INTRODUCTION:

Information Technology has made a revolution in each and every sphere of human life. Indian Banking System has reached every nook and corner of the country. Indian Banking System is no longer kept to just the metropolitans, yet has come to try and to the remote corners of the nation. The current technological environment facilitated in providing multiple and innovative contemporary services to the customers. Expectations of the customers have increased due to the impact of technology, increase in modern technology and increase in global literacy levels. Globalization, liberalization and privatization have brought remarkable changes in the banking service sector in India. Competitive pressures have also forced the banks to reconsider the way they do business.

The traditional over-the-counter banking is slowly losing its prominence due to self-service techniques and competitive pressures by banks. Computer, telecommunications and internet have revolutionized banking service by offering alternate services by shifting towards internet banking. This enabled customers to access banking services in different ways on their smart phones and computers. Introduction of Information Technology in banking industry has led the banks to store, assimilate and process information electronically. Banks have embraced latest technologies to survive and grow in the changing market environment. Thus, the banks are able to deliver the provisions required for customers and offer the best solution from their product or service. This technological advancement in banking sector such as online banking, mobile banking, telebanking, ATM/Debit card and credit card has led to the advancements in the payments and settlement systems. Banks have been the earliest in India to adopt technology by automating systems and streamlining their processes. Introduction of tech advancements have enabled banks to keep a high level of security, check fraud, abuse or pilferage, and to minimize the risk and cost of handling cash. Introduction of non-cash payment modules like RTGS, NEFT, NECS, UPI and digital wallets also play an instrumental role in transforming the banking services.

REVIEW OF LITERATURE:

Geetha and Ramanarayanan [1], in their study explored the impact of core banking solutions on select consumers. Their research indicates that younger population (especially between the age group of 35-45) have annual income of more than Rs: 1,20,000 and were familiar and accustomed with the internet banking. The customers, in the study area had opined that core banking solution saves time and is more consumers friendly.

[2], defines “core banking as the business conducted by a banking institution with its retail and small business customers”. She defines core banking solutions as anywhere and anytime banking. Core banking was considered as a paradigm shift. CORE refers to Centralized Online Real time Exchange. She has carried out a study to ascertain the level of satisfaction among the customers of core banking solutions of the State Bank of India and has made out an inference.[2] study reveals that 50 percent of the customers are happy about the core banking solutions.

An analysis has been carried out by Rishi [3] to determine the Vendor Managed System (VMI) in banks. The VMI is popularized by Walmart and proctor in gamble in late 1980s. The vendor decides the inventory levels of each product and the inventory policies. Vendor managed inventory needs acceptance from the employee for any transaction and they will be communicated about it. This requires an effective communication between the bank and customers that should be done without any time delay.

A study conducted by Vinita et al. [4], analyzed the improvement in value added services, quality and convenience. Customer satisfaction is considered more important. The prices of most of the bank products are raised and there should be a reason in pricing bank services. Reserve Bank of India worked on this issue and revealed that there is unfairness and non-transparency in price hike by the banks. The personal relationship between the bank employees and customers are considered to be very important in customer satisfaction.

Ali and Hayat [5], investigated the factors influencing customer’s perception on mobile banking adoption. The extended technology adoption model was adopted to measure its impact on mobile banking adoption in Bahrain. The study revealed that the factors such as perceived usefulness and ease of use were result of adoption of mobile banking. On the other hand, few factors such as perceived cost and perceived risk did not reveal any effect on the customer’s intention to access mobile banking services. This study has promoted managers to consider the above factors to enforce mobile banking services.

Rakhi and Mala [6], carried out a study to accomplish two objectives – to test the functional relationship between adoption readiness, perceived risk and usage intention for mobile payments in India. This study investigated the constancy of proposed structural relationships across different customer groups. The literature concerning major attributes of technology acceptance was systematically reviewed to develop and construct the adoption of technology services. A comprehensive model consisting of adoption readiness, personal innovativeness and perceived risk was put together and the model was then empirically tested using structural equation modelling. On appraising the proposed model, five out of six hypotheses were fully supported while one hypothesis was partially supported.

Nayak et al. [7] discovered the factors that affect the adoption pattern of mobile banking services by Indian consumers and several stages involved to increase mobile banking services based on user’s database. The study found that trust, perceived ease of use and perceived cost are some of the important factors that influence the adoption behaviour of mobile banking services by Indian consumers. The study further recommended that banks should create awareness through mobile banking services such as advertisements, pamphlets, demo fares, and campaigning etc., and the study revealed that customers adopt mobile banking as they find it easy to use and comprehend.

Sharma and Sharma [8], investigated the effectiveness of data handling by the commercial banks. They opined that it might take few more years for virtual banking to be established in India. The trends witnessed in modern banking are computerization and outsourcing, and integration of various IT products related to banking. They observed that the customers switching from one bank to another has been reduced after the introduction of bank vendors.

Patel and Pithadia [9], explained in their study the various challenges faced by the Indian banking sector. The infusion of technology and agreement of banks to Core Banking Services (CBS) have not been smooth for traditional banks. Many large banks have converted only 20-30% of their branches to CBS and they feel that this would cover 70-80% of the bank business. The technology based delivery channels through bank vendors have helped in improving quality and standard. They are of the opinion that outsourcings of bank duties entitle high risk because the vendors may not have the requisite awareness about the banking domain.

Bishnoi [10], discussed about the different facilities provided by ATM, reasons to use ATM cards and several problems encountered while using ATM card. Further the researcher examined the relationship between various personal profile and ATM facilities offered by various banks. The study found out that problems while using ATM services such as machine out of cash, poor quality currency notes, machine out of order, internet failure, no printing of mini statement and poor visibility of statement slip were the significant issues. The study concluded that ATM was more comfortable at anytime and anywhere usage to their customers. ATM was increased day by day and also customers increased. There is no significant difference between opinion of male and female customers and public and private sector bank ATM customers concerning many problems while using ATM facilities.

Chandio [11], examined the recent trend of ATM facilities and paper based transactions in customer retail banking. The result showed that ATM was frequently used for cash withdrawals and to check balance enquiry. Majority of the customers use ATM in their own banks and they sometimes use ATM of other banks. The study revealed that customers were highly satisfied with their own ATM facilities.

Praful [12], studied customers’ perception towards products and services of State Bank of India (SBI). The study determined that maximum of 99.27 percent of customers expressed their satisfaction and a minimum of 0.73 percent of customers expressed dissatisfaction towards the service provided by SBI. State Bank of India was the first bank in public sector to start the use innovative technology for computerization and core banking and the bank used information technology based products and services. This study reveals the impact of the information technology on customer satisfaction in urban, semi- urban and rural branches of Yavatmal District.

Gulla and Gupta [13], have explained the role of information technology in commercial banks. The physical banking has been replaced by technology aided banking. This reduced the cost and risk, and enhanced profit. They have cited the example of Bank of India which was the first to use the tool infrastructure outsourcing. Outsourcing has both short term and long term impact on the banking services. The amount of risk that is faced from the vendors differs from one bank to another.

Alsamydai et al. [14], this study has been divided into five attributes such as Electronic Banking, personal factors, perceived usefulness, customer satisfaction and continuity of dealing with Electronic Banking services. The results revealed that there is a significant relationship between all attributes and also the factors relating to Electronic Banking - perceived usefulness and service quality. Particular reasons have an affect on customer satisfaction and continuation in dealing with E-Banking services.

Shah [15], identified the customers’ perceptions towards electronic banking services in Thane city and analyse “the customers’ perceptions, the problems faced by the bank customers and strategies to enhance e-banking services”. This study revealed that public sector banks, private sector banks and foreign banks are offering e-banking services even though customers have become more challenging with the passage of time. Customers faced more problems like inadequate computer knowledge, poor response of bank staff, and lack of internet banking facilities, forgetting ATM PIN and language problem.

Kuchara [16], in her article titled “A study on customers’ perception towards internet banking at Ahmedabad city”, analyzed results such as convenience, security, easy to maintain banking facility, curiosity, better rate and low service charges as main factors. Half of the respondents agreed that internet banking was more convenient and flexible. It has different transactions and related advantages to customers. Banks offering internet banking was day by day increasing, becoming a need to have than a nice to have service.

Sekar [17], has analyzed the status of adoption of banks to information technology. The private sector banks were able to pursue technology based services much faster than the public sector banks. Technology is able to provide the methodology by which the banks can deliver and manage integrated problems. Sekar [17] believes that the banks shall become technology companies offering banking products. The developments of bank vendor’s technology include biometric ATM’s, information kiosks with local language and voice facility, e-marketing of SHG products through banks payment gateway. The vendor, face number of challenges like integrating several services, taking care of the requirement of enterprises and managing technical products which have lower life cycle. Security is also considered as a major challenge for the vendors.

Subhashrao [18], discusses about the challenges faced by the banking industry, from the non-traditional banking institutions. The new competitors are able to enter the financial service market quickly and efficiently. The e-banking services are offered in much better way by the private sector banks. Internet advertisement through banking services is yet another challenge faced by the public sector banks.

Mermod [19], has analyzed the role of technology on banking industry. Due to competition in the banking sector, the profit margin has reduced and so many banks have introduced internet based banking. In Turkey there are 15 million registered users for retail banking and 1 million registered users for corporate banking. This accounts for nearly 47 percent of the customers. The integrated banking services enable the customers to increase market shares and the decision making by the customer. The author feels that there should be more co-ordination among the vendors.

Sharma [20], has listed the advantages of e-banking. The vendors, being professionals, are able to help in programming and storing the data. Core banking solution has resulted in less use of paper money and more use of plastic money. The author had reviewed “the impact of e-banking on customer relationship, performance of the bank, and adoptability of bank employees and public for the banking”. Sharma [20] has given the opinion that there are shortcomings which need to be set right.

Sawant [21], has observed that the banking sector supports economic growth by the introduction of information technology. The Electronic Clearance Services (ECS) created in late 1990s, Electronic Fund Transfer (EFT) presented in mid-2000, and RTGS presented in 2004, and NEFT presented in 2005-06 with a specific end goal to build effectiveness of business banks. Nearly 90 percent of the banks have introduced core banking system by the end of 2010. The authors have explored about SWIFT, Bank net, and NPCI and demat cards and concluded that the use of technology has been helpful in providing facilities and services to the customers. Jain and Natarajan [22], have outlined the usual factors that influence the outsourcing decisions. In any industry outsourcing is taken up only when providing regular employment is costly for the organization. The researcher states that in the Indian banking sector both the banks and the agency outsourcing the labour (vendor) draw from the same labour pool and pay more or less the same wage. So outsourcing in Indian commercial banks is not for cost reduction. But when technical labours are outsourced it becomes easier for the commercial banks to manage their traditional functions. However outsourcing results in greater risk for the commercial banks and lesser accountability for the vendor financing.

CONCLUSION:

The review of studies is related to digital technology in banking sector. The role of technology is most important in the present scenario. Indian banking sector is one of the fast emerging industries in the world. Over the past era, banks portrayed a drastic improvement by the introduction of new technological solutions. The installations of ATM network, growth of the internet, development of mobile phones and telecommunication technology have carried out a revolution in the services delivered by the bank. Banks realized that the technology can help them to achieve a better competitive position. Still, banking sector is creating the awareness to the people about e-banking, mobile banking, credit card facilities, business loans and home loans facilities, to ensure demonetization in the country, which will make the financial transactions transparent. This revolutionary change could eliminate the black economy on the one hand help the people at grass root level to get the financial assistance from the banks producing necessary documents on the other. Hence, internet banking and digital banking assures the best financial practices throughout India which is desired by our prime minister and ultimately every citizen of India.

REFERENCES:

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Received on 11.07.2019 Modified on 06.08.2019

Asian Journal of Management. 2020; 11(1):120-124.

DOI: 10.5958/2321-5763.2020.00019.0