UOI -3

Class XII
Banking

Vocational: INNOVATIONS IN BANKING TECHNOLOGY

Employability: Information & Communication Technology – IV
 UNIT 2

INNOVATIONS IN BANKING TECHNOLOGY

What exactly is Core Banking?

Core Banking Solution (CBS) is networking of bank branches, which allows customers to
manage their accounts, and use various banking facilities from any part of the world.

In simple term, there is no need to visit your own branch to do banking transactions. You can do
it from any location, any time. You can enjoy banking services from any branch of the bank
which is on CBS network regardless of branch you have opened your account.

For the bank which implements CBS, the customer becomes the bank’s customer instead of
customer of particular branch.

Execution of Core banking system across all branches helps to speed up most of the common
transactions of bank and customer. In Core banking, the all branches access banking applications
from centralized server which is hosted in secured datacentre.

Banking software/application performs basic operations like maintaining transactions, balance of

withdrawal & payment, interest calculations on deposits & loans etc. This banking applications
are deployed on centralized server & can be accessed using internet from any location.
Why we need Core Banking Technology ?

Nowadays, the use of Information Technology (IT) is must for the survival & growth of any
organization and same applicable to banking industry also. By using IT in any industry, banks
can minimize the operation cost; also banks can offer products & services to customers at
competitive rates.

CBS is required:

 To meet the dynamically changing market & customer needs.

 To improve &simplify banking processes so that bank staff can focus on sales &
marketing stuff.
 Convenience to customer as well as bank.
 To Speed up the banking transactions.
 To expand presence in rural & remote areas.

Basic elements of CBS that helps customers are:

 Internet Banking
 Mobile Banking
 ATM
 POS & kiosk systems
 Fund Transfers – NEFT, RTGS

Benefits of Core banking –

Core banking solutions are beneficial to both banks as well as customers.

A] Benefits for Customers

 Quicker services at the bank counters for routine transactions like cash deposits,
withdrawal, passbooks, statement of accounts, demand drafts etc.
 Anywhere banking by eliminating branch banking.
 Provision of banking services 24 X 7.
 Fast payment processing through Internet banking, mobile banking.
 Anytime anywhere banking through ATMs.
 All branches access applications from central servers/datacentre, so deposits made in any
branch reflects immediately and customer can withdraw money from any other branch
throughout the world.
 CBS is very helpful to people living in rural areas. The farmers can receive e-payments
towards subsidy etc. in his account directly. Transfer of funds from the cities to the
villages and vice versa will be done easily.

Benefits for Banks

  Process standardization within bank & branches.
 Retention of customers through better customer service.
 Accuracy in transactions & minimization of errors.
 Improved management of documentation & records – having centralized databases
results in quick gathering of data & MIS reports.
 Ease in submission of various reports to the Government & Regulatory boards like RBI.
 Convenience in opening accounts, processing cash, servicing loans, calculating interest,
implementing change in policies like changing interest rates etc.

What is 'Online Banking'

Online banking allows a user to execute financial transactions via the internet. Online banking is
also known as "internet banking" or "web banking." An online bank offers customers just about
every service traditionally available through a local branch, including deposits, which is done
online or through the mail, and online bill payment.

Advantages of Online Banking

Convenience is a major advantage of online banking. Basic banking transactions such as paying
bills and transferring funds between accounts can easily be performed at times convenient to
consumers. In effect, consumers can perform banking transactions 24 hours-a-day, seven-days a
week. Online banking is fast and efficient. Funds can be transferred between accounts almost
instantly, especially if the two accounts are held at the same banking institution. Banking
accounts can be monitored more closely thanks to online banking. This allows consumers to
keep their accounts safe. Around-the-clock access to banking information provides early
detection of fraudulent activity that has the potential to cause financial or damage loss. Online
banking allows for the opening and closing of fixed deposit and recurring deposit accounts that
typically offer higher rates of interest.

Disadvantages of Online Banking

For a novice online banking customer, using systems for the first time may present challenges
that prevent transactions from being processed. Although online banking security is continually
improving, such accounts are still vulnerable when it comes to hacking. Consumers are advised
to use their data plans, rather than public Wi-Fi networks when using online banking, to prevent
unauthorized access. Additionally, online banking is dependent on a reliable internet connection.
Connectivity issues from time-to-time may make it difficult to determine if banking transactions
have been successfully processed. On occasion, consumers may prefer face-to-face interactions
for more complex banking issues.

DEFINITION of 'Mobile Banking'

Mobile banking is the act of doing financial transactions on a mobile device (cell phone, tablet,
etc.). This activity can be as simple as a bank sending fraud or usage activity to a client’s cell
phone or as complex as a client paying bills or sending money abroad. Advantages to mobile
banking include the ability to bank anywhere and at any time. Disadvantages include security
concerns and a limited range of capabilities when compared to banking in person or on a
computer.

What is the difference between Internet Banking and Mobile banking?

The Digital user is fast, sharp and always on the move. They are always connected and ready to
try new products on the shelf. As far as banking is concerned, they like it swift and convenient.
In a Digital world that is constantly evolving, they are always willing to keep up with the latest
trends that are making banking simpler. The same has happened with the onset of Internet
Banking and Mobile Banking. It has made banking simpler, easier and extremely convenient.

What started with cashless transactions with Credit Cards and Debit cards, has now moved to an
all new level with Mobile apps and Internet Banking. There used to be a time when swiping a
card at a shop would mean a big leap of faith but now everything is on your screen. Up, close
and personal. You shop online, you pay online. You book movie tickets online and you make the
payment online. Every minor transaction can happen without walking across to a vendor
personally or actually exchanging cash. While some swear by Internet banking, there are some
who prefer to use their mobile Apps for banking. But what is the difference between Internet
Banking and Mobile Banking?

Well, first things first. It all started with Internet Banking. Mobile banking is a much latest
entrant into the digital world of banking. When Internet Banking took off, it felt like the go to
thing for all transactions. Never before could a customer access his/her account balance and
make transactions sitting on their sofa in the comfort of their home. All you require is your
customer ID and the rest falls into place. Right from making credit card payments to setting up
your mutual fund and loan repayment debits, everything is a part of Internet banking. If you
needed to buy anything, you could immediately make a payment online and there that was, your
transaction was done. There is no waiting time; there is no need to check if there was cash in
your wallet. All you needed was your login credentials.

Mobile banking is just the thing you need when you are on the move. In the absence of a
laptop/computer, your mobile app is the answer to all your banking needs. Be it a phone recharge
or a fund transfer, a mobile app takes care of all your basic utility bill payments for which you
would, once upon a time make multiple trips. What mobile banking gives you is the freedom to
make a transaction irrespective of the place or time. You maybe commuting or waiting at the
airport, your mobile app is always handy! Further you can locate ATMs and add beneficiary
payees. All this and more adds to your convenience as a user.

Mobile Banking and Internet banking are two sides of the same coin. The screens have changes,
the sizes have become smaller and banking has become simpler.
What is an 'Automated Teller Machine - ATM'

An automated teller machine (ATM) is an electronic banking outlet, which allows customers to
complete basic transactions without the aid of a branch representative or teller. Anyone with a
credit card or debit card can access most ATMs. The first ATM appeared in London in 1967, and
in less than 50 years, ATMs spread around the globe, securing a presence in every major country
and even tiny little island nations such as Kiribati and the Federated States of Micronesia.

BREAKING DOWN 'Automated Teller Machine - ATM'

There are two primary types of ATMs. Basic units allow customers to withdraw cash and receive
reports of their account balances only. The more complex machines accept deposits, facilitate
line of credit payments and report account information. To access the advanced features of the
complex units, a user must be an account holder at the bank that operates the machine.

Analysts anticipate ATMs will become even more popular and forecast an increase in the
number of ATM withdrawals. ATMs of the future are likely to be full-service terminals instead
of or in addition to traditional bank tellers.

ATM Ownership

In many cases, banks and credit unions own ATMs. However, individuals and businesses may
also buy or lease ATMs, on their own or through an ATM franchise. When individuals or small
businesses such as restaurants or gas stations own ATMs, the profit model is based on charging
fees to the machine's users. Banks also own ATMs with this intent, but in addition, the
convenience of an ATM is a service banks use to attract clients. ATMs also take some of the
customer service burden off bank tellers, saving banks money in payroll costs.

ATM Fees

Account holders can use their bank's ATMs at no charge, but accessing funds through a unit
owned by a competing bank usually incurs a small fee. As of 2016, the average fee to withdraw
cash from an out-of-network ATM is $4.52. Seattle boasts the lowest average ATM fees at
$4.21, while Atlanta tends to have the highest average fees at $5.15. In 2014, consumers
withdrew a total of $92 billion in cash from ATMs.

Using ATMs Abroad

For travelers, ATMs make it simple to access their checking or savings accounts from almost
anywhere in the world. When travelers use foreign ATMs, they receive a better exchange rate
than they would at most currency exchange offices. Additionally, using an ATM is easier than
cashing traveler's checks, and arguably, it makes travel safer, as the traveler doesn't have to carry
a lot of cash. However, the account holder's bank may charge a transaction fee or a percentage of
the amount exchanged. Most ATMs do not list the exchange rate on the receipt, making it
challenging to track spending.
Keywords:

CPU – Central Processing Unit

ALU – Arithmetic Logical Unit
TPS – Transaction Processing System
CORE - Centralised On-line Real Time Environment
SOA - Service Oriented Architecture
BPM - Business Process Management
ECM - Enterprise Change Management
OTP - One-time password
PKI - Public Key Infrastructure
PIN - Personal Identification number
NBFC – Non Banking Finance Company

Practice Questions
Choose the correct answer:
• ATM stands for
* Any Time Money * Automated Teller Machine
* Automobile Trending Machine * Alternating Turing Machine
• Phishing
* is an electronic instrument for fishing * is related to cyber crime
* is one of the latest forms of wishing somebody * None of the above
• Currently, which bank has the highest ATMs network?
* ICICI Bank * SBI Bank * HDFC Bank * Central Bank
Fill in the blanks:
• Full form of ALU is ____________
• Full form of CPU is ____________
• Computerized accounting uses the concept of _______
• Data validation is made by the ______ and _____ procedures.
• CBS is based on ___ _________ architecture.
• CBS helps in customer convenience through _____ and _____ Banking
• AML stands for ___________
• CORE stands for ______ ____ ____ _____ environment.
 • Online Banking _________ and Online Banking ______________ is need for online
banking access.
• Controls embedded at various in CBS are: ____ controls, ____ ____ controls and security
and ____ _____ controls

Answer in detail:
• State the meaning and characteristics of Computer?
• Explain the limitations of a Computer?
• Explain the role of Computers in Accounting?
• Differentiate between Manual accounting and Computerised accounting system?
• What are the advantages and disadvantages of using Computers in Banking?
• What are advantages of Core Banking solution to the Bank?
• What are the controls available in CBS system and explain each of them?
• What are the advantages / disadvantages of Online / Internet Banking?
• What are the services provided through mobile banking?
• What are the frauds in Credit card?
• Explain Phishing, skimming and spoofing?
 Unit 3
Information & Communication Technology – IV

List of basic computer shortcut keys:

 Alt + F--File menu options in the current program.

 Alt + E--Edits options in the current program.
 F1--Universal help (for any sort of program).
 Ctrl + A--Selects all text.
 Ctrl + X--Cuts the selected item.
 Ctrl + Del--Cut selected item.
 Ctrl + C--Copy the selected item.
 Ctrl + Ins-- Copy the selected item.
 Ctrl + V--Paste the selected item.
 Shift + Ins -- Paste the selected item.
 Home -- Takes the user to the beginning of the current line.
 Ctrl + Home--Go to the beginning of the document.
 End -- Go to the end of the current line.
 Ctrl + End -- Go to the end of a document.
 Shift + Home -- Highlight from current position to beginning of the line.
 Shift + End -- Highlight from current position to end of the line.
 Ctrl + (Left arrow) -- Move one word to the left at a time.
 Ctrl + (Right arrow) -- Move one word to the right at a time.

A spreadsheet is a computer application for organization, analysis and storage of data in tabular
form. Spreadsheets were developed as computerized analogs of paper accounting worksheets. The
program operates on data entered in cells of a table.

A spreadsheet is a large sheet having data and information arranged in rows and columns. As you know,
Excel is one of the most widely used spreadsheet applications. It is a part of Microsoft Office suite.
Spreadsheet is quite useful in entering, editing, analysing and storing data.

Spreadsheet programs have become very popular because of the following features:

• Built-in functions make calculations easier, faster and more accurate.

• Large volumes of data can be easily handled and manipulated.

• Data can be exported to or imported from other similar software applications.

 • Data can be easily represented in pictorial form like graphs or charts.

• Formulae cells get automatically recalculated whenever underlying data values are changed.

What is the main purpose of spreadsheet?

The three most common general uses for spreadsheet software are to create budgets, produce
graphs and charts, and for storing and sorting data. Within business spreadsheet software is used
to forecast future performance, calculate tax, completing basic payroll, producing charts and
calculating revenues.

How do you use spreadsheet application?

1. Create a Spreadsheet and Fill It with Data
1. Click the red "NEW" button on your your Google Drive dashboard and select "Google
Sheets"
2. Open the menu from within a spreadsheet and select "File > New Spreadsheet"
3. Click "Blank" or select a template on the Google Sheets homepage

What is presentation?
A presentation program is a software package used to display information in the form of a slide show. It
has three major functions: an editor that allows text to be inserted and formatted, a method for inserting
and manipulating graphic images, and a slide-show system to display the content.

What are the benefits of presentation?

Businesses and professional firms use presentations to inform, educate, motivate and persuade
internal and external audiences. They build presentations into sales, training and internal
communication programs, using the power of words and images to engage their audience and
retain attention.
Common Features of Interactive Presentation Software—
 Customizable Content. ...
 Transition Effects. ...
 Linear Presentation of Content. ...
 Templates. ...
 Speaker Notes. ...
 Shareability. ...
 Hotspots. ...
 Device Adaptability

Worksheet
1. By default, how many worksheets are there in a Calc workbook?
 2. How are rows numbered in Calc?
3. Name the column after column Z.
4. What is the address of a cell formed by the intersection of 3rd column 5th row?
5. Name the cells in the range A2:B5.
6. How can you select entire worksheet using keyboard?
7. How can you select entire column number B?
8. Which key will you press if you want to select multiple ranges of cells?
9. Name the column after BZ?
10. How will you refer to a cell in column B and row 3?
11. How will you refer to range of cells in row 5?
12. How will you refer to range of cells in column D through F and rows 3 through 8?
13. Write mathematical operator for the following operation: a. Multiplication b. Division 5.
If formula in cell C3 is =A3+B3, what formula will be copied in cell D3?
14. How will you write a function to find average of numbers 5, 12, and 17?
15. Name the function used to find total of numbers in the range of cells A1 to A10.
16. Name the menu used to print the document.
17. What error will you get if the column is not wide enough to display the value?

Employability Subjective Question

Q.1 The short cut command to COPY a text is____

a) Ctrl+ V
b) Ctrl+ C
c) Ctrl+ P

Q.2 ________of a presentation are displayed one by one on the screen.

Q.3 Explain any two benefits of Spreadsheet for a banker?

Q.4 A _______ is a systematic display of information.

Q.5 Mention any two ways to run a slide show.

Q.6 How a presentation can help the bank manager to showcase branch reports to higher
authorities?

Q.7 Name any two software’s used for creating presentation.

Q.8 What is presentation? How is it useful for bank employee?

Q.9 Name any two-software’s used for creating presentation