Banks face a major challenge in terms of introducing innovative customer-friendly products and services and newer technologies to reduce transaction costs. | |
| "For this, banks will have to reposition their strategies by using high IT content which will not only provide benefit the customer but also improve decision making," said Devaki Muthukrishnan, regional director, RBI. |
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| V P Gulati, consulting adviser, TCS and former director-Institute for Development and Research in Banking Technology (IDRBT) said that technology in over 40 per cent of the bank branches in the country was obsolete and technology investment in banks in India was very low compared to west. Concurrently, an ovewhelming majority of customers still prefer branch banking. |
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| Banking practices are undergoing a rapid transformation. The core banking functions alone do not add to the bottomline of banks and value-added services are emerging as the key opportunity for banks. |
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| The prime factors necessitating these changes are competition, productivity, efficiency of operation, reduced operating margin and the need for better asset-liability management. This can be achieved by exploiting the benefits of technology which facilitates handling increased volumes at higher levels of efficiency. |
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| There is an urgent need not only to upgrade technology but also integrate the technology with the general way of functioning of banks. |
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| Banks need to constantly look at innovative services which offer customers the convenience of transacting from anywhere, at any time and using delivery channels more suitable for the customers. |
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| One of the most significant areas where IT can improve quality is fund transfer services. With the advent of electronic banking and electronic funds transfer there is a need for quick delivery instruments. |
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| The most prominent challenge above all is security. Hence, various concepts like digital signatures, certification, storage of information in a secure and tamper-proof manner like smart cards assume significance. |
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| "At present technology is the greatest differentiator not only in terms of competitive advantage but also in terms of administrative and back-end processes," said Gulati. Selection of the right kind technology is also equally important. |
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| The bank management has to give a thought to the utilisation rate and be impartial in technology decisions. |
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