Status of Information Technology in the Modern Scenario: A Screen Short of Indian Banking Sector

Subhadeep Dutta


Banking can simply be expressed as the business of keeping, lending, exchanging and issuing money [Barnhart and Barnhart, 2000]. It can also be express as the business of bankers. Banking to-day is under-going a radical transformation. The symptoms are obvious; new products, new players, new channels are appearing daily. This transformation is taking place across all sectors of the banking industry. Information Technology (IT) is one of the major issues on any bank chief executive’s agenda, thrust into prominence by the massive and increasing magnitude of its costs at a time when competitive pressure has never been greater, (Carrington et al., 1994). Information system or technology can be any organized combination of people, hardware, software, communications networks, and data resources that collect, transforms, and disseminate information in an organization. Banks urgently need to improve the ability to think strategically about information technology investments. Only banks that use their technology resources effectively have the opportunity to secure real competitive advantage in this fast changing industry through real product or service differentiation. The Indian banks are subject to tremendous pressures to perform as otherwise their very survival would be at stake. Information Technology (IT) plays an important role in the banking sector as it would not only ensure smooth passage of inter-related transactions over the electronic medium but will also facilitate complex financial product innovation and product development. The application of Information Technology (IT) and Electronic Banking (e-banking) is becoming the order of the day with the banking system heading towards virtual banking. As an extreme case of Electronic Banking (e-banking), World Wide Banking (WWB) on the pattern of World Wide Web (WWW) can be visualized. That means all banks would be interlinked and individual bank identity, as far as the customer is concerned, dose not exist. There is no need to have large number of physical bank branches, extension counters. There is no need of person-to-person physical interaction or dealings. Customers would be able to do all their banking operations sitting in their offices or homes and operating through internet. This would be the case of banking reaching the customers. This paper made an attempt to study various services provided by the bank with the help of Information Technology (IT), electronic banking (e-banking), service quality, banking system and confidentiality of data.


Electronic banking (e–banking) is generally an extension of traditional banking, using the internet as an electric delivery channel for banking products and services. The intense competitive environment is continuously forcing the banks to become customer-centric. To-day technology has emerged as a strategic resource for achieving higher efficiency, control of operations, productivity and profitability for Banks as well as it is the realization of their anywhere, anytime, anyway banking dream for customers. But instead of all these benefits, the awareness and adoption rate of banking services among the rural customers is still found very low. The banking to-day is redefined and re-engineered with the use of Information Technology (IT) and it is sure that the future of banking will offer more sophisticated services to customers with the continuous product and process innovations. Thus there is a paradigm shift from seller’s market to buyer’s market. So, banks also change their approach from Conventional Banking to Convenience Banking and Mass banking to Class Banking. The study examines various relevant issues relating to role of Information Technology (IT) in banking and recommends ensuring privacy and confidentiality of data’s, implement Information Technology (IT) and other Cyber laws properly. This will ensure the developmental role of Information Technology (IT) in the banking industry.

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