IRACST – International Journal of Commerce, Business and Management (IJCBM), ISSN: 2319–2828

Vol. 3, No. 4, August 2014

Modern Banking Services - A key Tool for Banking Sector

Dr.T.Vijayaragavan
Assistant Professor (Sr.G)
Department of Humanities
PSG College of Technology
Coimbatore - 641 004
Mobile No: 90038 12289

Abstract
Key Words: Banking Services, On-line
Banking occupies one of the most important banking, Video banking, Mobile banking,
positions in the modern economic world. It ATMs, Telephone banking
is necessary for trade and industry. Hence it
is one of the great agencies of commerce. Introduction
Modern banking services presence is very
helpful to the economic activity and Banking today is a flourishing industry,
industrial progress of the country. The focused on technological innovation. Banks
banking industry is on a major technological play an important and active role in the
up gradation drive after having successfully economic development of a country.
introduced international standards in their Banking systems of any country needs to be
operating norms. It is commonly perceived effective, efficient and disciplined because it
that technology is important to enhance the brings about a rapid growth in the various
quality of customer service and to make it sectors of the economy. Liberalization
customer friendly. Banking industry is fast brought several changes to Indian service
growing with the use of technology in the industry. Technology is revolutionizing all
form of ATMs, on-line banking, Telephone areas of human endeavor and activity. It has
banking, Mobile banking etc., plastic card is now brought in E-banking, which is
one of the banking products that cater to the gradually replacing the traditional branch
needs of retail segment has seen its number banking. Internet banking has emerged as
grow in geometric progression in recent the biggest focus and targetable area. The
years. Today, the concept of core banking customers are able to choose their banker
has made ‘Any Where and any time’ from a number of banks offering wide range
banking a reality. Along with technology, of services and delivering quality service.
banking services have also evolved and the The commercial banks in India are now
delivery of various banking products are becoming more market oriented and
carried out through the medium of high customer friendly. Internet banking is
technology at a fraction of the cost to the changing the banking industry and is having
customer. This paper focus on how the a significant impact on the banking
technological services in banking sector relationship. Banking industry is fast
luring the sustainable development. growing with the use of technology in the
form of ATMs, on-line banking, Telephone
banking, Mobile banking etc., This growth

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has been strongly supported by the

development in the field of technology, 1. To understand the need of modern
without which this could not have been banking services
possible. Besides it will change our lifestyle 2. To know the impact of technological
in coming years. Banks now a day’s provide banking services
a wide range of services to satisfy the 3. To aware the importance with respect to
financial and non-financial needs of all types modern banking services
of customers from the smallest account 4. To realize the benefits of modern banking
holder to the largest company and in some services
cases of non customers. The range of
services offered differs from bank to bank Methodology
depending mainly on the type and size of the
bank. This paper describes the modern Secondary data has been collected for this
banking services are pivotal for banking paper. The same has been compiled from
sectors. This paper describes the need, various sources like journals, books,
impact, importance and benefits of modern magazines and reports.
banking services for the sustainable
development of banking sector. Need for the study

Statement of the Problem The pace of development for the Indian

banking industry has been tremendous over
Banking system plays a very significant role the past decade and the future growth of
in the economy. An efficient banking system India’s banking sector will remain high.
must cater to the needs of high end investors India’s financial services sector will enjoy
by making available high amounts of capital generally strong growth during coming
for big projects in the industrial, years, driven by rising personal incomes,
infrastructure and service sectors. The corporate restructuring, financial sector
facility of internet banking enables a liberalization and the growth of a more
consumer to access and operate their bank consumer-oriented, credit-oriented culture.
account without actually visiting the bank The banks were finding it difficult to
premises. The facility of ATMs and the compete with the international banks in
credit/debit cards has revolutionized the terms of the customer service without the
choices available with the customers. In the use of the information technology and
modern day economy people are becoming computers. The use of the modern
busy with their life style and find no time to innovation and computerization of the
make these payments by standing in queue, banking sector of India has increased many
the service provided by the banks is folds after the economic liberalization of
commendable. With the growing Internet 1991 as the country's banking sector has
awareness among customers, increase in role been exposed to the world's market.
of banks in e-business and it would become
an important part of the banking sector in
the years to come. Nevertheless, these Significance of the study
banking services are considered to be the
strategic tool for over all development. Customer services and customer satisfaction
are the prime work of any system.
Objectives of the Study Information technology has given rise to

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Vol. 3, No. 4, August 2014

new innovations in the product designing banking sector reforms and introduction of
and their delivery in the banking and finance e-banking has made very structural changes
industries. The change has been very in service quality, managerial decisions,
productive for banks bringing in an increase operational performance, profitability and
in productivity and operational efficiency to productivity of the banks. E-banking is one
be more competitive. With customers of the emerging trends in the banking and is
demanding ‘anytime and anywhere’ access playing a unique role in strengthening the
to their money and financial information, banking sector and improving service
banks have no option but to implement quality. It has enabled the banks to handle
wireless solutions in device-independent and the payments electronically and inter-bank
network-agnostic ways. settlement faster and in large volumes.
Current banking sector has come up with a Customers can view the accounts, get
lot of initiatives in the form of providing a account statements, transfer funds, purchase
better customer services with the help of drafts by just making a few key punches.
new technologies. Banking through internet Availability of ATMs and plastic cards,
has emerged as a strategic resource for EFT, electronic clearing services, internet
achieving higher efficiency, control of banking, mobile banking and phone banking
operations and reduction of cost by to a large extent avoid customers going to
replacing paper based and labour intensive branch premises and has provided a wider
methods with automated processes thus range of services to the customers.
leading to higher productivity and
profitability. Technology based Modern Banking
Services
Impact of Modern Banking Services
Use of advanced technology has led to the
Technology has been one of the most shift from traditional banking methods to
important factors for the development of the modern banking methods. Currently, the
nation. Information and communications are most common and useful technology based
significant part in the field of technology banking methods are online banking, Mobile
which is used for accessing, processing, banking, Video banking, Telephone
storage and dissemination of information banking, ATMs, Plastic money and so on.
electronically. Banking industry is growing
rapidly with understanding the requirements
of customer by offering technological
services like ATMs, online banking,
telephone banking, and mobile banking and • Online Banking
so on. This growth has been strongly
supported by the development in the field of It empowers customers to conduct financial
technology. With the development of banking transactions on a secure website
information technology, the world has which can be operated by a retail, virtual
become a global village and it has brought a bank, credit union or building society. It
revolution in the banking industry. Bank makes banking faster and easy.
customers are becoming very demanding The following are transactional and non –
and it is the extensive use of technology that transactional applications of online banking
enables banks to satisfy adequately the services.
requirement of customers. Further the

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• Transactional remote video connection. It can be

Bill payments and wire transfers to third performed over purpose built banking
parties transaction machines similar to Automated
Fund transfer between customer's Teller Machines (ATM) or through bank
transactional and savings account branches enabled with video conferencing.
Sale and purchase of investments Video banking improves the following
Applications and transactions for loans and banking activities:
enrollment repayments Customer authentication
• Non-transactional Cash and cheque deposits
Analyzing recent transactions Cash and coin withdrawals
Downloading bank statements Account transfers and bill payments
Viewing paid cheques Processing new accounts and loans
Financial Institution Administration Bank consultations and enquiries
Portfolio Management of multiple users at
different authority levels • Telephone Banking
Transaction approval process
It is a bank service provided by financial
• Mobile Banking institutions allowing its customers to
conduct banking transactions over the
Mobile banking is a system that allows telephone. Institutions which provide
customers of a financial institution to banking services exclusively over telephone
conduct a number of financial transactions are called Phone Banks. They use special
through a mobile device such as mobile technology to modernize the customer by
phone or personal digital assistant. It is used providing bank and account related
for performing through mobile device such information over a telephone.
as a mobile phone or a Personal Digital
Assistant (PDA), banking activities such as: Benefits of Telephone Banking
Balance checks
Account details Automated phone answering system
Portfolio management Account transactions Phone keypad response resources
Payments and investments Voice recognition capability
Credit applications and other transactions
Mobile Banking enables connection with Features of Telephone Banking
customers throughout the customer life Account balance information
cycle in a much better way than before. List of latest transactions
Electronic bill payments
Its main objectives are: Funds transfer between customer accounts
Building customer relationships Loan and account applications
Reducing cost and gaining revenue Purchase and redemption of investments
Promotion of banking organization brand Cheque book orders
Personalization of banking experience Debit or credit card replacements.
Requests such as change of address
• Video Banking
• ATM (Automated Teller Machine)
It is used for conducting banking
transactions or consultations through a

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ATMs are electronic machines, which are Emergency need

operated by a customer himself to deposit or Additional features
to withdraw cash from bank. For using an
ATM, a customer has to obtain an ATM • Electronic Payment System
card from his bank. The ATM card is a
plastic card, which is magnetically coded. It Electronic Payment is a financial exchange
can be easily read by the machine. that takes place online between buyers and
Advantages of ATMs sellers. The content of this exchange is
ATM provides 24 hours service usually some form of digital financial
It gives convenience to bank's customers instrument that is backed by a bank or an
It reduces the workload of bank's staff intermediary, or by a legal tender.
It provide service without any error
It is very beneficial for travellers Benefits of Electronic Payment System
It may give customers new currency notes Speed
It provides privacy in banking transactions Convenience
Efficiency
Facilities of ATMs Reduced costs
Increased customer base
Cash withdrawals  
Cash deposits
Balance enquiry or checking the balance in • Electronic Data Interchange
the bank account
Request for statement of account Electronic data interchange is an automated
Change of personal identification number system of business-to-business data
(PIN) exchange. Two primary areas of EDI are
Cheque book request data interchange and electronic funds
Transfer of funds from one account to transfer used among banks.
another account
Other facilities like bill payments

• Plastic money Benefits of Electronic Data Interchange

Plastic Money is a must need of our busy Cost efficiency

life. Today plastic money is the best Increased speed
alternative of the cash. It is also safer to Improved accuracy
traveling with a plastic money card than Better logistics management and increased
cash. Today it is very easy to carry money productivity
without having a lot of cash or gold. This is Improved delivery of goods and services
a new idea of present life-style which has Migration from paper to electronic
made money transition so easy that anybody transactions
can carry it with him or her in a pocket. Faster response time and Customer service
Benefits of Plastic Money improvement
Purchasing Power
Time Saving • Cyber Cash
Additional Safety
Credit Limits

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Cyber cash is pioneer in the electronic Nevertheless modern banking services are
commerce industry and the leading provider highly sophisticated to the customers in all
of Internet payment technologies and the ways.
services. It enables merchants to accept
secure payments on the Internet with more
ease, flexibility, reliability and cost-savings
than any other solution. REFERENCES

Conclusion
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