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Concepts of Digital Banking
- 2. CONTENTS Introduction todigital banking Digitization, digitalization and digital transformation Definition of Digital banking Channels of Digital Banking Automated Teller Machine Input devices and Output devices of ATM ATM networking Working process of ATM
- 3. Introduction to DigitalBanking The term “digital banking”, just like any new buzzword, means different things to different stakeholders in a service organization. For customers, it can mean myriad of new services and products resulting in a pleasurable buying/spending experience.
- 4. Continued For thedecision-making team in the organization, it could mean setting up of state-of-the-art ICT infrastructure coupled with a good dose of analytics in order to provide an excellent customer experience, which is a precursor to having sustained and profitable customer relationships.
- 5. Continued For theregulator or third party, it could mean the ability to provide accurate and reliable information on the fly. To start with, let us distinguish between the terms “digitization” and “digitalization”. The term “digitize” describes the process by which any form of data is converted into a digital format.
- 6. Continued For example: convertingan analog audio signal into its digital form, Converting credit records and applications into a soft copy, usually into a database, etc. In a broader business context, “analytics” can be considered as further digitizing the information into new knowledge or insights in order to make a decision.
- 7. Continued The term“digital” is typically used to refer to the storage of data in the form of digital signals represented using the numbers 1 and 0. Here, the term refers to information and the format in which it is stored, such as digital music, digital customer records, etc.
- 8. Continued The term“digitalization” goes beyond simply digitization. In this sense, books don't simply become eBooks, but a complete interactive and multimedia experience; business processes give way to online dialogues between parties that were not previously connected directly.
- 10. Continued Thus, anorganization in order to become digital might focus on the automation of processes to make it more efficient. A company focusing on digitalization might aim to realize more effective outcomes from those processes by improving the customer engagement.
- 11. Digital Banking Definition 1.“Digital Banking—a new concept in the area of electronic banking, aims to enrich standard online and mobile banking services by integrating digital technologies, for example strategic analytics tools, social media interactions, innovative payment solutions, mobile technology and focus on user experience.”
- 12. Digital Banking Definition 2.“Digital Banking is the application of technology to ensure seamless end-to-end (STP in the 'old‘ jargon) processing of banking transactions/ operations; initiated by the client, ensuring maximum utility to the client in terms of availability, usefulness and cost; to the bank in terms of reduced operating costs, zero errors and enhanced services.” -Institute for Development and Research in Banking Technology (IDBRT)
- 13. Continued However, anydefinition of digital banking is only centred around enhanced customer service and user experience based on their engagement, expectations and experience, which can be captured in a variety of datasets resulting in a huge repository which is akin to a digital super highway.
- 14. Channels of DigitalBanking ATM Mobile banking Internet banking Cards Cash deposit machines Cash recyclers Prepaid instruments Point of sale terminals Kiosks Mobile wallets
- 15. Automated Teller Machine(ATM) What is an Automated Teller Machine (ATM)? An ATM is a computerised machine that provides customers of banks the facility of accessing their accounts for dispensing cash and to carry out other financial & non- financial transactions without the need to visit the bank branch. – Reserve Bank of India (RBI)
- 16. Continued It isan electronic device that is used by only bank customers to process account transactions. The users access their accounts through a special type of plastic card that is encoded with user information on a magnetic strip. The strip contains an identification code that is transmitted to the bank’s central computer by modem.
- 17. Continued The usersinsert the card into ATMs to access the account and process their account transactions. The automated teller machine was invented by john Shepherd-Barron in the year of 1960.
- 18. The automatedteller machine consists of mainly two input devices and four output devices that are; Input Devices: Card reader Keypad Output Devices: Speaker Display Screen Receipt Printer Cash Depositor
- 19. Input Devices ofATM Card Reader: The card reader is an input device that reads data from a card. The card reader is part of the identification of your particular account number and the magnetic strip on the backside of the ATM card is used for connection with the card reader. The card is swiped or pressed on the card reader which captures your account information i.e. the data from the card is passed on the host processor (server).
- 20. Continued The hostprocessor thus uses this data to get the information from the cardholders.
- 21. Input Devices ofATM Keypad: The card is recognized after the machine asks further details like your identification number, withdrawal, and your balance inquiry. Each card has a unique PIN so that there is little chance for some else to withdraw money from your account. There are separate laws to protect the PIN code while sending it to the host processor.
- 22. Continued The PINis mostly sent in encrypted form. The keyboard contains many keys and is interfaced to the processor.
- 23. Output devices ofATM Speaker: The speaker provides audio feedback when a particular key is pressed. Display Screen: The display screen displays the transaction information. Each step of withdrawal is shown by the display screen. A CRT screen or LCD screen is used by most of the ATMs.
- 24. Display Screen ReceiptPrinter: The receipt printer prints all the details recording your withdrawal, date and time, and the amount of withdrawal and also shows the balance of your account in the receipt. Cash Dispenser: The cash dispenser is the heart of the ATM. From this portion, the user can collect the money. This is a central system of the ATM from where the required money is obtained.
- 25. Continued The cash dispensermust count each bill and give the required amount. If in some cases the money is folded, it will be moved to another section and becomes the reject bit. All these actions are carried out by high precision sensors. A complete record of each transaction is kept by the ATM with the help of an RTC device.
- 26. ATM Networking: Theinternet service provider (ISP) also plays an important role in the ATMs. This provides communication between ATM and host processors. When the transaction is made, the details are input by the cardholder. This information is passed on to the host processor by the ATM. The host processor checks these details with an authorized bank. If the details are matched, the host processor sends the approval code to the machine so that the cash can be transferred.
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- 28. Steps to WithdrawMoney from ATM Step 1 • Insert ATM card Step 2 • Select Language Step 3 • Enter 4-Digit ATM Pin
- 29. Continued Step 4 • Selectthe type of Transaction Step 5 • Select the Type of Account Step 6 • Enter the withdrawal amount
- 30. Continued Step 7 • Collectthe Cash Step 8 • Take a printed receipt , if needed