Impact of Technology in Banking Sectors
The role of technology in this banking industry is significant and has changed the entire banking system. Twenty years ago the bank used to be a mere building to make a deposit and withdrawal. Now with the modernization of technology a large part of the traditional banks have crumbled and the banking industry is seemed to be remodeled. Banks are now highly modernized by the technological features like imaging technology, electronic data transfer, ATM’s, and smart cards.
Evolution of technology in banking
Today the immense impact of technology in banking industry can’t be denied but the technological advancement was brought step by step. It started with the computerization of few key functions and certain important departments. These systems were designed to look after the accounts and their related functions which were the heart of banking operations. Then came the network based operations which provided interbank connectivity. After that came the most important stage with the evolution of the most user friendly technology the ATM and core banking solutions that rapidly changed the way of banking both by bankers and customers. And finally a number of innovations like the internet banking, mobile banking, pre-paid cards emerged which has made the entire banking process much more convenient.
Benefits of technology in banking
The role of technology has a beneficial effect on both the banks and the customers. The ATM banking, mobile banking has important benefits to the customers. It has also allowed the customers to use debit cards and credit cards which also provides major benefits to the banks as it allows centralization of a customer’s information and at the same time a centralized transaction and accounting process. It has a positive impact on the payment systems. These days’ electronic based payments are much more superior in terms of efficiency, accuracy, speed and safety.
Electronic data transfer
The impact of technology in banking industry has gifted one of the most beneficiary gifts- the electronic data transfer. It is a process where companies make electronic payments directly without the involvement of any human. Transactions are very much speedy with reduced error and handling costs. Labor costs are significantly reduced as fewer people are required for the process. This has helped to strengthen the bank’s financial position.
The advent of smart cards and virtual banking
It is perhaps the greatest gift that is achieved through the role of technology. The advent of ATM cards and internet banking services has allowed banking to move from the banks to the houses. Anyone using an internet banking service can do their transactions by simply sitting in their homes. Smart cards which are credit card sized plastic cards with a microprocessor chip fitted inside can hold or release a particular amount of money stored in it and they can manipulate cash or information. Smart cards also provide timely customer service apart from generating revenues for banks. Presently the credit card serves as the most important tool for a customer for a wide range of transactions. So, it can be said that the role played by technology in the banking system is of so much importance that it can be expressed but could only be visualized through the benefits provided.