Recent Trends in Banking Sector

Dr.S.VIJAYALAKSHMI.

Assistant Professor

PG & Research Department of Commerce,

Cardamom Planters’ Association College, Bodinayakanur.

Electronic fund transfer (EFT)

It is a system of transforming money from one bank account direct to another without any paper money charging hands. It refers transfer of funds initiated through on electronic terminal, including credit cards, ATM, and point of sale transactions. It used for both credit transfer and debit transfer.

Real time gross settlement (RTGS)

Real time gross settlement is a fund transfer system. Settlement in “real time” means the transactions happen almost immediately “gross settlement “means transaction is settled one to one basis unlike national electronic fund transfer (NEFT). Where the transaction happen in bulk at a given point in time during the day. This is mainly used for transaction which high in value and need to be cleared immediately .Service transaction are available to banks from 9.00 am to 4.30 p.m in a week and 9.00 am to 4.00 pm in Saturday’s for settlement at from RBI’s end.

IMPS

• NPCI introduced the facility in Nov 2010.Fund Transfer service to allow customer instantly transfer money online or from mobile phone using their Registered mobile Number.
• Even during holidays bank provide these online money tranfer service
• Minimum transfer limit Rs.2lakhs

Electronic Clearing Service

ECS Initiated by RBI. Bulk & represent fund from one bank account direct to another account. Making Payment such as the distribution of dividends, interest, salary, pension, etc.

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SWIFT

It Stands Society for world wide inter bank financial Telecommunication.

Transfer the fund from one bank to another bank . Swift code is a standard format of bank identifier code (BIC). BIC consist of 8 to 11character

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PHONE BANKING:-

Latest trends is the introduction of mobile online banking services.Phone and mobile banking are a fairly recent up-gradation for the banking industry. Its channels function through an Interactive Voice Response System (IVRS) or Telebanking executives of the banks.

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Biometric verification system

For the purpose of security the bio-metric authentication places a major role. Now a day’s many organisations are implementing bio-metric authentication. It works comparing two sets of data

• Owner of the device
• Visitor of device

Both are one and same gives access to person. There are different types of scanners

• Finger print scanner
• Eye scanner
• Speaker recognition

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Demat Account

Demat Account is an electronic account to store shares and securities.

This eliminates the problems regarding payment and holding physical securities certificates.

Demat account is opened by several banks and brokers. This trend in banking helps bank customers to buy shares online. Every investor i.e. smaller or bigger investors can have registration through stockbrokers like HDFC Securities, Kotak Securities, Upstox, etc.

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UNIVERSAL BANKING

All the operations now can be performed in a single step. Electronic conveniences are provided for a busy life. Below are various services provided by E-Bank:

1. Check account balance

2. Keep track of account transactions

3. Make third-party payments

4. Transfer funds

5. Download transactions

6. Order chequebooks

7. Request stop payments

8. Apply for a Loan

Point of sale (POS)

POS is making a payment transaction in exchange for goods at that time. The transaction can be done by using a debit or credit card. Every time PIN needs to be entered to make a transaction.

Now, the bank will send that payment from the buyer’s account to the seller’s account. These transactions are mostly used in malls where people do shopping with their cards.

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UPI (Unified Payments Interface)

UPI has changed the way payments are made. It is a real-time payment system that enables instant inter-bank transactions with the use of a mobile platform developed by the NPCI.UPI makes funds transfer available 24 hours, 365 days unlike other internet banking systems. UPI is quicker, safe, and easy to use. Examples- Google pay, Paytm, Bhim UPI, etc

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Blockchain Technology

Blockchain is known for cryptocurrency or online currency like Bitcoin which helps in keeping track of transactions in a secure and verifiable way.

As blockchain is highly secure and easy to operate, it can be used for promoting transparency during payments & currency exchange in banking. It can also help banks to save money and improve customer experience.

Artificial Intelligence Robots

Most banks use chatbots or Artificial intelligence robots for assistance in customer support services.These technologies are made up of machine learning, chatbots, robotic process automation, and intelligent analytics.

This technology removes the chances of human error and creates accurate solutions for customers. Also, it can recognize fraudulent behaviour, and assists in financial decisions. Letters of credit

A letter of credit is a legal document from a bank that says the bank will pay the exporter when the conditions in the letter are met. In effect, the bank is liable to pay the amount to the seller.

The issuing bank ( buyer’s Bank ) pays the seller through the advising bank (seller’s bank). The buyer of goods pays the issuing bank a fee for its services. GLOBALIZATION OF BANKING

Globalization has come out as a prime mover in the Indian banking system. The banking sector rises after the policy of liberalization in 1991 by opening up banking and other sectors.

Foreign banks that wanted to set up their offices/branches in India have been granted licenses by RBI. It helps India to improve its technology.

Benefits of Recent Banking Trends

• Easy to access banking services
• Can do transactions or transfer anytime
• Reduces the banking cost
• Reduces corruption & money laundering
• More services to the customers

1)Hyper personalization in the banking industry�

• Highly personalized digital interactions
• creates loyalty by recognizing past interactions and anticipating future needs.

Example: API,fintech

2)Artificial intelligence in the entire banking industry

• providing customers with 24/7 support and personalized recommendations.
• Help banks improve fraud detection and reduce financial crime risk.
• Example: machine learning

 3. Open banking

• Meaning

 Sharing customer data between banks and other financial institutions, such as bank accounts, transactions made, choosing banking products, and other financial information with third-party providers.

4. Payments 4.X as a trend in banking

• bank customers have access to more personalized financial services that are faster, more efficient, and more secure than legacy solutions.
• Example:debit cards and bank transfers, using new technologies such as blockchain, AI, and automation

5. Low-code or no-code platforms

• software development process using such platforms is much , as they contain ready-made components to build a product, process, or service with minimal programming knowledge.

6. Security and legacy systems as a trend in banking in 2024

• increasingly sophisticated analytical tools to detect suspicious activity and enhance anti-fraud efforts.
• biometric technologies, such as facial recognition and iris scanning, to replace traditional passwords and PINs.

7. RegTech in banking

• RegTech is expected to disrupt the regulatory landscape soon, providing advanced technology solutions to compliance issues.
• Example: Know-Your-Customer (KYC)

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 8. Robotic Process Automation (RPA)

• uses software robots or “bots” to automate repetitive, rule-based tasks.
• This automation not only minimizes human error, but also speeds up processes.

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9.Blockchain

• Blockchain, a decentralized ledger technology, provides a secure and transparent platform for transactions
• The lack of intermediaries in blockchain transactions results in significantly reduced transaction fees, making cross-border transactions faster and cheaper.

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10. Internet of Things (IoT)

• opportunity for a more customized and efficient service delivery.
• IoT devices transmit real-time data, allowing banks to precisely analyze the data stream and quickly detect any anomalies or suspicious activities associated with a customer’s account.

CYBER SECURITY THREATS AND PROTECTING YOURSELF

1. Advance Fees Fraud

2. Phishing Fraud

3. Card Skimming

4. Accounting data fraud

5. Account opening fraud

6. Cheque kiting

7. Cheque fraud

8. Counterfeit securities

9. Bank hacking fraud

10. Loan fraud

11. Money laundering fraud

12. Money transfer fraud

13. Letters of Credit

14. Telex Fraud

CONCLUSION

An upgradation of technology banks are playing vital role in economic development. Banking sector in India is resulting with increased growth in customers. By providing innovative facilities of banks. The changes made by banks are mostly focused on financial inclusion for expansion into rural areas and bringing stability by boosting credit growth making banking services near to the customer directly and reducing customer valuable time.