Today Banks operate in a highly globalized, liberalized, privatized and a competitive environment. Banks use information technology for surviving in this environment.
Banking all over the world is influenced by information technology, fantastic developments in the technology of
telecommunications and electronic data processing. So banks are experiencing a fast and far reaching renovation. Liberalisation and globalization process was initiated in India in 1991. Introduction of reforms have had a profound impact on the financial system particularly on the banking industry. Integration of information system with communication technology has fundamentally changed the traditional way of doing banking business. The earlier brick and motor branch is not sufficient today. Banks are trying to bring flexibility in their distribution channels for giving various innovative services to customers.
Technology is now taking banks to their home and offices, 24 hours a day, 365 days a year through Automatic Teller Machines (ATM), telephone and personal computers. The next noteworthy milestone was the introduction of mobile banking primarily through SMS. The launch of smart
phones created a revolution in the banking world. The smart phones are now a widely accepted delivery channel in developed countries. In India also the numbers of mobile phone users are increasing day by day. So the banks are exploring the feasibility of using the omnipresent device as an alternative channel for delivery of full-fledged banking services. All this indicate the financial supply chain is undergoing a dramatic change due to technological evolutions.
Traditional Banking Vs E-Banking
In traditional banking system, the customers are required to visit bank branch for doing every banking transactions. He should go to bank to know account balance, sending money from one branch to other, cash withdrawal etc. Actually the brick and mortar structure of a bank is a unavoidable necessity to perform banking functions. The customer can visit the bank only at working hours. Now the position is changed. After the introduction of E- banking a customer
can do a number of transactions by sitting in his office or home or from anywhere at any time. There is no time restriction. The brick and mortar structure of the traditional banking is converted into a click and portal model. So the concept of virtual banking came into existence. Core banking is introduced. Now the banks are offering a number of services through E- banking. ATM, Tele banking, Mobile banking, internet banking, Credit cards etc. The customers can go to shops for purchasing goods without keeping cash in his pocket. He can use credit cards and E cheques for
payment.
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