EVOLUTION OF IT IN BANKING

SECTOR
EVOLUTION OF:

HUMAN RACE

TRADE

BANKING

IT IN BANKING

Beginning of IT implementation

FACIT Machines
Elementary mechanisation in banks
Selected activities, like ledger posting,
reconciliation etc. computerised
Stand alone PCs
Large scale opposition to computerisation
by staff unions
Reluctance and refusal of staff to operate
in computerised environme

Initial Computerisation

Branch Automation
Replica of manual processes in
computerised mode
Local area networks at branch level
Single window systems introduced
ATMs at branches, exclusively connected to
branch server
No change in processes, only used to speed
up back office activities
Foreign exchange transactions SWIFT 1991

Technology and Banking

The Quintessence Nature of Banking harmonizes
closely with Technology
Tasks Common to
Both

Banking

Information
Storage
Processing
Transmission

Technology

Focus aspects of Commercial

Banking now are:
RAISING DEPOSITS

Core
Banking (CBS)
Electronic
Banking
Any Branch
Banking
CRM

ATMs
MIS &
Intranet POS

Terminals
and Cash
dispenser
Card

Corporate
Network
Risk
Managem
ent

Managem
ent

Document
Managem
ent
Resource
Managem
ent

BANKS BUSINESS

LOANS & MISC.

SERVICES

BANKS
BUSINESS

Reasons for Adopting

Technology

To offer enhanced customer service

Decrease transaction costs and

overheads

Increase productivity and profitability

To attract the technology savvy young

population, which has more income levels

Banking Software
Characteristics

Automated Ledger Posting Machines

(ALPM)

Single User

No connectivity

Focus only on accounting

Information not used by senior

management

Branch Automation
Software

Multi user systems

Use of local area networks
Single window service to customers
Limited integration of modules
Accounting, interest calculation, reports
preparation
Use of reports only at local level

Branch Automation

Integration of all modules in a single

system
Bank wide focus of automation
MIS systems start to take shape
Limited inter-branch connectivity
Software still focussed on the branch
No integration across branches

Centralised Banking
Solutions

Common software across the entire bank

Total connectivity through Wide Area
Network
Centralised operations with single
integrated database
Focus on customer, rather than branch
Anywhere banking access enabled
Ability to launch products and services
rapidly
Integration across delivery channels

Technology Developments Driving

Banking / Financial Services

Hardware advances processing and storage

Data portability better interfaces, cheaper
network connectivity, wide array of network
options
Security solutions
Design and maintenance advances
Advances in web-based software technology
Advanced reporting tools
Digitising solutions are more practicable due
to faster networks

Benefits of Technology In
Banking

Decreased overheads and transaction costs

Increased operational efficiency
Superior customer service
Greater profitability and productivity
Multi-channel and real-time transaction processing
Better cross-selling ability
Improved management and accountability
Increased safety and security of funds
Multi-location integration
Efficient risk management
Better ability to manage funds
Better ability to collect business intelligence