Need of Technology of Banking (All you need to know about in detail)

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Need of Technology of Banking: Technology has brought about a complete paradigm shift in the functioning of banks and delivery of banking services. Gone are the days when every banking transaction required a visit to the bank branch. Today, most of the transactions can be done from the comforts of one’s home and customers need not visit the bank branch for anything. Technology is no longer an enabler, but a business driver. The growth of the internet, mobiles and communication technology has added a different dimension to banking. The information technology (IT) available today is being leveraged in customer acquisitions, driving automation and process efficiency, delivering ease and efficiency to customers.

Need of Technology of Banking :

1) Liberalisation : With adoption of the new economic policy in 1991, Indian economy is being opened by removing restrictions on flow of goods and finance. In foreign banks, foreign direct and portfolio investments are allowed.

2) Increase in Bank Deposits : Deposits of NRIs are being solicited. The procedure is being made easy skipping over RBI permission.

3) Extension of Branches : Indian banks are also opening their branches in many countries. Thus, India’s external financial transactions are¬†bound to increase manyfold to USA, Europe South Asian Countries, Japan, Middle East countries, etc.

4) Increasing Transactions : With the extension of branches the transactions have been increased to handle these transactions efficiently, Indian banks have to computerise and modernise their operations. They have to go in for e-mail facility, networking, satellite based cheque clearing system,etc. The nationalised banks can conveniently pool their resources and erect common facilities as is done by banks in Europe and America. They have established a common facility for fund transfer, called SWIFT (Society for the Worldwide Interbank Financial Telecommunication).

5) Increasing Competition : Foreign banks are entering in the banking sector if 80% of Indian banking business is computerised and interconnected, it will provide very cheap banking service and withstand competition from foreign banks. The Electronic Fund Transfer System can be used both for Indian and foreign customers. It will transfer funds cheaply, quickly and reduce burden on postal department. In short, Indian banking is now on the threshold of “anytime, anywhere” banking era.

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