Role of IT in banking sector
The article presents a study which aims to analyse the role of information technology (IT) in the banking industry. IT has helped the banking industry to deal with the challenges the new economy poses. More than most other industries, financial institutions rely on gathering, processing, analyzing, and providing information in order to meet the needs of customers. Given the importance of information in banking, it is not surprising that banks were among the earliest adopters of automated information processing technology.Technology has opened up new markets, new products, new services and efficient delivery channels for the banking industry. Online electronics banking, mobile banking and internet banking are just a few examples. Information Technology has also provided banking industry with the wherewithal to deal with the challenges the new economy poses. Information technology has been the cornerstone of recent financial sector reforms aimed at increasing the speed and reliability of financial operations and of initiatives to strengthen the banking sector. The IT revolution has set the stage for unprecedented increase in financial activity across the globe. The progress of technology and the development of world wide networks have significantly reduced the cost of global funds transfer. It is information technology which enables banks in meeting such high expectations of the customers who are more demanding and are also more techno-savvy compared to their counterparts of the yesteryear. They demand instant, anytime and anywhere banking facilities. IT has been providing solutions to banks to take care of their accounting and back office requirements.Many banks have modernized their services with the facilities of computer and electronic equipment. The electronics revolution has made it possible to provide ease and flexibility in banking operations to the benefit of the customer. The e-banking has made the customer say good-bye to huge account registers and large paper hank accounts. The e-banks, which may ‘ call as easy bank offers the following services to its customers like Credit Cards/Debit Cards, ATM, E- Cheque, EFT (Electronic Funds Transfer), DEMAT Accounts, Mobile Banking, Telephone Banking, Internet Banking, EDI (Electronic Data Interchange).The banking system is slowly shifting from the traditional banking towards relationship banking. Traditionally the relationship between the bank and its customers has been on a one-to-one level via the branch network. This was put into operation with clearing and decision making responsibilities concentrated at the individual branch level. The head office had responsibility for the overall clearing network, the size of the branch network and the training of staff in the branch network. The bank monitored the organisation’s performance and set the decision making parameters, but the information available to both branch staff and their customers was limited to one geographical location. And it is now changing the way how banks are delivering services to their customers. However this technology comes at a cost, implementing all this technology has been expensive but the rewards are limitless.