ASYNCHRONOUS ASSIGNMENT

BANK MANAGEMENT

Submitted by:
Tanya Anandpara – 1820451
5 BBA D
DATE- 21ST JUNE 2020
 FINANCIAL TECHNOLOGY REVOLUTION IN BANKING

Finance is one of the oldest markets in the world. Financial services are an industry that
invented credit cards in the 1950s, internet banking in the 1990s and at the turn of the
millennium, contactless payment technology. Therefore, the use of technology to support
financial services is by no way a recent phenomenon.

From the past few years, banking has experienced financial technology which has provided
simple functionalities to the people that were once unavailable to them. The threat of
financial technology to banks has caused the latter to reorganize its model of service delivery
and administration.

The conventional way of saving money comprises depositing money into the bank and
relaxing while your savings yielded interests with time. While these banks operated using
conventional methods, financial technology brought a wave of revolution that rang a bell of
caution across the banking sector.

The FinTech for banking has impacted numerous applications and revolutionized the way
consumers access their finances. Its impact ranges from mobile payment apps like Square to
investment and insurance companies. This profound impact of FinTech can also be seen as a
potential threat to the brick-and-mortar or traditional banks.

In today’s digital era, customers are not keen to go for services provided by the traditional
financial services industry. Instead, they prefer services that are quick and safe. This is the
reason why FinTech and FinTech is gaining popularity and causing disruption in the banking
and other financial services.

Now, let’s see FinTech’s impact through some stats. According to a study that took place in
2016, a vast majority of Americans (84 percent) use FinTech for managing their finances.
Moreover, the majority of them use between one to three apps in order to manage their
finances. In addition, around 69 percent use these apps at least a few times a week and around
one-third use it on a daily basis.

Currently there are approx. 1.7 billion people worldwide without any bank accounts. FinTech
comes as a savior for all those people by providing an easy option to participate and access
the financial services without any need of a bank account. FinTech is the best option to carry
out financial inclusion since it’s developed to provide consumers a direct access to their
finances through simple yet cutting-edge technology.

Smart chip ATM cards have significantly helped in minimizing the financial loss that occur
in the case of mishaps. It comes with EMV technology that is embedded in the chip. This
technology uses a one-time password for each transaction. This increases the security since
the code is valid only for one transaction; so, even if somebody steals it, he won’t be able to
do anything.

Bank officials generally advise their customers to memorize their pin to avoid unnecessary
hassles and troubles. Bankers are constantly looking for ways to combat thefts and frauds by
providing top-notch security to its customers. As compared to smart chip, the magnetic stripe
technology uses the same pin for all the transactions, thus making it more susceptible to
frauds.

Biometric sensors along with Iris scanners are two technological advancements that ATMs
are witnessing. Moreover, these advancements are path breaking since it would simply
eliminate the need to carry your plastic card. Furthermore, you won’t need to remember your
pin.

Apart from providing convenience and ease, these advancements will also make ATMs
secure than ever since you’ll be able to access your own account without any password. The
biometric ATMs use integrated mobile applications, fingerprint sensors, palm, and eye
recognition to identify the account’s owner. To make the identification more accurate and
secure, ATMs also use micro-veins which completely eliminates the errors made by ATMs in
customer recognition.

Monetary Control Act (MCA) was setup in 1980 with the primary purpose of promoting an
efficient payment system in the entire country by encouraging competition between private
sector payment service providers and the Federal Reserve.

The Automated Clearing House (ACH) assisted in efficient processing all the electronic
interbank payments taking place in the whole country. These electronic payments include
insurance premiums, social security, salary, dividend payments, bill payments, and direct
debits of mortgage.
 “CORE BANKING SOLUTIONS”
A back-end system that efficiently processes banking transactions across the various branches
of a bank, core banking is the future of banking as well as the lending industry. Core banking
allows inter-connectivity between branches of the same bank and facilitates management of
deposit, loan, and credit processing.

With CBS, customers can operate their accounts as well as avail banking services from any
branch of the bank on the network.

Core banking services are all about floating new accounts, servicing loans, calculating
interests, processing deposits and withdrawals, and all over customer relationship
management activities.

From the end user’s perspective, Core banking solutions enable streamlined execution of
routine transactions like cash deposits, withdrawal, passbooks, statements of accounts,
demand drafts, etc. CBS allows customers to be more than just branch-bound by making it
possible for them to enjoy anywhere, anytime 24*7 banking through ATMs and digital
channels.

As all the bank branches work with a centralized server/data center, transactions are updated
regularly and are accessible to the customers in real-time. Core banking systems are built to
empower existing and probable customers with greater freedom of their account transactions.
Customers also appreciate the enhanced transparency in banking thanks to core banking
solutions.

Even from a banker’s perspective, Core banking provides efficient support for deposit
collection and loan disbursement system. CBS brings a level of standardization to processes,
which makes them valuable. Core banking not only brings down operational costs
considerably but also ensure lesser manpower requirement for execution.

Giving customer experience a priority, most banks use CBS for leveraging a single view of
customer’s records, thereby minimizing the need to resubmit details to different departments
every time. Since core banking solutions help banks offer a better experience to their
customers, there is a surge in their retention rates. Automation through core banking allows
superior accuracy in transactions & minimizes chances of errors. Digitization brings along
improved management of documentation & records and helps create centralized database
results that help them manage their customer needs in more proficient ways. Services like
opening accounts, processing cash, servicing loans, calculating interest, implementing change
in policies like changing interest rates can efficiently be executed with core banking.

The multifaceted benefits of core banking solutions also include keeping pace with fast-
evolving markets and expanding the outreach of the banks to remote places. New age Core
banking solutions also help banks in selling need-specific, customized products to customers
to increase their own ROIs.

Core banking functions will include transaction accounts, loans, mortgages and payments.
Banks make these services available across multiple channels like automated teller
machines, Internet banking, mobile banking and branches.

Banks are connected using SWIFT and IBAN system. Only the core branch or the first
branch of the bank is allocated with SWIFT and IBAN number. Once this number is known
you can transfer the money to the member account from any part of the work where SWIFT
and IBAN is supported.

CBS enables single-view of customer data across all branches in a bank and thus facilitate
information across the delivery channels. It enables banks to provide their customers with
specific, targeted and tailored products and services at one place. The convenience of core
banking services enable customers to access all banking facilities from any of the bank
branches across the country, regardless of which one is their home branch.

Mobile banking is a service provided by bank or financial institution that allows its customers
to conduct financial transactions remotely using their mobile devices. With the advent of
technology and increasing use of smartphone and tablet based devices, mobile banking
technology enables customer connect across entire customer lifecycle much more
comprehensively than ever before.

The bank typically has a multi-channel approach to delivering transaction services to its
customer base. Its channels include the traditional brick-and-mortar branches, ATMs, POS
devices and internet. These channels have gone a long way in extending the banking reach to
customers. Mobile banking represents a more cost-efficient channel for the bank, allowing it
to charge less for transactions and permitting the consumer to have immediate access to
information related to their bank accounts. Mobile banking is seen to be an extension of the
existing payment infrastructure of a bank to mobile phones as a channel for the leveraging of
the mobile network and its reach, to deliver banking services to consumers.

MAXIMUS FLEXI is a secure mobile banking solution built on open standards and
leverages recent technological advances in the mobility space. The intuitive and easy-to-use
interfaces make the end-user experience rich, secure and convenient. The mobile service
platform integrates seamlessly with the bank’s ISO 8583 host and delivers mobile banking
services over GPRS to customers. The downloadable client and browser-accessible website
offer unmatched security by implementing both single factor and two factor authentication.
Communication over these channels is made secure by implementing end-to-end encryption.

PhonePe Private Limited or PhonePe is an Indian e-commerce payment system and digital
wallet company headquartered in Bangalore, India. It was founded in December 2015, by
Sameer Nigam and Rahul Chari. PhonePe app went live in August 2016 and was the first
payment app built on Unified Payments Interface. sing PhonePe, users can send and receive
money, DTH, recharge mobile, data cards, make utility payments, buy gold and shop online
and offline. In addition PhonePe also allows users to book Ola rides, pay for Redbus tickets,
order food on Freshmenu, eaf, fit and avail Goibibo Flight and Hotel services through
microapps on its platform.

PhonePe is accepted as a payment option across 5 million offline and online merchant outlets
covering food, travel, groceries, movie tickets etc. The app crossed 100 million user mark in
June 2018 and also crossed 5 billion transactions in December 2019.