UNIT 1 Note & Coin Counting Machines

Digital Banking Overview  Automated currency processing

 Transformative integration of technology in  High-speed counting capabilities
banking sector  Counterfeit detection features
 Redefined financial service delivery and  Batch processing support
customer expectations Digital Services
 Key components: Mobile banking, digital Electronic Banking
wallets, AI/blockchain implementation  Online/mobile banking services
 Focus on efficiency, security, and customer  Features: Fund transfers, bill payments,
experience statements
Gopalakrishna Committee Recommendations  Multiple channels: Web, mobile, ATM
 Framework for banking technology adoption  Enhanced with security measures
 Guidelines for computerization and Signature Storage & Retrieval
modernization  Digital signature management
 Standards for digital banking implementation  PKI infrastructure implementation
 Focus on security and efficiency  Secure storage protocols
Core Banking Technology Solutions (CTS)  Legal compliance framework
 Central software platform for bank Security Systems
operations management PINs (Personal Identification Numbers)
 Key features: Account management,  Numeric security codes for authentication
transaction processing, reporting  Used with cards and digital services
 Enables real-time banking across branches  Part of two-factor authentication
 Supports multiple channels: ATM, internet,  Critical for transaction security
mobile banking Electromagnetic Cards
Network Infrastructure  Plastic cards with magnetic stripes
LANs (Local Area Networks)  Stores customer and account data
 Network connecting computers in limited  Used for payments and identification
geographical area  Being replaced by chip cards
 Components: NICs, switches, cables, routers Document Management
 Topologies: Bus, Star, Ring Microfiche
 Used for resource sharing and  Flat sheets storing microphotographs
communication  Used for document archival
WANs (Wide Area Networks)  Requires special readers
 Connects multiple LANs across large  Largely replaced by digital storage
distances Payment Systems
 Uses satellites, fiber optics, or leased lines NPCI (National Payments Corporation of India)
 Key for global banking operations  India's retail payment systems operator
 Enables branch connectivity  Manages RuPay, UPI, IMPS
Power & Infrastructure  Promotes digital payments
UPS (Uninterruptible Power Supply)  Enhances financial inclusion
 Provides emergency backup power RuPay
 Types: Offline, Line-interactive, Online  India's domestic card payment network
 Critical for banking system continuity  Alternative to Visa/Mastercard
 Protects against power disruptions  Both debit and credit cards
Banking Access Points  Focus on cost-effective transactions
ATMs (Automated Teller Machines) CTS (Cheque Truncation System)
 Self-service banking terminals  Electronic cheque clearing process
 Functions: Withdrawals, deposits, balance  Reduced physical movement
checks  Faster settlement cycles
 Uses magnetic cards and PIN authentication  Enhanced security features
 Networked with core banking systems Monetary Policy
HWAK (Monetary Hawks)  Security settings customization
 Conservative monetary approach  Regulatory compliance measures
 Focus on inflation control  Audit trail tracking of all activities
 Advocates higher interest rates Personal Identification Numbers (PINs)
 Contrasts with dovish growth focus  Crucial security element for credit/debit
Digital Banking Security cards
 Multiple authentication layers  Used with magnetic stripe cards
 Encryption for data protection  Required for ATM transactions
 Regular security updates  Needed for POS transactions
 Compliance with regulations  Enhances transaction security
 Protection against unauthorized use
UNIT 2  Option to change/reset through secure
Online Banking channels
 Internet-based banking services allowing  Integration with biometric authentication
remote account access and transactions  Used in contactless payment verification
 Secure access through web browsers or Smart Cards
mobile apps  Contains embedded microprocessor chip
 Features include account management, fund  Available in contact and contactless types
transfers, bill payments  Enhanced security features
 Mobile banking apps for smartphones/tablets  Used for authentication/authorization
 Real-time alerts and notifications  Common in financial transactions
 Integration with ATM services  Used in identification systems
 Investment management capabilities  Applied in healthcare services
 Global accessibility  Used in telecommunications (SIM cards)
 Enhanced security measures like encryption  Transportation applications
and multi-factor authentication  Multi-application capabilities
 Loan applications and payments  More durable than magnetic stripe cards
 Customer support through multiple channels  Electronic passport integration
 Compliance with regulatory standards  Educational institution ID cards
 E-statements and paperless services  Library access management
 Integration with budgeting apps and digital  Corporate access control
wallets  Electronic wallet functionality
 Innovation features like open banking  Secure storage of biometric data
initiatives  Cross-border transaction capabilities
 Customizable alert system for account Signature Storage and Electronic Display
activities  Digital signature creation using cryptography
Online Enquiry and Update Facilities  Capture through specialized devices
 Real-time account information checking  Biometric authentication integration
 Personal details management  Document integration capabilities
 Account preferences customization  Secure storage systems
 Transaction history viewing  Cloud-based solutions
 E-statement access  Blockchain technology implementation
 Transaction limits management  Verification systems
 Card services management  Audit trail maintenance
 Beneficiary management Cheque Truncation
 Document upload capabilities  Converts physical cheques to electronic
 Secure communication channels images
 Profile security settings management  Speeds up clearing process
 Service request initiation  Reduces transportation needs
 Address change capabilities  Enhanced security features
 Password and PIN management  Automated processing
  Digital archiving system o Account management
 Cost-effective solution o Transaction processing
 Faster settlement cycles o Loan/deposit handling
 Reduced fraud through digital verification 4. Integration Features:
 Enhanced customer experience o Payment gateways
 Faster dispute resolution o APIs for third-party services
 Better record keeping o CRM systems
 Automated reconciliation o Document management
 Real-time tracking capability EFT System Evolution Timeline
 Environmental benefits from reduced paper 1. 1960s: Credit cards introduction
usage 2. 1970s: ATMs deployment
Note and Coin Counting Devices 3. 1980s: Electronic banking emergence
 Automated counting of cash 4. 1990s: Online banking rise
 Counterfeit detection features 5. 2000s: Mobile banking introduction
 Sorting capabilities 6. 2008: Contactless payments
 Multi-currency handling 7. 2010s: P2P payments growth
 Integration with POS systems 8. Present: Blockchain and cryptocurrencies
 High-speed processing Funds Transfer Systems Details
 User-friendly interfaces 1. Traditional Methods:
 Detailed reporting features o Wire transfers
 Portable options available o Bank drafts
 Regular maintenance required o Check systems
 Batching capabilities for large volumes 2. Modern Systems:
 Mixed denomination handling o Mobile wallets
 Coin wrapping functionality o UPI platforms
 Customer verification displays o RTGS/NEFT
 Integration with banking systems
o Cryptocurrency transfers
 Multiple currency recognition
3. Cross-Border Solutions:
 Detailed transaction reporting
o International wire transfers
 Maintenance tracking systems
o SWIFT messaging
Security Features (Across All Systems)
o Forex transactions
 Multi-factor authentication
o International ACH
 Encryption protocols
Data Communication Network (DCN)
 Secure socket layer (SSL)
 System of interconnected computers and
 Real-time monitoring
devices for data exchange
 Fraud detection systems
 Essential for banking communication
 Compliance with international standards
infrastructure
 Regular security updates
 Key components: Routers, switches, servers,
UNIT 3
VPNs
Digital Banking Components
 Uses security measures like encryption, SSL,
1. User Interface (UI) and UX:
firewalls
o Visual interface
 Employs TCP/IP, HTTPS protocols
o Customer interaction points
 Features redundancy for reliability
o Cross-device accessibility
 Integrates with EFT systems
2. Authentication & Security: Electronic Funds Transfer (EFT)
o Username/password systems
 Computer-based system for electronic
o Biometric authentication
financial transactions
o Two-factor authentication (2FA)
 Types: Wire transfers, ACH, direct deposits,
o Security infrastructure bill payments
3. Core Banking Elements:  Components: Payment gateways, POS
o Central banking system terminals, ATMs
  Uses security features like tokenization,  Types include ACH, RTGS, Direct Debit
biometric authentication  Enables batch processing
 Enables real-time processing  Supports real-time settlements
 Supports international transactions  Facilitates cross-border payments
 Complies with regulatory requirements  Integrates with check truncation
Modes of Transmission  Follows regulatory standards
 Simplex: One-way communication (e.g., TV Recent Developments in India
broadcasting) 1. Digital Payments Growth:
 Half-Duplex: Two-way but not simultaneous o UPI expansion
(e.g., walkie-talkies) o Increased digital adoption
 Full-Duplex: Simultaneous two-way 2. Technology Integration:
communication o AI and chatbots
 Serial: Sequential data transmission o Open Banking initiatives
 Parallel: Multiple bits simultaneously o Digital lending platforms
 Analog: Continuous signal transmission 3. Security & Regulation:
 Digital: Binary code transmission o Enhanced cybersecurity focus
 Guided: Uses physical media (cables) o Cryptocurrency regulations
 Unguided: Wireless transmission o Data protection measures
Major Networks in India 4. Financial Inclusion:
1. Telecommunications: o Digital banking expansion
o BSNL, Airtel, Jio, Vodafone Idea o Neobank emergence
2. Television Broadcasting: o Mobile banking growth
o Doordarshan, Star India, Zee, Sony Emerging Trends
3. Internet Service Providers: 1. Technology Integration:
o Airtel, Jio Fiber, Hathway, ACT o 5G implementation
4. Banking Networks: o Edge computing
o NPCI (UPI, IMPS) o Cloud solutions
o Major banks: SBI, ICICI, HDFC o IoT in banking
SWIFT 2. Customer Experience:
 Global messaging network for financial o Personalized banking
institutions o Omnichannel experience
 Connects 11,000+ institutions across 200+ o Digital onboarding
countries o 24/7 banking services
 Uses standardized message formats
3. Future Developments:
 Features robust security measures
o CBDCs (Central Bank Digital
 Provides unique BIC codes
Currencies)
 Supports cross-border transactions
o Open banking expansion
 Includes compliance tools
o AI-driven solutions
 Offers SWIFT GPI for payment tracking
o Blockchain adoption
EFT System Evolution Timeline
1. 1960s: Credit cards introduction
UNIT 4
2. 1970s: ATMs deployment
Role of Technology Upgradation
3. 1980s: Electronic banking emergence
Operational Efficiency
4. 1990s: Online banking rise
 Automation of routine processes
5. 2000s: Mobile banking introduction
 Workflow optimization through RPA
6. 2008: Contactless payments
 Reduced manual intervention
7. 2010s: P2P payments growth
 Cost-effective operations
8. Present: Blockchain and cryptocurrencies
Customer Experience
Automated Clearing Systems
 Digital banking services (online/mobile)
 Electronic systems for processing financial
 Personalization through AI/ML
transactions
 Multichannel banking capabilities
  Seamless user interface Sustainable Banking
Security Measures  ESG integration
 Advanced encryption  Green technologies
 Biometric authentication  Paperless operations
 Real-time fraud detection  Environmental responsibility
 Continuous monitoring Financial Inclusion
Recent Technology Trends Accessibility
Digital Transformation  Banking for underserved populations
 Legacy system modernization  Mobile money solutions
 Cloud adoption  Agent banking networks
 API integration  Rural connectivity
 Process digitization Digital Identity
Customer-Centric Innovations  eKYC solutions
 Mobile-first banking  Remote onboarding
 Contactless payments  Digital documentation
 AI-powered customer service  Secure verification
 Voice banking integration Preventive Vigilance
 Personalized services Phishing Protection
Security Advancements  Email authentication
 Enhanced biometric solutions  Customer education
 Blockchain implementation  Real-time monitoring
 RegTech solutions  Incident response planning
 Advanced encryption Safety Checks
Impact of IT on Banking  Transaction monitoring
Core Operations  Fraud detection systems
 Process automation  Velocity checks
 Paperless transactions  Geographical monitoring
 Real-time processing Security Precautions
 Efficient workflows For Banks
Customer Services  Robust security infrastructure
 24/7 banking access  Regular audits
 Mobile banking apps  Employee training
 Digital wallets  Incident response planning
 ATM services  Data protection
 Instant payments For Customers
Security Infrastructure  Strong passwords
 Multi-factor authentication  Multi-factor authentication
 Encryption protocols  Secure Wi-Fi usage
 Cybersecurity measures  Regular account monitoring
 Continuous monitoring  Up-to-date software
Global Trends Innovation & Development
Open Banking Fintech Collaborations
 API-driven integrations  Partnership models
 Third-party collaborations  Innovative solutions
 Enhanced service ecosystem  Rapid deployment
 Innovation promotion  Technology integration
Neobanks Cloud Computing
 Digital-only banking  Infrastructure optimization
 Mobile-centric solutions  Cost reduction
 Innovative financial products  Scalable solutions
 Customer-focused approach  Flexible deployment
Customer Education Core Security Framework
Security Awareness Security Considerations & Risk Areas
 Phishing prevention  Data Security
 Safe banking practices  Protection against unauthorized
 Fraud recognition access
 Regular updates  Data breach prevention
Digital Literacy  Encryption & access controls
 Online banking guidance  Data classification & handling
 Mobile app usage  Authentication & Authorization
 Security best practices  Multi-factor authentication
 Transaction safety  Identity verification
Regulatory Technology  Access management
Compliance Automation  Biometric security
 AML monitoring  Mobile & Transaction Security
 Transaction reporting  App security
 Risk assessment  Device protection
 Regulatory adherence  Real-time monitoring
Data Privacy  SSL/TLS protocols
 Information protection  Fraud detection
 Consent management Types of Threats
 Access controls  Phishing attempts
 Data governance  Malware attacks
Cross-Border Banking  DDoS attacks
International Transactions  Man-in-the-Middle attacks
 Real-time settlements  Insider threats
 Currency management  Data breaches
 Global accessibility  Identity theft
 Cross-border compliance  Social engineering
Blockchain Applications  SQL injection
 Cross-border payments  Cross-site scripting
 Smart contracts  Zero-day exploits
 Digital currencies (CBDCs)  Cryptojacking
 Transaction transparency Control Mechanisms
Control Mechanisms  Access controls
Authentication  Encryption
 Biometric verification  Firewalls
 Two-factor authentication  Multi-factor authentication
 Device recognition  Regular security audits
 Identity validation  Incident response plans
Monitoring  Network segmentation
 Transaction surveillance  Data loss prevention
 Behavior analytics  Patch management
 Fraud detection systems  Security awareness training
 Real-time alerts Information Systems & Infrastructure
Compliance IS Security
 Regulatory adherence  Confidentiality measures
 Regular audits  Integrity protection
 Documentation standards  Availability assurance
 Risk management  Network security
 Physical security
UNIT 5  Cloud security
  Mobile device security  Transaction monitoring
 Application security  Cloud security
Cloud Computing  API security
 Service models (SaaS, PaaS, IaaS)  Incident response
 Storage requirements  Physical security
 Security measures  Documentation standards
 Data backup systems Risk Management
Blockchain Integration  Assessment frameworks
 Cryptocurrency considerations  Mitigation strategies
 Smart contracts  Monitoring systems
 Transaction security  Periodic reviews
 Distributed ledger management  Risk reporting
Regulatory & Compliance Customer & Business Aspects
IT Act Overview Customer Services
 Legal recognition of electronic records  24/7 accessibility
 Digital signature regulations  Mobile payments
 Cybercrime prevention  Online transactions
 Electronic governance  Real-time monitoring
 Data protection guidelines  Customer support
 CERT-In establishment  Digital onboarding
 International cooperation User Education
Gopalakrishna Committee Recommendations  Security awareness
 NPD (Non-Personal Data) framework  Best practices
 Data classification guidelines  Fraud prevention training
 Consent requirements  Digital literacy programs
 Data ecosystem roles Business Continuity
 Data sharing protocols  Disaster recovery
 Technology architecture  Backup systems
 Regulatory oversight  Emergency procedures
NPD Categories  Business impact analysis
 Public NPD Technology & Documentation
 Private NPD Technology Integration
 Community NPD  AI/ML implementation
 Data sensitivity levels  IoT security
 Storage requirements  API management
 Processing guidelines  System upgrades
Operational Framework  Innovation adoption
Computer Audit Documentation & Reporting
 Scope definition  Audit requirements
 Compliance assessment  Compliance reporting
 Risk evaluation  Performance monitoring
 Security controls review  Regular assessments
 Data protection audit  Incident documentation
 Infrastructure review Third-Party Management
 Performance monitoring  Vendor assessment
 Documentation review  Security requirements
Evaluation Requirements  Service level agreements
 Regulatory compliance  Risk evaluation
 Security controls  Performance monitoring
 Data management
 Identity management