The banking sector has experienced a tremendous technological revolution that has paved the way for creating newer, better opportunities for its customers. The impact of technology on the banking industry is manifold and can be witnessed with the speed at which banks operate in the country today. Gone are the days of standing in long queues to open an account, receive a physical statement of account or wait days for loan approval. Each of these processes and more have improved with accuracy and precision, thanks to the positive impact of technology.
POSITIVE IMPACT OF TECHNOLOGY ON THE BANKING SECTOR-
(1)The biggest revolution that comes in banks is Digitization.
(2)Banking process is faster than before and more reliable. Maintenance and retrieval of documents and records have become much faster and easier.
(3)Computerized banking also improves the core banking system. With a core banking system, all branches have access to common centralized data and are interconnected.
(4)With the innovation of the MICR cheque processing system, the processing of cheques become more faster and efficient than before
(5)Unstructured supplementary service data (USSD) was launched by Government so people with no internet- connectivity too can access their bank accounts without visiting the branch.
(6)With increasing internet reach, internet banking was developed and is now offered by almost every bank. Through this, every transaction detail and inquiry can be performed online without visiting the bank.
(7)It offered more transparency in transactions.
(8)The scope of fraud in banks is being minimized through the use of passwords, and double authentication in online banking.
(9)Technology also leads to competition among the banks which eventually provides better services to people.
(10)With the introduction of mobile banking, one can access their bank from anywhere- anytime. Everything is one quick tap away.
(11)To facilitate better service, Banks have introduced Automated Banking Services Solutions like Cash Deposit Machines, Cheque Deposit Machines, and Passbook Printing Machine this service have become easier.
NEGATIVE IMPACT OF TECHNOLOGY ON THE BANKING SECTOR-
(1)The biggest negative impact of technology is the loss of Jobs as automation has replaced a number of jobs in the banking sector.
(2)Through technology comes to the threat of Cyber Attacks, a loophole in the system, and millions of data can be lost in the blink of an eye.
(3)These technologies consume less time, but they also sometimes make people careless which causes loss of personal details as happened in 2016, many debit card details of big banks were compromised.
CONCLUSION
It should be noted that innovation is a standout amongst the most significant variable for the advancement of humankind. Data innovation and correspondence is the greatest volumes in the field of innovation, the telephone is for the handling, stockpiling and scattering of data by electronic methods. Banking is developing quickly with the utilization of innovation in the ATM, bank web-based banking, versatile banking and so on. Plastic card is a financial item that accommodates the necessities of the retail fragment and has seen their numbers develop in geometric movement lately. This development has been unequivocally impacted by advancements in innovation. Since the coin has two sides, innovation additionally has different sides in the financial sector- positive and negative. The dangers are high, however, they are generally limited and technology will become the backbone of the banking industry in the near future.
FAQs
For financial services, online banking enabled banks to deliver lower transaction costs, more easily integrate services, and more accurately target consumers with their marketing.
How is technology disrupting the banking industry? ›
The way FinTech disrupts the banking industry is by offering an improved customer-centered approach. A report by the Economist shows that FinTech is fast making banks more customer-centered in their business model. Banks now have more insight into more information through Big Data and Artificial Intelligence.
How is technology changing banks? ›
(2)Banking process is faster than before and more reliable. Maintenance and retrieval of documents and records have become much faster and easier. (3) Computerized banking also improves the core banking system. With a core banking system, all branches have access to common centralized data and are interconnected.
What are technology risks in banking sector? ›
Technology risk arises from the use of computer systems in the day-to-day conduct of the bank's operations, reconciliation of books of accounts, and storage and retrieval of information and reports. The risk can occur due to the choice of faulty or unsuitable technology and adoption of untried or obsolete technology.
How will technology change banking in the future? ›
Digital banking transformation allows financial institutions to enhance risk management practices. Banks can detect and mitigate fraud more effectively by leveraging advanced analytics, AI, and ML, accurately assessing credit risk, and identifying real-time anomalies.
How many ways is technology used in banking? ›
Mobile banking lets people view their account balances, make transfers and deposits, and even make payments from their smartphones. Several small business lenders have made it possible for business owners to start and manage business lines of credit and check loan balances.
How is technology impacting the banking sector disadvantages? ›
Cybersecurity Risks and Data Breaches. The implementation of new technologies in the banking sector will, of course, have an impact on cybersecurity risks and data breaches. Both are caused by cybercrime aimed at gaining access to customers' bank accounts, credit cards, and other sensitive information.
How digitalization has affected the banking sector? ›
Digitization has made banking easier and more convenient for customers. Customers no longer have to wait in long queues at the bank or worry about bank hours. With the help of online banking and mobile apps, customers can perform banking transactions anytime, anywhere.
How is AI disrupting the banking industry? ›
AI in Banking: How AI is Disrupting the Banking Industry. AI in banking has tremendously changed the way banks operate. It has modified the banking and finance sectors, by providing improved fraud detection, automating tasks, predicting market trends, and assisting in better decision-making.
How can we improve technology in banking sector? ›
Data-Driven Decision Making
Banks can analyze customer behavior, transactional data, and market trends. Data-driven decision-making allows banks to derive growth areas and pain points from the trends, optimize operations, and drive growth. This gives banks valuable insights to improve their services to customers.
Today's customers want things to be easy and personalized at every interaction point. Banks adopt trends like mobile banking, contactless payments, and AI customer service. However, this helps meet expectations and provide exceptional experiences. Technology is reshaping banking with blockchain and cryptocurrencies.
What are some technological innovations in banking? ›
Top 10 Banking Innovations amp; Trends in 2024
- Artificial Intelligence. AI banking provides high-quality banking services to customers and saves operating costs. ...
- Open Banking. ...
- Hyper-Personalized Banking. ...
- Blockchain Banking. ...
- Banking of Things. ...
- Cybersecurity. ...
- Immersive Technologies. ...
- Banking Process Automation.
From customer service chatbots to software robot bankers, disruptive digital technologies like artificial intelligence (AI), robotics, and blockchain are changing the financial services industry.
What is technology in banking sector? ›
What are banking technology solutions? Banking technology solutions provide financial services organizations with key business functionalities (both customer and internal operations facing), execution expertise, infrastructure and hosting.
What is the biggest risk in the banking sector? ›
Credit risk is the biggest risk for banks. It occurs when borrowers or counterparties fail to meet contractual obligations. An example is when borrowers default on a principal or interest payment of a loan. Defaults can occur on mortgages, credit cards, and fixed income securities.
What are the benefits of technology in banking? ›
Faster transactions - when you conduct your banking online, your transactions are processed almost instantly. Having transactions show up on your account immediately allows you more control of timing for transactions and a more accurate view of your current account balance.
How technology helps make banking more efficient? ›
Technology has made banking transactions more efficient and quicker. Online banking permits customers to review their account information at their convenience. It also allows for automatic deposits, automatic bill payments and online electronic transfer of funds from different accounts.
