to level up their digital offering by

facilitating end-to-end customer journeys for any banking product. Our

unified digital experience with responsive design and guided application

workflow helps any process feel simple and straightforward.

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 20. FINDINGS OF THE STUDY

The project has given an insight into the various aspects of role of modern technology
in banking namely
 Meaning and definition of modern technology in banking.
 Different functions of technology in banks like Phone banking, Mobile banking,
Electronic Clearing Services & Electronic Fund Transfer, RTGS etc.
 Organizational structure & objective of modern technology in banking.
 Future scope of technology and role of information technology in banking sector .
 People are not confident enough to whether to rely completely on technology. There
is hesitancy in their minds with regards to preference. So they use both the techniques
of banking i.e. Technology (online) and Traditional.
 People are not sure whether their account is completely secured in online banking,
phone banking, internet banking. Security concern is the main and the core reason
why people do not tend to use technology.
 People in India are not aware of the full utility of technology and the services that can
be availed of in online banking.
 Risk involved in technology in banking for is the same like operational risk and
financial risk and they aim for a well-integrated and innovative management of
banking with low risk and proper function for customer.

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 21. SUGGESTIONS AND RECOMMENDATIONS

After analysing the entire study on online banking with respect to both the primary
and the secondary data, the following recommendations can be put forth:-
 The infrastructure for the development is not being implemented in way that
could be beneficial.
 There are various obstacles in the banking scenario with regards to guidelines
and issues for functioning. This has led to decline in the usage of the
technology service of the banks.
 The people having accounts can be urged to take up an internet banking
facility. They should be motivated rather than just being told that there exists a
service of technology.
 There are more people who are not actually aware of all the benefits that they
reap out of the transaction of technology. They should be proper awareness.
 Most of the people are not count technology due the problems of security
concerns. Proper security software should be developed and people should be
convinced that their accounts are secured in technology.

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 22. CONCLUSION

Today, banks deployed to technology intensive solutions like enhancing core banking
value, revamping the digital agenda, moving from information to insight, dealing with
a changing risk regime, from cash to electronic modes of payment, grappling with
financial inclusion, empowering employees and accelerating innovation. Banks have
changed in their operations and moved towards universal banking along with the
increased usage of technology. Majority of banks are insisting on cashless and
paperless payment modes. Today banking is known as innovative banking. A wide
range of services are being offered by banks using the electronic media. Banking
through internet has emerged as a strategic resource for achieving higher efficiency,
control of operations and reduction of cost by replacing paper based and labour
intensive methods with automated processes thus leading to higher productivity and
profitability. Challenging business environment within the banking system create
more innovation in the fields of product, process and market. Internet banking is
highly comfort in our routine life, in fact this made our life simple and convenient and
over all we are able to enjoy quality service smartly. These technologies created
efficiency and time saving methods of conducting business for people. Nevertheless
modern banking services are highly sophisticated to the customers in all the ways.

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 23. BIBLIOGRAPHY

BOOKS
 Innovation In Banking- A K Sohani
 Innovation In Financial System.- Katuri Nageswara Rao

INTERNET

 www.investopedia.com

 www.financialexpress.com

 http://techin.oureverydaylife.com/disadvantages-internet-banking-1588.html

 http://www.onlinebanking.net/how-does-online-banking-work

 http://economictimes.indiatimes.com/opinion/money-banking/e-banking-could-
open-opportunities-for-banks/articleshow/4461581.cms
 http://www.sendmoneyindia.org/icici-net-banking.php

 http://nedogluka.com/internet-banking-global-way-for-banks-in-india.html

 https://toughnickel.com/personal-finance/Advantages-and-Disadvantages-of-
Internet-Banking

 http://businesswolf.org/rise-digital-banking-benefits-drawbacks/
 http://www.researchjournal.co.in/upload/assignments/6_138-140.pdf
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 http://www.atkearney.in/documents/10192/5264096/Going+Digital+-
+The+Banking+Transformation+Road+Map.pdf/60705e64-94bc-44e8-9417-
652ab318b233

 http://www.business-standard.com/article/current-affairs/mumbai-police-
salary-accounts-with-axis-bank-hacked-113061500031_1.html

 http://timesofindia.indiatimes.com/city/mumbai/Rs-1-crore-stolen-from-
executives-bank-account/articleshow/18298758.cms

 http://techin.oureverydaylife.com/disadvantages-internet-banking-1588.html

 https://docs.google.com/forms/d/e/1FAIpQLScvudjX7gGVXlLhE9HkaAKpS
7DYf0kQ6bnA1BplcvXL2EW6g/viewform

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 24. ANNEXURE
QUESTIONNAIRE OF MODERN TECHNOLOGY IN BANKING

Personal Details:
Name: _________________________________
Age (in years): Below20 20 – 35 35 – 50 above 50
Gender: Male Female

Educational Profile:
10th Pass 12th Pass
Graduate Post Graduate

Question 1 Which bank do you have an account?

Private sector bank Public sector bank
Co-Operativebank

Question 2 What kind of banking do you prefer?

Traditional Online
Both

Question 3 Do you think Technology banking is useful?

Yes No
Can’t say

Question 4 How frequently do you use banking technology services?

Weekly Monthly
Regularly Rarely

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Question 5 Do you think Technology in banking is better than traditional banking?
Yes No
Can’t Say

Questions 6 Do you feel technology in banking has a growth potential in India?

Yes No
Can’t Say

Question 7 What type of transaction do you make in online banking?

Check balances Make payments
Transfer funds Other

Question 8 Do you feel your account is completely secured in technology banking?

Yes No
Can’t Say

Question 9 Are you happy with the services of technology provided by your bank?
Completely Partially
Fairly Not at all

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Question 10 How frequently do you use the following banking services per month?
1to3 3to8 8to12 Over12
Times Times Times Times

A. Branch Banking
B. ATM
C. Internet Banking
D. Tele Phone banking
E. Mobile banking

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