The new era of Banking: e-Banking

These days, all over the world, Banks are giving hard competition to each other that leads them to the greater heights. In the entire game customer is the king. Banks are always in search of the strategies that satisfy the dynamic needs of customers to attract them. It may include any transactions related to online usage.

In India, the major problem with which the banks are dealing with is, low literacy of its people and lack of basic requirements in remote areas etc. but banks are overcoming these problems in good pace. With the financial reforms in India in 1991, competition among financial institutions started increasing year after year, that leads to adoption of world class practices of the industry.

Banks are adopting better technologies that result into technology oriented systems like ATMs, CBS, e-banking, plastic cards, electronic funds transfer (EFT) System, phone banking etc, that leads to the concept of any-time along with any-where banking. And thus with such innovative technologies banks are successful in cutting costs and thus getting more benefits.

Role of Technology: In banking industry, it is observed that better the technology is, better is the level of service. The need for higher operational efficiency results into innovative thinking and innovative strategies that result into better technology. Now the banking service is branchless anytime anywhere. Through internet banking banks have reached even into the bedrooms of the customers by overcoming the limitations of physical reach of the branches. The focus of the banks is to improve the efficiency and to reduce intermediate costs.

There is also a negative impact of this technology enhancement for the banks. By this banks are losing the most valuable personal touch with the customers. Proper care is required to protect the emotional contact with the customers that the banks are doing again with the help of technology like viral marketing etc.

But this is limited to very few people in India as here very few people know how to use this technology.

CBS( Core Banking Solution): These days almost all the banks are CBS. It is an integrated application that supports real time, multi-banking and multi-channel strategies. It means each customer has become the customer of bank not just the customer of branch. They can access their accounts globally.

Alternate delivery channels: With day to day new coming delivery channels banking has become easy and local to everyone. Among these delivery channels the most popular and most useable is Automated Teller Machine (ATM). It is mainly used by the customers to withdraw money and to have short statement. Technology has become such vast that the customer of one bank can use the ATM machine of any other bank. With the increasing network of ATMs in India withdraw of money has become very fast and easy. One more important self banking channel is internet banking/online banking with which customers can do transactions even sitting inside his bedroom. It has also given the facility of bill payments and electronic remittances. Thus now customers can pay phone bill, mobile bill, electricity bills sitting at home instead of standing in the long queues at the offices. Along with this he can also book the tickets for various shows, theaters, and movies etc. Internet banking along with ATMs has made banking 24*7, anytime and anywhere. Some other important banking channels are phone banking, mobile banking etc. which leads to mobilization of virtual money to great extent.

Benefits realized by banks due to enhancement of technology:

• The usage of plastic cards, internet banking has reduced manual transactions and thus the paper work as well as back office reconciliation work at the branches which leads to lowering down the operational and the transaction costs and burden over the branches.
• It has improved service efficiency, speed and accuracy in the day to day work in the banks.
• As the system is now CBS, whole data is stored centrally which leads to quality decision making by the banks.
• I has reduced the burden of banking in branches.

Benefits realized by customers due to enhancement of technology:

• It is 24*7 i.e. not bound by operational timings of the banks.
• There are not geographical barriers. Now the customers are free to do banking anywhere.
• Customers can view transactions at any time of the day and for any number of times.

Conclusion: Now banks are adopting latest technology that helps in serving customers better. With increase in literacy rate, more people are using the latest methods of technology which leads to easier and faster banking. The experience of any time and any where banking is liked by all and thus catching more and more people every day.

The new payment gateways and electronic transfers are becoming popular. Banks must encourage more and more customers to go for e-Banking. Costs so saved can be divided with them to attract them. To reach the goals banks must use technology to its best.