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Role of technology in banking

Communication & connectivity


initiates from Total Branch Automation (TBA) packages. convergence of communication technologies, like internet, mobile/cell phones in banking. Centralisization of banks . Implementation of Centralized Funds Management System.
In first phase centralised funds enquiry system (CFES) In second phase centralised funds transfer system (CFTS)

Special Electronic Funds Transfer


NEFT would provide for movement of electronic transfer of funds in a safe, secure and quick manner across branches of any bank to any other bank through a central gateway of each bank, with the inter-bank settlement being effected in the books of account of banks maintained at RBI. Real Time Gross Settlement System (RTGS)

MICR (magnetic ink character recognition ) & Imaging technology for cheque clearing

E-BANKING Offers the following services to its customers: Credit Cards/Debit Cards ATM E-Cheques EFT (Electronic Funds Transfer) DeMAT Accounts Mobile Banking Telephone Banking Internet Banking EDI (Electronic Data Interchange)

COST REDUCTION
Technology in banking leads to cost reduction in processing as well as in human resources.
Less manual intervention Revenue increase Less investment to bring new products to market

Prior to ATMs, funds withdrawals, accounts enquiries and funds transfers required face to face interactions between bank staff and customers, a process which was slow and subject to costly human errors and large costs of labour. cell phone banking, no costs of travelling to the bank and the convenience of cell phone banking (customers can do their transaction anywhere and anytime)

RISK MANAGEMENT
Technology is an important tool for the risk manager, delivering the benefits of control and traceability of events and data, as well as efficiency gains. use of technology are playing an important role in reducing risk, as well as increasing efficiency and cost effectiveness. For technology risk - A comprehensive IT security strategy is a vital component of an effective risk management process

cryptographic technologies play an important role in ensuring confidentiality, authenticity and integrity. Customers are required to provide their User ID and PIN combination and a one-time password (OTP), dynamic access code or digital signature so that their identity and authenticity could be verified before access to their accounts is permitted. Credit risk - After 90 days of non payment of loan amount it automatically transfers in NonPerforming loans. Helps banks to recognise it at early stage.