| | June 20198CIOReviewBy Sourabh Tiwari, CIO, Overseas Infrastructure Alliance (India) Pvt. Ltdigitalisation is the process of converting analogue signal into digital format that can be understood by computer systems. In business, it means converting information into digital form. In banking, it means having customer related information, request, processing and related movement of data digitally rather than manual paper based stock and flow. Digital bank varies from aggregate of apps and tablets, a paperless bank to a bank with all processes and products digitised, five essential features are designed and created upon a digital core infrastructure, created outreach through physical and digital access, geared to digital with human contacts through network, innate knowledge of the customer with data aggregated across access points, digital being considered as a culture rather than as a project. Digitalisation is the application of technology to ensure seamless end to end processing of banking transactions 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 cost, zero errors, improve customer service, scalability, risk management, robust information system and enhanced services. This encourages banks to accelerate the automation into digitalisation process and explore innovation. Computerisation of the operations of the banks in India commenced in the 1980s only for ledger maintenance through advanced ledger posting machines (ALPM) to facilitate the customer facing branch activities. In the late 80s, concept of total bank automation (TBA) came into vogue, front office automation only. This affected hardware and network cost reduction. Later, few new private sector banks came into existence with full automation model. Therefore, concept of linking the branches through core banking solution was adopted with various challenges like legacy customer data and format, different processed and non-compatible systems. RBI nudged banks to achieve progress in automation and complete connectivity with all branches over the years. There are limited number of core banking platforms in India- Finacle designed by Infosys, Flex-cube of Oracle, BaNCS designed by TCS are the major CBS platforms, though some in-house developed solutions too. This facilitated RBI's decision to have macro-view of an automated data flow of reports in structured format straight from the bank's computer system without any mutual intervention to RBI's system. This rapid automation helped banks to have better control over the internal processes, accounting errors and improved customer services and operational cost.The Institute for Development and Research in Banking Technology established Indian Financial Network (INFINET) as the nationwide communication backbones for banks and financial institutions spread across the country by 2000. Banks opened alternative channels for service delivery- ATMs, phone banking, internet banking etc. In short, account with a branch means account with a bank, centralised bank-neutral. The Indian Banking Association is working out the methodology for portability of accounts across banks which will allow customers to move seamlessly between banks without having to change their account numbers. Add-on, increased presence on social media such as Facebook, LinkedIn, Twitter etc. Parallels, banks developed systems to enrich the MIS, risk management monitoring, ALM & payment system etc. taking care of back end operations included interbank connectivity. It can be easily visualised that these are steps taking advantage of available technology to offer the existing services in a better ways from customers, banks and regulatory perspectives. FinTech ScenarioOnce the entire processes within the bank were automated, the creative mind started exploring the technology further. Technology not only supported banks but also started inventing disruptive innovations broadly called FinTech. (Emerging technological innovations in the financial service sector). RBI setup a working group (WG) in 2016 to do some thin like "guess the future" when it started, also to look into report on the granular aspects of FinTech implications for the financial sector so as to review and reorient appropriately the regulatory framework and respond to the dynamics of the rapidly evolving FinTech scenario. The term FinTech and Digital are being used as though synonyms now. It means the digital banking progress is expected to be guided by FinTech innovations in future. NPIC established alerts of international banking network DBANKING AUTOMATION TO DIGITALIZATION IN MY OPINION
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