View of NEW TECHNOLOGICAL INNOVATION IN BANKING SECTOR OF INDIA

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal IMPACT FACTOR: 2.104 (ISSN NO. 2456-1037) Vol.03, Issue 09, Conference (IC-RASEM) Special Issue 01, September 2018 Available Online: www.ajeee.co.in/index.php/AJEEE

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NEW TECHNOLOGICAL INNOVATION IN BANKING SECTOR OF INDIA Shweta Kapse

(Research Scholar)

Abstract - Information technology has attracted many banks in India, by starting up new markets, new products and efficient delivery channels for the banking industry. In thedevelopment of our Indian Economy, Banking sector plays a very vital and key role. With theuse of technology there had been an increase in invasion, effectiveness and good union.

It has notonly enlarged the cost usefulness but also has helped in making small value business viable. Italso enlarges choices, creates new trade, and improves production and good organization. The focus is shifting fromgroup banking to class banking with the introduction of value added and customized products.This new Technology allows banks to create new innovations in operations of banking with reducing efforts of manpower. Now a day‟ssbanking gives us facility oftransaction24 X 7working, made possible by the use of Tele banking, ATMs, Internet banking, Mobile banking and E -banking. These technologies are being used to reach out to maximumnumber of customers at lower cost and in most efficient manner. The beauty of these bankinginnovations is that it puts both banker and customer in a win- win situation. Effective use oftechnology has a multiplier effect on growth and development

Keywords: ATMs, Commercial Banks, E - banking, Internet Banking, Information Technology,Mobile Banking, Telebanking.

1. INTRODUCTION

The banking industry of India is in the centre of an Information technology revolt. A mixture of authoritarian and spirited logics has led to growing significance of banking automation.

Information technology has basically been used under two different channels inbanking industry. One is communication and connectivity and other is business process reengineering.

ICT enables worldly product development, better market communications,functioning of reliable techniques for control of risks and helps the financial mediators to reach purely distant and varied markets.Information technology has changed the silhouette of three major functions being performed by theBanks. Approach with liquidity, change in assets and monitoring of risks.

ICT networking systems have a crucial bearing on the efficiency ofmoney, capital and foreign exchange markets.In 90s banks started computerizing their branches for the customers. This year allowed with new financial rules and regulation in banking world .computer and communication technologies, like internet, mobile/cell phones etc. which changed the life of Indian banking system completely.

2. LITERATURE REVIEW

Abhinav Sharma and CM Sharma reported that Indian customers of

different banks that hold around 85 % ofmarket share who want to take initiative in the field of IT. They are moving towards they want to do their all banking decisions and banking transactions through ICT tools for time management and other purposes. T.shreelata and Chandra Shekhar revelled that Technology has changed the Indian banking sector through computation.

Among the total number bank, 97% are fully computerized at end – March 2010.IBMRD's Journal of Management and Research, Print ISSN: 2277-7830, Online ISSN: 2348-5922Volume-3, Issue- 1, March 2014Most of studies on banking have used either SFA or DEA approach tocalculate the effectiveness.

3. RESEARCH METHODOLOGY

The meaning of research as “the investigation or inquiry especially through search for new factsin any branch of knowledge.” It is the activityof academics in which researcher searches for new innovations and such they should be used in atechnical sense. Researcher considers their research as a action of movement from the known tounknown. It is actually expedition of finding.

3.1 Objectives of the study This study has following objectives:

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2 1. To find out the growth of

automation in all the public sector banks of India.

2. To analyze the banking innovations after computerization.

3.2 Sources of Data Collection

This study is based on the secondary data collected from different journals, magazines, sites and published data from various issues of RBI and different Public sector banks. Various studies on this subject have also been referred in this.

The heads and other functionaries have also beencontacted personally to collect the required data for this study.

3.3 Significance of the study

The use of Information Technology in all orbof financial and banking sectors is a truth.The banking sector go beyond its traditional working and is now a day‟s working of this sector tremendously change day by day using ICT . the important role is its areas of operation as securitization, risks preference andliquidity among others in which ICT plays a very crucial role . this revolution in banking sectors plays a key role because of this all the branches of the bank increasingly interconnecting their computer systems not only across branches ina city but also to other geographic locations . The customers are also now techno- savy now they want to do smart work. They do not have lots of time to spend in banks. The demand of customer is only that is instant, anything and anywhere banking facilities. Though RBI has forge many policies on adoption of I.T. in the overall working of the commercial banks in India, yet we are not able to equalize our banking system with foreign banking system where the working of the bank employees are more customized. As such there is a great need to focus more on this aspect. This study helps a lot in this regard.

3.4 Limitations of the study

This research work carried out on the basis of secondary data only. Another important thing observedthat duration of time. With this both limitation we tried to collect maximum database for this study.

4. ANALYSIS AND FINDINGS

Technology has changed the working of Indian banking sector through computerization. Public sector banks have also made a significant progress in this regard. The analysis of the data collected from various banks has been done under the following heads:

(a) Computerization in Banks

Totalnumber of public sector bank branches, 98.8 percent is fully computerized at the end of March 2010 whereas all branches of SBI are fully computerized.

(b) Technical Innovations in banks Today we have electronic payment system along with currency notes.Which increases the E-commerce means cashless business which is very helpful in increasing the national income .now customer knows how to do safe truncations payment of cheques is also acceptable. Now it becomes a necessity to electronicfund transfer system on account of the following reasons:

1. Total Legal transaction 2. Cost of physical handling

3. Quick process for payment issues Most common technologies used for electronic payments are as follows:

(i) National Electronic fund Transfer (NEFT):

It is a nation-wide payment system facilitating one-to-one funds transfer.

Under this Scheme, individuals, firms and corporate can electronically transfer funds from any bank branch to any

Individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.

For being part of the NEFT funds transfer network, a bank branch

Has to be NEFT- enabled

(ii) Real Time Gross Settlement (RTGS):

The acronym RTGS stands for Real Time Gross Settlement. RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a real time and on gross basis.

This is the fastest possible money transfer system through the banking channel.

Settlement in real time means payment transaction is not subjected to any waiting period. TheTransactions are settled as soon as they are processed.

Gross settlement means the transaction is

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3 settled on one to one basis without bunching with any other transaction.

Considering thatMoney transfer takes place in the books of the Reserve Bank of India the payment is taken as final and irrevocable.

(iii)Credit Card:

A form of the e-payment system which requires the use of the card issued by a financial institute to the cardholder for making payments online or through an electronic device, without the use of cash.

(iv)E-wallet:

A form of prepaid account that stores user‟s financial data, like debit and credit card information to make an online transaction easier.

(v) Smart card:

A plastic card with a microprocessor that can be loaded with funds to make transactions; also known as a chip card.

(vi)E-check:

A digital version of an old paper check.

It‟s an electronic transfer of money from a bank account, usually checking account, without the use of the paper check.

(vii)E-cash

Is a form of an electronic payment system, where a certain amount of money is stored on a client‟s device and made accessible for online transactions?

(vii)Stored-value card

A card with a certain amount of money that can be used to perform the transaction in the issuer store. A typical example of stored-value cards are gift cards.

(viii)ATMs:

Even through ATM originally developed for cash dispenses, now it includes many other bankrelated functions such as- cash withdrawal, paying routing bills fees and taxes, printing bank statements, funds transfers, purchasing online products, train tickets reservations, products fromshopping mall, donations and charities, adding pre-paid cell phone/mobile phone credit, advertisingchannels for own or third party products and services and payment of insurance premiums.

(iX) Amazon Pay

Amazon Pay provides the option to purchase goods and services from websites and mobile apps using the addresses and payment methods stored in the Amazon account, such as credit cards or direct debit bank account.

(X)Unified payments system(UPI):

Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless found routing & merchant payments into one hood. It also caters to the “Peer to Peer”

collect request which can be scheduled and paid as per requirement and. Each Bank convenience provides its own UPI App for Android, Windows and iOS mobile platform(s)

5. CONCLUSION

In this competitive era the augmenting prospect of customers had resulted in increased alertness on information technology among the commercial banks in India. The advent of foreign banks and advanced private sector banks with their better technology based services has also forced the commercial banks in India to switch over to the new technology in their day to day operations. The use of technology in expanding banking sector in India is one of the key focus areas not only forcommercial banks but for the policy makers also. The banks in India are using InformationTechnology not only to improve their own internal processes but also to manage facilities and Services to their customers. The efficient use of technology helps to use in time saving or we can say time management transction which increased business volumes of banks with larger customer base. Indian banking industry is really benefiting from I.T. revolution all over the world.

It enabled sophisticated product development, better market infrastructure, implementation of reliable and new techniques for control of risks and also it has helped the new financial intermediaries to reach geographically distant and diversified markets. By IT Act, 2000 court also treated this electronic data or electronic payment as a valid proof, except in those areas, which continue to be governed by the provisions of the Negotiable Instruments Act, 1881.

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4 By designing and offeringsimple, safe and secure technology, banks reach at the doorsteps of the customers with an objective of customer satisfaction„. In fact

Information technology has succeeded in creating a win- win situation for all concerned segments in India.