Information technology (IT) has become a vital part of every business organization, whether it’s a case of manufacturing, trading or any other service organization. These days email is the principal means of communication between employees, suppliers and customers. Due to information technology there is no need to keep many files. Today, most companies store digital versions of documents on servers and storage devices. These documents become instantly available to everyone in the company, regardless of their geographical location. Companies are able to store and maintain a tremendous amount of historical data economically, and employees benefit from immediate access to the documents they need. Management Information Systems (MIS) enable companies to track sales data, expenses and productivity levels. The information can be used to track profitability over time, maximize return on investment and identify areas of improvement. Companies are using IT to improve the way they design and manage customer relationships. Customer Relationship Management (CRM) systems capture every interaction a company has with a customer. The customer has a better, more focused experience and the company benefits from improved productivity. 2. Role of IT for banks
Banking sector is becoming highly competitive day by day. So banks can not break away from themselves from changing technological environment. Banks are dependent on IT based systems for almost all of their activities, although the level of sophistication and refinement in such systems may vary from bank to bank or across activities or banking Industry segments (commercial banks, cooperative banks etc.). Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products and services. The e-banking has made the customer say good-bye to huge account registers and large paper bank accounts. Though the pace of change has been slow, yet the Indian banking scene is no exception to this phenomenon of transformation in products and services affected through IT. Banking in developing countries like ours has also started witnessing the changed technological and socio-economical factors, the emergence of new financial services has been provided with support of Information Technology, e.g. easy transfer of funds and messages across and beyond the national boundaries. Financial institutions, including banks, all over the world are, therefore, crucially dependent on products of IT. During the last decade, with the liberalization and opening up of Indian Economy, new private sector banks were established. Foreign banks also expanded their presence in India. The new private sector banks had a distinct advantage over the nationalized banks as they were able to start their operations with fully computerized services from day one. Foreign Banks were already offering such services. 3. Why IT is must for banks
The banking system is slowly shifting from the Traditional Banking towards relationship banking. Traditionally the relationship between the bank and its customers has been on a one-to-one level via the branch network. This was put into operation with clearing and decision making responsibilities concentrated at the individual branch level. The head office had responsibility for the overall clearing network, the size of the branch network and the training of staff in the branch network. The bank monitored the organization’s performance and set the decision making parameters, but the information available to both branch staff and their customers was limited to one geographical location. Today’s technology has become essential component for customer related and market related activities and participant banks cannot meet the requirements imposed by timelines or volumes without leveraging on technology. Even for backend and internal work processes, cost and time constraints are pushing banks to lean upon technology. It may...
Please join StudyMode to read the full document