Explain how computers changed Banking

These days the banking is very much dependent on the computers, starting from almost every thing from attendance to mails to any type of the communication to management of the customers to the management of the staff to the management of the cash to the various other things, all have the dependence on the utility of the computers. There was a time when there were no computers and all the work was done manually from the homes to the work station but now starting from the work station to the home, the computer has a very major role to play from the time to time. But in this article, as the name of the article suggests, the main motive here will be to focus on having an in depth analysis of the relationship between the Banking and the Computers. The computers were not every time with the banking as the computers have been invented few decades ago but the banking finds its roots up to a large number of the decades in the past. Starting from the initial years of the banking to quite a number of the years following these initial years, all the work was done manually starting from the attendance to the management of the cash to the depositing of the cash to the payments of the cash to the management of the customer base to the management of the staff members, all was in fact done in the manual form.

No doubt all this was being done from quite some time and the staff members and the clients were very well dependent on such type of the working and were always having a large amount of the trust on this type of the working but at the same time this type of the working was not that quick and also the level of the accuracy was not that high computer to the level of the speed and the accuracy that has been and can be maintained by the machines like that of the computers. But one thing that the customers of the present times miss a lot is the personal touch that was present at that time in the providing of the various kinds of the services to the customers from time to time depending on the various types of the requirements of the customers. These days there is no kind of the doubt that there has been a very drastic change in the working of the banks as the management of every thing has increased starting from the management of the staff members of the bank to the management of the data to the management of the customer base to the management of the various kinds of the jobs of the bank to the management of the cash to the delivery of the various other cross selling’s and almost every thing these days is dependent on the computers and the main reason for all this is that the accuracy and the time management has increased a lot and that has made the banking structure grow a lot in the recent times. There have been times when there has been extreme kind of the situations starting from the globalisation to the severe form of the competition to the recession and a lot of such kind of the things but in all these kinds of the times, the banking and the computers have been in a very strong relationship and both have gone side by side.

After looking at the past no body could have imagined that both of these concepts will come so close to each other and now the present situation is such that the banking can not be even though of without the computers, such is the height of the dependence of the banks on the computers. The computers with the help of the internet and the intranet have made the things even better and a basic thing from opening an account can even be done online without even filling a single kind of the form by just scanning the documents and the signatures online and after these are verified, the account is opened on line without even going to the bank and wasting the precious time. The banking has been made such that the customers have been made completely dependent on all the various kinds of the facilities that have been provided by the computers like that of the internet banking as in these type of the cases a large number of the things from the management of the accounts to the transfer of the money to the various required accounts to the management of the mutual funds to the management of the insurances to the applying of the cheque book to a large number of the facilities, all can be done by the customer at his or her home only with the help of the computers and this facility is such that it not only wastes the energy and the time of the customer base but also saves the energy and the time of the staff members of the banks and hence raising the level of the productivity for both the sides of the coin. These days there are a lot of the customers for whom it has become very difficult to spare time for the various kinds of the banking activities and for all of them the internet banking is a very good ground at the base level as the banks have the certain kind of the timings for the operations but with the help of the internet banking with the help of the computers, a lot of the facilities and the banking operations are such that can be processed even when the banks are physically closed as the banks are not open on Sunday and generally are open on week days from 9 a.m. to 5 p.m. but this is not the case in the case of the internet banking as there are a large number of the activities that can be done beyond these timings as well with the help of the computers.

Banking with the help of the technology at the present is the biggest combination that is spreading the globalisation in the field of the banking at the national as well as at the international stage. It has the power to enable the financial institution and the international banks to increase there reach and then offer the technology to the white spectrum of the clients. This very deadly combination is in fact growing very fast and the banks are becoming very essentially the processors of the information in a very large amount. The banks use the information technology in order to handle the very large volumes of the business with the much needed efficiency. It in fact maximises the profitability that is derived from the operations. It helps to exercise a very strict vigil on the cost. The international banks have achieved the targets that have been discussed above and in fact the Indian banks have started entering this specific area in the recent past. The Indian banks have started the collection, processing and the storage of the information in the offices that are very much administrative in the nature of the working. It in fact helps to tome up the book keeping efficiency by the computerisation of the back office operations. The Indian banks have become fully computerised and further its branches also are fully equipped with the technology. The automated teller machines (ATM) are set up in almost each and every corner of the country and all this has given the provision to deposit or withdraw the specified amount from any where and at any time as the new private sector banks have adopted the information technology in a much better way so that they can have the power to capture the corporate business. The information technology is used as a tool for marketing and then further designing aggressively and the very wide variety of the retail banking products also helps a lot to capture the business in the metro or the urban centres. In the centres the customers very usually expect the remittance facility, any where banking facility, home banking, telephone banking, Automated teller machines, credit card facility, personal loans for the cars, consumption purposes or the houses, cash management for the various corporate houses etc. The banks have in fact met all these requirements of the customers to a very great level. The Reserve Bank of India has set up a special group that is working on the internet banking in order to examine the different aspects of the internet banking. In this case the areas that are focused to a great level are the technology and the security issues, regulatory and the supervisory issues and also the various kinds of the legal issues. The guidelines were given by the Reserve Bank of India on June14, 2001 and hence all the banks that propose to offer the various kinds of the transactional services on the internet are very much required to obtain the prior approval from the Reserve Bank of India. Only such kind of the banks that are supervised and also licensed in India have and are also physically present in India will be given the required necessary permission to offer the internet banking products to the residents of the nation. Both of the banks and the virtual banks that are incorporated out side the nation and also that are having no kind of the physical presence in India are not at all allowed to offer the service of the internet banking to the residents of India. The overseas branches of the various Indian banks are allowed to offer the internet banking service to there customer that are also overseas but provided they all are subject to there satisfaction, in addition to all this and also in addition to the host supervisor and the home supervisor. The banks are very much required to designate a network along with the database administrator with the roles that have been very clearly defined. The banks must have the security policy that is also approved by the board of the directors and the security officer that deals with the information system security and the information technology division, the banks must introduce the logical access control to the system, data, utilities, application software, libraries, telecommunication lines, system software etc. The proxy server type of the fire wall must be used by the banks in order to avoid the direct connection between the banking system and the internet. The physical access control is very much required to be enforced strictly. The physical security must cover the information system and the sights that are housed against the various kinds of the threats that may be external or internal in the nature of the working so it can be said that it is very necessary for the banks to have the proper infrastructure and the schedule in order to keep the back up for the data.

The backed up data must be tested in a very periodical manner so as to ensure the recovery with out the loss of the transaction. All the applications of the bank are very much required to have the proper record keeping facility for the various kinds of the legal purposes. The received and the sent data must be kept in the encrypted as well as the decrypted form for the purpose of the various kinds of the legal issues. In order to avoid any kind of the mistake the request for opening the account must be completed on the internet only after the physical verification of the identity of the customer. The security procedure that is adopted by the bank must be recognised by the law for the substitute for the signature. The secrecy and the confidentiality of the account of the various customers must be maintained in a very proper way and the very specific risk of not at all meeting this kind of the obligation must be kept a very close watch. In the case of the internet banking the scope for the stop payment instruction from the client is very little as the bank must notify to the customer very clearly about the time frame in which the stop payment instruction can be accepted. The product must be restricted to the holder of the account only and it must not be given in the other jurisdiction. The service must only be involving the local currency product and the banks must report to Reserve Bank of India about the failure of the security system and its procedure and the discretion. The banks must make the very necessary disclosures of the risks, liabilities and the responsibilities of the customers while doing the business with the help of the internet banking. The banks need to provide the latest published financial results over the internet from the time to time and hence it can be said that it is the responsibility of the banks to keep the customer updated in the very proper way. The Electronic Fund Transfer (EFT) is used as the accelerated movement of the funds across the globe. The cyber cash or the e cash plays a very important role in the world of the commerce. All such of the electronic movements amounts to few of the trillion dollars and they are in fact settled on the daily basis at the international financial centres. The SWIFT (Society for Worldwide Inter Bank Financial Telecommunication) is the very classic example of the EFT. With in the banks along wit the standards messages and in this specific case the speed, security, accuracy and the reliability is assured.