CONTENT

1. INTRODUCTION: WHAT IS INFORMATION

TECHNOLOGY?
2. OBJECTIVE
3. HISTORY
4. HOW INFORMATION TECHNOLOGY HELP
IN BANKING SECTOR?
5. CURRENT SCENERIO
6. CASE STUDY
. PROBLEM
. SOLUTION
. FINDINGS
7. BIBILOGRAPHY
Information technology (IT) is "the study, design,
development, application, implementation, support
or management of computer-based information
systems, particularly software applications and
computer hardware", according to the Information
Technology Association of America (ITAA).[1] IT
deals with the use of electronic computers and
computer software to securely convert, store,
protect, process, transmit, input, output, and retrieve
information.
it pertains to organizations within enterprises, IT
represents an operational group that helps solve
such problems as those related to data, information
and knowledge capture, persistence, processing,
brokering, discovery and rendering. Such
organizations can be as small as one or two people
that can be shared between multiple small business
and as large as multi-billion dollar structures that are
common in all Fortune 500 enterprises. Today, the
term information has ballooned to encompass many
aspects of computing and technology, and the term
has become very recognizable. IT professionals
perform a variety of functions (IT
Disciplines/Competencies) that range from installing
applications to designing complex computer
networks and information databases. A few of the
duties that ITIt is important to consider the overall
value chain in technology development projects, as
the challenge for the value creation is increasing
with the growing competitiveness between
organizations. The concept of value creation
through technology is heavily dependent upon the
alignment of technology and business strategies.
While the value creation for an organization is a
network of relationships between internal and
external environments, technology plays a role in
improving the overall value chain of an
organization. However, this increase requires
business and technology management to work as a
creative, synergistic, and collaborative team instead
of a purely mechanistic span of control. Technology
can help an organization improve its competitive
advantage within the industry in which it resides
and generate superior performance at a greater
value
The objective of study is to see that with the
fast growing world there is also a vast change in
the technology in the work. Indian banking
industry, today is in the midst of an IT revolution
so banking industry are not far behind from the
technology, they also use information technology
to provide their customer more services. With
the use of it fast application processing, better
services to consumer, mass consumer client
record handling, reduce calculation errors is
possible. A combination of regulatory and
competitive reasons have led to increasing
importance of total banking automation in the
Indian Banking Industry.
In the five decades since independence, banking in
India has evolved through four distinct phases.
During Fourth phase, also called as Reform Phase,
Recommendations of the Narasimham Committee
(1991) paved the way for the reform phase in the
banking. Important initiatives with regard to the
reform of the banking system were taken in this
phase. Important among these have been
introduction of new accounting and prudential norms
relating to income recognition, provisioning and
capital adequacy, deregulation of interest rates &
easing of norms for entry in the field of banking.

Entry of new banks resulted in a paradigm shift in

the ways of banking in India. The growing
competition, growing expectations led to increased
awareness amongst banks on the role and
importance of technology in banking. The arrival of
foreign and private banks with their superior state-
of-the-art technology-based services pushed Indian
Banks also to follow suit by going in for the latest
technologies so as to meet the threat of competition
and retain their customer base.

Indian banking industry, today is in the midst of an

IT revolution. A combination of regulatory and
competitive reasons have led to increasing
importance of total banking automation in the Indian
Banking Industry.
Information Technology has basically been used
under two different avenues in Banking. One is
Communication and Connectivity and other is
Business Process Reengineering. Information
technology enables sophisticated product
development, better market infrastructure,
implementation of reliable techniques for control of
risks and helps the financial intermediaries to reach
geographically distant and diversified markets.

In view of this, technology has changed the contours

of three major functions performed by banks, i.e.,
access to liquidity, transformation of assets and
monitoring of risks. Further, Information technology
and the communication networking systems have a
crucial bearing on the efficiency of money, capital and
foreign exchange markets.
The Software Packages for Banking Applications in
India had their beginnings in the middle of 80s, when
the Banks started computerising the branches in a
limited manner. The early 90s saw the plummeting
hardware prices and advent of cheap and inexpensive
but high-powered PCs and servers and banks went in for
what was called Total Branch Automation (TBA)
Packages. The middle and late 90s witnessed the
tornado of financial reforms, deregulation, globalisation
etc coupled with rapid revolution in communication
technologies and evolution of novel concept of
'convergence' of computer and communication
technologies, like Internet, mobile / cell phones etc.
 INFORMATION TECHNOLOGY NEED IN
CONSUMER BANKING
Now a days Information Technology is no doubt
plays a significant role in the growth of other
industries. Its need in consumer banking can be
justified by the following key considerations where
only IT infrastructure can help to handle these
issues.
Fast application processing: By using information
technology, the application processing of the
customer can be made fast. Electronic transactions
take less time to process the application than
manual because all the information is available
online and relevant application processing persons
just have to take the decision on the data available
Better Services to customers: In this era of high
competition, it is the better service which attracts the
customers toward doorstep. In consumer banking, this
can be done by solving all the hurdles that come in
front of the customer to avail the product. In this
perspective, the information technology seems to be
quite useful such as easy accessibility of resources
online, fast and easy availability of the product by fast
application processing described above.
Mass consumer client record handling: This
problem is a big concern for CBSP. In consumer
banking, the number of clients is very high and to
keep the record of all customers manually is not only
hard to maintain but also time consuming and
resource intensive. By using any good consumer
banking software solves this problem with an ease.
Reduce calculation errors: By using a good
consumer banking software makes the tiring and
time taken calculations faster and error free
I.T. in Banking:
1). Technology has opened up new markets, new
products, new services and efficient delivery channels
for the banking industry. Online electronics banking,
mobile banking and internet banking are just a few
examples.
2). Information Technology has also provided banking
industry with the wherewithal to deal with the
challenges the new economy poses. Information
technology has been the cornerstone of recent financial
sector reforms aimed at increasing the speed and
reliability of financial operations and of initiatives to
strengthen the banking sector.
3). The IT revolution has set the stage for
unprecedented.
increase in financial activity across the globe. The
progress of technology and the development of world
wide networks have significantly reduced the cost of
global funds transfer.
4). It is information technology which enables banks
in meeting such high expectations of the customers
who are more demanding and are also more techno-
savvy compared to their counterparts of the yester
years. They demand instant, anytime and anywhere
banking facilities.
5). IT has been providing solutions to banks to take
care of their accounting and back office requirements.
This has, however, now given way to large scale
usage in services aimed at the customer of the banks.
IT also facilitates the introduction of new delivery
channels--in the form of Automated Teller
Machines, Net Banking, Mobile Banking and the
like. Further, IT deployment has assumed such high
levels that it is no longer possible for banks to
manage their IT implementations on a stand alone
basis with IT revolution, banks are increasingly
interconnecting their computer systems not only
across branches in a city but also to other
geographic locations with high-speed network
infrastructure, and setting up local area and wide
area networks and connecting them to the Internet.
As a result, information systems and networks are
now exposed to a growing number
In India, banks as well as other financial entities
entered the world of information technology and
with Indian Financial Net (INFINET). INFINET, a
wide area satellite based network (WAN) using
VSAT (Very Small Aperture Terminals) technology,
was jointly set up by the Reserve Bank and Institute
for Development and Research in Banking
Technology (IDRBT) in June 1999.

The Indian Financial Network (INFINET) which

initially comprised only the public sector banks was
opened up for participation by other categories of
members.
The first set of applications that could benefit greatly
from the use of technological advances in the
computer and communications area relate to the
Payment systems which form the lifeline of any
banking activity. The process of reforms in payment
and settlement systems has gained momentum with
the implementation of projects such as NDS
((Negotiated Dealing System), CFMS (Centralised
Funds Management System) for better funds
management by banks and SFMS (Structured
Financial Messaging Solution) for secure message
transfer. This would result in funds transfers and
funds-related message transfer to be routed
electronically across banks using the medium of the
INFINET. Negotiated dealing system (NDS), which
has become operational since February 2002 and
RTGS (Real Time Gross Settlement system)
scheduled towards the end of 2003 are other major
developments in the area.

Internet has significantly influenced delivery

channels of the banks. Internet has emerged as an
important medium for delivery of banking products
& services. Detailed guidelines of RBI for Internet
Banking has prepared the necessary ground for
growth of Internet Banking in India.

The Information Technology Act, 2000 has given

legal recognition to creation, trans-mission and
retention of an electronic (or magnetic) data to be
treated as valid proof in a court of law, except in
those areas, which continue to be governed by the
provisions of the Negotiable Instruments Act, 1881.

As stated in RBI's Annual Monetary and Credit

Policy 2002-2003: "To reap the full benefits of such
electronic message transfers, it is necessary that
banks bestow sufficient attention on the
computerisation and networking of the branches
situated at commercially important centres on a
time-bound basis. Intra-city and intra-bank
networking would facilitate in addressing the "last
mile" problem which would in turn result in quick
and efficient funds transfers across the country".
A case study is a research methodology common in
social science. It is based on an in-depth investigation of
a single individual, group, or event. Case studies may be
descriptive or explanatory. Rather than using samples
and following a rigid protocol (strict set of rules) to
examine limited number of variables, case study
methods involve an in-depth, longitudinal (over a long
period of time) examination of a single instance or
event: a case. They provide a systematic way of looking
at events, collecting data, analyzing information, and
reporting the results. As a result the researcher may gain
a sharpened understanding of why the instance happened
as it did, and what might become important to look at
more extensively in future research. Case studies lend
themselves to both generating and testing hypotheses.
The Client:
The client is a leading global financial services
company with three business units: Private Banking,
Corporate and Retail Banking, Insurance and
Investment Banking. Private Banking offers advice
as well as wealth management products and services
to high net-worth clients in Europe and other
markets worldwide. Corporate and Retail Banking
offers banking products and services to corporate
and retail clients through various channels.
Investment Banking performs the function of a
financial intermediary for global, institutional,
corporate, government and individual clients.

.
Business Situation:
The client is a pioneer in offering online banking to
its customers. However, as competitors started
catching up, the client wanted to completely
transform the way in which it provided these
services. The
client wanted to leverage its strong customer base to
create an additional revenue stream, while
offering customers extended services. With the
availability of multiple channels for interaction with
customers, it was necessary to have a common
platform for seamless flow of information. All this
was becoming increasingly difficult, as the clients
existing system was based on legacy technology
and architecture.
Approach
Cognizant was introduced to restructure and
revamp the existing application architecture and
develop applications on a Multi-Channel
infrastructure, which would cater to several
channels, including the Internet. A phased approach
was decided upon and the Online Banking service
was to be introduced in a set of multiple releases.
With ready access to a huge customer base, the
client was in an ideal situation to introduce the
Electronic Bill Presentment and Payment Services
the first release taken up by Cognizant.
Subsequent releases included Safekeeping,
Portfolio Management, Payments, File Transfer
and Security Trading functionalities.
As this was a huge business transformation exercise,
functional experts (business analysts) from
Cognizant worked with the clients business team
early in the engagement, to elicit and define
requirements.
Cognizant undertook an extensive analysis to
understand the clients functional, non-functional, and
technical requirements. It also mapped the project
implementation and management processes
followed by the client to its CMMI Level 5 processes,
to develop a client-specific customized process
framework.
On the technology front, architecture teams decided to
use the industry standard advanced J2EE
Framework, which is a component-based,
service-oriented, layered architecture approach
suiting middleware-based applications
development. In all the architecture and design-
related decisions, the primary focus was to add
maximum value by using a mix of best-of-breed
solutions, while ensuring seamless integration
with existing client systems.

TECHNOLOGY USED:
Solaris, Windows (Development)
Java, JSP, Servlet, EJB, XML
Weblogic 6.1
Eclipse version 1.5.0, PMD and Checkstyle for
adherence to coding conventions
 Creation of an additional revenue stream: The
Electronic Bill Presentment and Payment
(EBPP) functionality was introduced, which
provided the banks customers with new services
and helped the client derive significant revenues
from the same.
Service-oriented architecturE: The client could
expose individual business processes across
multiple channels, as per business demands, to their
customers.
File transfer: With the removal of the system of
direct delivery of files to the clearing house, file
transfer to banks assumed even more importance.
Online Banking further facilitated corporate
customers by enabling them to deal with thousands
of payments together and route them online
to the bank.
Time to market: There was a significant reduction
in the time required to extend new services
and functionalities to customers.
Payments: An improved version of the Payments
functionality, the backbone of any European
financial institution, made online payments faster
and more convenient for the customers.
Portfolio and wealth management: Customers
could have a cross-sectional view (based on
geography, currency and maturity) of their assets
Consumer banking plays a vital role in
economical growth of any country. The Housing
schemes create job opportunities not only for banks
itself but almost 20 industries including cement, steel,
paints, and most importantly unskilled labor
employment. For consumer banking products, by the
increasing of number of consumer clients, it becomes
almost impossible to manage the data without
proper information technology support.
WORLD
WIDE WEB
1.www.banknetindia.com

2.http://www.cognizant.com

3.www.wikipedia.com