Information Technology In Banking Industry

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EMERGING TRENDS IN IT AND SYSTEM INFRASTRUCTRE IN BANKING INTRODUCTION . In the banking field, there has been an unprecedented growth and diversification of banking industry has been so stupendous that it has no parallel in the annals of banking anywhere in the world. The major challenges faced by banks today are as to how to cope with competitive forces and strengthen their balance sheet. The Indian banks are subject to tremendous pressures to perform as otherwise their very survival would be at stake. Information technology (IT) plays an important role in the banking sector. As it would not only ensure smooth passage of interrelated transactions over the electric medium but will also facilitate complex financial product innovation…show more content…
Internet banking is all poised to emerge as the most profound electronic channel in the near future. Internet banking reduces bank operating expenses mainly due to savings on prohibitive estate costs and expensive staff salary. It is estimated that the cost per transaction in internet banking will be one-tenth of regular bank transactions. Internet banking is platform for electronic delivery of banking services to the customers. With the drastic fall in cell phone tariff and emergence of seamless tariff internet banking is set to emerge as one of cost effective delivery channel in near future. Successful adoption of wireless technology would help banks to offer not only anytime, anywhere banking but also device…show more content…
One such important mode introduced was the unique system of MICR based cheque clearing system. Apart from being a security bar code to protect your transaction, the MICR code is also an indispensable part for online money transfers. Every bank branch is given a unique MICR code and this helps the RBI to identify the bank branch and speed up the clearing process. The MICR code has nine digits in. Unlike the manual clearing of cheques where there is a possibility of many human errors and subsequent delay in clearing, the MICR code on the cheque printed with a unique magnetic ink usually iron oxide has magnetic material present in it and thus makes it machine-readable and almost error proof! Under this method the reading machine or a cheque sorting machine reads through a cheque when inserted and identifies the branch the cheque belongs to and activates the automation clearing process. The MICR code is so clear and fine that the machine could read it even if the MICR code isn't visible due to other marks or stamps on

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