Objectives : Appreciate the role of technology in banking Distinguish between modern banking and traditional banking Appreciate new products in banking
Role of Technology in Banking : Role of Technology in Banking Some factors that have resulted in a change of the business environment in banking are: End of fixed return era Intense competition Demographic shift towards younger investors Advent of online distribution Surge in the popularity of private mutual funds Emergence of regulated markets Deregulation of insurance Ban on rebates in mutual funds Trust of customers
Benefits of Leveraging Technology : Benefits of Leveraging Technology Cost reduction In transaction cost In procurement cost Efficiency of services Increase in reach to global customers Large basket of services offered Increase of customer loyalty Attraction for new customers Reduction of customer’s attrition
Benefits of Leveraging Technology for Customers : Benefits of Leveraging Technology for Customers Easier access Quicker services Safer in terms of virtual money Convenience of banking Global access Round the clock services available Cheaper services
CORE BANKING SYSTEM : CORE BANKING SYSTEM Core banking is a general term used to describe the services provided by a group of networked bank branches. Bank customers may access their funds and other simple transactions from any of the member branch offices. Banks use core banking applications to support their operations where CORE stands for "centralized online real-time environment". This basically means that all the bank's branches access applications from centralized datacenters . This means that the deposits made are reflected immediately on the bank's servers and the customer can withdraw the deposited money from any of the bank's branches throughout the world. A few decades ago it used to take at least a day for a transaction to reflect in the account because each branch had their local servers, and the data from the server in each branch was sent in a batch to the servers in the datacenter only at the end of the day ( EoD ). Normal core banking functions will include deposit accounts, loans, mortgages and payments. Banks make these services available across multiple channels like ATMs, Internet banking, and branches
Products and Services : Some of the products and services provided are: ATM / Debit / Credit / Smart Cards Internet Banking - Infinity Home Banking Minor and Children Bank A/c Electronic Bill Payments Products and Services
Innovation in Technology : Innovation in Technology Innovation always keeps one ahead in the race Innovation in the true sense involves: A new product A new process A new way of communicating A new pricing policy A combination of all the preceding
Impact of Technology on Decision-Making : Impact of Technology on Decision-Making Some advantages of efficient decision-making in technology are: Helps overcome time and distance Ensures effective customer service , anytime and anywhere Enables convenience, increases speed , and accuracy of operations Reduces cost for the customer Enables the introduction of new products and services at low servicing costs
Impact of Technology on Decision-Making (Contd.) : Impact of Technology on Decision-Making (Contd.) Ensures focus on the customer’s life time value (LTV) Lays stress on influencing potential customers Enables all channels to reinforce relationships and explore revenue productivity
Impact of Globalisation : Impact of Globalisation Globalisation refers to integration of domestic market with the international market Globalisation brings: Fresh investments Capital flows Improved technology and business practices Better quality / quantity of products in the market giving more choice to buyers
Impact of Globalisation (Contd.) : Impact of Globalisation (Contd.) The impact of globalisation is: Integration of domestic and foreign markets Increased investments and capital flows Improved technology Increased competition Better quality of products New business opportunities Opportunities for overseas expansion