Banks are using IT extensively to offer newer products and services to customers and automating internal processes.
The dependence on IT is such that the banking business cannot be thought of without IT.
The core of banking functions is acceptance of deposits and lending of money.
Further, other services such as demand drafts, bank guarantees, letter of credits, etc. are also provided.
Key features of a banking business are as follows:
Some of the major products and services provided by banks are:
Real Time Gross Settlement (RTGS) is an electronic form of funds transfer where the transmission takes place on a real-time basis.
In India, transfer of funds with RTGS is done for high value transactions.
National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one- to-one funds transfer. Under this Scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank.
Immediate Payment Service (IMPS) is an instant payment inter-bank electronic funds transfer system in India. IMPS offers an inter-bank electronic fund transfer service through mobile phones. Unlike NEFT and RTGS, the service is available 24/7 throughout the year including bankholidays.
Retail Banking: These are also called front-office operations that cover all operations which provide direct retail services to customers.
High Net-worth Individuals (HNI): Banks provide special services to customers classified as High Net-worth Individuals (HNI) based on value/ volume of deposits/ transactions.
Back operations: All operations done at the back end like general ledger, Management Information Systems, reporting, etc.
Specialized Services: Banks also perform other services such as loan, insurance broking, claims, underwriting, life insurance, non-life insurance, etc. However, these would be offered by separate entities set up by the bank.
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