Technology and Banks Transformation

The 21st century is all about convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past. Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. Bankers are convinced that investing in IT is critical. Its potential and consequences on the banking industry future is enormous. Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before - thus creating new bases of competition

Technology and Banks Transformation

Computers are getting more sophisticated. They have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks. Consistent management and decision support systems provide the bank that competitive edge to forge ahead in the banking marketplace.

The advantages from computerization are from three sides - to the customer, to the bank and to the employee.

For the customer:- Banks are aware of customer's need for new services and plan to make them available. IT has increased the level of competition and forced them to integrate the new technologies in order to satisfy their customers. They have already developed and implemented a certain number of solutions among them:

-        Self-inquiry facility

-        Remote banking

-        Anytime banking-

-        Telebanking: A 24-hour service through which inquiries regarding balances and transactions in the account can be made over the phone.

-        Electronic Banking:

For the bank. During the last decade, banks applied IT to a wide range of back and front office tasks in addition to a great number of new products. The major advantages for the bank to implement IT are:

-        Availability of a wide range of inquiry facilities,

-        Immediate replies to customer queries without reference to ledger-keeper as terminals are provided to Managers and Chief Managers.

-        Automatic and prompt carrying out of standing instructions on due date and generation of reports.

-        Generation of various MIS reports and periodical returns on due dates.

-        Fast and up-to-date information transfer enabling speedier decisions, by interconnecting computerized branches and controlling offices.

For the employees. IT has increased their productivity through the followings:

-        Accurate computing of cumbersome and time-consuming jobs such as balancing and interest calculations on due dates.

-        Automatic printing of covering schedules, deposit receipts, pass book / pass sheet, freeing the staff from performing these time-consuming jobs, and enabling them to give more attention to the needs of the customer.

-        Signature retrieval facility, assisting in verification of transactions, sitting at their own terminal.

-        Avoidance of duplication of entries due to existence of single-point data entry.

The new Delivery Systems. The increasing cost of building brick-and-mortar branches, decreasing cost of computers, high delivery costs and slow revenue growth force a relook at the conventional delivery systems. Moreover, growing comfort of technology usage by the customer is rapidly fostering usage of non-branch channels for routine transactions.

Human Resources (People) Problems. Banking industry is heavily depending upon information technology that needs professionals for development, implementation and support.

Problems that are facing banks with people.

-        Shortage of qualified personnel.

-        Lack of professional training programs-

-        High turnover rate of technical staff.

-        Resistance to change.. The only way to solve this problem is to design adequate training programs and increase the awareness of the employees. Most banks have realized this fact and some of them have established a training centers.

Therefore it is very much need the support of the systems as well as from people to run the banking industry where highly vulnerable. The banks are therefore faced with the challenges of matching skills and performance to compensation systems to retain the best and skilled employees.