Banking Ppt

INFORMATION TECHNOLOGY IN BANKING

Information Technology in Banking Sector

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ATMs Electronic Banking Branch Banking Branch 3 Branch 2 Branch 1 Head Office

Branch 4

Branch 5

Branch n Branch 6 Information Technology in Banking Sector

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E-Banking Developments  ALPMs and Back Office Computerization.  Need to improve Customer Service.  Reconciliation/ union problems.

 Competition and Reforms.  Introduction of Computerization.  Clearing Houses, ATMs, Electronic Fund Transfers, Banknet, Swift,

Electronic Mail, Credit Cards, Online Banking, Tele-Banking, etc.

Information Technology in Banking Sector

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Why Technology In Banks ?  To transform financial services industry in the net-worked world  Banks to be customer centric

 Provide services / products across a range of channels  To be futuristic and have “time” value in all its dealings with customers

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Many Benefits of Technology  Increased operational efficiency, profitability & productivity.

 Superior Customer Service.  Multi-channel, real-time transaction processing.  Better Cross-Selling ability.

 Improved management / accountability.  Efficient NPA and Risk Management.  Minimal transaction costs.  Improved financial analyses capabilities.

Information Technology in Banking Sector

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Pre-requisites for Technology Human Resource

Business Process

Empowerment

Re-engineering

Planning for

Disasters Information Technology in Banking Sector

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Communication Networks         

MICR (Magnetic Ink Character Recognition) Clearing. BANKNET. INFINET. SWIFT. Electronic Funds Transfer at Point of Sale(EFTPOS) Electronic Data Interchange (EDI). Electronic Funds Transfer (EFT) System. Electronic Clearing Services (ECS). ATM network - SWADHAN (Shared Payment Network System).

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MICR Clearing  Magnetic Ink Character Recognition.  Introduced in 1987 in the four metros.  1,047 Clearing Houses; 42 with MICR.  SB/CA Cheque leaves standardized size (8 X 3 2/3”) are pre-printed with

the bank-branch code and account type in MICR strip, while the amount is read manually and fed into the system using the encoders for funds settlements.  Speeds up clearing work.

Information Technology in Banking Sector

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Automated Teller Machines  ATMs or 24 hour Tellers – Electronic Terminals - allow to bank at any time.  On-site and Off-site Automated Teller Machines.  Average withdrawal per ATM transaction - Rs 1,500 to Rs 3,000  Total cash movement through ATMs in India is Rs 35,000 - 40,000 crores

every year  Medium for non-cash transactions such as printing of statements, credit

card enquiry, cross selling, etc

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BANKNET  Set up in 1991 by RBI  Meant to facilitate transfer of inter-bank/ inter-branch messages within

India by Public Sector banks who are members of this network  Wide connectivity.

Information Technology in Banking Sector

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INFINET  Indian Financial Network.  Set up by RBI in June 1999.

 Satellite based WAN using VSAT (Very Small Aperture Terminal)

technology .  Major applications: E-mail, Electronic Clearing Service - Credit and

Debit, Electronic Funds Transfer.

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Electronic Funds Transfer (EFT)  Hosted and operated by the RBI.

 Permits fund transfer up to Rs 5 lacs from any account at any branch of any

member bank in any city to any other account at any branch of any member bank in any other city.  RBI acts as the service provider as well as regulator.

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Electronic Funds Transfer at Point of Sale(EFTPOS)  While travelers' cheques meant 'pay-now-buy-later' and credit cards

had 'buy-now-pay-later' advantages, EFTPOS or debit cards signify 'buy-now-pay-now' but without cash transaction. The user presents his ATM card when he buys goods and the EFTPOS system immediately debits his bank account.

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Electronic Data Interchange  EDI typically denotes paperless financial transactions across the

locations. EDI is fast becoming the norm for inter-company transactions and also for procurement of bought out items from the suppliers.  The companies can now operate their bank accounts through corporate banking terminals in their own offices which are linked to the bank computers.  Companies can thus carry out transactions like transferring funds, managing its cash flow, opening letters of credit,etc.

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ECS  Electronic Clearing Scheme (ECS) operated by the RBI since 1996-97  Utilizes BANKNET and INFINET  Facilitates payment from a single account at a bank branch to any

number of accounts maintained with the branches of the same or other banks.  RBI has also launched ECS – Debit for payment to utility companies

like Telephones, Electricity etc.

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SWADHAN  Launched in 1997  India's FIRST Shared Payment Network Service  55 member banks in the network, which include nationalized, private and

foreign banks  Enables member banks to share their ATMs with other participating banks  Objective - reduce the huge investment being made by the banks to deploy

ATMs in different locations

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Services  Bill Payment through Electronic Banking  Electronic Shopping Mall  Effecting Personal Investments through Electronic Banking  Trading in shares  Investing in Mutual Funds

 Trade In Derivatives  IPOs Online

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Real Time Gross Settlement  Introduced in India in 2004 by RBI  Internationally accepted system to minimize the settlement risks  Settlements occur simultaneously  >10,000 bank branches networked  Balances held with RBI by banks

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Smart Cards  Multi-application Smart Card  Channel of the future  Pilot project started  Pilot Project funded by Govt. of India

 Project is in progress in partnership with IDRBT, IIT Mumbai and Banks

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Beware of  Hacking  Phishing  Pharming  Skimming  Trojan

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THANK YOU

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