Sohini Maji 89, MARKT.

Understanding the Emergence of Digitization in the Indian Banking
Sector
CAPSTONE PROJECT REPORT
Post Graduate Diploma in Management (PGDM)
Marketing Sohini Maji
2019 – 2021 Roll no. 89
SIES COLLEGE OF MANAGEMENT STUDIES
NERUL, NAVI MUMBAI 400706
1
UNDERSTANDING THE EMERGENCE OF DIGITIZATION IN
THE INDIAN BANKING SECTOR
CAPSTONE PROJECT REPORT
SUBMITTED
AS A PARTIAL FULFILMENT OF THE CURRICULUM
FOR THE DIPLOMA
POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)
SIES COLLEGE OF MANAGEMENT STUDIES

NERUL, NAVI MUMBAI
BY
SOHINI MAJI
ROLL NO. 89
SPECIALIZATION : MARKETING
2019-2021
2
Declaration
I, Ms.Sohini Gopinath Maji, studying in the second year of Post Graduate Diploma in Management (PGDM)
at SIES College of Management Studies, Nerul, Navi Mumbai, hereby declare that I have completed the
Capstone Project titled ―Understanding the Emergence of Digitization in the Indian Banking Sector‖ as a part
of the curriculum requirement for Post Graduate Diploma in Management (PGDM).
I also declare that the work undertaken by me is original and has not been copied from any source. I further
declare that the information presented in this project report is true and has not been submitted to SIESCOMS
or any other Institute for any other examination.
Signature of the student Date:
Name of the Student: Sohini Maji
Roll No.: 89
3
Certificate By Faculty Guide
This is to certify that Ms. Sohini Gopinath Maji, studying in the second year of Post Graduate Diploma in
Management (PGDM) program at SIES College of Management Studies, Nerul, Navi Mumbai, has
completed the Capstone Project titled ―Understanding the Emergence of Digitization in the Indian Banking
Sector‖ as a part of the curriculum requirement for Post Graduate Diploma in Management (PGDM).
Signature of the Faculty Guide
Name: Dr. Vatsala Bose
Date:
4
Acknowledgements
I wish to take this opportunity to express my deep sense of gratitude to Dr. Vatsala Bose for her invaluable
guidance and support in this endeavor they have been a constant source of inspiration.
Finally it is the foremost duty to thank all my respondents, family and friend who have help me directly or
indirectly in completing my report work, without which this project would not have been successful
Signature
Sohini Maji
Date:
5
6
Executive Summary
Due to the pandemic, the Indian banking industry has recently witnessed the roll out of innovative banking
models like payments and small finance banks at a fast pace. RBI‘s latest measures might help in
restructuring the domestic banking industry.
Banking sector is currently adopting various existing and emerging technologies in concert with associated
changes in internal operations as well as external relationships for providing superior customer Digital
services and experiences efficiently and effectively.
As part of its impetus for Digital Transformation in India, Government also encourages providing
connectivity with high speed bandwidth to every nook and corner of the country. Latest technology and
service offerings in the new age Digital Payments space by the banking sector, such as Unified Payments
Infrastructure (UPI), BHIM (Bharat Interface for Money) which is a Mobile App developed by National
Payments Corporation of India (NPCI), E-wallets, Bharat Bill Payment System (BPSS), mobile money,
payment aggregation etc. have created a revolution by themselves.
Currently, several technologies, infrastructure and processes are made available to enable banks to become
super-efficient and dependable banks. Due to the recent pandemic, the adaptation and implementation of
highly capital intensive global technologies, infrastructure and processes are decisive in order to remain
ahead of the curve has taken a rise.
Digital banking and its different forms provide mission critical solutions to bankers for their short term and
long term business and technological requirements. Today, different parameters such as enhanced customer
satisfaction and value through unified customer experiences, faster output, financial inclusion, operational
efficiencies, infinite banking volumes, scale of economy etc. are being taken care by leveraging digital
banking and mobile technologies. Digitizing the banking experience can improve efficiency and provide a
better customer experience.
7
Table of Content Page No
CHAPTER 1 INTRODUCTION 11
1.1. Overview 11
1.1.1. Market Size 12
1.1.2. Government Initiatives 12
1.1.3. Digitization of the Indian Banking Sector 13
1.2. Objectives of the Study 14
1.3. Scope of the Study 15
1.4. Purpose and Significance of the Project 15
1.5. Limitations of the Study 16
CHAPTER 2 LITERATURE REVIEW 17
CHAPTER 3 METHODOLOGY 19
3.1. Research Methodology 19
3.2. Research Design 19
3.3. Data Collection (Secondary & Primary) 19
3.4. Statistical Tool 19
3.5. Hypothesis 20
CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 21
4.1. How Technology is redefining the Banking Sector 22
4.2. Different types of online banking and transaction methods 25
4.2.1. ATM Banking 26
4.2.2. Mobile Wallet 27
8
4.2.3. Digital Cash 27
4.2.4. Kiosk Banking 28
4.2.5. NEFT: National Electronic Funds Transfer 29
4.2.6. RTGS: Real Time Gross Settlement 29
4.2.7. Mobile Banking 29
4.2.8. Smart Card/Store Value Card 30
4.3. Advantages of Digitization of Banking System 31
4.4. Disadvantages of online banking 33
4.5. Threats to Digitization of Banking Sector 35
4.5.1. Types Of Frauds 36
4.5.1.1. Trojan Attack 36
4.5.1.2. Man-in-the-Middle Attack 36
4.5.1.3. Phishing 37
4.5.1.4. Spyware 38
4.5.1.5. Viruses 38
4.5.1.6. Hacking 39
4.5.1.6.1. Identity Theft 39
4.5.1.6.2. Spam 40
4.5.2. Steps to Minimize Security Issues 41
4.6. Digitalization In The Top Banks Of India 43
9
4.6.1. SBI (STATE BANK OF INDIA) 43
4.6.2. AXIS Bank 46
4.6.3. HDFC BANK 48
4.6.4. BANK OF INDIA 50
4.7 Primary Research 52
CHAPTER 5 CONCLUSIONS 77
CHAPTER 6 SUGGESTIONS & RECOMMENDATION 78
CHAPTER 7 REFERENCE 80
10
CHAPTER 1 – INTRODUCTION
1.1 Overview of the Indian Banking Sector
India has a diversified banking sector undergoing rapid expansion, both in terms of strong growth of existing
financial services firms and new entities entering the market. The banking sector is the backbone of the
Indian economy. The Indian banking sector is displaying the potential for becoming the 5th largest banking
industry globally by 2022. With a continued boost in banking performance strengthened by numerous
technological advancements, the Indian banking sector is likely to assume the 3rd largest position in the
world by 2025. Currently, the banking industry holds pride in contributing nearly 7.7% to the national GDP
(2019). This industry is also the prime employment generator for almost 1.5 million people in the country.
The Government of India has introduced several reforms to regulate and enhance this industry. The
Government and Reserve Bank of India (RBI) have taken numerous measures to facilitate easy access to
finance for Micro, Small and Medium Enterprises (MSMEs).
 As per Union Budget 2019-20, the Government proposed fully automated GST refund module and an
electronic invoice system that will eliminate the need for a separate e-way bill.
 Under the Budget 2019-20, Government proposed Rs. 70,000 crore (US$ 10.2 billion) to the public sector
banks.
 As of September 2018, the Government of India made Pradhan Mantri Jan Dhan Yojana (PMJDY)
scheme an open-ended scheme and added more incentives.
 The Government of India planned to inject Rs. 42,000 crore (US$ 5.99 billion) in public sector banks by
March.
11
1.1.1. Market Size
The Indian banking sector consists of 22 private sector banks, 12 public sector banks, 46 foreign banks, 56
regional rural banks, 1485 urban cooperative banks and 96,000 rural cooperative banks in addition to
cooperative credit institutions. As of September 2020, the total number of ATMs in India increased to
210,049 and is further expected to increase to 407,000 by 2021.
During FY16-FY20, bank credit grew at a CAGR of 3.57%. As of FY20, total credit extended surged to US$
1,698.97 billion. During FY16-FY20, deposits grew at a CAGR of 13.93% and reached US$ 1.93 trillion by
FY20. Credit to non-food industries stood at US$ 1.40 trillion as of November 20, 2020.
1.1.2. Investments/Developments
On November 6, 2020, WhatsApp started UPI payments service in India on receiving the National Payments
Corporation of India (NPCI) approval to ‗Go Live‘ on UPI in a graded manner.
In October 2020, HDFC Bank and Apollo Hospitals partnered to launch the ‗HealthyLife Programme‘, a
holistic healthcare solution that makes healthy living accessible and affordable on Apollo‘s digital platform.
In October 2019, Department of Post launched the mobile banking facility for all post office savings account
holders of CBS (core banking solutions) post office.
Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY) stood at Rs. 1.06 lakh crore (US$ 15.17 billion.
In October 2019, Government e-Marketplace (GeM) signed a memorandum of understanding (MoU) with
Union Bank of India to facilitate a cashless, paperless and transparent payment system for an array of
services.
12
1.1.3. Digitization of the Indian Banking Sector
In November 2020, Unified Payments Interface (UPI) recorded 2.21 billion transactions worth Rs. 3.90 lakh
crore (US$ 53.06 billion) throwing light on the emergence and significance of Digitized Banking.
Digital banking is the digitization (or moving online) of all the traditional banking activities and programs
that historically were only available to customers when physically inside of a bank branch. This includes
activities like:
 Money Deposits, Withdrawals, and Transfers
 Checking/Saving Account Management
 Applying for Financial Products
 Loan Management
 Bill Pay
 Account Services
Even before the pandemic, the Consumer preferences had started shifting to online and mobile devices.
Though many financial organizations have had trouble shifting their on boarding experiences online and to
smaller screens but the pandemic made it possible for many.
In addition, until the past few years, banks were not envisioning the tremendous shift in consumer behavior
that occurred as a result of the millennial generation now become the largest consumers of financial product.
13
1.2. Objectives of the Study
 The following are the objectives of the project:
 To study consumer awareness about the digital banking service
 To analyze customer satisfaction level in the digital banking
 To know the customer perception about the digital banking service
 To know the reason for preferring digital banking service
 This study mainly aims to identify the bank customer level of awareness with regard to four major
banks
 To find out the opinion of the respondents regarding the various problem of digital banking
 To give valuable suggestions to improve awareness and satisfaction about the digital banking
14
1.3. Scope of the Study
The project can be referred to while understanding digitalization and tactics in the banking sector of India. It
helps in understanding the market scenario and the factors influencing the digital practices of the Banking
sector of India. It provides an overview of the sector along with in depth knowledge about the elements of the
industry. It also covers the Major Banks breakthrough developments with regards to the Digital banking
aspect.
1.4. Purpose and Significance of the Study
The main purpose of this project was to understand the emergence of digitization in the Indian banking
sector. This project studies the developments in the Digital Banking space by the Top banks of the country
and other digital services available. Hence, this project will prove to be helpful to understand digitization
strategies of companies providing financial and banking services. As volumes and amount of banking
transactions are increasing rapidly and banks need to serve existing customer and also plan and improve their
infrastructure for the increasing customer base.
And keeping in mind the current situation where person to person contact needs to kept at minimal; for all of
these problems, digitalization and automation will provide a better solution. The cost of implementing these
new digital channels might be high or adds burden to banks financials, but for the current scenario and for
long run it multiples the banks revenue many folds also helps bank to retain existing customers and attract
more new customers.
15
1.5. Limitations of the Study
 This study is based on the prevailing respondent‘s satisfaction.
 The survey was limited only for Navi Mumbai Area
 The sample size of the taken survey was small therefore it could be said that the chosen sample is not the
representative of the whole population
 A small sample size of 103 respondents is taken for primary data analysis, so we could not draw proper
inferences about the respondents from this sample size
 For the secondary research, out of the whole research and analysis, only top four major banks could be
highlighted leaving aside the other banks
 Respondent may not have been true in answering various questions
16
CHAPTER 2 - LITERATURE REVIEW
Digitalization by banking service industries has started gaining momentum especially due to the COVID -19
pandemic. In India and also all over the world, the financial sector has impelled all the players to redefine
what business they are in and strategically think how to stay ahead in the existing business. Digital
orientation of banks is imperative for survival and success in the current scenario and also for long term.
The study by Ali Yakhlef (2001) found that as more and more of the transaction processing load is taken over
by technology, banks are concentrating on strengthening their marketing approach and re-inventing their
business model. Traditional bank branches, with an infrastructure supporting transaction processing, were
being transformed into an open-space interface within which bank experts engage intimately with their
customers, delivering specialized, advisory services with more focus on retail banking.
Mike Wright, Trevor Watkins and Christine Ennew (2010) while studying the current state of the financial
services industry worldwide identified four major trends: (1) the trend towards financial conglomeration; (2)
globalization (3) information technology in bank marketing; and (4) new approaches to financial services
marketing. These trends, it was concluded, will affect the marketing of banks and other financial services in
the 1990s.
Vijay M. Kumbhar (2011) In his research paper ―Factors Affecting the Customer satisfaction In E- Banking:
Some evidences Form Indian Banks‖ evaluates major factors (i.e. service quality, brand perception and
perceived value) affecting customers‘ satisfaction in e-banking service settings. This study also evaluates
influence of service quality on brand perception, perceived value and satisfaction in e-banking. The study
suggested that Perceived Value, Brand Perception, Cost Effectiveness ,Easy to Use, Convenience, Problem
Handling, Security/Assurance and Responsiveness are important factors in customers satisfaction in e-
banking. Contact Facilities, System Availability, Fulfillment, Efficiency and Compensation are
comparatively less important. Security/Assurance, Responsiveness, Easy to Use, Cost Effectiveness and
Compensation are predictors of brand perception in e-banking and Fulfillment, Efficiency,
Security/Assurance, Responsiveness, Convenience, Cost Effectiveness, Problem Handling and Compensation
are predictors of perceived value in e-banking.
17
Rakesh H M & Ramya T J (2014) In their research paper titled ―A Study on Factors Influencing Consumer
Adoption of Internet Banking in India‖ tried to examine the factors that influence internet banking adoption.
Using PLS, a model is successfully proved and it is found that internet banking is influenced by its perceived
reliability, Perceived ease of use and Perceived usefulness. In the marketing process of internet banking
services marketing expert should emphasize these benefits its adoption provides and awareness can also be
improved to attract consumers‘ attention to internet banking services.
Shaza W. Ezzi (April 2014) In their research paper titled ―A Theoretical Model for Internet Banking: Beyond
Perceived Usefulness and Ease of Use‖ tried to inquired different types of electronic banking like ATM‘s,
telephone banking, and electronic funds transfer, Internet banking like has evolved from consumers‘ needs to
have superior access to banking services clear of most banks teller-staffed, normal operating hours. Internet
banking (IB) continues to govern the landscape of electronic banking as consumers continue to use IB to
complete schedule banking transactions in addition to conducting on-line sales and purchasing. This study
presents a theoretical model considered to help researchers and practitioners better understand the acceptance
and adoption of Internet Banking.
18
CHAPTER 3 - RESEARCH METHODOLOGY
3.1 Research Methodology
For the purpose of research the project is divided into many sub-parts. The first part describes how
technology is playing a crucial role in today‘s banking. The second part covers all the online banking
services available for today‘s customers. The third part covers digital banking services are available and
provided by 4 leading banks. And the forth part throws light on the risk associated for the same. A secondary
research was carried out for the purpose of the first four parts.
The next part contains primary research to understand adoption of these services amongst the customers and
their experience for using the same. In-order to understand the consumer perception and effectiveness of
digitization in banking, a survey was prepared using Google Forms and circulated amongst 103 individuals
belonging to different demographics.
3.2 Research Design
A descriptive research design was followed which included data collection and analysis
3.3 Data Collection (Secondary & Primary)
Both types of Secondary and Primary Research was used to reach respective conclusions. The secondary research
sources mainly included analysis of previous research papers. Also various books related to the Digitalization of
the Banking sector and related topics, websites and other online sources providing information about the topic
were considered. While the primary research included taking survey from 103 consumers who had previous
experience with Banking.
3.4 Statistical Tool
Google Form and IBM SPSS Statistics was used to analyze the data of the respondents of survey
19
3.5 Hypothesis
I used the following hypotheses:
H0: Majority of the Customers are not satisfied with digital banking
H1: Majority of the Customers are satisfied with digital banking
H0: There is no significant relationship between the age group and the frequency of cashless transactions
H1: There is significant relationship between the age group and the frequency of cashless transactions
H0: There is no significant relationship between the occupation and the frequency of cashless transactions
H1: There is significant relationship between the occupation and the frequency of cashless transactions
H0: There is no significant relationship between the age group and their awareness about digitized banking
solutions pre COVID
H1: There is significant relationship between the age group and their awareness about digitized banking
solutions pre COVID
20
CHAPTER 4 – DATA ANALYSIS AND INTERPRETATION
Secondary Research
Digital banking also known as internet banking-banking or virtual banking, is a payment system that enables
customers of bank or other financial to conduct a range of financial transactions through the financial
institution's website.
The digital banking system will typically connect to or be part of the core banking system operated by a bank
and is in contrast to branch banking which was the traditional way customers accessed banking services.
The emerging digitization has allowed banks to enable their customers to download transactions directly into
the customer's accounting software. The facility may also enable the customer to order a cheque book,
statements, report loss of credit cards, stop payment on a cheque, advice change of address and other routine
actions, everything digitally. Apart from the services provided by banks, many digital payment methods like
E-wallets have also emerged due to digitization.
The use of mobile devices has increased the speed of transactions for everyone. Some SBA platforms give
banks and credit unions the ability to offer small businesses a loan decision in 5 minutes and funding in 5
days. Financial institutions will speed up their account opening, loan decisioning and other processes in order
to deliver — and market — speed.
The Apple Watch, the next version of Google Glass and other wearable products will further the
digital/mobile trend. The attraction here is the presentation of data and functionality against the real world in
order to create a virtual financial application. Property data for real estate investors will be fed to wearable by
financial and real estate companies looking to pick up new customers at the point of inflection.
More financial institutions will move more of its processes to mobile so that loans, deposits and fee service
transactions can all be initiated on the move instead of in a branch.
21
4.1. How Technology is redefining the Banking Sector
Almost 12 times as many Internet users in India use e-commerce as those who purchase banking products
online. However, this will change. A perfect storm may soon come and enable technology-led disruption at a
far greater scale, leading to better outcomes for customers and innovators.
Significant improvement in the infrastructure for customer identity, credit bureaus, and payment systems are
making remote delivery models possible. Rapidly evolving consumer behavior, influenced by e-commerce
and social media, is resetting customer expectations. New technology-enabled ecosystems created by these
forces could completely disrupt the current order in financial services.
22
According to estimates by McKinsey Global Institute, the economic impact of applying technology to
financial services in India could be $32-140 billion per year in 2025, due to improved productivity and higher
incomes as well as lower costs and leakage in financial transfers and payments. The scale of the opportunity
is driven by the massive under banked population and inefficiencies in financial-services delivery that India
faces today. Only 39% of rural Indians have bank accounts, and even those with bank accounts often do not
have access to any other financial service such as credit to buy farm equipment or fund a small business. Of
some 180 million rural households in India, just 50-55 million have access to formal credit, and one-third of
them also borrow from informal sources at punishingly high rates of interest. The high number of unbanked
borrowers has made benefit transfer cash- or kind-based and more prone to leakage and inefficiency.
The Pradhan Mantri Jan Dhan Yojana (Prime MinisterNarendra Modi‘s programme for universal financial
inclusion, which provides basic bank accounts, overdrafts and insurance to the poor) is an attempt to bridge
the gap. In the past, a key barrier has been the prohibitive cost of serving low-value customers through
traditional channels. Technology will dramatically reduce the cost of service, improving the efficiency of all
sorts of financial intermediation. As new business models make financial inclusion commercially viable, they
can also completely disrupt existing businesses in mainstream banking.
23
5 crore technology applications—universal electronic bank accounts, technology-enabled business
correspondents, mobile money and digital government transfers and payments—have the potential to
advance financial inclusion in India, using combinations of the mobile Internet, digital payments, verifiable
digital identity and automation of knowledge-work technologies. They can also be combined to create
paperless and nearly instantaneous account-opening processes, and a network of banking correspondents
armed with smartphones and micro- ATMs, whose costs could be less than 1% of that of a typical bank
branch. The massive reach of mobile phones even in rural India makes mobile money an obvious platform
for financial inclusion.
Other technology-based applications such as enhanced customer experience and digitization of sales and
fulfillment will transform how the financial sector acquires, engages, and serves customers—both poor and
rich. Around the world, banks are making the customer experience simple, fun, convenient, and user-friendly
with the help of smartphones. From private, secure chats with virtual agents to smartphone apps that enable
potential mortgage customers to take a picture of a property and see its sales history, banks are using
technology to reach new levels of simplicity, personalization and customer engagement.
It is very plausible that the next generation of winners in financial services will focus on just three parts of
the value chain: owning and delighting the customer, managing risk and ensuring compliance.
Other elements of the business system may be automated, outsourced or redesigned, using technology to
achieve significantly lower cost and far greater nimbleness. Regulations that allow seamless, efficient, and
customer-centric financial services are a critical prerequisite if the potential of technology is to be realized.
But with the right policies in place, technology can revolutionize the business of banking and bring massive
economic value to more than 300 million underserved Indians and ease friction and transaction costs for
customers across the spectrum.
24
4.2. Different types of online banking and transaction methods
Core banking solution
Core Banking is a banking service provided by a group of networked bank branches where customers may
access their bank account and perform basic transactions from any of the member branch offices.
Core banking is often associated with retail banking and many banks treat the retail customers as their core
banking customers. Businesses are usually managed via the Corporate banking division of the institution.
Core banking covers basic depositing and lending of money. Normal Core Banking functions will include
transaction accounts, loans, mortgages and payments. Banks make these services available across multiple
channels like ATMs, Internet banking, mobile banking and branches.
The core banking services rely heavily on computer and network technology to allow a bank to centralize its
record keeping and allow access from any location. It has been the development of banking software that has
allowed core banking solutions to be developed.
It became possible with the advent of computer and telecommunication technology that allowed information
to be shared between bank branches quickly and efficiently. Before the 1970s it used to take at least a day for
a transaction to reflect in the account because each branch had their local servers, and the data from the
server in each branch was sent in a batch to the servers in the data centre only at the end of the day (EoD).
Over the following 30 years most banks moved to core banking applications to support their operations
where CORE Banking may stand for "centralized online real-time exchange". This basically meant that all
the bank's branches could access applications from centralized data centres. This meant that the deposits
made were reflected immediately on the bank's servers and the customer could withdraw the deposited
money from any of the bank's branches.
25
4.2.1. ATM Banking
An automated teller machine (ATM) is a computerized telecommunications device that provides the
customers of a financial institution with access to financial transactions in a public space without the need for
a human clerk or bank teller.
On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or
a plastic smartcard with a chip that contains a unique card number and some security information, such as an
expiration date or CVC (CVV). Security is provided by the customer entering a personal identification
number (PIN).
Using an ATM, customers can access their bank accounts in order to make cash withdrawals (or credit card
cash advances) and check their account balances as well as purchasing mobile cell phone prepaid credit.
ATMs are known by various other names including automated transaction machine, automated banking
machine, money machine, bank machine, cash machine.
In order to allow a more diverse range of devices to attach to their networks, some interbank networks have
passed rules expanding the definition of an ATM to be a terminal that either has the vault within its footprint
or utilizes the vault or cash drawer within the merchant establishment, which allows for the use of a scrip
cash dispenser.
26
4.2.2 Mobile Wallet
As shopping patterns continue to evolve thanks to Covid 19, even mobile and digital wallets in India small-
time have evolved with it. With UPI making payments seamless, mobile wallets and digital payment apps
have been surpassing credit card usage and are slowly beginning to replace the traditional payment methods.
A mobile wallet or digital wallet, in simple terms, is a virtual mobile-based wallet where one can store cash
for making mobile, online or offline payments. There are various types of mobile wallets in India, such as
open, semi-open, semi-closed and closed - depending on the type of usage and payments that can be made.
Wallets are growing rapidly as they help in increasing the speed of transaction, especially for e-commerce
companies and all e-commerce marketplaces have integrated with such mobile wallets too. With the launch
of UPI, it has become even easier, as the transfer happens directly from the bank account rather than from a
wallet.
The top players in India are Google Pay, Phone pe, PayTM, Dhani, Bhim, MobiKwik, YONO, Amazon Pay.
4.2.3. Digital Cash
Digital cash is a system of purchasing cash credits in relatively small amounts, storing the credits in your
computer, and then spending them when making electronic purchases over the Internet.
27
4.2.4. Kiosk Banking
This is the latest development on the remote baking front, also known as 'Touch-screen' banking. A kiosk is a
self- service banking terminal that can be operated with both credit & debit cards. The Debit/credit card can
be swiped at against the card reader at the kiosk and account accessed post entering the ATM PIN.
Unlike an ATM, which is primarily used for cash transactions like withdrawals, deposits, etc., a kiosk is
primarily used for non-cash transactions like cheque book request, printing bank account statements, funds
transfer etc. The number of transactions a particular location is expected to be able to support is key here
along with the types of transactions required.
An ATM and a Kiosk can both easily perform the same non cash and non-deposit transactions however the
real differentiators come down to how much time/ input the transaction takes (Financial Kiosks have full
keyboards and document printers, ATMs generally don`t) and queuing considerations (at an ATM, most
people just want to get their cash and go).
28
4.2.5. NEFT: National Electronic Funds Transfer
NEFT is electronic funds transfer system, which facilitates transfer of funds to other bank accounts in over
63000 bank branches across the country. This is a simple, secure, safe, fastest and cost effective way to
transfer funds especially for Retail remittances.
4.2.6. RTGS: Real Time Gross Settlement
Real time gross settlement systems (RTGS) are a funds transfer mechanism where transfer of money takes
place from one bank to another on a "real time" and on "gross" basis. Settlement in "real time" means
payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are
processed. "Gross settlement" means the transaction is settled on one to one basis without bunching with any
other transaction. Once processed, payments are final and irrevocable.
In an RTGS system, transactions are settled across accounts held at a Central Bank on a continuous gross
basis. Settlement is immediate, final and irrevocable. Credit risks due to settlement lags are eliminated.
RTGS does not require Core Banking to be implemented across participating banks.
4.2.7. Mobile Banking
Mobile Banking is said to be more secure and risk-free than online Internet Banking. With the help of
Mobile, Banking user can transfer funds, and pay bills, checking account balance, study your recent
transaction, block your ATM card, etc. Mobile Banking is lucrative, and Banks offer this service at less rate
to the customers. Users can transfer funds from your bank account to another bank account with a
smartphone just with the help of the internet, from anywhere to everywhere using mobile banking. It is
obtainable for 24 hours and easy and convenient mode for many mobile users in the rustic areas.
29
Mobile banking can be used for most of the same tasks that you would execute at a bank branch or on your
home desktop computer. In addition, many banks provide customers with the ability to deposit checks. All of
this is done through an app that is downloaded to your smartphone or tablet from your provider‘s app store.
The app makes navigation much stress-free than if you were trying to use online banking through the browser
on your phone.
4.2.8. Smart Card/Store Value Card
A smart card, typically a type of chip card, is a plastic card that contains an embedded computer chip–either a
memory or micro-processor type–that stores and transacts data. This data is usually associated with either
value, information, or both and is stored and processed within the card's chip. The card data is transacted via
a reader that is part of a computing system.
Systems that are enhanced with smart cards are in use today throughout several key applications, including
healthcare, banking, entertainment, and transportation. All applications can benefit from the added features
and security that smart cards provide. Markets that have been traditionally served by other machine readable
card technologies, such as barcode and magnetic stripe, are converting to smart cards as the calculated return
on investment is revisited by each card issuer year after year
30
4.3. Advantages of Digitization of Banking System
Some advantages of the emerging digitsation go hand-in-hand with simply being online; others are
competitive advantages provided by online banks taking advantage of their cost structure. The few of the
prominent benefits provided by online banking include:
 Convenience
 Transfer service
 Monitoring service
 Online bills payment
 Quality service
31
Convenience
In this busy and hectic schedule it is difficult for an individual to make time to visit bank for checking their
account balance, interest rates, successful transfer of money, and any other update. Banking system has
developed virtual banking system for customer convenience where an individual can access their banking
system anytime and anyplace. There are many scenarios when there is banking holiday due to which your
money can‘t be transferred. Online banking system has provides an ease by providing 24 hours and 365 days
services. It resolves issues faced by the customers during traditional banking system. An individual don‘t
need to stand in queue for any money deport and transfer.
Transfer service
The virtual banking system provides convenience to transfer money 24 hours in 365 days. You don‘t need to
stick to perform any transaction within working hours as you can do as per your convenience in 24 hours.
Monitoring service
The customers can access their updated passbook anytime for monitor their transactions to manage their
financial plans.
Online bills payment
You don‘t need to stand in queue for paying bills as it has feature to pay any kind of bill including electricity,
water supply, telephone, and other bills.
Quality service
Internet banking has improved the quality of services by providing them convenience to perform their
transactions anytime during the day. The consumers are able to apply for loan, insurance, and any other
services without visiting the banks physically which shows that the quality of e-banking is fast and effective.
32
4.4. Disadvantages of online banking
In spite of their many advantages, there are some drawbacks of the digitization of banking sector as well.
Here are some of the downsides of working with an online bank:
 Technology issues
 Security issues
 Inefficient at complex transactions
 No relationship with personal banker
Technology Issues
In many ways, an online bank is only as good as your — or their — internet connection. If there‘s a power
outage, or if servers go down, you might not have any access to your account whatsoever. While some banks
offer a phone number for customer service, it might be overwhelmed if online access is down. With a real
bank, you can always find someone to talk to in the branch.
Security Issues
While many online banks are reputable and well-established, sometimes it can be hard to feel comfortable
with a bank that doesn‘t have a physical presence, particularly when large sums of money are involved.
If a website suddenly folds up, what will happen to your money? There‘s also the risk of identity theft — or
actual theft — if someone gains unauthorized access to your account via a hacked or stolen password or log-
in credentials.
Inefficient at Complex Transactions
Online banks might be able to transfer money between accounts or pay bills, but you might be more
comfortable with an international, bricks-and-mortar bank if you have complex transactions.
Worldwide, business-oriented banks like Chase have global transaction capabilities, such as the ability to
send payments to more than 35 different currencies worldwide, that online banks might not be able to muster.
33
Without a real-world presence, most online banks can‘t even offer the services of a notary public, which
require an in-person visit and necessary for most important financial transactions like buying a home.
No Relationship with Personal Banker
Over time, you can develop a relationship with a personal banker if you visit a traditional bricks- and-mortar
location. If you‘re dealing with an online bank, on the other hand, you‘re typically handed off to an
anonymous customer service agent who is unlikely to know you from the next customer.
If you‘re really in a bind, financially speaking, having a relationship with someone who can help and who
knows you well can be a major advantage over a strictly online banking relationship.
34
4.5. Threats to Digitization of Banking Sector
The Internet has made banking, shopping, and conducting other financial transactions online quite
convenient. But when it comes to your money, you want to make sure your transactions are safe. Security of
a customer's financial information is very important, without which online banking could not operate.
Presently, Internet banking customers only need a computer with access to the Internet to use Internet
banking services.
Customers can access their banking accounts from anywhere in the world. Each customers is provided a
login ID and a password to access the service. It is indeed easy and convenient for customers. However, the
use of password does not provide adequate protection against Internet fraud such as phishing.
The problem with password is that when it has been compromised, the fraudsters can easily take full control
of online transactions. In such cases, the password is no longer works as an authentication token because we
cannot be sure who is behind the keyboard typing that password in. However, easy access and convenience
should not be at the expense and mercy of the security of information.
This is important in order to ensure the confidentiality of information and that it is not being manipulated or
compromised by the fraudsters.
35
4.5.1.Types Of Frauds
4.5.1.1. Trojan Attack
The attacker installs a Trojan, such as key logger program, on a user‘s computer. This happens when users
visited certain websites and downloaded programs. As they are doing this, key logger program is also
installed on their computer without their knowledge.
When users log into their bank‘s website, the information keyed in during that session will be captured and
sent to the attacker. Here, the attacker uses the Trojan as an agent to piggyback information from the user‘s
computer to his backyard and make any fraudulent transactions whenever he wants.
4.5.1.2. Man-in-the-Middle Attack
Here, the attacker creates a fake website and catches the attention of users to that website. Normally, the
attacker was able to trick the users by disguising their identity to make it appear that the message was coming
from a trusted source.
Once successful, instead of going to the designated website, users do not realize that they actually go to the
fraudster‘s website. The information keyed in during that session will be captured and the fraudsters can
make their own transactions at the same time. Diagram on how information is being compromised
36
4.5.1.3. Phishing
One of the primary methods a hacker gains access to account information is through phishing, or tricking the
victim into giving up the information voluntarily. A hacker might send an e- mail or even call, pretending to
be a representative of the bank and informing you about some irregularities with your account.
All you need to do to sort things out is to provide your password or other account information to verify your
identity. If you ever receive a communication that appears to be from your bank and requests this type of
information, contact your bank by phone immediately.
37
Do not give out account information to a caller, and do not click any links provided in any e- mails that claim
to be from your bank. You should also ensure that any employees with access to the company‘s accounts
follow the same procedures.
Step 1 (attacker sends spoof email) Original Website.
Step 2 (victim access accesses the attacker website) 2 Attacker Victim 1 Website.
4.5.1.4. Spyware
Spyware is the number one way that online banking credentials are stolen and used for fraudulent activities.
Spyware works by capturing information either on your computer, or while it is transmitted between your
computer and websites.
Often times, it is installed through fake ―pop up‖ ads asking you to download software. Industry standard
Antivirus products detect and remove software of this type, usually by blocking the download and
installation before it can infect your computer
4.5.1.5. Viruses
Viruses are designed to compromise your computer systems, and allow others to gain access to your files,
etc. This is different than spyware in that a virus may search for information considered to be of value, where
spyware will wait for input or action from whomever is using the computer. A system that is compromised
may be used to attack other systems, denying people legitimate access to services.
An example would be the recent activities of the group called ―Anonymous.‖ This group took over computer
systems around the world, and used them to launch attacks on websites. These types of attacks are called
―denial of service‖ attacks.
38
One of the most common scenarios with viruses is where they will discover financial data such as payroll
files, bank account information, and credit card information. This information is then transferred to criminals
who sell it on the black market, or worse – use it for blackmail.
Criminals can get anywhere from pennies to hundreds of dollars for each piece of information, depending on
what it is and how they can exploit it.
4.5.1.6. Hacking
Hacking works similarly to viruses. A ―hacker‖ uses software to probe for vulnerabilities, and then uses
programming techniques, software utilities, or system commands to exploit the vulnerability.
The primary objective is to gain access to your system. Once this access is obtained, you can think of it like a
burglary – they search for anything of value and often times leave damage behind. More threatening are
those hackers who simply take control of your system and wait, to see what information becomes available or
what other systems they can gain access to.
4.5.1.6.1. Identity Theft
Identity theft refers to all types of crime in which someone illicitly obtains and uses another person's personal
data through deception or fraud, typically for monetary gain.
With enough personal information about an individual, a criminal can assume that individual's identity to
carry out a wide range of crimes.
39
Identity theft occurs through a wide range of methods—from very low-tech means, such as check forgery and
mail theft to more high-tech schemes, such as computer spyware and social network data mining. The
following table1 illustrates well-known social Web sites that have been attacked
4.5.1.6.2. Spam
Spam is an electronic 'junk mail' or unwanted messages sent to your email account or mobile phone. These
messages vary, but are essentially commercial and often annoying in their sheer volume.
They may try to persuade you to buy a product or service, or visit a website where you can make purchases;
or they may attempt to trick you into divulging your bank account or credit card details.
40
4.5.2. Steps to Minimize Security Issues
I. Install Latest Security Software
Prevention is better than cure and the same is true for all online transactions. The World Wide Web is full of
malware, spam and spyware and the best protection to avoid your security being compromised is to use good
antivirus software.
One can also seek to purchase a full version of protection software rather than an antivirus which can guard
against phishing, malware and Trojans.
Look for Encryption Signs
Before entering any confidential information or sensitive data on any webpage, check if the website is using
proper encryption. Encryption is a security measure that helps protect data while travelling over the various
networks on the internet.
The basic sighs of encryption include an internet protocol or url address starting with https (where s stands or
security) as well as a sign displayed a closed padlock located in the right corner of the screen.
Different Passwords
A recent study has revealed that majority of the people use common passwords for a number of transactions
including sensitive transactions like net banking and credit cards for the convenience of recollecting.
Using the same password makes you at high risk, as if hackers can somehow get access to one password,
they would virtually have access to all your accounts. The best way to keep you safe in the virtual world is to
use unique passwords for different transactions.
Cash on delivery option
If any sites are offering cash on delivery option, don't hesitate to use it as it is a good safety tip at no cost.
Many sites give this option, but many of us ignore it mainly because of our carelessness in going through all
details.
41
Avoid Using Public Computers
Always use personal computers or electronic gadgets like phones or tablets to complete any financial
transaction over the internet. Never use any public computers or your friend's mobile for such sensitive
transaction as their security may have been compromised.
Also make sure you always connect to the internet using a secured Wi-Fi connection which is password
protected. Doing financial transactions over a public Wi-Fi connection is highly unsafe and not
recommended.
Buy From Reputed Merchants
Doing online transaction from reputed merchant websites and e-commerce platforms make sure your security
is not compromised
42
4.6. Digitalization In The Top Banks Of India
4.6.1. SBI (STATE BANK OF INDIA)
State Bank of India is an Indian multinational, public sector banking and financial services statutory body
headquartered in Mumbai, Maharashtra. SBI has a total of 22,141 Branches and 58,555 ATMs and has more
than 35+ subsidiaries for a targeted focusing.
Currently the bank‘s focus is on simplifying the digital experience. For a significant percentage of branch
processes, the bank analyzed that customers can be serviced with lesser number of screens to click. Today,
the bank‘s basic principle is to ensure that a customer‘s need is not clicked for more than four times for any
service request to get completed.
The huge focus on customer satisfaction can also be seen from initiatives such as the ‗No Queue‘ app on
mobile, which enables customers to book a Virtual Queue Ticket (e-Token) for select services at select SBI
branches. What‘s unique is that customers can generate e-tokens before reaching the branch, thus avoiding
waiting in the queue at the branch and saving valuable time. The app also conveys the estimated waiting
time, number of customers ahead and a map showing the direction to reach the branch. Customers are also
updated about their position in the queue through instant alerts that provided a major assistance during the
pandemic.
Transforming branches digitally
Despite high usage rates for Internet and mobile channels, it has been found that customers still derive value
from branches. Representing and protecting the brand of an organization, providing a physical presence and
serving the full range of customer needs, the branch network has always been the heart of a bank‘s franchise
and revenue generating potential.
43
Keeping the above facts in mind in State Bank of India, the bank led by its CTO carried out a few disruptive
transformations of the branches by optimizing the business processes, digitizing the paper based processes
and ensuring digital presence in their day to day usage of paper.
Digitized transformation includes the process of branch teller application transformation, where the
application has been transformed by re-imagining the user interface of branch teller application to provide
next generation customer experience. It has cut down the time to serve the customers at the branches by the
teller from 30% to 75%. Another initiative called the SBI Digi Voucher has been undertaken with the
intention of cutting down paper-based transactions. For most of the transactions, customer needs to fill-up
paper forms or vouchers for cash withdrawals or for cheque or cash deposits.
The bank has also embarked upon an initiative called SBI Scribe, which facilitates digitization of customer
acquisition and the account opening process. A customer needs to only fill-up paper forms on the digital pad,
which has customer handwriting recognition capability.
This data is then transmitted on a real-time basis to the core banking system. KYC documents are
photographed and scanned by the branch staff, and uploaded real-time. This has enhanced the customer
experience by a significant percentage, as the customer can walk out of the branch with a fully operational
account immediately.
Building the foundation for acceleration SBI understands that speed to roll out new services is critical in the
digital age, and has accordingly adopted cloud and network virtualization services in a big way. The bank has
built its own private cloud called ‗Meghdoot‘. This private cloud now powers multiple business services.
Planning for the future
SBI is preparing for the future to the technology by taking a series of initiatives. For starters, it has started
inviting startups to pitch their solutions or products to the bank on specific days of a month. The bank
believes that the engagement with startups will help it ride the wave of digital disruption in a faster manner.
SBI has also decided to publish some of its APIs for fintech companies. Another innovation is a P2P funds
transfer application that allows customers to quickly transfer funds to a third party without beneficiary
registration, either through mobile number or email- ID of the beneficiary.
The bank has setup a private cloud for digital channels, so that it can serve at least 50% of its more than 31
crore debit card customers by 2022 using digital channels.
44
SBI is also considering deployment of the public cloud for hosting utility, communication and productivity
enhancement services for its staff. It is also dipping its feet into cognitive computing, and is evaluating a
number of vendors. The objective is to enhance branch services using artificial intelligence
Understanding the potential of rural India, the bank has also announced a new initiative called ‗SBI Digital
Villages‘. This initiative aims to help villages to transition into a cashless economy, by adopting them. In the
first phase, 21 digital villages have already been adopted, and the bank plans to have 100 villages under this
initiative.
For a bank of SBI‘s size, even a small percentage of efficiency enabled by technology can have massive
implications.
The analysis of SBI‘s digital transformation is also important, as it shows India‘s public sector giants how
they can adopt similar strategies and leverage their size and scale, while being as nimble as a startup.
SBI has partnered with Flipkart to offer its consumers the facility of pre-approved EMI Facility on purchases.
Under this partnership SBI will provide overdraft facility to pre-qualified set of customers for transacting on
Flipkart for a minimum purchase of Rs. 5000.
The bank also launched 'SBI Mingle' - its social media banking platform for Facebook and Twitter users.
Using SBI Mingle, its customers can do a host of banking services like checking balance and requesting mini
statements on their Facebook or Twitter accounts.
The Bank is also planning to introduce more services like request for chequebook, stop cheque, register for
mobile banking, internet banking, SMS alerts and block ATM/Debit Cards on this platform soon.
Several activities are undertaken for ensuring 100% financial inclusion with focus on migration to Any Time
Channels through State Bank etc.
45
4.6.2. AXIS Bank
Axis Bank, India's third largest private sector bank by assets, is taking digital banking to corporate clients as
they are potential targets for mushrooming payment technology companies. Many payments, and
documentation that delay transactions will now be on the palms of chief financial officers and top finance
related decision makers who would now be able to do so at the tap of a button.
Digital applications of Axis bank has brought convenience to the customer and bank has also improved
customer stickiness with it and has also been able to monetize this in current account flows and forex fees
and trade fees.
For Axis Bank which derives nearly a fifth of its income from transactions banking, it is important to stay
ahead of competition with consumer friendly offerings. Indeed, even global banks which were thriving on
trading income, shifted focus to transaction banking as the revenue is assured and continuous.
The products are pay connect for electronic payments, TF connect for trade finance transactions, FX connect
for foreign exchange transactions and a tablet based internet banking application for corporate customers.
The new applications will help corporate chief finance officers (CFO) and CEOs approve bank guarantees,
foreign exchange transactions and letters of credit instantly and also send reports via the applications.
CFOs will be able to transfer funds using NEFT, RTGS and demand drafts through the payment application.
They can also manage their workflows through letters of credit and bank guarantees and buy and sell foreign
exchange in multiple currencies on a real time basis.
All customers have different needs and unique ways of living. And banks while serving their customers
across different channels and lines of business need to factor in this business truth. The customer is
interacting with the world through various digital interfaces through the web, social media, digital wallet and
ecommerce. This is an opportunity that banks have capitalized.
46
Banks need to create offerings that can be integrated with the Customer experience barometer; Banks need to
gauge how different customers will relate to them.
Banks need to adapt their offerings to each of those different needs. With digital banking gaining momentum,
banks are bringing more and more functionality into the mobile phones and wearable‘s as the next frontier of
convenience banking.
So if a customer doesn't want to visit the branch he can access services on a self-service mode through the
mobile.
In the digital world instant gratification is important. But it should happen at the time of the choosing of the
customer and not at the time of the choosing of the bank. Customers today are tech savvy and say- Give it to
me when I want it, don't burden me with it when you want to.
Digital Overdrive
Axis Bank is making steady strides in the direction of digital banking. The bank is re-tooling its core to cope
up with the demands of the new age customer. It's building a culture of experimentation for digital initiatives.
Axis Bank launched LIME - India's first mobile app integrating wallet, shopping, payments and banking.
LIME acts as an independent app, empowering any person to open individual, shared mobile wallets and
make seamless peer to peer as well as online, offline merchant payments.
Users can also experience the convenience of in-app shopping that allows them to compare and buy products
and services. LIME will enable individuals to open a full-fledged savings account digitally, by completing
the KYC process, using their mobile.
It launched Ping Pal, a multi social payment app. The customers find locker booking was a very tedious and
long drawn process. So Axis Bank launched a new mobile app to allow its customers to book lockers, saving
them many branch visits. It has also launched an offer based service for millennial who are discount buyers.
The users can share pre-login screens to search for nearby dining offers.
The bank has gone digital in the areas of customer engagement, sales, operations and customer acquisition
and is leveraging direct online sales and big data for cross sell to boost sales. They are also going for
paperless operations, which will reduce turnaround time, complaints and risk So they may maintain a laser
sharp focus on their customers.
47
4.6.3. HDFC BANK
Topmost private sector HDFC Bank focuses on digital platforms in rural and semi-urban markets to achieve
sustained growth.
HDFC is now focusing upon Customer Focus, Operational Excellence, Product Leadership, People and
Sustainability as mentioned in their Integrated Annual Report 19-20.
The bank has leveraged on its distribution strength and digital platforms especially in the rural and semi-
urban parts of the country for higher stable sustained growth.
During the pandemic, HDFC launched Mobile ATM vans across the country, shared information on vendors
providing critical supplies and shared government advisories and protocols online.
HDFC Bank with its focus on implementing Digital Transformation within the organization looks at key
technologies to harness its digital potential and empower employees to amplify the reach of its digital
initiatives and dramatically improve customer engagement and increase customer servicing capabilities of the
bank.
The bank‘s digital transformation has been successfully implemented under the Centre of Digital Excellence
(CODE) initiative that helped bank adopt best practices in the Digital Space. The purpose of CODE is to
equip HDFC Bank employees with skills and resources to build a better solution for our digital customers
and build a dedicated organizational structure for carrying all-digital initiative.
To leverage on this, HDFC Bank has taken up a number of initiatives under its CODE program including the Digital
Command Centre, a User Interface (UI) / User Experience (UX) Laboratory, Artificial Intelligence (AI), CODE
Hackathons, CODE Knowledge, Social Media Maturity Model, Internal Social Collaboration and Partner
Collaboration Solutions.
48
Digital Command Centre
One of our most promising projects is the Digital Command Centre which is set – up to bring real – time
intelligence and help HDFC Bank make informed business decisions. Each of the Command Centre screens
is dedicated to providing real – time visualisation and analytics of the buzz around HDFC Bank Brand and its
competitors to facilitate understanding of digital chatter.
AI as a service
In addition to this, we have also been viable to devise an entire Artificial Intelligence strategy for the bank.
Although, EVA and IRA are the public faces of our software AI and humanoid robot respectively, we are
looking forward to deploying a lot more exciting initiatives in the near future.
Social Media Maturity Model
Our efforts under the CODE initiative do not end here. To ensure that HDFC Bank is on the path of
continuous improvement and digital empowerment we have set up a Social Media Maturity Model and to top
it up we have also built an Internal Social Collaboration platform that can help us in channelising intellectual
input garnered from productive employees. To enable this, we have undertaken a seminal project to induct
social media technology to improve internal efficiencies.
CODE Knowledge
For projects to be executed at this scale, it is essential that the employees have the necessary skill set to
implement them effectively. Therefore, one of its first ‗Digital Learning‘ platforms for bank employees will
be fabricated where employees can get certified across various digital subjects like Search Engine Marketing,
UI/UX Design Thinking, Mapping Digital journey, Blockchain etc.
CODE Hackathons and Partner Collaboration Solutions
The industry is competitive and grappling to provide the best of the experience to its customers. In such a
scenario, it is necessary to collaborate with the best of the solution providers in the industry. CODE
Hackathons is one such initiative where start-ups, individuals and ITES companies compete to solve
emerging digital use cases. Another such programme is the partner collaboration solutions wherein HDFC
Bank will focus on areas like Industry Academia, Start – Up and Accelerator engagement programs and
building innovation centres in collaboration with the Government.
49
UI / UX Laboratory
All these solutions that will be enabled for HDFC Bank customers require a set of standard processes,
approaches and consistency for seamless user experience. To facilitate this, a UI / UX lab will be set up with
the objective of accessing UI / UX skills to the entire organisation and ensure that all digital assets are
consistent and all teams are utilising the best of breed knowledge while creating digital properties
To conclude, HDFC Bank is at cusp of a digital revolution and aims to provide customers and empower employees
with the best of digital infrastructure.
4.6.4. BANK OF INDIA
Bank of India (BoI) is commercial bank with headquarters at Bandra Kurla complex, Mumbai. Founded in
1906, it has been government-owned since nationalization in 1969. However, some branches are individually
owned, such as Kandia, Indonesia, etc. The Bank has over 5000 branches in India spread over all states/
union territories including specialized branches. These branches are controlled through 55 Zonal Offices and
8 NBG Offices. BoI is a founder member of SWIFT (Society for Worldwide Inter Bank Financial
Telecommunications), which facilitates provision of cost-effective financial processing and communication
services.
Bank of India was founded on 7 September 1906 by a group of eminent businessmen from Mumbai,
Maharashtra, India. The Bank was under private ownership and control till July 1969 when it was
nationalized along with 13 other banks.
50
Beginning with one office in Mumbai, with a paid-up capital of ₹5 million (US$78,000) and 50 employees,
the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong
national presence and sizable international operations. In business volume, the Bank occupies a premier
position among the nationalized banks. The Bank came out with its maiden public issue in 1997 and follow
on Qualified Institutions Placement in February 2008.Bank of India has set each of its 54 zones a target of
converting a minimum five villages into ‗digital villages‘ by September 2019. A digital village is one where
transactions in the local economy happen in a cashless mode through use of, among others, credit/debit cards
and mobile phone applications/e- wallets. ―Of our 54 zones pan-India, Bank has already converted 81
villages into digital villages in 49 zones within a period of three months which is achieved because now the
National Bank for Agriculture and Rural Development (NABARD) is subsidising the cost of point-of-sale
(PoS) machines and allied digital infrastructure. Bank of India‘s digitization is going on at a good pace.
Creating awareness
Apart from creating digital villages, the public sector bank has floated two schemes Paathshala and
Prayogshala — to create national awareness on digital transactions. Under Paathshala, students, NCC cadets,
NGOs, SHGs, clubs, and so on, are taught the uses of various digital tools. Prayogshala is targeted at those
who are associated with fee or business-based income, by showing them how the Bharat Quick Response
code works and how other digital tools operate.
51
Primary Research
Total Respondents = 103
Age
Options Responses Percentage
Below 20 2 1.9 %
21 to 30 61 59.2 %
31 to 40 22 21.4 %
41 to 50 0 0
51 to 60 7 6.8 %
61 and above 6 5.8 %
Total 103
INTERPRETATION: The results of the survey show that for this research most the views and study would
be focusing more on the age group of 21 to 40 due to major number of responses totaling to 80.6% of total
respondents.
52
Gender
Female 58 56.3 %
Male 45 43.7 %
Total 103
INTERPRETATION: According to the survey 56.3% of the respondents are are female & remaining 43.7%
are male out of 103 responses. Hence in the survey majority of the respondent‘s view comes from females.
53
Marital status:
Single 70 68 %
Married 33 32 %
Total 103
INTERPRETATION: According to the survey 32% of the respondent are married & the rest 68% are
single.
54
Occupation
Home Maker 10 9.7 %
Retired 5 4.9 %
Salaried 35 34 %
Self Employed 9 8.7 %
Student 44 42.7 %
Total 103
INTERPRETATION: According to the survey, most of the respondents are students and quite like are also
the ones who have just started with their job. Majority of the respondents that is 42.7% are students followed
by 34% of salaried individuals and 9.7 % of home makers and the remaining others.
55
Do you have bank account?
Yes 103 100%
No 0 0
Total 103
INTERPRETATION: As per the survey all the 103 respondents own single or multiple bank accounts. The
changing lifestyle and the growing bank securities can be a reason for attaining this result.
56
If Yes, then in which Bank do you have an account / accounts?
Axis 19 18.4 %
Bank of India 23 22.3 %
Canara Bank 17 16.5 %
HDFC 31 30.1 %
ICICI 30 29.1 %
Kotak 17 16.5 %
Punjab National Bank 9 8.7 %
SBI 62 60.2 %
Yes Bank 7 6.8 %
Others 1 1%
Total 216
57
INTERPRETATION: As per the survey a total of 216 answers were recorded from 103 respondents
indicating that at least each respondent has 1 account and most of them have multiple bank accounts under
them. Out of 103, 62 respondents have an account at SBI making it the most widely used bank.
58
Did your bank have Digitized banking options pre-COVID?
Yes 47 46.1 %
No 6 5.9 %
May be 49 48 %
Total 102
INTERPRETATION: As per the survey, we can see that either the banks didn‘t provide digitalized
solutions or the customer was not aware of their banks providing such kind of service. Almost more than
50% of the respondents were either not aware or the bank didn‘t provide such service.
59
Did your bank have digitized banking options post-COVID?
Yes 85 82.5 %
No 1 1%
May be 17 16.5 %
Total 103
INTERPRETATION: As per the survey, around 82.5% stated that their bank provided them with digital
services. We can say that due to COVID and restrictions the banks either advertised their online solutions
well or people were forced to switch to digitzed solutions and hence were now aware of the services which
were either already existing or was newly introduced by the banks to survive in the pandemic.
60
Are you able to use various banking facilities through Digital Banking?
Yes 98 96.1 %
No 4 3.9 %
Total 102
INTERPRETATION: The survey says the majority of the respondents are able to avail the digital banking
services. This can be due to the increase internet penetration and also due to COVID as people were forced to
switch to using digitized solutions more.
61
Which mode of money transaction do you use / prefer the most?
Cash 73 70.9 %
E wallet 46 44.7 %
Google Pay / Phone Pe / Amazon Pay / PayTM 75 72.8 %
Net Banking 56 54.4 %
Debit Card / Credit Card 79 76.7 %
Smart phone - Application 27 26.2 %
Total 356
INTERPRETATION: In a survey of 103 respondents a total of 356 responses were recorded suggesting that
respondents are using more than just 1 form of money transactions for their day to day life. Like the
tradinitional times Cash is one of the major form of transaction with 70.9% of the respondents using it, but
the major transactions form are the digital form that is Debit and Credit cards with 76.7% respondents using
it and the newest digitized service that is UPIs like Google Pay, Phone Pe recording 72.8% usage by the
respondents. This shows the high adaption to the digitized way of banking services.
62
How often do you use cashless transactions?
Daily 45 43.7 %
Weekly 37 35.9 %
Monthly 18 17.5 %
Yearly 3 2.9 %
Never 0 0
Total 103
INTERPRETATION: As per the survey, around 79.6% of the respondents perform transactions either on
daily or on weekly basis. This reflects the major shift from the traditional methods of transaction to the newer
ones.
63
Where do you make use of Digital Banking the most?
Online Shopping 77 74.8 %
Transfering money from one account to another 67 65 %
Checking Bank Balance and other updates 57 55.3 %
Paying at local stores 61 59.2 %
Paying Utility Bills 58 56.3 %
Online Booking 61 59.2 %
I don’t use Digital Banking facilities 0 0
Total 381
INTERPRETATION: As per the survey, a total of 381 responses were recorded from 103 respondents
reflecting that people are cashless or online transactions for online shopping followed by 65% using it from
transferring money from one account to another. There was no single person saying that they don‘t avail
these services showcasing the normalization of the digitized banking habits making use of multiple services
provided by the digitization of banking sector.
64
What are the reasons to choose Digital Banking options
Convenience 64 62.1 %
Save time 59 57.3 %
24 * 7 Access to bank 67 65 %
No need to carry wallet around all the time 62 60.2 %
Good deals and cashback offers 39 37.9 %
Total 291
INTERPRETATION: As per the survey, we are already aware that all our 103 respondents avail the
digitized facilities so we try here to understand why they do so. A total of 291 responses were recorded from
103 respondents stating that each respondent has either one or multiple benefits that they enjoy by availing
online services. 24*7 access to bank was one of the major factor for using these facilities with 65% people
voting for it that shows access to the banking services at all times plays such a vital role in today‘s time.
Followed by Convenience and the fact that one doesn‘t have the need of carrying their wallet around all the
time with 62.1% and 60.2% respectively.
65
Do you still visit branches since you started using Digital Banking?
Often 3 2.9 %
Always 15 14.6 %
Sometimes 40 38.8 %
Rarely 39 37.9 %
Never 6 5.8 %
Total 103
INTERPRETATION: Earlier for every monetary requirement one has to rush to their banks but times have
changed now. With the growing adoption to digital facilities there has been a decline in the visits to the banks
and the survey supports the same. 82.5% of the respondents now hardly visit any branches as now they have
the convenience of digital banking. Also the pandemic can be another reason for the fast adoption to this
change.
66
What do you think are the main disadvantages of visiting a bank? (Without considering
the pandemic situation)
Waiting time 73 70.9 %
Proximity from Home or Office 72 69.9 %
Quality of service 57 55.3 %
Lack of personal assistance 52 50.5 %
Total 254
INTERPRETATION: From the survey we have seen the shift from traditional banking to the digitized one
and the benefits. So we try to understand the disadvantages in the traditional one. As per the survey, when
asked about disadvantages, 254 responses were recorded from 103 respondents meaning that each respondent
has at least 1 grievance associated with the traditional banking. For approx. 70% of the respondents the
waiting time and the proximity of the banks from their home or their office were the major disadvantages
with the traditional banking services.
67
What would encourage you to use Digital Banking services more?
High security 49 47.6 %
No transaction fee 70 68 %
More offers on shopping or attractive deals 75 72.8 %
Lesser transaction processing time 33 32 %
Total 227
INTERPRETATION: As per the survey, when asked about disadvantages, 227 responses were recorded
from 103 respondents meaning that each respondent has at least 1 demand or need that will encourage them
to make use of the digitized banking services more. 72.8% respondents would like to have more offers on
shopping or attractive deals on it and 68% of respondents are more likely to use digital services if there is no
transaction fee associated to it.
68
Which was one of your recent digitized transaction amongst the following
Registration for Mobile and Net Banking 9 8.7 %
Paying at a local Kirana Store 39 37.9 %
Money transaction from 1 account to another 30 29.1 %
Checking Balance and other banking services 16 15.5 %
Cash withdrawal from ATM 9 8.7 %
Total 103
INTERPRETATION: People already shifting to the digital emergence in banking, it was also important to
understand how they were using it in daily life. So this question addresses it by asking the respondents about
their last ―digitalized‖ activity. 37.9% of the respondents made a payment to local Kirana store. This
indicates that not just we are using the digitzed banking services for personal banking but now it has also
become essential for every business to service be it large or small. 29.1% made a transaction from 1 account
to another that shows the convenience associated with the digital services
69
Is the shift from traditional offline Banks to digital helpful to you?
Yes 103 100 %
No 0 0
Total 103
INTERPRETATION: Though it was very clear from the survey that people have adopted to the emerging
digitization but it was important to understand if they supported it. As per the survey, it was no surprise that
all the 103 respondents supported this shift.
After the results from the Google form we can conclude that majority of the Customers are satisfied with
digitization of the banking sector.
70
Relation 1
H0: There is no significant relationship between the age group and the frequency of cashless transactions
H1: There is significant relationship between the age group and the frequency of cashless transactions
71
Chi-Square Tests
Asymptotic
Significance
Value df (2-sided)
a
Pearson Chi-Square 66.749 15 .000
Likelihood Ratio 41.603 15 .000
N of Valid Cases 103
a. 19 cells (79.2%) have expected count less than 5. The

minimum expected count is .06.
Since the level of significance is less than 0.05, Therefore, we reject H0 and accept H1 and conclude that
there is a significant relationship between the age group and the frequency of cashless transactions
Analysis
The following hypothesis puts forth the idea that the younger generation is more prone to frequently make
use of cashless transactions. This behavior could be due to their awareness and better handling of the
digitized solutions.
72
Relation 2
H0: There is no significant relationship between the occupation and the frequency of cashless transactions
H1: There is significant relationship between the occupation and the frequency of cashless transactions
73
Since the level of significance is less than 0.05, Therefore, we reject H0 and accept H1 and conclude that
there is a significant relationship between the occupation and the frequency of cashless transactions
Analysis
The following hypothesis puts forth the idea that salaried individuals and students make more use of cashless
transactions. This could be due to higher number of transactional activities happening in day to day life and
the convenience provided by digital solutions and also the awareness and being tech-savy about the same.
74
Relation 3
H0: There is no significant relationship between the age group and their awareness about digitized banking
solutions pre COVID
H1: There is significant relationship between the age group and their awareness about digitized banking
solutions pre COVID
75
Since the level of significance is more than 0.05, Therefore, we accept H0 and reject H1 and conclude that
there is no significant relationship between the age group and their awareness about digitized banking
solutions pre covid.
Analysis
The following hypothesis puts forth the idea that banking being a very essential sector every age group tries
or is aware of the updates associated with it. So there is not one significant age group that is more aware of
the other.
76
CHAPTER 5 - CONCLUSIONS
Based on this study, the opinion of the sample respondents among the bank customers the various aspects of
digital banking services provided by public and private sector banks are evaluated using appropriate
techniques.
It is concluded from the results of the study that the usage of ATM, Tele banking and, Internet banking are
perceived as important and the use of these services is associated with socio- economic and demographic
characteristics of the respondents..
Most of the services through banking perform both public and private banks are beyond the expectation of
the customer‘s. Similarly the various services provided by both public and private sector banks are more than
adequate for customers. It is concluded finally that there is significant difference between public and private
sector banks in respect of both services provided and services performed via digital banking.
From the evaluation of the customer‘s opinion with regard to the benefits and usefulness of digital banking in
addition to the factors associated with their decisions, we have covered it and made assumptions on the basis
of the same. It is identified that there are four major benefits, namely save time & Cost Less, Provide
accurate, relevant and up-to date information. Flexible and easily accessible with convenience and Assists to
share the experience with bank and other customers more efficiently from digital banking. It is found that
―flexibility and easy accessibility with convenience‖ is the most desirable benefit followed by providing
accurate, relevant and up-to date information and Saving time & Cost Less and the perceived status of the
above benefits is associated with education and family income of the respondents
Regarding the usefulness of e-banking / internet banking, it may be concluded that making easy transactions
from one person to another and to small and large businesses are the major usefulness followed by Funds
transfer, Pay bills using available cash in the accounts and Order to buy online and pay utility bills.
It is found that the usefulness of digital-banking with regards to its use in the present, all respondents have
expressed positive opinion that they have intention of using these services in the present as well as in the
future. It is identified that ―time saving and less cost‖ tend to influence the bank customers along with the
attractive cash back offers. Intention to continue using this & also the research report is useful to know the
consumer awareness of digital banking system and what type of risk involved in digital banking system.
77
CHAPTER 6 - SUGGESTIONS & RECOMMENDATION
The implication of above mentioned findings is that now commercial bank is required to play a leading and
aggressive role affecting consumer perception, attitude and behavior of existing and potential e-banking
customers. The recommendations for banks are as follow:
The best strategy at the early adaptation stage is to provide and maximize the awareness regarding digital
banking among customers. Because e-banking products and services have started penetrating in India at
large scale so it becomes important that how ones product or services stand out from the rest. To fulfill and
showcase these objective banks should use every form of advertising such as -
 T.V. commercials, advertisement in magazines, brochures, online advertisement etc. to educate

customers about its advantages, so it can reach to the maximum number of existing and prospecting e-
banking customers.
 To reach maximum number of prospecting internet banking customers and banking staff should take
initiative to inform them digital banking services provided by the bank.
 Bank should eliminate the language barrier to have effective communication with clients. Specifically
in India, bank should provide banking information in English as well as other vernacular languages.
 The major driving factor of adopting digital banking for its users is the reliable access system. The
information regarding security should not provide in technical terminology and should comprise with
standard security statement.
 Banks should try to give higher value services to its consumers. Banks should closely analyze the
history of its customers‘ banking transactions to have better understanding regarding their
requirements and provide them well customized internet banking products and services. With the help
of emerging technologies like AI and ML banks should be able to understand the customer
requirements and preferences better.
 Banks should emphasize on the advantages of the digital banking usage i.e. time saving, 24 hour
service availability, information availability, convenience, low cost services etc.
78
 Banking customers perceive that digital banking charges levied by the banks are not fair. Banks
should initiate a campaign for educating customers regarding the fairness of e- banking charges.
 The frequency of the online transactions through digital banking is less. Thus, Banks should provide
motivation to banking customers to increase their frequency of e-banking transaction
 Generally, customers use the digital banking service to know the account statements. Therefore,
banks should have a good marketing campaign to popularise the other services offered by banks
through e- banking.
 Banks should increase the frequency of reviewing of websites in a financial year.
 Most of the banks provide literature and brochures as the assistance & help to the customer regarding
the use of e- banking services.
 Banks should do cost analysis especially on e- banking and communicate it to the banking staff.
 Banks should have more prevention measures against hackers, as it is the primary concern for the
customers.
 It was observed that there is no significant prevention measure against the discovered intrusion
attacks in the banks. Banks should take significant actions in the directions.
 Banks should have more prevention measures against attack after hours, as it is the primary concern
for the customers.
 Banks should have a focused approach towards e- banking customers. They should specify the target
market for e- banking
79
CHAPTER 7 - REFERENCE/BIBLIOGRAPHY
 India Brand Equity Foundation.(2021). Banking Sector of India.

https://www.ibef.org/industry/banking-india.aspx
 Subham Sharma. (2019). How Indian banks are moving towards digital revolution.
https://groww.in/blog/how-indian-banks-are-moving-towards-digital-revolution/. Groww
 WeSchool. (2017). Digital revolution in the Indian banking sector.

https://www.forbesindia.com/article/weschool/digital-revolution-in-the-indian-banking-
sector/47811/1. Forbes India
 Manisha Jagtap. (2018).The Impact of Digitalisation on Indian Banking Sector.

https://www.researchgate.net/publication/333709353_The_Impact_of_Digitalisation_on_Indian_Ban
king_Sector. Researchgate
 Ali Yakhlef. (2001). Does the Internet Compete with or Complement Bricks-and-Mortar Bank
Branches.
https://www.researchgate.net/publication/242024537_Does_the_Internet_Compete_with_or_Comple
ment_Bricks-and-Mortar_Bank_Branches. Researchgate
 Mike Wright, Trevor Watkins, Christine Ennew. (2010). Marketing Financial Services. Taylor and
Francis. ISBN-9781136380228
 Vijay M. Kumbhar. (2011). FACTORS AFFECTING THE CUSTOMER SATISFACTION IN E-

BANKING: SOME EVIDENCES FORM INDIAN BANKS.
https://www.researchgate.net/publication/216513476_FACTORS_AFFECTING_THE_CUSTOMER
_SATISFACTION_IN_E-BANKING_SOME_EVIDENCES_FORM_INDIAN_BANKS.
Researchgate
 RAKESH H M and RAMYA T J. (2014). A STUDY ON FACTORS INFLUENCING CONSUMER

ADOPTION OF INTERNET BANKING IN INDIA. International Journal of Business and General
Management (UBGM)
80
 Shaza Ezzi. (2014). A Theoretical Model for Internet Banking: Beyond Perceived Usefulness and
Ease of Use.
https://www.researchgate.net/publication/275574170_A_Theoretical_Model_for_Internet_Banking_
Beyond_Perceived_Usefulness_and_Ease_of_Use#:~:text=A%20research%20model%20reflecting%
20the,on%20TAM%20constructs%20is%20proposed.&text=Based%20on%20research%20conducted
%20by,be%20relatively%20free%20from%20difficulties. Researchgate
 PwC. (2016). Fintech: Redefining banking for customers. CII BANKing TECH Summit 2016
 ESDS. (2013). What exactly is Core Banking?. https://www.esds.co.in/blog/what-exactly-is-core-

banking/#sthash.MG8cmltW.dpbs. ESDS
 SBI. (2021). State Bank of India. https://www.onlinesbi.com/. SBI
 Wikipedia. (2021). State Bank of India. https://en.wikipedia.org/wiki/State_Bank_of_India.

Wikipedia.org
 Sneha B K. (2016). How To Use SBI Digivoucher App For Cash Deposits?.
https://www.goodreturns.in/classroom/2016/10/how-use-sbi-digivoucher-app-cash-deposits-
499667.html. Goodreturns
 Axis Bank. (2021). Axis Bank. https://www.axisbank.com/
 Axis Bank. (2021). Axis Bank. https://en.wikipedia.org/wiki/Axis_Bank. Wikipedia.org
 Sneha Jha. (2015). Axis Bank‘s digital strategy revealed.

https://cio.economictimes.indiatimes.com/news/strategy-and-management/axis-banks-digital-
strategy-revealed/49723810. Economic Times
 HDFC Bank. (2021). Axis Bank. https://www.hdfcbank.com/
 HDFC Bank. (2021). Axis Bank. https://en.wikipedia.org/wiki/HDFC_Bank. Wikipedia.org
 Munish Mittal. (2017). HDFC Digital Journey.

https://www.cisco.com/c/dam/assets/global/IN/enterprisecxosummit/pdfs/hdfc_bank_s_digital_journe
y_cio_s_take_on_getting_enterprise_digital_ready.pdf. CISCO
81
 NCR Story HUB. (2021). Financial Services.
https://www.ncr.com/company/blogs/financial#.VwulcqR97NM. NCR
 SHIKHA GOYAL. (2020). What is Mobile Wallet and how does it work?.
https://www.jagranjosh.com/general-knowledge/what-is-mobile-wallet-and-how-does-it-work-
1538043252-1. JagranJosh
 TechTarget Contributor. (2011). digital cash (eCash). https://whatis.techtarget.com/definition/digital-

cash-eCash. TechTarget Network
 Business Jargons. (2021). https://businessjargons.com/kiosk-banking.html
 Statista. (2020). Digital Shopping Behavior.https://www.statista.com/statistics/870487/india-mobile-

banking-payment-volume/. Statista
82

Sohini Maji 89, MARKT.

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sohini Maji 89, MARKT.

Uploaded by

Copyright:

Available Formats

Understanding the Emergence of Digitization in the Indian Banking

CAPSTONE PROJECT REPORT

Post Graduate Diploma in Management (PGDM)

Marketing Sohini Maji

2019 – 2021 Roll no. 89

SIES COLLEGE OF MANAGEMENT STUDIES

NERUL, NAVI MUMBAI 400706

CAPSTONE PROJECT REPORT

AS A PARTIAL FULFILMENT OF THE CURRICULUM

FOR THE DIPLOMA

POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)

SIES COLLEGE OF MANAGEMENT STUDIES

Signature of the student Date:

Name of the Student: Sohini Maji

Signature of the Faculty Guide

Name: Dr. Vatsala Bose

1.1.1. Market Size 12

1.1.2. Government Initiatives 12

1.1.3. Digitization of the Indian Banking Sector 13

1.2. Objectives of the Study 14

1.3. Scope of the Study 15

1.4. Purpose and Significance of the Project 15

1.5. Limitations of the Study 16

CHAPTER 2 LITERATURE REVIEW 17

3.1. Research Methodology 19

3.2. Research Design 19

3.3. Data Collection (Secondary & Primary) 19

3.4. Statistical Tool 19

CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 21

4.1. How Technology is redefining the Banking Sector 22

4.2. Different types of online banking and transaction methods 25

4.2.1. ATM Banking 26

4.2.2. Mobile Wallet 27

4.2.4. Kiosk Banking 28

4.2.5. NEFT: National Electronic Funds Transfer 29

4.2.6. RTGS: Real Time Gross Settlement 29

4.2.7. Mobile Banking 29

4.2.8. Smart Card/Store Value Card 30

4.3. Advantages of Digitization of Banking System 31

4.4. Disadvantages of online banking 33

4.5. Threats to Digitization of Banking Sector 35

4.5.1. Types Of Frauds 36

4.5.1.1. Trojan Attack 36

4.5.1.2. Man-in-the-Middle Attack 36

4.5.1.6.1. Identity Theft 39

4.5.2. Steps to Minimize Security Issues 41

4.6. Digitalization In The Top Banks Of India 43

4.6.2. AXIS Bank 46

4.6.3. HDFC BANK 48

4.6.4. BANK OF INDIA 50

4.7 Primary Research 52

CHAPTER 6 SUGGESTIONS & RECOMMENDATION 78

1.1 Overview of the Indian Banking Sector

 Money Deposits, Withdrawals, and Transfers

 Checking/Saving Account Management

 Applying for Financial Products

 The following are the objectives of the project:

 To study consumer awareness about the digital banking service

 To analyze customer satisfaction level in the digital banking

 To know the customer perception about the digital banking service

 To know the reason for preferring digital banking service

1.4. Purpose and Significance of the Study

 This study is based on the prevailing respondent‘s satisfaction.

 The survey was limited only for Navi Mumbai Area