1. What is banking technology?
“Banking technology” refers to the use of sophisticated information and communication technologies together with computer science to enable banks to offer better services to its customers in a secure and reliable manner, and get competitive advantage over other banks.

2. Focus aspects of Commercial Banking now are:
BANK’S BUSINESS
Focus aspects of Commercial Banking now are:
LOANS & MISC. SERVICES
Core
Banking (CBS)
MIS & Intranet
ATMs
RAISING DEPOSITS
POS Terminals and Cash dispenser
Electronic
Banking
Corporate
Network
Card
Management
Any Branch Banking
Document
Management
BANK’S BUSINESS
CRM
Risk
Management
Resource
Management

3. Core Banking System

4. ATM Electronic Banking Branch Banking Branch 2 Branch 3 Branch 1
Head Office
Branch 4
Branch 5
Branch n
Branch 6

5. IT Developments affect Bank
Reduction of costs
Bank services
Branding
Customer Demographics

6. Remote Banking
Remote banking refers to the provision of extending banking services without face to face contact between the bank employees and its customers.

7. Types of Remote Banking Services
Kiosk banking
The customer uses multipurpose ATMs installed by the bank which may also be used as an interactive link between the customer and the bank.
Telephone banking
Telephone is used as a message carrier to enable person to person or voice activated automated communication between the bank and the customers.

8. Online banking
Internet is used as a message carrier where the computer uses a PC and a modem to connect to the bank using its online website or a software provided by the bank.

9. Future Trend in Remote Banking
Spectacular growth in the use of online banking facilities to manage money rather than just for accounting reporting- in both retail & corporate sector.
New digital signatures legally binding in many countries leading to entirely new patterns of consumer activity.
Huge growth in wireless banking & payment services using mobile phones.

10. Electronic Payment channels
Payment systems
payment is made by two ways - paper based and electronic bases system
In the paper based there are various types of instruments like cheques, drafts, payment orders and interest/dividend warrants.
Inter bank clearing, G-sec clearing and Forex clearing are the system of electronic bases payment.

11. Diffusion of Electronic Money
Types of e-money
Card based money
Network based money

12. Reason for adopting the e-money slowly
Reluctance of merchants to accept the card as the mode of payment
Cost consideration of the merchant. i.e., the installation & transaction costs
Cost consideration of the consumer.
Insufficient customer information.

13. Technology and Bank’s strategies
Technology is an important strategic tool for banks to safeguard long-term competitiveness , cost efficiency and profitability.
Cost Aspects
The use of technology in banking sector reduce per transaction cost
Revenue Aspects
Offering new services and attracting more number of customers , reach customers demand.

14. Banking sector
The technology resources are used in a number of ways by the banks.
Number of customers
Number of customers to be serviced through both remote banking and conventional banking.
Bank branches
Because of the remote channel would not become complete substitutes, physical presence of the bank is still available.
Mergers and strategic alliances
Cost efficiency can be achieved by the use of more efficient technologies in merged banks. Strategic alliances have been forced between various banks to increase co-operation and know- how and share IT Costs.

15. Effect of Technology on Risks in Banking
Strategic Risks
Increased competition
Excessive investment in technology
Long time lag for break even
Legal Risks
Operational Risks
Credit Risks

16. Delivery Channels & Channel Migration
Changing business needs paved the way for new technology & channel migration. The key areas of application of technology can be classified into two as mentioned as follow:
Transaction Processing
Cost Cutting

17. Delivery Channels & Channel Migration (contd.)
1. Transaction processing
Makes the routine but necessary work
Easier
Faster
Accurate
Cheaper
Focused factory concept for processes like account opening & cheque clearing

18. Delivery Channels & Channel Migration (contd.)
Economies of scale
Control & consistency in processes
Reduced loan on branches
Improved turnaround times
Automated check processing

19. Delivery Channels & Channel Migration (contd.)
Cost Cutting
Normal transaction re-routing
Automating integral administrative task
Centralized operation

20. Types of Channels Internet banking services Automatic teller machine
Mobile banking
Call center

21. Functions of Channels Sales 1. Pre sales - Accounting opening
2. Post sales
- Cross sales
- Relationship deepening

22. 1. Cash payment / withdrawal 2. Request for demand draft / Pay order
Transaction
1. Cash payment / withdrawal
2. Request for demand draft / Pay order
3. Account opening / closure / transfer
4. Investment consultancy
5. Balance Enquiry / Last few transactions
6. Statement of account
7. Cheque book request
8. Cheque status enquiry
9. Demat queries
10. Stop payment
11. Fund transfer
12. Balance/Interest certificates

23. Institute for Development and Research in Banking Technology (IDRBT)

24. About IDRBT, Explore and Exploit technology for common good
Establishment
“Established by RBI in 1996 for promoting use of technology in Banking Sector.”
Mission
Explore and Exploit technology for common good

25. Agencies involved in IT Development In Banking sector
IDRBT – Institute for Development and Research in Banking Technology
Role: Technical Standards / Frameworks Development, Inter- operability and security.
NPCI – National Payment Corporations of INDIA.
Role: Build and operate switch for Inter-Bank transactions and settlement.

26. CONT…. UIDAI—Unique Identification Authority of INDIA.
Role: Build and operate bio metric database for the entire population. Helps in authentication and Identity Management.
IBA– Indian Banks Association.
Role: Propagate Standards / Frameworks.

27. CONT…. I.I.T. – Indian Institute of Technologies --Chennai and Kanpur
Role: Help Develop frameworks and conduct lab tests.
R.B.I – Reserve Bank of INDIA.
Role: Regulatory Framework to ensure safety and security.

28. Conclusion
In summary, it is quite clear that banking technology has emerged as a separate discipline in its own right. As regards future directions, the proliferating research in all fields of Technology and computer science can make steady inroads into banking technology because any new research idea in these disciplines can potentially have a great impact on banking technology.