www.mbainfoline.com

Source: E-mail dt. 23.2.2012

 

Impact of Technology Based Services in Banking Sector with Special Reference to LVB, Coimbatore

 

Dr. R. Haridas

Asst.  Professor and Head of the Dept -MBA

Krishnagiri Govt. Art College for Men – 635 001

 

and

 

P . Manonmani

Ph.D Research Scholar, Karpagam University

Asst Professor, PPG Business School, Coimbatore

 

ABSTRACT

 

The current trend in any industry depends largely upon two general phenomena one is convenience and the other is connectivity. Particularly in banking industry the competition is too heavy that every avenue in banking service is finding new ways to succeed with customer delight. It has become very vital that the banker need to pay attention to retain every customer by providing them the best convenient service. This condition has given a threshold to introduce information, communication and technology in banking services. The banks are dealing with heterogeneous clients and are forced to deal with technology that enables to satisfy every single customer. Innovation does drive both growth and efficiency.

 

The author has made an attempt to analyze impact of technology based banking services with special reference to Lakshmi Vilas Bank, Coimbatore. Since technology is presumed to be the vital factor for the development of the mankind. These technologies are used to access, process, store and disseminate information electronically at the time of requirement. Banking industry is adopting these trends in the form of ATMs, on-line banking, mobile banking, plastic cards etc, without which such a comfort and conveniences would not have been possible.

 

INTRODUCTION

 

Development of any country depends on the banking system of the country. Since the bank money is highly floated into the modern business and forms the life blood of trade, commerce and Industry.  The French word “Banco” implies bench or money exchange table. The process of money lending was carried out by the European money lenders by displaying heaps of coins of different countries on benches and tables.

 

Similarly a bank is a financial institution dealing with deposits, lending and other related services.  In current trend the information, communication and Technology together with computer science facilitates banking institutions to offer their services in sophisticated manner with maximum security, reliability and affordability.

 

 

IMPACT ON TRANSACTION PROCESSING IN THE BANK

 

Huge volume of transactions indulging a lot of manual efforts, recording humpty number of transactions like cheques to be processed, interests to be calculated and funds to be transferred demanded the intervention of IT and computerization. Thus the first stage of computerization involved transactions processing and maintain accurate accounts of all the transactions. And the IT application involved ledger posting machines to post the transactions. The another intensive operation involved in banking demanding heavy manual effort is clearing of cheques issued by bank’s customer for settlement. Manual sorting and exchanging of cheques among the bankers were replaced by MICR (Magnetic Ink Character Recognition) and was introduced in 1950. These  applications  were  recorded  off  line  and  processed  in  batch  mode  wherein  the transactions were entered after they were done at the counter. It continues to be an important application with banks increasingly resorting to have data centres and data warehouses to store their data and even cross border processing of their transactions to reduce the cost.

 

POSITIVE IMPLICATION OF IT IN BANKING

 

Internet banking allows expanded customer contact through increased geographical reach and lower cost delivery channels.  In fact some banks are doing business exclusively via the Internet — they do not have traditional banking offices and only reach their customers online. Internet banking allows national banks to offer a wide array of options to their banking customers. Some customers will rely on traditional branches to conduct their banking business. For many, this is the most comfortable way for them to transact their banking business.  Those customers place a premium on person-to-person contact.  Other customers are early adopters of new technologies that arrive in the marketplace.  The challenge to national banks is to understand their customer base and find the right mix of delivery channels to deliver products and services profitably to their various market segments. Other financial institutions are using the Internet as an alternative delivery channel to reach existing customers and attract new customers. Relationship building is a strategic priority for many national banks.  Internet banking  technology  and  products  can  provide  a  means  for  national  banks  to  develop  and maintain an ongoing relationship with their customers by offering easy access to a broad array of products  and  services. 

 

Banks offering mobile access are mostly supporting some or all of the following services:

 

  1. Account Balance Enquiry
  2. Account Statement Enquiries.
  3. Cheque Status Enquiry.
  4. Cheque Book Requests.
  5. Fund Transfer between Accounts.
  6. Credit/Debit Alerts.
  7. Minimum Balance Alerts.
  8. Bill Payment Alerts.
  9. Bill Payment.
  10. Recent Transaction History Requests.
  11. Information Requests like Interest Rates/Exchange Rates.

 

The other way to categorize the mobile banking services, by the nature of the service, gives us two kind of services – Transaction based and Enquiry Based.

 

Purchasing Power: Credit or Debit cards made it easier to purchase things. Now we don’t have any need to carry hard cash in a large amount. Plastic money is accepted everywhere, anytime.

 

Time Saving: Through a credit card or debit card anyone can purchase anything from anywhere without spend money on fare or cash transition. Just provide the card details to seller store or companies and finalize the order. Use internet for minimum time consuming.

 

Extra Safety: While none carrying cash how can it be lost? But if the card gets lost, just contact to the bank or financial institution, which provides the cards. It will block the account and nobody can draw a single coin without ones permission. So it is 100% safe without any tension.

 

Credit Limits: the customer get an extra amount to spend with the card. This extra spent money should be returned before a fix time schedule or will have to pay a little interest. So there is no problem to having less money. Just use money without any tension.

 

ANALYSIS AND INTERPRETATION

 

One Way ANOVA for Educational Qualification and Easy Usage of Internet Banking.

 

Null hypothesis H0: There is no significant relationship between educational qualification and easy usage of the internet banking.

Alternative hypothesis H1: There is significant relationship between educational qualification and easy usage of the internet banking.

 

Table 1

 

ANOVA

 

Sum of Squares

df

Mean Square

F

Sig.

Between Groups

1.173

2

.587

1.642

.214

Within Groups

8.934

25

.357

 

 

Total

10.107

27

 

 

 

 

Interpretation

 

The F ratio for two degrees of freedom is 1.642 and the p= .214 which is greater than .05, hence the null hypothesis is accepted and says that there is no significant relationship between the educational qualification and easy usage of the internet banking.

 

One Way ANOVA for Years of Experience in LVB and Level of Satisfaction in Using Internet Banking.

 

Null hypothesis H0: There is no significant relationship between years of experience in LVB and level of satisfaction in using Internet Banking.

Alternative hypothesis H1: There is significant relationship between years of experience in LVB and level of satisfaction in using Internet Banking.

 

Table 2

 

ANOVA

 

Sum of Squares

df

Mean Square

F

Sig.

Between Groups

5.745

2

2.873

1.673

.208

Within Groups

42.933

25

1.717

 

 

Total

48.679

27

 

 

 

 

Interpretation

 

The F ratio for two degrees of freedom is 1.673 and the p= .204 which is greater than .05, hence the null hypothesis is accepted and says that there is no significant relationship between years of experience in LVB and level of satisfaction in using Internet Banking.

 

CONCLUSION

 

In summary, it is quite clear that banking technology has emerged as a separate discipline in its own right. As regards future directions, the proliferating research in all fields of Technology and computer science can make steady inroads into banking technology because any new research idea in these disciplines can potentially have a great impact on banking technology.