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Let's Understand The Background Of Banking

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Banking before Computers.

  • The banks worked mostly as they work today, but compared to today slowly and using mostly paper.
  • In those days someone would make a deposit, the clerk would count the money, and give the depositant a receipt of depositing the money.
  • Then at the end of the day bank would keep the money and daily send the money and a copy of the registry to the central bank.
  • This was, hectic of course, more time-consuming and consuming, and required each branch to be more independent, being controlled and monitored by regular audits.
  • It’s very hard to believe those less than 100 years ago, people had to walk physically to the bank to pay their utility bills and had no way but to carry around loose change.
  • Cheques were actually considered an exciting new technology back in the day.
  • After World War II, the use of cheques skyrocketed to become the most basic cashless payment method. However, it was like a headache to get a cheque processed and cleared. 
  • Before computers banks used to take three or four days just to take your money off you and put it into your account before they could make it available to you to withdraw it.
  • Each day a banker received an envelope full of microfilm slides that had all of the branch customer's balances displayed-these were for the previous day.

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The past scenario in E-Banking technology

  • The opening up of the Indian economy in 1991 the LPG almost corresponded with the worldwide internet revolution which impacted the Indian public and private sector banks that were following traditional manual methods of functioning.
  • Then the Indian banks embraced technology wholeheartedly.
  • This paved a way for business process automation in banking, which enhanced customer service, reduced manpower costs, and increase profitability.
  • Besides these normal banking products banks in India started selling third-party products such as mutual funds and insurance to their clients as well.
  • This saved customer’s time and banks started focusing on customer relationships.

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The present scenario in E-Banking technology

  • Now a day, the world depends on technology so as the banking industry too.
  • A concept called virtual banking or direct banking is gaining advantages for many banks in ways like to increase sales, customer satisfaction.
  • This model offers online banking products, services, and financial transactions only through electronic channels.
  • This has resulted in more and more customers an option of non-branch banking and the virtual banking trend will surely catch up in India as technology-savvy banks adopt this model.
  • The power of technology makes everything smooth and virtually but every customer’s satisfaction is something that calls for human touch.
  • Virtual banking should be a hassle-free and pleasurable experience for the customer.
  • There are two main advantages of virtual banking i.e. fewer paper works and doing transactions wirelessly.
  • In the last few years, many banks have implemented content management and success in doing paperless transactions using the software.
  • Processing online application for opening bank account and other services, transfer of funds without using cheques, online account statements are all becoming part of the regular banking process.
  • Banks can provide better quality customer service with the digitization of customer transactions and data, improve productivity, and optimize costs and deliver quick services to the customer.
  • Without having fear of losing account statement and the documents which are physical in nature virtual banking help in these terms to the customers.
  • Customer demands for any time and anywhere banking forces banks to use the direct banking model.   
  • The above mentioned showing the benefits of using virtual banking but on the flip side, mobile phones and PCs are small and are easily lost or stolen, making them more vulnerable to fraudulent transactions.
  • This means the banking system, customers, and e-banking users and call for greater security measures combined with powerful regulation.
  • There are also more privacy issues to wireless banking that need to be resolved.
  • Overall, there is no denying that there is both challenge and opportunity for banks in enriching customer experience. 

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The views, thoughts and opinions expressed in the article belong solely to the author and not to RozBuzz-WeMedia.
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