Banking Ppt

Information Technology in Banking Sector 1

INFORMATION TECHNOLOGY IN BANKING


Electronic Banking

ATMs

Head Office

Branch Banking

Branch 1

Branch 2Branch 3

Branch 4

Branch 5

Branch 6

Branch n


E-Banking DevelopmentsALPMs 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.


Why Technology In Banks ?To transform financial services industry in the net-worked

worldBanks to be customer centric Provide services / products across a range of channelsTo be futuristic and have “time” value in all its dealings

with customers


Many Benefits of TechnologyIncreased 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.


Pre-requisites for Technology

Planning for

Disasters

Business Process

Re-engineering

Human Resource

Empowerment


Communication NetworksMICR (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).


MICR ClearingMagnetic 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.


Automated Teller MachinesATMs 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


BANKNETSet 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.


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.


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.


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.


Electronic Data InterchangeEDI 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.


ECSElectronic 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.


SWADHANLaunched in 1997 India's FIRST Shared Payment Network Service55 member banks in the network, which include nationalized,

private and foreign banksEnables member banks to share their ATMs with other

participating banksObjective - reduce the huge investment being made by the

banks to deploy ATMs in different locations


ServicesBill Payment through Electronic Banking

Electronic Shopping Mall

Effecting Personal Investments through Electronic BankingTrading in shares Investing in Mutual FundsTrade In Derivatives IPOs Online


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


Smart CardsMulti-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


Beware of

Hacking

Phishing

Pharming

Skimming

Trojan


THANK YOU

Banking Ppt

Documents

Transcript of Banking Ppt