1. The Impact of Information Technology in Banking System
R.Priyanga #
1, V.Sathyabama*
2
# M.Phil Scholar, Department of Computer Science, Theni Arts & Science College, Theni,
*Assistant Professor, Department of Information Technology, G.Venkataswamy Naidu College,Kovilpatti,
1
priyanga021994@gmail.com ; 2
sathyasuresh@gmail.com
Abstract
The appearance of data innovation to each part of human life and business has been obvious to
the point that it doesn't should be complemented more. Data innovation has been of extraordinary
substance in managing an account framework. This examination expects to explore the impact of
data innovation in the saving money arrangement of Bank. The information are acquired both
through the clients and the workers. The information were then broke down utilizing the correct
rate and the 5-point Liker scale to decide the effect of Information innovation in the saving money
framework undertakings. The discoveries at that point demonstrated that Information innovation
adds to the saving money framework in three diverse routes as tails: IT spares the season of the
clients and the representatives obviously, IT chops down the costs and IT encourages the system
exchanges.
Key words: Information Technology; time saving; expenses; network transactions

2. INTRODUCTION
Every one of the necessities of present day life conveyed light to the way that data for the
cutting edge association is an asset parallel in significance to land, work and capital. It is
exceptionally imperative and an inestimable asset. It is never again news that we are presently in
data age that is portrayed by a regularly changing data innovation insurgency and a data
superhighway on which each corporate element and calling must more, on the off chance that it is
to make due in the 21st century.
The area that has been most profoundly influenced by the data innovation advancements is
the managing an account framework. The data innovation has turned into a basic business asset
since its nonattendance could bring about poor choices and at last business disappointment.
Innovation has opened up new markets, new items, new administrations and proficient conveyance
channels for the saving money industry. Online gadgets saving money, portable managing an
account and web keeping money are only a couple of cases.
Data Technology has additionally furnished saving money industry with the fortitude to
manage the difficulties the new economy postures. Data innovation has been the foundation of late
money related area changes went for expanding the speed and dependability of budgetary activities
and of activities to fortify the saving money part.
The IT upset has set the phase for exceptional increment in monetary action over the globe.
The advance of innovation and the improvement of overall systems have essentially decreased the
cost of worldwide assets exchange.
It is data innovation which empowers banks in meeting such exclusive requirements of the
clients who are all the more requesting and are additionally more techno-astute contrasted with their
partners of the yester years. They request moment, whenever and anyplace saving money offices.
Different examines demonstrate that data innovation has been giving answers for banks to
deal with their bookkeeping and back office prerequisites. This has, be that as it may, now offered
approach to extensive scale utilization in administrations went for the client of the banks. IT
additionally encourages the presentation of new conveyance channels- - as Automated Teller
Machines, Net Banking, Mobile Banking and so forth. Further, IT arrangement has expected such
abnormal states that it is never again feasible for banks to deal with their IT executions on an
independent premise with IT upset, banks are progressively interconnecting their PC frameworks
crosswise over branches in a city as well as to other geographic areas with rapid system foundation,
and setting up neighborhood wide region organizes and associating them to the Internet.
Subsequently, data frameworks and systems are presently presented to a developing number.
With everything taken into account, this propitious innovation impacts the managing an
account industry, principally in the accompanying three viewpoints:
1. Technology is influencing competition and the degree of contestability in banking.
Due to the development of technology, bank’s superiority in information is deteriorated. Entry
barrier have been declining, new competitor have emerged. Some financial products and services
have become more transparent and commodities, customer show willing to unbundled the demand
for financial products and services, all these lead to a more competitive market environment. Due
to lowered entry and exist and deconstruction, for some sub-financial markets, contestability in
banking is also raised.

3. 2. Technology influence Economy of scale:
Focused weight drive banks to bring down their cost. Bank looks to get economy of scale in
bank parade as opposed to being a major bank. Bank looks to secure the ideal business structure,
and secure the focused basic of economy of scale. There are different choices to get economy of
scale, including joint wander and confederation of monetary firms. Little firms likewise can get
economy of scale by outsourcing, i.e. purchase in economy of scale.
3. Technology influence the economics of delivery
Technology has a major impact on the way banking and financial services are delivered. A wide
range of alternative delivery mechanism becomes available, Internet, ATM… these Reduces the
dependence on the branch network as a core delivery mechanism. With the development of
technology, the financial systems are substantially over-supplied with delivery system through a
duplication of network, bank has to change their delivery strategy, rationalize their branch network
strategy, and widen the range of delivery option.
Banking industry has been taking advantage of the following 22 Technology Products:
 Net Banking
 Credit Card Online
 One View
 InstaAlerts
 Mobile Banking
 NetSafe
 e-Monies Electronic Fund Transfer
 Online Payment of Excise & Service Tax
 Phone Banking
 Bill Payment
 Shopping
 Ticket Booking
 Railway Ticket Booking through SMS
 Prepaid Mobile Recharge
 Smart Money Order;
 Card to Card Funds Transfer;
 Funds Transfer (eCheques);
 Anywhere Banking;
 Internet Banking;
 Mobile Banking;
 Bank@Home
 Cash on Tap
THE REVIEW OF RELATED LITERATURE
The number of studies on information technology in the literature is abounding and is
dramatically on the rise due to its indispensable significance in all aspects of our life. As Princhard
and Cole (1997) state, Information Technology (IT) is a term, which generally covers the
harnessing of electronic technology for the information needs of business at all levels. It is a
computer based system as well as telecommunication technology for storage, processing and
dissemination of information.
Mario Castelino (2006) suggests that Indian banking industry has provided the leading edge to
what is happening to the Indian economy. Banks have equipped themselves with the latest of
technology-core Banking. Business Process Reengineering has been introduced to enhance spleen
and efficiency of delivery.
Information Technology has basically been used under two different avenues in Banking. One
is Communication and Connectivity and other is Business Process Reengineering. Information
technology enables sophisticated product development, better market infrastructure,
implementation of reliable techniques for control of risks and helps the financial intermediaries to
reach geographically distant and diversified markets. But focusing on both threats and
opportunities of information technology, Blili and Raymond (1993) concluded that the strategic
use of information technology can both threaten and benefit small and medium- sized enterprises

4. (SMEs). In this paper, the strategic importance of information technology is analyzed in light of
the specificity of these organizations. Planning approaches are then outlined, focusing on how
SMEs can attain a mastery of information technology for competitive advantage.
There are also statistical reports regarding the banking industry affected by IT announced by
organizations throughout the world. For instance, you can find those released by Computer Industry
Report, March 27, 1992 as follows:
The banking sector in the survey base saw budgets drop 10% on average in 1991, and expects
only average growth in 1992. With average site budgets in excess of $4 million, the highest in the
survey group, the downturn for banking has affected the entire IT market.
Banking had the highest negative rating in its attitude towards IS spending; almost half checked
choices indicating stable spending with no major growth in any area, or a contraction of spending.
Controlling costs is a critical imperative for nearly two-thirds of the banking community, by far
the highest ratio for any of the sectors surveyed.
The replacements will presumably be largely PCs, since banking had the lowest percentage
(18%) agreeing that UNIX workstations are becoming a viable alternative to traditional personal
computers.
A survey-low 29% of PCs in banking were connected to a host computer, compared to an
average of two-thirds.
Overwhelmingly the major activity of software staff at banking sites is systems or network
maintenance, which accounted for 60% of staff time compared to an average of 33%.Only 16% of
staff time went to developing new applications.
METHOD
Both Exploratory Research and Descriptive Research were used in accomplishing the
objective of the study.
3.1 Sampling Design
Random sampling is the sampling design of this study; it is the most appropriate design to use
in this study since the researcher decided the sample size of the study i.e. 100 bank customers and
a sample of 20 clerical and 20 managerial in the bank. Primary research was conducted using
questionnaire surveys to them. The researcher tallied, scored and tabulated all the responses in the
provided survey questions. The researcher conducted the survey personally with the respondents.
Further research will be carried out through consultation of books, journals and magazines.
FINDING AND CONCLUSION
The research brought to light the fact that IT has been of great impact on bank. The findings
both from the questionnaires and the library research reveal that IT leads to saving the time of the
customers and the employees conspicuously, cutting down the expenses and facilitating the
network transactions. The details are as follows:

5. Regarding the first research question, both the customers and employees believe that IT has a
meaningful effect on saving the time of the customers and the employees of bank (84% and 91%
respectively).
Apropos to the second question, around 91 % of the bank managers believe that IT has a
meaningful effect on cutting down the expenses of bank.
Concerning the third research question, the customers and bank employees answered that IT
has a meaningful effect on facilitating the network transactions of bank (88% and 93%
respectively). The data gathered from the library research also approved the abovementioned
results.
The outcome of this study is limited only to the data gathered from the books and journals
about information technology and its impact on bank and from the primary data gathered from the
result of the questionnaire survey and interview conducted by the researcher. As the research was
completed in a limited period of time other factors and variables are not considered. This might
have an impact on the results of the study.
We cannot deny that the advancement of technology was a necessity of the current era.
Businesses need to adopt and embrace new technologies to provide excellent business operation
and services to their clients. The bank industry is not an exception with regards to this adaptation.
So it is worth suggesting that the banking industry needs to spend more on IT and better apply IT
to improve its operations, customer services and products. Banks should devote more resources to
development of secure IT systems, services and products
REFERNCE
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Business Value. MIS Quarterly © 2004 Management Information System Research Center,
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Management, 42 (5),781-787.
3. Berger, A. N. (2003), The economic effects of technological progress: evidence from the
banking industry, Journal of Money, Credit, Banking, 35 (2), 141-176.
4. Blili, S & Raymond L. (1993), Information technology: Threats and opportunities for small
and medium-sized enterprises. International Journal of Information Management. Volume
13, Issue 6, December 1993, Pages 439-448
5. Bloom, N., L. Garicano, R. Sadun and J. Van Reenen (2009), The distinct effects of
Information Technology and Communication Technology on firm organization, NBER
working paper 14975.