TOPIC NAME

TRANSFORMATION OF BANKING INDUSTRY & its

Services by Information Technology

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 INDEX

SR.NO TITLE PAGE .NO

1 Introduction 4
1.1 SWOT Analysis 5
1.2 Objective 6
1.3 Limitation 6
2 Literature Review 7
3 Research Methodology 9
4 Data Interpretation & Analysis 10
5 Key Findings 17
5.1 Conclusion 18
5.2 Suggestion 18

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 EXECUTIVE SUMMARY
Banks that embrace digital transformation will be well-positioned to compete in the future.

The literature review concludes that digital transformation is a major challenge for banks, but
also an opportunity to improve customer experience and gain competitive advantage. Banks
that fail to embrace digital transformation will be left behind.

Here are some specific examples of how digital transformation is impacting the banking
industry:

 Customer experience: Banks are using digital technologies to improve the customer
experience by providing new channels for customer service, such as mobile banking
and online chat. For example, Bank of America has a mobile app that allows
customers to deposit checks, transfer money, and pay bills.
 Compliance: Banks are using digital technologies to comply with regulations, such as
Know Your Customer (KYC) and Anti-Money Laundering (AML). For example,
JPMorgan Chase uses blockchain technology to track customer transactions and
comply with KYC regulations.

The literature review also discusses the role of digital banking in financial inclusion. Digital
banking can help to expand access to financial services to underserved and unbanked
populations. For example, Kiva is a non-profit organization that uses mobile technology to
provide microloans to entrepreneurs in developing countries.

In conclusion, the literature review provides a comprehensive overview of the digital

transformation of the banking industry. It identifies the key challenges and opportunities
facing banks, and provides examples of how digital technologies are being used to improve
the banking experience. The literature review concludes that digital transformation is a major
trend in the banking industry and that banks that fail to embrace it will be left behind.

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 CHAPTER 1

INTRODUCTION

1. Transformation of the Banking Industry & its services by

Information Technology
The transformation of the banking industry by information technology has been nothing short
of revolutionary, reshaping every facet of the way financial services are provided, accessed,
and managed. Over the past few decades, the integration of cutting-edge technology has
ushered in an era of unprecedented convenience, efficiency, and innovation, fundamentally
altering the way banks operate and interact with their customers. This transformation has
streamlined operations within the banking sector and led to the emergence of entirely new
financial services and business models.

 It has increased efficiency and cost savings. IT has enabled banks to automate many
of their processes, which has led to significant cost savings. For example, banks can
now automate the processing of transactions, the issuance of loans, and the collection
of payments. This has freed up staff to focus on more complex tasks like customer
service and relationship management.
 Improved customer experience. It has enabled banks to offer a wider range of services
to customers and to deliver those services in a more convenient and personalized way.
For example, banks now offer mobile banking, online banking, and ATMs, which
allow customers to conduct banking transactions from anywhere at any time. Banks
are also using IT to collect data about customer behaviour, which they can use to
personalize their products and services.
 Enhanced security. IT has also helped to improve the security of banking systems.
Banks now use sophisticated encryption techniques to protect customer data, and they
are investing in cutting-edge technologies such as biometrics and artificial intelligence
to prevent fraud.
 New business models. IT has also led to the development of new business models in
the banking industry. For example, FinTech companies are using IT to offer
innovative new products and services, such as peer-to-peer lending and mobile
payments. These new business models are challenging the traditional banking
industry, and are forcing banks to adapt their own offerings.

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1.1 SWOT Analysis

Strengths:

 Increased efficiency and cost savings: IT has enabled banks to automate many of their
processes, which has led to significant cost savings. For example, banks can now
automate the processing of transactions, the issuance of loans, and the collection of
payments. This has freed up staff to focus on more complex tasks like customer
service and relationship management.
 Improved customer experience: IT has enabled banks to offer a wider range of
services to customers, and to deliver those services in a more convenient and
personalized way. For example, banks now offer mobile banking, online banking, and
ATMs, which allow customers to conduct banking transactions from anywhere at any
time. Banks are also using IT to collect data about customer behavior, which they can
use to personalize their products and services.

Weaknesses:

 Security risks: IT can also introduce new security risks, such as data breaches and
cyberattacks. Banks need to invest heavily in security measures to protect their
customers' data.
 Compliance challenges: IT can also make it more challenging for banks to comply
with regulations. For example, banks need to ensure that their IT systems are secure
and that they are not being used for money laundering or other illegal activities.

Opportunities:

 Emerging markets: IT can help banks to expand into emerging markets, where there is
a growing demand for financial services.
 New products and services: IT can help banks to develop new products and services,
such as mobile payments and peer-to-peer lending.

Threats:

 FinTech competition: FinTech companies are using IT to offer innovative new

products and services that are challenging the traditional banking industry.
 Regulatory changes: Changes in regulations can make it more challenging for banks
to operate and can limit the benefits that they can achieve from IT.

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1.2 Objectives:
 Understand the impact of IT in the banking industry.
 Customer perspective towards interaction with technology-driven banking services.

1.3 Limitation:
 Financial losses & reputation change
 Not all customers are comfortable using mobile banking & online banking

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 CHAPTER 2
REVIEW OF LITERATURE
1. "A Literature Review on Digital Transformation in the Banking Sector" by
Cziesla (2014)
This paper provides a systematic literature review of digital transformation in the banking
sector. The paper identifies four key themes in the literature:
* The impact of digital technologies on banking business models
* The role of customer experience in digital banking
* The challenges of digital transformation for banks
* The opportunities of digital transformation for banks
The paper concludes that digital transformation is a major challenge for banks, but also an
opportunity to improve customer experience and gain competitive advantage.

2. "The Rise of Digital Transformation in Banking: Why It Matters" by G2 (2020)

This article discusses the importance of digital transformation for banks. The article argues
that digital transformation is essential for banks to remain competitive in the face of new
technologies and changing customer expectations.
The article identifies four key areas where digital transformation is impacting the banking
industry:
* Customer experience: Banks are using digital technologies to improve the customer
experience by providing new channels for customer service, such as mobile banking and
online chat.
* Risk management: Banks are using digital technologies to improve risk management by
monitoring customer behavior and identifying potential fraud.
* Compliance: Banks are using digital technologies to comply with regulations, such as
Know Your Customer (KYC) and Anti-Money Laundering (AML).
* Operations: Banks are using digital technologies to automate operations and reduce costs.
The article concludes that digital transformation is a major trend in the banking industry and
that banks that fail to embrace it will be left behind.

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 3. "Digital Banking and Financial Inclusion" by Ozili (2018)
This paper discusses the role of digital banking in financial inclusion. The paper argues that
digital banking can help to expand access to financial services to underserved and unbanked
populations.
The paper identifies four key ways in which digital banking can contribute to financial
inclusion:
* Reducing the cost of financial services: Digital banking can help to reduce the cost of
financial services by eliminating the need for physical branches.
* Expanding the reach of financial services: Digital banking can help to expand the reach of
financial services by making them available through mobile phones and the Internet.
* Improving the quality of financial services: Digital banking can help to improve the quality
of financial services by providing customers with more convenient and user-friendly channels
for accessing services.
* Increasing customer awareness of financial services: Digital banking can help to increase
customer awareness of financial services by providing information and education about
financial products and services.
The paper concludes that digital banking is a promising tool for promoting financial
inclusion.
These are just a few examples of the literature on the transformation of the banking industry
by IT. The banking industry is undergoing a major transformation, and IT is playing a key
role in this transformation. Banks that embrace digital transformation will be well-positioned
to compete in the future.

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 CHAPTER 3
RESEARCH METHODOLOGY

3.1 Research Design

The design used for carrying out this research is exploratory.
1. Primary data
2. Secondary data
3.2 Sample Size
 The Sample size in our study is 53 Respondents.
3.3 Sampling Technique
 The type of sampling method used is convenient sampling.
3.4 Method data collection
 The data was collected through google forms.
3.5 Statistical Tool & Technique
 The study done is descriptive and then the data is tested through the Inferential
Tool.

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 CHAPTER 4
DATA ANALYSIS and INTERPRETATION

Interpretation: The majority of the age group is between 18-25

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Interpretation: The Majority is 64% male and the remaining female.

Interpretation: The majority of people use Biometric authentication for secure

banking transactions.

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Interpretation: The majority of 59% of population believe that it has improved
bank efficiency

Interpretation: The Majority of 40% population believes that banking services

are more convenient.

Interpretation: The majority of 53% population believes that security measures

are being implemented by the bank to protect personal and financial
information.

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Interpretation: The majority of 45% believe that mobile banking is easy to
navigate.
Interpretation: The majority of 46% agree to it has improved access to financial
services for underserved populations.

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Interpretation: The majority of 29% population is concerned about their
financial data while using online banking services.

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Interpretation: The majority of 51% population agree that it has helped banks
to reduce costs.

Interpretation: The majority of 42% population believe that bank need to invest
in their more in information security in order to protect customer data.

Interpretation: The majority of 57% believe IT has improved the ability of banks
to detect and prevent fraudulent activities.

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4.1 Data Analysis
H0: The adoption of online banking services has not significant impact on customer
satisfaction in the banking industry.
H1: The adoption of online banking services has significant impact on customer satisfaction
in the banking industry.
t-Test: Paired Two Sample for Means

The use of digital banking The use of digital banking

services has not made my services has made my
banking services more banking experience more
convenient convenient.
Mean 3.134615385 3.846153846
Variance 1.099170437 1.34841629
Observations 52 52
Pearson Correlation 0.226721678
Hypothesized Mean
Diff erence 0
df 51
t Stat -3.726768101
P(T<=t) one-tail 0.000243355
t Critical one-tail 1.67528495
P(T<=t) two-tail 0.00048671
t Critical two-tail 2.00758377

The results of the test show that the mean convenience of banking experience is
significantly higher for those who use digital banking services (3.846) than for those
who do not (3.135). The p-value is very low (p<0.0005), which means that there is a
very low probability that the difference in means is due to chance.
Therefore, we can say that the use of digital banking services does make the banking
experience more convenient. This is likely because digital banking services allow
customers to access their accounts and make transactions from anywhere, at any
time. This can be very convenient for customers who are on the go or who do not
have time to visit a bank branch.

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 Chapter 5
Key Findings, Conclusion, and Suggestions

5.1 Key Findings

The results of the z-test suggest that people who use digital banking services are more likely
to find their banking experience to be convenient than people who do not use digital banking
services. This is likely due to the fact that digital banking services offer a variety of features
that can make banking more convenient, such as:
 The ability to check account balances and transfer money online
 The ability to pay bills online
 The ability to deposit checks through a mobile app
 The ability to speak to a customer service representative through a live chat feature
These features can save people time and hassle, which can lead to a more convenient banking
experience.
 The majority of respondents are between the ages of 18-25.
 The majority of respondents are male.
 The majority of respondents use biometric authentication for secure banking
transactions.
 The majority of respondents believe that IT has improved bank efficiency.
 The majority of respondents believe that banking services are more convenient.
 The majority of respondents believe that security measures are being implemented by
the bank to protect personal and financial information.
 The majority of respondents believe that mobile banking is easy to navigate.
 The majority of respondents agree that IT has improved access to financial services
for underserved populations.
 The majority of respondents are concerned about their financial data while using
online banking services.
 The majority of respondents agree that IT has helped banks to reduce costs.

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  The majority of respondents believe that banks need to invest in more information
security in order to protect customer data.
 The majority of respondents believe that IT has improved the ability of banks to
detect and prevent fraudulent activities.

5.2 Conclusion
The findings of this research suggest that IT has had a positive impact on the banking
industry. It has improved bank efficiency, convenience, and security. It has also helped banks
to reduce costs and improve access to financial services for underserved populations.
However, there are still some concerns about the security of online banking and the need for
banks to invest more in information security.

5.3 Suggestion
Based on the findings of this research, the following suggestions can be made for banks:
 Continue to invest in IT to improve efficiency, convenience, and security.
 Make sure that security measures are in place to protect customer data.
 Make mobile banking more user-friendly.
 Educate customers about the risks of online banking and how to protect themselves.
 Invest more in information security to protect customer data.
 Continue to develop innovative products and services that use IT to meet the needs of
customers.

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 Chapter 6
Bibliography

 Cziesla (2014): A Literature Review on Digital Transformation in the

Banking Sector

 G2 (2020): The Rise of Digital Transformation in Banking: Why It Matters

 Ozili (2018): The Rise of Digital Transformation in Banking: Why It Matters

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