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Technology And Banking Essay

1274 words - 6 pages

The Software Packages for Banking Applications in India had their beginnings in the middle of 80s, when the Banks started computerizing the branches in a limited manner. The early 90s sawthe plummeting hardware prices and advent of cheap and inexpensive but high-powered PCs andservers and banks went in for what was called Total Branch Automation (TBA) Packages. Themiddle and late 90s witnessed the tornado of financial reforms, deregulation, globalization etccoupled with rapid revolution in communication technologies and evolution of novel concept of 'convergence' of computer and communication technologies, like Internet, mobile / cell phonesetc.
Different constituents of banking technology ...view middle of the document...

The relationship between banking and technologyis such that nowadays it is almost impossible to think of the former without the latter.Technology is as much part of the banking industry today as a ship’s engine is part of the ship.Thus, like a ship’s engine, technology drives the whole thing forward.Technology in banking ceased being simply a convenient tool for automating processes. Today banks use technology as a revolutionary means of delivering services to customers by designingnew delivery channels and payment systems. For example, in the case of ATMs, people realizedthat it was a wrong approach to provide the service as an additional convenience for privilegedand wealthy customers. It should be offered to the people who find it difficult to visit the bank branch. Further, the cost of delivering the services through these channels is also less. Banks thenwent on to create collaborative ATM networks to cut the capital costs of establishing ATMnetworks, to offer services to customers at convenient locations under a unified banner.

People interact with banks to obtain access to money and payment systems they need. Banks, infact, offer only what might be termed as a secondary level of utility to customers, meaning thatcustomers use the money access that banks provide as a means of buying the things they reallywant from retailers who offer them a primary level of utility. Customers, therefore, naturallywant to get the interaction with their bank over as quickly as possible and then get on with doingsomething they really want to do or with buying something they really want to buy. Thatexplains why new types of delivery channels that allow rapid, convenient, accurate delivery of banking services to customers are so popular. Nowadays, customers enjoy the fact that their banking chores are done quickly and easily. This does not mean that the brick-and-mortar bank branches will completely disappear. Just as increasing proliferation of mobile phones does notmean that landline telephone kiosks will disappear, so also the popularity of high-tech deliverychannels does not mean that physical branches will disappear altogether. It has been found thatcorporate and older persons prefer to conduct their business through bank branches.The kind of enormous and far-reaching developments discussed above have taken place alongwith the blurring of demarcations between different types of banking and financial industryactivities. Five reasons can be attributed to it:1. Governments have implemented philosophies and policies based on an increase in competitionin order to maximize efficiency. This has resulted in the creation of large new financialinstitutions that operate simultaneously in several financial sectors such as retail, wholesale,insurance, and asset management.2. New technology creates an infrastructure allowing a player to carry out a wide range of banking and financial services, again simultaneously.3. Banks had to respond to the increased...

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