OVERVIEW OF BANKING SERVICES AND RELATED IT RISK AND CONTROLS

OVERVIEW OF BANKING SERVICES AND RELATED IT RISK AND CONTROLS

 INTRODUCTION

• Information Technology (IT) is an integral aspect of functioning of enterprises and professionals in this digital age. In case of banking which deals with money, has now increasingly become digital and IT plays a very critical role.
• The dependence on IT is such that the banking business cannot be thought of in isolation without IT. 
• There has been massive use of technology across many areas of banking business in India, both from the asset and the liability side of a bank’s balance sheet. The technology footprint has spread across the Indian banking landscape in a very big way.
•  In fact, with most banks using technology, the key differentiator now is how IT is used for delivering services to customers. Delivery channels have immensely increased the choices offered to the customer to conduct transactions with ease and convenience.
•  Various wholesale and retail payment and settlement systems have enabled faster means of moving the money to settle funds among banks and customers, facilitating higher turnover of all financial transactions using IT. 
• Developments in IT have also ushered in a whole set of challenges, issues and risks to deal with as most of the data is automated and thus available in digital form. 
• Banking is the engine of economic growth specifically in a rapidly developing country like India with its diverse background, practices, cultures and large geographic dispersion of citizens.
•  Banking has played a vital and significant role in the development of the economy. The changes in the banking scenario due to moving over to Core Banking System and IT-based operations have enabled banks to reach customers and facilitate seamless transactions with lesser dependence on physical infrastructure. 
• This has resulted in all the core functions at the branches, such as loan processing & sanctioning, safe keeping of security documents, post sanction monitoring & supervision of borrower’s accounts, accounting of day-to-day transactions, receipts & payments of cash/ cheques and updating passbooks/statements,being either centralized or made online or with the use of ATMs. The accounting transactions and all services of the banks are being done from a central server using core banking solutions.
•  This is changing the modus operandi of how banking services are delivered to customers by using alternate delivery channels such as ATM, Internet Banking and Mobile Banking.

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