Innovations in Banking

Topics: Bank, Banking, Commercial bank Pages: 19 (6760 words) Published: May 15, 2013

Managerial Innovations @ ING


Table Contents
Executive Summary Introduction Universal Banking Why Innovations in Banking? Significance of IT Innovation in the Banking Sector Impact of Banking Innovations in a Developing Economy Innovations in Indian Banking Industry – An Update About ING Vysya Bank Innovations @ ING ING Vysya Bank making a difference in Indian Banking Industry Technology in Banking Conclusion References

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Executive Summary Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct, the reasons can be lack of proper managerial innovations at different stages or according to the industry change. The oldest bank in existence in India is the State Bank of India which is not an innovative bank in fact but follows the industry change & other bank’s innovative ideas & products. Overall, banking in India is considered as fairly mature in terms of supply, product range and reach; even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets, as compared to other banks in comparable economies in its region. Banking environment has become highly competitive today. To be able to survive and grow in the changing market environment banks are inventing innovations & going for the latest technologies, which is being perceived as an ‘enabling resource’ that can help in developing learner and more flexible structure that can respond quickly to the dynamics of a fast changing market scenario. It is also viewed as an instrument of cost reduction and effective communication either people and institutions associated with the banking business. The banking scenario has changed drastically. The changes which have taken place in the last ten years are more than the changes took place in last fifty years because of the institutionalization, liberalization, globalization and automation in the banking industry. Indian banking system has several outstanding achievements to its credit, the most striking of which is its reach. Indian banks are now spread out into the remote corners of our country. In recent years the Indian banking system has come up with many innovations in order to change the psychology of the customers. Introduction After the banking sector reforms, ideas & innovations have developed as a more integrated function within financial service organizations like banks largely as a result of rapid changes in the operating environment. Banks innovations are defined as an aggregate of function directed at providing service to satisfy customer’s financial needs and wants, more effectively than the competition keeping in view the organizational objective of the bank. The bank innovations have become a very complex yet interesting subject as it requires the knowledge of economics, sociology, psychology, banking and also core marketing concept. In present banking scenario, it is the customer who has the upper hand. The mantra of effective banking relationship lies in the systematic and professional approach towards satisfying customers’ needs. Thus, banks have to set up “Research and Market Intelligence” wings so as to remain innovative to ensure customer satisfaction and to keep abreast of market development.



Universal Banking Since the early 1990s, banking systems worldwide have been going through a rapid transformation. Mergers, amalgamations and acquisitions have been undertaken on a large scale in order to gain size and to focus more sharply on competitive strengths. This consolidation...
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