Technological Innovation in Indian Banking Sector – Use of It Products

Topics: Bank, Credit card, Debit card Pages: 21 (5883 words) Published: January 5, 2013
International Journal of Management and Strategy (IJMS) 2011, Vol. No.II, Issue II, January-June 2011 ISSN: 2231-0703

TECHNOLOGICAL INNOVATION IN INDIAN BANKING SECTOR – USE OF IT PRODUCTS Dr. Kanhaiya Singh, Professor, Fore School of Management, New Delhi,India Dr. U. S. Pandey, Associate Professor University of Delhi, New Delhi, India Priya Gupta, Asst. Professor, SSCBS, University of Delhi, Research Scholar, BIT(Mesra) Ranchi

ABSTRACT Transformation is taking in Indian banks from all verticals, and subtle and not – so – subtle makeovers in banking products are dynamically altering the face of banking. The research paper focuses on the way transformation is affecting the banking sector and the way use of IT products have changed the face of banking in India. It reveals current environment of the banking industry; the factors that have brought changes in the industry; and the way these changes have contributed to the development of banking. This paper concludes that financial market has turned into a buyer’s market. Banks are have now bloomed into one-stop Supermarkets. Their focus is shifting from mass Banking to Class banking with introduction of value added and customized products. Technology now allows banks to create what looks like a branch in a business building’s lobby without having to hire manpower for manual operations. These branches are working on the concept of 24 X 7 working made possible due to Tele banking, ATMs, Internet Banking, Mobile Banking and E - banking. This technology driven delivery channels are used to reach maximum customers at lower cost and in most efficient manner. The beauty of these banking innovations is that it puts both banker and customer in a winwin situation. The need of an hour is to design a system to promote marginal efficiency of investment in technology and widen the gap between marginal benefits and marginal cost involved in Banking transformation with special reference to technological up gradation. Keywords: CRM, ECS, Skimming, Spoofing, ATMs

INTRODUCTION The study presents a broad overview of the current state of the banking industry in India. It then goes on to identify some important forces for change and some important forces resisting change. Attention is paid finally to growth path of banking sector with technological advancement. It is depicted that banking is going to be intensely competitive and complex. The best idea would be for the domestic banks to enhance mutual co-operation in order to create a healthier market order and raise the overall competitiveness of the industry as a whole. Incorporation of advanced technology and

International Journal of Management and Strategy

ISSN: 2231-0703

International Journal of Management and Strategy (IJMS) 2011, Vol. No.II, Issue II, January-June 2011 ISSN: 2231-0703

utilization of modern management techniques are other crucial aspects at which domestic banks should pay keen interest. Indian Banking Transformation – The Starting Point Since independence Indian banks have undergone through four major shifts which can categorized as pre reform (before 1991) and post reform period (after 1991): Pre-Reform period: A period of consolidation of banks up to 1966 A period of historic expansion in both geographical and functional terms from1966 to mid- 1980s A period of consolidation of branches from mid - 1980s to 1991 These changes were policy induced but not driven by market forces. Post- Reform period Entry of technology in the Indian banking sector can be traced back to the Rangarajan Committee report, way back in the 1980s but during nineties, the banking sector witnessed various liberalization measures. New private sector and foreign banks emerged - equipped with the latest technology. These banks opted for a different model of having a single centralized database through a network infrastructure, instead of having multiple databases for all...
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