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Scope of Information
Technology in Banking
• What is Information Technology?
• IT has basically been used under two different avenues in Banking. One is
Communication and Connectivity and other is Business Process Reengineering.
• Technology has changed the contours of three major functions performed by banks,
i.e.,
1. Access to Liquidity,
2. Transformation of Assets and
3. Monitoring of Risks.
Further, IT and the communication networking systems have a crucial bearing on
the efficiency of Money, Capital and Foreign Exchange markets.
• The Software Packages for Banking Applications in India had their beginnings in
the mid of 80s, when the Banks spurred on by RBI and the Rangarajan Committee
Report, started computerizing the branches in a limited manner
• The early 90s saw the plummeting hardware prices and advent of cheap and
inexpensive but high-powered PCs and servers and Banks went in for what was
called Total Branch Automation (TBA)
• Multi-branch Solutions
• Foreign Packages
• IT Services
05/27/10 Vikas Prasad 5
THE FUTURE OF RETAIL
BANKING SOLUTION
*Source: TowerGroup
**Source: McKinsey
05/27/10 Vikas Prasad 7
Causes for this Growth
• Technology - itself had enabled to multiply
the number of transactions by each
customer e.g.: ATM withdrawals
• Economic growth – more disposable income
leading to increase in spend transactions
• All these factors have tremendous impact
on the profitability of the bank - Pressure
on Costs and Profitability.