A

SUMMER TRAINING REPORT

On
“ARTIFICIAL INTELLIGENCE COMPUTING
IN HDFC BANK”
submitted in the partial fulfillment of the requirement for the award of

MASTER OF BUSINESS ADMINISTRATION

(Session 2022-2023)

(Affiliated to AKTU University Lucknow)

Submitted To : Submitted By:

MISS. SHERYA JINDAL RACHITA RASTOGI
(Faculty of Management ) Roll No. 210174070039
MBA- III Sem.

KISHAN INSTITUTE OF INFORMATION TECHNOLOGY,

MEERUT
(Affiliated to AKTU, University)

1
 CERTIFICATE

This is to certify that the report titled “ARTIFICIAL INTELLIGENCE

COMPUTING IN HDFC BANK” being submitted by RACHITA RASTOGI Roll

No. 210174070039., in partial fulfilment of the requirements for the award of the

Degree of Master of Business Administration, is a bonafide record of the project work

done by RACHITA RASTOGI of MBA, KISHAN INSTITUTE OF

INFORMATION TECHNOLOGY, MEERUT.

Dr. AAKASH CHABAQUE

(Director )

2
 DECLARATION

I RACHITA RASTOGI undersigned, hereby declare the Project Report titled

“ARTIFICIAL INTELLIGENCE COMPUTING IN HDFC BANK”

submitted in partial fulfillment of the award of degree of master of Business

admiration of a APJ Abdul Kalam technical University is a bonafied report of

work done by me Under the guidance of MISS. SHERYA JINDAL Assistant

Professor of Management KISHAN INSTITUTE OF INFORMATION

TECHNOLOGY, MEERUT. This Report has not previously formed the bases

for the award any degree, diploma or sommelier tittle of any university .

Date :

Place :

Student Signature

RACHITA RASTOGI

Roll No. 210174070039

MBA- III Sem.

3
 KISHAN INSTITUTE OF INFORMATION

TECHNOLOGY, MEERUT

CERTIFICATE BY GUIDE

This is to certify that the project report entitled “ARTIFICIAL INTELLIGENCE

COMPUTING IN HDFC BANK” submitted by RACHITA RASTOGI Roll No.

210174070039 to AKTU, University for the partial fulfillment of Masters Degree in Business

Administration is an outcome of genuine

Place: MEERUT

DATE:

DR. AAKASH CHABAQE

4
 ACKNOWLEDGEMENTS

Through this acknowledgement I express my sincere gratitude towards all those

people who helped me in this project, which has been a learning experience.

This space wouldn‘t be enough to extend my warm gratitude towards my

project KISHAN INSTITUTE OF INFORMATION TECHNOLOGY,

MEERUT for his/her efforts in coordinating with my work and guiding in right

direction.

I escalate a heartfelt regards to our Institution Director Dr. AAKASH

CHABAQUE and Head Of Department Mr. SANJAY KAUSHIK for

giving me the essential hand in concluding this work.

It would be injustice to proceed without acknowledging those vital supports I

received from my beloved classmates and friends, without whom I would have

been half done.

I also use this space to offer my sincere love to my parents and all others who had

been there, helping me walk through this work.

RACHITA RASTOGI

5
 CONTENT

S.No. Particulars Page No.

1. Project Home Page

2. Student Declaration

3. Certificate by H.O.D. & Faculty Guide

4. Certificate by Reporting Officer

5. Acknowledgement

6. Preface

7. Executive Summery

8. Introduction

9. History

10. Company Profile

11. Research & Development

12. Objective of the study

13. Research Methodology

14. Swot Analysis

15. Data Analysis And Interpretation.

16. Findings

17. Recommendation Suggestions

18. Limitations

19. Conclusion

20. Bibliography

21. Questionnaire

6
 PREFACE

Embracing futuristic technologies has gained significant momentum across the banking and
financial sector

The banking industry in India is geared up for a transformational space with the implementation of
advanced technologies such as applications of Artificial Intelligence (AI), Machine Learning (ML),
Block-Chain and Robotics

Robotic Process Automation is improving the user experience by allowing bots to handle
repetitive tasks without human intervention

Distinctive technological solutions and an ability to rapidly adapt gives companies a competitive
advantage. They are now developing and employing new technologies to move aggressively and
strategically to disrupt rather than be disrupted. Greater emphasis is being laid on leveraging
sophisticated technology to improve productivity and reach.

Embracing futuristic technologies has gained significant momentum across the banking and financial
sector as well. Streamlining services for the customers along with system upgrades in terms of tech
deployments are rapidly gaining acceptance. The banking industry in India is geared up for a
transformational space with the implementation of advanced technologies such as applications of
Artificial Intelligence (AI), Machine Learning (ML), BlockChain and Robotics.

So, let us have a look at how the BFSI sector is transforming with emerging technologies:

7
 INTRODUCTION

As the banks recognize this skill gap that stops them from transforming to meet the potential
presented by technology – they are beginning to invest significant amounts into banking technologies
they seem most relevant for their business models.

For example, blockchain might not be a priority for most industries today, but banks and financial
institutes foresee a great advantage in implementing these. Therefore, the financial services industry
as a whole sees them as a high priority investment.

Further, the evolution of the banking industry makes it imperative that technology becomes a
―core competency‖ with enterprise-wide engagement. The technology focus cannot be limited to the
top alone, or even to an IT department cutoff from the rest of the operations.

Finally, the focus of technology implementation must be customer experience – and not revenue or
cost savings. Those are important but will come automatically if you can retain customers in the years
to come.

In the years to come, bankers will have look at FinTech startups as partners rather than competitors.
Remember that a bank can be the biggest customer for a FinTech company and can help them reach a
newer customer base.

This is where developing a banking platform will come in handy and result in better customer
satisfaction. Bankers should work towards new business models where they own the
customer relationships and pull together FinTech resources from around the globe to generate the most
value for the end customer.

1
 LATEST TECHNOLOGIES USED IN BANKING SECTORS

These are the few latest Technologies used in Banking Sectors

1. Augmented Reality

2. Blockchain

3. Robotic Process Automation

4. Quantum Computing

5. Artificial Intelligence

6. API Platforms

7. Prescriptive Security

8. Hybrid Cloud

9. Instant Payments

10. Smart Machines

2
Let‘s explain one by one what are effects happening when these latest
technologies emerging in Banking Sector‘s.

3
 COMPANY PROFILE
COMPANY PROFILE – HFDC BANK

History

HDFC Bank was incorporated in 1994 as a subsidiary of the Housing Development Finance
Corporation, with its registered office in Mumbai, Maharashtra, India. Its first corporate office
and a full-service branch at Sandoz House, Worli were inaugurated by the then Union Finance
Minister, Manmohan Singh.

As of 30 June 2019, the bank's distribution network was at 5,500 branches across 2,764 cities. It
has installed 430,000 POS terminals and issued 23,570,000 debit cards and 12 million credit
cards in FY 2017.[15] It has a base of 1,16,971 permanent employees as of 21 March 2020.[16]

Products and services

HDFC Bank provides a number of products and services including wholesale banking, retail
banking, treasury, auto loans, two-wheeler loans, personal loans, loans against property,
consumer durable loan, lifestyle loan and credit cards. Along with this various digital products
are Payzapp and SmartBUY

Mergers and acquisitions

HDFC Bank merged with Times Bank in February 2000. This was the first merger of two
private banks in the New Generation private sector banks category.[18] Times Bank was
established by Bennett, Coleman and Co. Ltd., commonly known as The Times Group, India's
largest media conglomerate.[19]

In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank. HDFC Bank's board
approved the acquisition of CBoP for ₹95.1billion in one of the largest mergers in the
financial sector in India.[20]

In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata Group, to
operate a Pan-India umbrella entity for retail payment systems, similar to National Payments
Corporation of India.

In September 2021, the bank partnered with Paytm to launch a range of credit cards powered by
the global card network Visa.
10
On April 4 2022, HDFC Bank announced merger with HDFC Limited.[23]

Investments

A HDFC Bank branch in Hyderabad

In March 2020, Housing Development Finance Corporation, parent company of HDFC Bank,
made an investment of ₹1,000 crores in Yes Bank. As per the scheme of reconstruction of Yes
Bank, 75% of the total investment by the corporation would be locked in for three years. On 14
March, Yes Bank allotted 100 crore shares of the face value of ₹2 each for consideration of
₹10 per share (including ₹8 premium) to the Corporation aggregating to 7.97 percent of the
post issue equity share capital of Yes bank.

Listings and shareholding

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and the National
Stock Exchange of India. Its American depositary receipts are listed on the NYSE issued
through JP Morgan Chase Bank.[26]

Its global depository receipts (GDRs) was listed on the Luxembourg Stock Exchange[citation
needed]
but was terminated by board of directors following its low trading volume.[27]

Shareholders (as of 30 September 2021)[28] Shareholding[citation needed]

Promoter group (HDFC) 25.88%

Foreign institutional investor(FII) 38.30%

Individual shareholders 13.25%

Qualified institutional buyer 4.74%

Insurance companies 2.94%

Unit Trust of India/mutual funds 14.57%

Financial institutions/banks 0.4%

11
Central government 0.6%

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an in
principle approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of
the RBI's liberalization of the Indian Banking Industry. The bank was incorporated in August 1994 in
the name of HDFC Bank Limited, with its registered office in Mumbai, India. The bank commenced
operations as a Scheduled Commercial Bank in January 1995.

The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial
Bank in January 1995. The Housing Development Finance Corporation (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private
sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994.

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1416
branches spread over 550 cities across India. All branches are linked on an online real–time basis.
Customers in over 500 locations are also serviced through Telephone Banking. The Bank also has a
network of about over 3382 networked ATMs across these cities.

The promoter of the company HDFC was incepted in 1977 is India's premier housing finance company
and enjoys an impeccable track record in India as well as in international markets. HDFC has developed
significant expertise in retail mortgage loans to different market segments and also has a large corporate
client base for its housing related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned
to promote a bank in the Indian environment.

The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India
Limited. The Bank's American Depository Shares ( ADS ) are listed on the New York Stock Exchange
(NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on
Luxembourg Stock Exchange.

On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was formally
approved by Reserve Bank of India to complete the statutory and regulatory approval process. As per
the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC Bank for every 29 shares
of CBoP.

The merged entity now holds a strong deposit base of around Rs. 1,22,000 crore and net advances of
around Rs. 89,000 crore. The balance sheet size of the combined entity would be over Rs. 1,63,000
crore. The amalgamation added significant value to HDFC Bank in terms of increased branch network,
geographic reach, and customer base, and a bigger pool of skilled manpower.

12
 In a milestone transaction in the Indian banking industry, Times Bank Limited (another new private
sector bank promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd.,
effective February 26, 2000. This was the first merger of two private banks in the New Generation
Private Sector Banks. As per the scheme of amalgamation approved by the shareholders of both banks
and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every
5.75 shares of Times Bank.

HDFC Bank offers a wide range of commercial and transactional banking services and treasury products
to wholesale and retail customers. The bank has three key business segments:

Wholesale Banking Services – The Bank's target market ranges from large, blue–chip manufacturing
companies in the Indian corporate to small & mid–sized corporates and agri–based businesses.

Retail Banking Services – The objective of the Retail Bank is to provide its target market customers a
full range of financial products and banking services, giving the customer a one–stop window for all
his/her banking requirements.

Treasury – Within this business, the bank has three main product areas – Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. The Treasury business is
responsible for managing the returns and market risk on this investment portfolio.

HDFC Securities (HSL) and HDB Financial Services (HDBFSL) are its subsidiaries.

Services offered by the company:

Personal Banking

 Accounts & Deposits

 Loans
 Cards
 Forex
 Investments & Insurance
NRI Banking

 Accounts & Deposits

 Remittances
 Investments & Insurance Loans Payment Services
Wholesale Banking

 Corporate
 Small & Medium Enterprises
 Financial Institutions & Trusts
 Government Sector
Achievements/ recognition:–

13
 HISTORY

The bank was founded on 3 December 1993 as UTI Bank, opening its registered office
in Ahmedabad and a corporate office in Mumbai. The bank was promoted jointly by the
Administrator of the Unit Trust of India (UTI), Life Insurance Corporation of India (LIC),
General Insurance Corporation, National Insurance Company, The New India Assurance
Company, The Oriental Insurance Corporation and United India Insurance Company. The first
branch was inaugurated on 2 April 1994 in Ahmedabad by Manmohan Singh, then finance
minister of India.

In 2001 UTI Bank agreed to merge with Global Trust Bank, but the Reserve Bank of
India (RBI) withheld approval and the merger did not take place. In 2004, the RBI put Global
Trust under moratorium and supervised its merger with Oriental Bank of Commerce. The
following year, UTI bank was listed on the London Stock Exchange.[13] In the year 2006, UTI
Bank opened its first overseas branch in Singapore. The same year it opened an office
in Shanghai, China. In 2007, it opened a branch in the Dubai International Financial Centre and
branches in Hong Kong.

On 30 July 2007, UTI Bank changed its name to HFDC BANK.

In 2009, Shikha Sharma was appointed as the MD and CEO of HFDC BANK.

In 2013, HFDC BANK's subsidiary, HFDC BANK UK commenced banking operations.

On 1 January 2019, Amitabh Chaudhry took over as MD and CEO.

In year 2021, the Bank had reduced its stake in Yes Bank from 2.39 per cent to 1.96 per cent.

OPERATIONS

INDIAN BUSSINESS

As of 12 August 2016, the bank had a network of 4,096 branches and extension counters and
12,922 ATMs.

HFDC BANK has the largest ATM network among private banks in India. It even operates an
ATM at one of the world's highest sites at Thegu, Sikkim at a height of 4,023 meters
(13,200 ft) above sea level.

INTERNATIONAL BUSSINESS

14
The bank has nine international offices with branches at Singapore, Hong Kong, Dubai (at the
DIFC), Shanghai, Colombo and representative offices at Dhaka, Dubai, Sharjah and Abu
Dhabi, which focus on corporate lending, trade finance, syndication, investment banking and
liability businesses. In addition to the above, the bank has a presence in UK with its wholly
owned subsidiary HFDC BANK UK Limited.

SERVICES

RETAIL BANKING

The bank offers lending services to individuals and small businesses, along with liability
products, card services, Internet banking, automated teller machines (ATM) services,
depository, financial advisory services, and Non-resident Indian (NRI) services. HFDC BANK
is a participant in RBI's NEFT enabled participating banks list.

CORPORATE BANKING

Transaction banking: HFDC BANK provides products and services related to transaction
banking to customers in areas of current accounts, cash management services, capital market
services, trade, foreign exchange and derivatives, cross-border trade and correspondent banking
services and tax collections on behalf of the Government and various State Governments in
India.

Investment banking and trustee services: The bank provides investment banking and
trusteeship services through its owned subsidiaries. Axis Capital Limited provides investment
banking services relating to equity capital markets, institutional stock brokering besides M&A
advisory. Axis Trustee Services Limited is engaged in trusteeship activities, acting as a
debenture trustee and as a trustee to various securitization trusts.

INTERNATIONAL BANKING

The bank offers corporate banking, trade finance, treasury and risk management through the
branches at Singapore, Hong Kong, DIFC, Shanghai and Colombo, and also retail liability
products from its branches at Hong Kong and Colombo. The representative office at Dhaka was
inaugurated during the current financial year.

15
 ISSUES AND CONCERN

Operation Red Spider

An Indian online magazine conducted a sting operation which was publicised along with 2013
videos evidence showing a wide range of violations and money-laundering schemes by top
officials at a number of Indian banks, including HFDC BANK. Consequently, penalties of ₹50
million (US$660,000) on HFDC BANK, ₹45 million (US$590,000) on HDFC Bank, and ₹10
million (US$130,000) on ICICI Bank were imposed by the Reserve Bank of India.

2016 Demonetisation related money laundering

Following the 2016 Indian Banknote Demonetisation, a number of HFDC BANK employees
were arrested for facilitating money laundering activities. Some media outlets highlighted the
disproportionate number of cases involving the bank, and claimed that the bank's aggressive
performance targets and internal culture fostered such activities and that the blame does not lie
solely in the hands of arrested employees.

SUBSIDIARIES

Axis Capital Ltd.

Axis Capital Ltd. was incorporated in India as a wholly owned subsidiary of the bank on 6
December 2005 and received its certificate of commencement of business on 2 May 2006.
Certain businesses of M/s. Enam Securities Pvt. Ltd. were merged with Axis Capital Ltd. as
part of a scheme and the following companies became direct subsidiaries of Axis Capital.

1. Axis Securities Ltd. (formerly Enam Securities Direct Pvt. Ltd.)

2. Axis Finance Ltd. (formerly Enam Finance Pvt. Ltd.)

3. Axis Securities Europe Ltd. (formerly Enam Securities Europe Ltd.)

4. Enam International Ltd., UAE (voluntarily dissolved with effect from 24 August 2014)

Axis Securities Ltd., Axis Finance Ltd. and Axis Securities Europe Ltd. later became direct
subsidiaries of the bank in line with the RBI directive.

Axis Securities Ltd.

16
Axis Securities Ltd was incorporated in India on 21 July 2006. The sales and securities
business, including the retail broking business of Axis Capital Ltd, was merged with ASL on 25
May 2013. ASL is a wholly owned subsidiary of the bank and offers retail asset products, credit
cards and retail brokerage services.

Axis Private Equity Ltd.

Axis Private Equity Ltd. was incorporated in India as a wholly owned subsidiary of the bank on
3 October 2006 and received its certificate of commencement on 4 December 2006. APE
manages investments, venture capital funds and offshore funds.

Axis Mutual Fund

Axis Mutual Fund is a subsidiary of HFDC BANK established in 2009 with in headquarters
in Mumbai.

17
 RECENT TRENDS IN COMPANY TECHNOLOGY

TREND 1: AUGMENTED REALITY

Augmented reality (AR) is an interactive experience of a real-world environment where the

objects that reside in the real world are enhanced by computer-generated perceptual
information, sometimes across multiple sensory modalities,
including visual, auditory, haptic, somatosensory and olfactory.[1][2] AR can be defined as a
system that incorporates three basic features: a combination of real and virtual worlds, real-time
interaction, and accurate 3D registration of virtual and real objects.[3] The overlaid sensory
information can be constructive (i.e. additive to the natural environment), or destructive (i.e.
masking of the natural environment).[4] This experience is seamlessly interwoven with the
physical world such that it is perceived as an immersive aspect of the real environment.[4] In
this way, augmented reality alters one's ongoing perception of a real-world environment,
whereas virtual reality completely replaces the user's real-world environment with a simulated
one.[5][6] Augmented reality is related to two largely synonymous terms: mixed
reality and computer-mediated reality.

TREND 2: BLOCKCHAIN

A blockchain is a growing list of records, called blocks, that are securely linked together
using cryptography.[1][2][3][4] Each block contains a cryptographic hash of the previous block,
a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are
represented by leafs). The timestamp proves that the transaction data existed when the block
was published to get into its hash. As blocks each contain information about the block previous
to it, they form a chain, with each additional block reinforcing the ones before it. Therefore,
blockchains are resistant to modification of their data because once recorded, the data in any
given block cannot be altered retroactively without altering all subsequent blocks.

Blockchains are typically managed by a peer-to-peer network for use as a publicly distributed
ledger, where nodes collectively adhere to a protocol to communicate and validate new blocks.
Although blockchain records are not unalterable as forks are possible, blockchains may be
considered secure by design and exemplify a distributed computing system with high Byzantine
fault tolerance.

TREND 3: ROBOTIC PROCESS AUTOMATION

Robotic process automation (RPA) is a form of business process automation technology

based on metaphorical software robots (bots) or on artificial intelligence (AI)/digital

18
workers.[1] It is sometimes referred to as software robotics (not to be confused with robot
software).

In traditional workflow automation tools, a software developer produces a list of actions to

automate a task and interface to the back end system using internal application programming
interfaces (APIs) or dedicated scripting language. In contrast, RPA systems develop the action
list by watching the user perform that task in the application's graphical user interface (GUI),
and then perform the automation by repeating those tasks directly in the GUI. This can lower
the barrier to the use of automation in products that might not otherwise feature APIs for this
purpose.

RPA tools have strong technical similarities to graphical user interface testing tools. These tools
also automate interactions with the GUI, and often do so by repeating a set of demonstration
actions performed by a user. RPA tools differ from such systems in that they allow data to be
handled in and between multiple applications, for instance, receiving email containing an
invoice, extracting the data, and then typing that into a bookkeeping system.

TRENDS 4: QUANTUM COMPUTING

Quantum computing is a type of computation that harnesses the collective properties

of quantum states, such as superposition, interference, and entanglement, to perform
calculations. The devices that perform quantum computations are known as quantum
computers.[1]: I-5  Though current quantum computers are too small to outperform usual
(classical) computers for practical applications, they are believed to be capable of solving
certain computational problems, such as integer factorization (which underlies RSA
encryption), substantially faster than classical computers.[2] The study of quantum computing is
a subfield of quantum information science.

There are several types of quantum computers (also known as quantum computing systems),
including the quantum circuit model, quantum Turing machine, adiabatic quantum
computer, one-way quantum computer, and various quantum cellular automata. The most
widely used model is the quantum circuit, based on the quantum bit, or "qubit", which is
somewhat analogous to the bit in classical computation. A qubit can be in a 1 or 0 quantum
state, or in a superposition of the 1 and 0 states. When it is measured, however, it is always 0 or
1; the probability of either outcome depends on the qubit's quantum state immediately prior to
measurement.

19
TREND 5: API PLATFORM

An application programming interface (API) is a connection between computers or

between computer programs. It is a type of software interface, offering a service to other pieces
of software.[1] A document or standard that describes how to build or use such a connection or
interface is called an API specification. A computer system that meets this standard is said
to implement or expose an API. The term API may refer either to the specification or to the
implementation.

In contrast to a user interface, which connects a computer to a person, an application

programming interface connects computers or pieces of software to each other. It is not
intended to be used directly by a person (the end user) other than a computer programmer who
is incorporating it into the software. An API is often made up of different parts which act as
tools or services that are available to the programmer. A program or a programmer that uses
one of these parts is said to call that portion of the API. The calls that make up the API are also
known as subroutines, methods, requests, or endpoints. An API specification defines these
calls, meaning that it explains how to use or implement them.

One purpose of APIs is to hide the internal details of how a system works, exposing only those
parts a programmer will find useful and keeping them consistent even if the internal details later
change. An API may be custom-built for a particular pair of systems, or it may be a shared
standard allowing interoperability among many systems.

TREND 5: CLOUD COMPUTING

Cloud computing[1] is the on-demand availability of computer system resources, especially

data storage (cloud storage) and computing power, without direct active management by the
user.[2] Large clouds often have functions distributed over multiple locations, each location
being a data center. Cloud computing relies on sharing of resources to achieve coherence and
typically using a "pay-as-you-go" model which can help in reducing capital expenses but may
also lead to unexpected operating expenses for unaware users.

20
 PROS OF TECHNOLOGY

In the modern day, Artificial Intelligence is making its way to a smarter world. AI is helping to
create advanced tools for automation that can save humans‘ time for productive tasks.
Therefore, in this section of pros and cons of Artificial Intelligence, we will discuss the various
pros of AI.

1. ERROR- FREE PROCESSING

The execution of tasks by humans is more prone to make errors. We often make mistakes while
doing a specific task. This might be due to the variation of the intellectual ability of an
individual. But, it is not the same case with AI-based machines. We program the machines for
accomplishing a specific task. Thus, the accuracy depends on how well we design and program
the machines to carry out the task.

If we compare AI-based machines to humans for executing a particular task, then Artificial
Intelligence has proved itself to be more efficient than humans. The use of Artificial
Intelligence in various fields helps reduce unnecessary errors and losses. Algorithms used for
building AI-based models implement complicated mathematical constructs that help perform
actions with greater efficiency and fewer errors. Thus, it helps solve complex real-world
problems.

2. HELPS IN REPITITIVE JOB

Unlike humans, machines do not require breaks to recover from tiredness and boost
productivity. There are many day-to-day tasks accomplished by a human, which are repetitive.
The efficiency of a human reduces while continuously performing the same job. Moreover, it is
a fact that a human worker can be productive only for 8–10 hours per day.

On the other hand, AI-based machines help perform repetitive tasks for a long time without any
slowdown. Artificial Intelligence helps operate the machines for an indefinite time, without
lacking productivity. This is one of the major pros of AI that have led to its acceptance in every
sector. Artificial Intelligence is used by manufacturers to continuously produce goods to meet
the market demand and earn high profits.

21
3. 24/7 AVAILABILITY

An average worker can only invest his/her services for 7–8 hours per day. Humans need time to
refresh themselves, and they need to maintain a work-life balance. They cannot work 24 hours a
day.

Here, Artificial Intelligence helps provide 24/7 services to an organization. In another scenario,
AI-based chatbots used by customer service applications can handle multiple queries at a time,
round-the-clock. AI can provide services without any delay or lack of efficiency. Nowadays,
every eCommerce application, e-learning website, healthcare sector, educational institute, etc.
uses Artificial Intelligence for support chat. This helps in enhancing customer services.

4. RIGHT DECISION MAKING

One of the advantages of Artificial Intelligence is its ability to make the right decision. There
are no emotions attached to the AI-based machines that help prevent hampering efficiency. The
machines that are built using Artificial Intelligence are capable of making logical decisions as
well. A human would examine a situation by considering many factors. These factors may
influence the decision emotionally or practically. However, the machines give accurate results
as they are programmed to make logical decisions. AI-powered machines use cognitive
computing that helps them make practical decisions in real-time.

5. DIGITAL ASSISTANCE

Another advantage of AI is digital assistance. AI-powered applications also provide digital

assistance. Today, most organizations make use of digital assistants to perform automated tasks.
This helps save human resources. There are digital assistants that can program to make a
website for us. The use of digital assistants has revolutionized the healthcare industry as well.
Now, doctors can look after their patients from remote locations with the help of digital
assistants that provide real-time data of patients.

Digital assistants also help us in our day-to-day activities. There are many practical applications
of AI-based digital assistants such as Google Maps, Grammarly, Alexa, and many more.
Google Maps helps us travel from one place to another, while Alexa executes voice searches to
give us results. Another very interesting digital assistant is Grammarly which helps us correct
grammar in our text. It helps auto-correct the text to improve our writing skills. These
applications make Artificial Intelligence advantageous over other technologies. Further, in this
blog on the pros and cons of Artificial Intelligence, we will discuss the cons of AI.

22
6. FASTER DECISION- MAKING

One of the reasons AI is known to make unbiased decisions is because it has no emotions. AI,
along with other technologies, can make decisions faster than human beings and carry out
actions rapidly. While making decisions, we need to analyze a lot of factors that may take time,
but AI can review all the relevant aspects much faster than a human. This helps businesses
develop an edge over their competitors as AI provides them with enough time to make better
decisions.

7. IMPLIMENTATION AI IN RISKY SITUATION

AI has reached where humans cannot. The areas of research and experiment involve situations
that are prone to risks. Human involvement in risky situations can be minimized by the
utilization of AI in those situations. If AI is aptly utilized, it can help scientists make
discoveries and inventions with minimal to no risk to human life.

8. NEW INVENTION

It is no brainer that AI is powering several inventions across the globe that will help humans
solve complex problems. For example, doctors, recently, leveraged the prowess of AI-based
technologies to predict breast cancer during earlier stages.

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 CONS OF TECHNOLOGY

We have already discussed the advantages of Artificial Intelligence in the real world. As we
mentioned earlier, There are various advantages and disadvantages of Artificial Intelligence. .
Therefore, in this section of the pros and cons of Artificial Intelligence, we will discuss all the
cons of AI.

1. HIGH COSTS OF CREATION

The creation of machines empowered with Artificial Intelligence is very costly. For a large-
scale project, the price might reach up to millions of dollars. Thus, for a small-scale business, it
is not possible to implement AI. For companies with large revenues too, the cost of the
development of an AI project may be felt high due to the features, functionalities, or scope with
which it is designed. The cost of development also depends on the hardware and software the
companies use. Moreover, to meet the demand of a highly changing world, the hardware and
software should be regularly updated. AI-powered devices are built, employing complex codes,
algorithms, software, and hardware. The maintenance of these components requires great effort
and costs very high. However, in the future, the cost of developing machines using AI may
reduce due to the invention of advanced tools that will help create them easily.

2. INCREASED UNEMPLOYMENT

Artificial Intelligence will create jobs, as well as may leave some people unemployed. This is
one of the major cons of Artificial Intelligence. It will create jobs for people, who are skilled in
technologies but will replace low-skilled jobs. Sectors, including the manufacturing industry,
have started employing AI-powered machines for manufacturing products. As AI-based
machines can work 24/7, industries would prefer to invest in Artificial Intelligence rather than
employing humans.

According to a report by Gartner, AI will create one million jobs by 2022. But, it will have a
huge negative impact on low-skilled laborers as machines will replace humans there. The
manufacturing industry, construction sites, the transport industry (with the advent of driverless
cars), etc. will result in large-scale unemployment.

3.LACKING CREATIVITY

Machines cannot become as creative as humans. Artificial Intelligence can provide

functionalities to learn from data but cannot make the machines mimic the exact human brain
and skills. The accuracy of the results from an AI-powered machine depends on the level of

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analytics used by the creator. Artificial Intelligence cannot invent anything. It can just perform
the task it is programmed for and improve itself by experience.

Although AI can collaborate with other technologies such as IoT, Big Data, advanced sensors,
and many more to give the best automation, the smartness and creativity of AI-based machines
depend on how intelligent and creative the algorithms are created by humans. Therefore, AI is
bound to rules and algorithms and cannot become as creative as humans.

4. LACKING IMPROVEMENT

AI algorithms are designed in such a way that they allow machines to learn by themselves by
exploring data. Then, the machines try to improve by learning. But, any redundancy in the data
may cause failures in learning, and the machines may show unpredictable results. Then, the
algorithms need to be readjusted for the new set of data or learned to adapt to exceptional
conditions. There may be inconsistency in the results due to the inability to process bits of
information. Also, due to the lack of improvement, AI-generated results may have inaccuracy
and cause great losses.

5. NO HUMAN REPLICATION

Humans have created machines to save their time and effort from doing non-essential repetitive
tasks. AI-powered machines work on algorithms, mathematical computing, and cognitive
technologies. They can become highly advanced but cannot act or think like a human. Machines
are considered intelligent, but they lack judgemental power as they are not aware of ethics,
morals, the right, or the wrong. The machines will break down or give unpredictable results if
they find a condition for which they are not programmed. Hence, if we try to implement AI in
places that require strong judgemental ability, then it would be a great failure.

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 1. Augmented Reality

The possibilities of the implementation of augmented reality technology in banking sector are only
limited by imagination, though these are still in a very early stage of development. The end-state is to
give customers complete autonomy in actions and transactions they could perform at home. Hybrid
branches are envisioned by technology experts who believe that bank branches as we know them today
are a thing of past.

11 Banks That Have Successfully Adopted Augmented Reality

1. Axis Bank

2. Westpac Bank

3. Citi Bank

4. Commonwealth Bank

5. Standard Chartered

6. Deutsche Bank

7. Desjardins Bank

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8. Visa

9. Capital One

10. BNP Paribas

11. ASB Bank

1. Axis Bank - Augmented Reality Navigation to access ATMs, Branches, and

Food Outlets

India‘s leading bank in adopting new technologies and innovations in banking sector, with their
mobile banking app offering multiple augmented reality services. Using the ‗AR View‘ option in
the ‗Near Me‘ tab, customers can define a geographical radius and the banking app can show them the
nearest ATMs and branches and provide directions to an ATM.
Not restricting to only cash withdrawals from ATMs, they also wanted to encourage their
customers to use other perks that they offer such as special discounts at food outlets and eDGE
reward points. For that they offered navigation options to the nearest food outlets as well and
allowed users to pay with their reward points at these partner outlets.

Your bank can use similar augmented reality features to help your customers locate the nearest
branches and ATMs and use your navigation services to give your brand a positive image.
Furthermore, you can encourage your users to pay using your payment wallets and cards thereby
keeping them engaged with your banking services.

2. Westpac Bank - AR Data Visualization, AR Account Management,

Budgeting, AR payment gateway, and more

Embracing the power of Augmented Reality technology and taking it to an international level, with
lot of interactive features that reformed the way customers manage their bank accounts. Their app
allows the customers to scan their debit or credit card with their phone‘s camera.

Overlaid on that card, customers can see their current balance, spending in the last two weeks,
categories they have spent most on and future payments due on their credit cards. They can also
complete their due payments through the Augmented Reality payment gateways seamlessly.

Going the extra mile, this banking app‘s UI provides the customers useful analytics and transaction
details through augmented reality data visualizations that help them understand their spending
patterns over time. Their Hotpoint‘s catalogue is also integrated into the banking app which allows
customers to shop using Augmented Reality.

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They have also added an augmented reality navigation feature to help users get to their nearest
ATMs in all of their international locations across the globe.

3. Citi Bank's Holographic Workstation - Using AR Data Visualization for

Finance and Trading
While most AR solutions in the banking industry are focused on the end customers who use banking
apps on their smartphones, a Proof of Concept that is focused on financial traders as end users.

Using Microsoft‘s HoloLens technology, they created a 2D-3D integrated system that allows
financial traders to visualize real time financial data and records through holograms and to monitor
and track past trends of stock indices so they can make financial decisions based on these. Users can
also share their interactive, augmented reality data visualizations with someone in real time to work
in teams and analyze the markets.

For real world usage, real time communication and visual data sharing is also facilitated by the
Augmented Reality system that works on voice commands given by the users. In the end, users can
finalize trades and investments through the interactive holographic system itself.

This whole setup is called the Holographic Workstation and it aims to increase the efficiency of
financial trades. This example helps us in understanding how banks can engage segments of users that
are not their direct customers, but can use their banking and financial services in an interactive way.

4. Commonwealth Bank AR Property Guide app - Insights on Real Estate; Home

Loans

With the motive of easing the process of finding a new home in Australia, Commonwealth Bank
launched their which has the data of about 95% residential properties in Australia. Using the
Augmented Reality real estate app, users to scan a property near them in real time and get all possible
information such as detailed suburb profiles revealing demographics, median price, buying/selling
conditions, property hotspots, and capital growth trends, thus enabling buyers to gain deeper insights on
a location and on whether it will suit their lifestyle.

.
5. Standard Chartered's Breeze Living - Sharing Coupons and Discounts
To engage their customers in China, Standard Chartered came up with a unique idea
for Breeze Living, their AR enabled mobile application. They created an open social network to find
and share coupons and offers from all across China by partnering with local coupons platforms.
They allowed users to sign up and create ‗Tribes‘ where they can share these coupons with their
friends as well. Using Augmented Reality, they simulated kites across the skyline and users could
catch those kites to get exclusive offers all across the country. Users could also flaunt their offers to
their ‗Tribes‘ using the social media aspect of the AR app.

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6. Deutsche Bank - Augmented Reality Marketing Campaign

Unlike other examples in this article, Deutsche Bank's augmented reality marketing campaign engaged
customers in an offbeat way and left a positive impact on them. They set up a large Magic Mirror in
Alexa Mall in Germany which was powered by Augmented Reality to give customers visual surprises.

As customers stood in front of the Mirror, they got transported to the sea as they surfed in Augmented
Reality, got the chance to meet unicorns in real (well, virtual) life, and ended up playing virtual
football. People got transported to an alternate reality and recorded themselves doing these fun
activities.

7. Desjardins Bank - Delivering Financial Literacy using Augmented

Reality Persona

The Insurance division of Desjardins Bank decided to make the experience of Retirement Planning
fun and simple for its customers. They created an Augmented Reality application called.
It is powered by a fictional character named ‗Penny.‘ Penny‘s sole job is to help and educate the
customer about various methods of saving for their future retirement irrespective of what stage of
life they are currently in.

Using a smartphone‘s camera, this fictional character comes to life by pointing to a customized bank
note and offers multiple learning options to its users to choose from. Be it starting early on or
regularly contributing towards your retirement, Penny instructs the users on how to get started with
interactive videos and also guides them through the whole process.

8. Visa - Augmented Reality Payment

Visa, the leading payments provider in the world used the power of Augmented Reality
technology to demonstrate how payments can be integrated with any service to facilitate seamless
and immersive payments.
This was presented at the Mobile World Congress. Integrating with a food ordering service, they
demonstrated the AR app over a simulated map of a city. Using the AR app, users can point to
specific parts of the city and pick a food outlet.

Then, users can go over the menu of the outlet and have a look at the various dishes to finalize their
order. Once the order is placed, users can process instant payment in AR using

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Visa. Such applications help financial institutions in offering features built on top of their
payment systems to potential users.

9. Capital One - AR app for Car Loans

What Common bank did for house loans, Capital One Bank has done for car loans. They have
launched using which users can go to retail showrooms of cars or just be on the street and point to
any car to get view details superimposed on the car.
Details such as year, model number and make of the car will appear on their screen to help them with
their buying decision. Users can pre-qualify themselves for a car loan after which, the car-loan app
will show them customized pricing based on their eligibility, preferences and financial health.

The intention behind such an augmented reality car-loan application was to bring the whole customer
journey of buying a new car on a single app that takes the user from exploration or awareness to
decision or buying stage through the mobile app itself, thereby creating a direct sales funnel for the
bank. This offers a great opportunity for a bank to create augmented reality applications that facilitate
loans through immersive interface.

10. BNP Paribas Fortis – Introducing & Comparing Products & Services

A huge problem faced by bank employees is that of remembering the details of all the products and
services they offer. To help their employees, BNP launched an interactive print app that recognizes
the photos of bank employees and overlay videos on their photos explaining various products of the
bank, thereby eliminating the need for employees to remember details about all the services.

11. ASB - Recruiting Banking Talent Using AR

Last and probably the most surprising use of Augmented Reality technology in the banking industry
has been by ASB in recruitment of corporate bankers for their organisation through The bank wanted
to communicate their story and innovative spirit in all their future endeavors to woo high-potential
candidates to apply to their bank. Using the AR app, a potential candidate can scan the pamphlet and
bring it to life.

Then, the candidate can witness the Executive General Manager of the Bank himself, talking about the
bank‘s values, future hopes and why their bank is the perfect destination for a high potential
candidate to work at. Using AR in recruitment and brand communication is not the most intuitive
use-case, but certainly a very novel one that can go a long way in differentiating your bank from the
rest.

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 2.Blockchain

Blockchain technology provides a way for untrusted parties to come to agreement on the state of a
database, without using a middleman. By providing a ledger that nobody administers, a blockchain
could provide specific financial services — like payments or securitization — without the need for a
bank.

Further, blockchain allows for the use of tools like ―smart contracts,‖ self-executing contracts based
on the blockchain, which could potentially automate manual processes from
compliance and claims processing to distributing the contents of a will.

For use cases that don‘t need a high degree of decentralization — but could benefit from better
coordination — blockchain‘s cousin, ―distributed ledger technology (DLT),‖ could help
corporates establish better governance and standards around data sharing and collaboration.

Blockchain technology and DLT have a massive opportunity to disrupt the $5T+ banking
industry by disintermediating the key services that banks provide, including:

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1. Payments: By establishing a decentralized ledger for payments (e.g. Bitcoin), blockchain
technology could facilitate faster payments at lower fees than banks.
2. Clearance and Settlement Systems: Distributed ledgers can reduce operational costs and
bring us closer to real-time transactions between financial institutions.
3. Fundraising: Initial Coin Offerings (ICOs) are experimenting with a new model of
financing that unbundles access to capital from traditional capital-raising services and firms.
4. Securities: By tokenizing traditional securities such as stocks, bonds, and alternative assets
— and placing them on public blockchains — blockchain technology could create more
efficient, interoperable capital markets.
5. Loans and Credit: By removing the need for gatekeepers in the loan and credit
industry, blockchain technology can make it more secure to borrow money and provide lower
interest rates.
6. Trade Finance: By replacing the cumbersome, paper-heavy bills of lading process in the trade
finance industry, blockchain technology can create more transparency, security, and trust among
trade parties globally.
7. Customer KYC and Fraud Prevention: By storing customer information on
decentralized blocks, blockchain technology can make it easier and safer to share
information between financial institutions.

1. Payments
Today, trillions of dollars slosh around the world via an antiquated system of slow payments and
added fees.

If you work in San Francisco and want to send part of your paycheck back to your family in
London, you might have to pay a $25 flat fee for a wire transfer, and additional fees adding up to
7%. Your bank gets a cut, the receiving bank gets a cut, and you‘re charged exchange rate fees. Your
family‘s bank might not even register the transaction until a week later.

Examples of improved payments through blockchain

While cryptocurrencies are a long way from completely replacing fiat currencies (like the US dollar)
when it comes to payments, the last couple of years have seen mostly upward growth in transaction
volume for cryptocurrencies like bitcoin and ether. In fact, the Ethereum network became the first to
settle $1T in transactions in one calendar year in 2020.

Some companies are using blockchain technology to improve B2B payments in developing
economies. One example is Bit-Pesa, which facilitates blockchain-based payments in
countries like Kenya, Nigeria, and Uganda. The company has processed millions of dollars in
transactions, reportedly growing 20% month-over-month.

2. Clearance and Settlements Systems

The fact that an average bank transfer — as described above — takes 3 days to settle has a lot to do with
the way our financial infrastructure was built.

It‘s not just a pain for the consumer. Moving money around the world is a logistical nightmare
for the banks themselves. Today, a simple bank transfer — from one account to

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another — has to bypass a complicated system of intermediaries, from correspondent banks to
custodial services, before it ever reaches any kind of destination. The two bank balances have to be
reconciled across a global financial system, comprised of a wide network of traders, funds, asset
managers, and more.

If you want to send money from a UniCredit Banca account in Italy to a Wells Fargo bank account in
the US, the money transfer will be executed through the Society for Worldwide Interbank Financial
Communication (SWIFT), which sends 37.7M messages a day for more than 11,000 financial
institutions.

3. Fundraising
Raising money through venture capital is an arduous process. Entrepreneurs put together decks, sit
through countless meetings with partners, and endure long negotiations over equity
and valuation in the hopes of exchanging some chunk of their company for a check.

In contrast, some companies are raising funds via initial coin offerings (ICOs), powered by public
blockchains like Ethereum and Bitcoin.

In an ICO, projects sell tokens, or coins, in exchange for funding (often denominated in bitcoin or
ether). The value of the token is — at least in theory — tied to the success of the blockchain
company. Investing in tokens is a way for investors to bet directly on usage and value. Through
ICOs, blockchain companies can short-circuit the conventional fundraising process by selling
tokens directly to the public.

Some high-profile ICOs have raised hundreds of millions — even billions — of dollars before
proof of a viable product. File coin, a blockchain data storage startup, raised $257M, while EOS,
which is building a ―world computer,‖ raised over $4B in its year-long ICO.

4. Securities
To buy or sell assets like stocks, debt, and commodities, you need a way to keep track of who owns
what. Financial markets today accomplish this through a complex chain of brokers, exchanges, central
security depositories, clearinghouses, and custodian banks. These different parties have been built
around an outdated system of paper ownership that is not only slow, but can be inaccurate and prone to
deception.

Say you want to buy a share of Apple stock. You might place an order through a stock exchange,
which matches you with a seller. In the old days, that meant you‘d spend cash in exchange for a
certificate of ownership for the share.

This grows a lot more complicated when we‘re trying to execute this transaction electronically. We
don‘t want to deal with the day-to-day management of the assets — like exchanging certificates,
bookkeeping, or managing dividends. So we outsource the shares to custodian banks for safekeeping.
Because buyers and sellers don‘t always rely on the same custodian banks, the custodians themselves
need to rely on a trusted third party to hold onto all the paper certificates

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5. Loans and Credit
Traditional banks and lenders underwrite loans based on a system of credit reporting. Blockchain
technology opens up the possibility of peer-to-peer (P2P) loans, complex programmed loans that can
approximate a mortgage or syndicated loan structure, and a faster and more secure loan process in
general.

When you fill out an application for a bank loan, the bank has to evaluate the risk that you won‘t
pay them back. They do this by looking at factors like your credit score, debt-to- income ratio, and
home ownership status. To get this information, they have to access your credit report provided by
one of three major credit agencies: Experian, TransUnion,
and Equifax.

Based on that information, banks price the risk of a default into the fees and interest collected on loans.

6. Trade Finance
Trade finance exists to mitigate risks, extend credit, and ensure that exporters and importers can
engage in international trade.

It is a pivotal part of the global financial system, and yet it frequently operates on antiquated, manual,
and written documentation. Blockchain represents an opportunity to streamline and simplify the
complex world of trade finance, saving importers, exporters, and their financiers billions of dollars
every year.

Blockchain technology has had an increasingly regular presence in trade programs for a few years
now, but its mainstream role in bills of lading and credit has only recently begun to firm.

Like many industries, the trade finance market has suffered from logistical setbacks due to old,
outdated, and uneconomical manual documentation processes for years. Physical letters of credit,
given by one party‘s bank to the other party‘s bank, are still often used to ensure that payment will
be received.

Blockchain technology, by enabling companies to securely and digitally prove country of origin,
product, and transaction details (and any other documentation), could help exporters and importers
provide each other with more visibility into the shipments moving through their pipelines and
more assurance of delivery.

One of the greatest risks to trade parties is the threat of fraud, which is greater because of a lack of
confidentiality and little oversight on the flow of goods and documentation. This opens up the
possibility of the same shipment being repeatedly mortgaged, an unfortunate occurrence that happens
so often that commodity trade finance banks write it off as a cost of business.

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7. Customer KYC and Fraud Prevention
Apart from the day-to-day activities of clearing transactions, processing payments, and trading,
a bank also needs to onboard customers, verify their identity, and ensure their information is in
order. This process is called ―know your customer‖ (KYC).

Banks can spend up to 3 months executing all KYC proceedings, which include verification of
photo IDs, documents such as address proofs, and biometrics. A delayed KYC process may cause
some customers to terminate their relationship. According to a Thomson Reuters survey, 12% of
companies said that they had changed their bank because of delays in the KYC process.

Apart from time and effort, complying with KYC rules also costs banks money. Banks end up
spending up to $500M annually on KYC compliance and customer due diligence.

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 3. Robotic Process Automation

The volume of unstructured data that the bank has to process is increasing exponentially with the rise
of the digital economy. This is not just banking transaction data, but also other behavioral data that
could potentially allow the banks to improve and innovate customer experience.
This has made bankers realize that they need to find technologies that can mimic human action and
judgment but at a higher speed, scale, and quality. The answer that has emerged is a combination of
various technologies that enable cognitive and robotic process automation
in banking.

These technologies consist of machine learning, natural language processing, chatbots, robotic
process automation, and intelligent analytics in banking that allow the bots to learn and improve.

It is no surprise that Deloitte‘s 2017 State of Cognitive survey found that 88% of financial service
professionals believe that such technologies are a strategic priority. That said, the current state of the
art in robotic automation is still quite weak at the cognitive and analytical aspects of the processes.
In the years to come, we would see the current cognitive capabilities being bundled with the robotic
process automation to achieve even better results. This is already being implemented in point-of-sale
solutions that automatically suggest marketing promotions that would be most effective for an
individual customer.

Robotics in banking & finance is primarily defined as the use of a powerful robotic process
automation software to –
Install desktop and other end-user device-level software robots

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 Build artificial intelligence workforce or virtual assistants

RPA in the banking industry serves as a useful tool to address the pressing demands of the banking
sector and help them maximize their efficiency by reducing costs with the services- through-
software model.

To seize this opportunity, banks and financial institutions must adapt a strategic, and not tactical,
approach. McKinsey foresees a second wave of automation and AI in the next couple years where
machines & software bots will execute 10% to 25% of tasks across a myriad of bank functions,
expanding the overall capacity and giving the workforce an opportunity to focus on higher-value
tasks and projects.

The exponential growth of RPA in financial services can be estimated by the fact that the industry
is going to be worth a whopping $2.9 billion by 2022, a sharp increase from $250 million in 2016,
as per a recent report.

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 4. Quantum Computing

Quantum computing is a way of using quantum mechanics to work out complex data operations. As is
common knowledge today, computers use bits that can have two values – 1 or 0. Quantum computing
uses ―quantum bits‖ that can instead have three states – 1 or 0 or both. This unlocks exponential
computing power over traditional computing – when the right algorithm is used.
This represents a huge leap in computing power, but any commercial implementations are still
decades away. Nevertheless, firms like JPMorgan Chase and Barclays are investing
in quantum computing research in partnership with IBM

any financial services activities, from securities pricing to portfolio optimization, require the
ability to assess a range of potential outcomes. To do this, banks use algorithms and models that
calculate statistical probabilities. These are fairly effective but are not infallible, as was shown
during the financial crisis a decade ago, when apparently low-probability events occurred more
frequently than expected.

In a data-heavy world, ever-more powerful computers are essential to calculating probabilities

accurately. With that in mind, several banks are turning to a new generation of processors that
leverage the principles of quantum physics to crunch vast amounts of data at superfast speed. Google, a
leader in the field, said in 2019 that its Sycamore quantum processor took a little more than three
minutes to perform a task that would occupy a supercomputer for thousands of years. The experiment
was subject to caveats but effectively demonstrated quantum computing‘s potential, which in
relative terms is off the scale.

Financial institutions that can harness quantum computing are likely to see significant benefits. In
particular, they will be able to more effectively analyze large or unstructured data sets. Sharper
insights into these domains could help banks make better decisions and improve customer service, for
example through timelier or more relevant offers (perhaps a mortgage based on browsing history).
There are equally powerful use cases in capital markets,
corporate finance, portfolio management, and encryption-related activities. In an increasingly
commoditized environment, this can be a route to real competitive advantage. Quantum computers are
particularly promising where algorithms are powered by live data streams,
such as real-time equity prices, which carry a high level of random noise.

The impact of the COVID-19 pandemic has shown that accurate and timely assessment of risk remains
a serious challenge for financial institutions. Even before the events of 2020, the last two decades have
seen financial and economic crises that led to rapid changes in how banks and other market
participants assessed and priced risk of different asset classes. This led to the introduction of
increasingly complex and real-time risk models powered by artificial intelligence but still based on
classical computing.

The arrival of quantum computing is potentially game changing, but there is a way to go before the
technology can be rolled out at scale. Financial institutions are only just starting to get access to the
necessary hardware and to develop the quantum algorithms they will need.

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Still, a rising number of initiatives suggest a tipping point is on the horizon. For banks yet to engage,
and particularly those that rely on computing power to generate competitive edge, the time to act is
now.

Applying emerging quantum technology to financial problems

Financial services has a history of successfully applying physics to help solve its thorniest
problems. The Black-Scholes-Merton model, for example, uses the concept of Brownian motion
to price financial instruments – like European call options – over time.

Applying emerging quantum technology to financial problems—particularly those dealing with

uncertainty and constrained optimization—should also prove hugely advantageous for first movers.
Imagine being able to make calculations that reveal dynamic arbitrage possibilities that competitors
are unable to see. Beyond that, greater compliance, employing behavioral data to enhance customer
engagement, and faster reaction to market volatility are some of the specific benefits we expect
quantum computing to deliver.

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What gives quantum computing this enormous advantage? The solution space of a quantum computer
is orders of magnitude larger than traditional computers—even immensely powerful ones. That‘s
because doubling the power of a classical computer requires about double the number of transistors
working on a problem. The power of a quantum computer can be approximately doubled each time
only one qubit is added.

While broad commercial applications may remain several years away, quantum computing is expected
to produce breakthrough products and services likely to successfully solve very specific business
problems within three-to-five years.

Quantum computing can also enable financial services organizations to re-engineer

operational processes, such as:

– Front-office and back-office decisions on client management for ―know your customer,‖
credit origination, and onboarding,

– Treasury management, trading and asset management,

– Business optimization, including risk management and compliance.

Quantum computing‘s specific use cases for financial services can be classified into three main
categories: targeting and prediction, trading optimization, and risk profiling.

We explore potential use cases in each of these categories, providing examples that apply to three
main industries in financial services: banking, financial markets, and insurance.

Powerful quantum use cases

Quantum computing‘s specific use cases for financial services can be classified into three main
categories: targeting and prediction, trading optimization, and risk profiling.

We explore potential use cases in each of these categories, providing examples that apply to three
main industries in financial services: banking, financial markets, and insurance.

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 5. Artificial Intelligence

The explosive growth that the last decade has seen in the amount of structured and unstructured data
available with the banks, combined with the growth of cloud computing
and machine learning technologies has created a perfect storm for Artificial Intelligence to be used
across the spectrum of banking and financial services landscape.
Business needs and capabilities of AI implementations have grown hand-in-hand and banks
are looking at Artificial Intelligence as a differentiator to beat down the emerging competition.
Artificial Intelligence allows banks to use the large histories of data that they capture to make
much better decisions across various functions including back-office operations, customer
experience, marketing, product delivery risk management, and compliance.

WEF report ―the New Physics of Financial Services‖ has identified the following sector- specific
opportunities that will be opened thanks to AI deployment in banking and financial services. These
opportunities are spread across deposits, lending, payments, investment management, capital markets,
and market infrastructure.

Artificial intelligence would revolutionize banks by shifting the focus from the scale of assets to
scale of data. The banks would now aim to deliver tailored experiences to their customers rather than
build mass products for large markets.

Instead of retaining customers through high switching costs, banks would now be able to become
more customer-focused and retain them by providing high retention benefits. Most importantly,
banks would no more just depend on human ingenuity for improving their services. Instead,
performance would be a product of the interplay between technology and talent.

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Discussions, articles, and reports about the AI opportunity across the financial services industry
continue to proliferate amid considerable hype around the technology, and for good reason: The
aggregate potential cost savings for banks from AI applications is estimated at
$447 billion by 2023, with the front and middle office accounting for $416 billion of that total,
per Autonomous Next research seen by Business Insider Intelligence.
Most banks (80%) are highly aware of the potential benefits presented by AI, per an OpenText survey
of financial services professionals. In fact, many banks are planning to deploy solutions enabled by
AI: 75% of respondents at banks with over $100 billion in assets say they're currently implementing
AI strategies, compared with 46% at banks with less than
$100 billion in assets, per a UBS Evidence Lab report seen by Business Insider Intelligence. Certain
AI use cases have already gained prominence across banks' operations, with chatbots in the front office
and anti-payments fraud in the middle office the most mature.

Impact of Artificial Intelligence in the Banking sector: How is AI transforming the

baking industry

AI minimizes operating costs

One inevitable thing the banking sector has to deal with is the paperwork. Banking employees need to
handle loads of paperwork daily. Such time-intensive and repetitive tasks can cause an increase in
operational costs and are more prone to human errors. This can be solved with the use of AI. It
eliminates these error-prone and time-consuming human processes. A research report published in
Business insider suggests that by switching to an AI banking system, banks can save an estimated
amount of USD 447B by 2023. For instance, with the help of machine learning (ML), automation
tools, and AI assistants, banks can streamline many aspects of human jobs. AI also plays a crucial role
in enabling banking institutions to add a new spectrum to their existing array of operations, thus
reducing operating costs as well as providing new opportunities for revenue.

AI improves customer support

The impact of Artificial Intelligence in banking, especially in the customer support segment has
helped the financial institutions shape customer‘s perception of them. Customer satisfaction directly
impacts the performance and revenue of any organization and the
banking industry is not an exception. With the help of AI chatbots and voice assistants, banks are now
able to serve their customers 24/7 irrespective of their time zone or location. Moreover, using AI and
ML for faster and granular analysis, banks can effectively address
the customer‘s need by drawing compelling insights from the customer‘s digital footprint and
payment behavior. AI also helps customize the bank‘s offerings for an entirely different audience,
ever-expanding their existing base. Thus, AI helps financial institutions in
providing their clients with the right services when they need them most.

AI improves risk management

In banking, AI is a major game-changer in risk management. Financial institutes like banks

are prone to risk due to the type of data they handle each day. For example, banks employ AI-

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powered solutions that can analyze data in massive volumes and can quickly spot patterns from several
channels. This helps predict and prevent credit risks and can identify individuals and businesses who
might default on their obligation to repay their loans. It can also identify malicious acts such as
identity theft and money laundering. AI tools and algorithms have revolutionized risk management in
providing a safer and more reliable banking experience. Thus, it is clear that the impact of Artificial
Intelligence in banking has improved risk management.

AI provides better regulatory compliance

This is one of the most overlooked impacts of Artificial Intelligence in banking. The banking
industry is one of the highest and strictly regulated industries globally. Banks need to comply with
strict laws, regulations, and guidelines to prevent, detect and address any and all deviations,
illegalities, and nonconformities in their operations. Moreover, compliance regulations are subject to
frequent change and banks need to constantly update their process and workflows in accordance with
these regulations. But by harnessing the power of AI in regulatory compliance, banks can simplify,
automate and streamline the regulatory compliance activities and workflows. Thus, by strategically
leveraging AI-powered
regulatory compliance solutions, banks can overcome the daunting regulatory compliance
challenges faced today.
The future of banking is now. As the world is pacing briskly towards complete digital
transformation, advanced technologies like AI will be an even bigger imperative for the banking
industry in the future. Thus, the impact of Artificial Intelligence in Banking is huge and it will
continue to play a huge role in the banking industry providing more flexible and agile business
models for growing needs in this digital world. At Intone, we provide innovative expertise and
capabilities needed to deliver the future of banking today. Whether we‘re helping to transform and
modernize core banking operations, enable a mobile banking experience to become a social one, create
world-class payment and credit processes, or provide data monitoring, analytics, and quality
assessment and compliance and assurance reporting, our banking consulting services empower our
clients with data-driven insights and the right tools to excel in today‘s digital landscape.

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 6. API Platforms

It‘s no secret that the last decade has been one of the most transformative periods for the global
banking industry, at least from a regulatory perspective. Financial institutions have been forced to
evolve under this new era of transparency, with authorities taking unprecedented steps to ensure that
consumer protection is maintained in the face of all of the business activity being conducted by
banks. Among the most comprehensive transparency drives is Open Banking, which requires big
banks to share their customer data with third parties. And at the heart of Open Banking lie application
programming interfaces (APIs). APIs traditionally refer to technical interfaces for software
programmes. Today, they have
become increasingly sophisticated, representing integral components of the Internet of Things
(IoT), whereby smart devices utilise APIs to deliver solutions to customers. Three

main types of APIs are being deployed by banks at present:

1. Private API: This API is accessible only within the financial institution and is therefore used to
improve internal processes, such as boosting operational efficiency.

2. Partner API: A more open API that can be accessed by the bank‘s preferred third-party partners. As
such, partner APIs can facilitate greater expansion through new channels than a private API. Such
partners could include clearinghouses, brokerages and custodian banks, and they can provide services
to their customers using the bank‘s platform.

3. Open/public APIs: Not as commonly used at this stage, this API involves making business data
available to third parties. Banks can deploy such APIs to generate additional business and grow their
customer bases. For example, the bank could enable an API for a loan- comparison app, which would
allow it potentially to acquire new business from customers
shopping for new loans.
4.
As such, banking APIs—especially open APIs—are now playing a crucial role in helping lenders
transition from traditional banking to open banking, allowing third parties to utilise banks‘ services
or indeed offer the same services to their own customers. They also enable businesses to more seamlessly
connect with their consumers than was previously possible, which in turn should improve the customer
experience. A digital wallet, for instance, helps to provide payment services. Or the customer could
use GPS (Global Positioning System) tracking with the bank‘s API to locate the nearest branch or
automated teller machine. Customer-specific APIs are also being created with the appropriate levels of
security to provide customers with their own individually tailored banking information—such as
account alerts, bill payments and fund-transfer services—allowing them ultimately to gain better
control of their finances.
As is often the case these days, data analytics lies at the heart of the banking API revolution. Banks can
now collect substantial quantities of data relating to customer behavior, which should, in turn, enable
them to create more tailored marketing initiatives. Through using networked accounts, for instance,
banks can gain a more realistic picture of customers‘ financial situations, which in turn should
inform them more accurately of the types of lending products that would be most suitable for them.
Customers can also now indicate their banking preferences directly to their bank, indicating exactly
which offerings they do and do not like.

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As an example, the Canadian digital bank Tangerine partnered with IBM to develop its mobile-
banking app, which provides an opt-in ―shake to feedback‖ feature. ―It offers customers an
immediately accessible way to provide personalized feedback directly to the bank,‖ according to
IBM. ―This capability gives personal attention to the banking consumers who may not believe they
are heard when they post in a generic app store comments area.‖ Importantly, IBM notes, Tangerine
―gains insight on any patterns for app defects and design improvement ideas straight from their
customers‖.
Third parties can also leverage banks‘ financial information to build applications that facilitate a
connected network of financial institutions and third parties. But while this should prove beneficial
in most instances, it also means that a large network of parties could be impacted adversely should the
bank fail to perform. India‘s Yes Bank provides an apt example of this problem. After being placed
under moratorium in March by the Reserve
Bank of India (RBI), the troubled lender caused service disruptions to payment-services providers and
other partners of the bank that were using its APIs as well as its B2B (business- to-business) API
service. Speaking to Indian start-up publication Inc42, the chief executive officer of payments firm
Razorpay noted that ―Yes Bank has one of the best API networks in the country which explains the
large dependence of ecosystem players on the bank. While our services have not been directly impacted,
the broader ecosystem will be hit due to the interconnectedness of the participants‖.
Nonetheless, APIs are now having an increasingly significant impact on the global banking system,
and things look set to only grow further from here. This seems especially likely given the
encouragement that Open Banking has received from not only the banking industry but also from
regulators and government entities. Indeed, through PSD2, there is now a
regulatory incentive for banks to adopt APIs sooner rather than later.
Initiatives such as the Open Bank Project, founded by Berlin-based software company TESOBE, are
certainly expediting this adoption rate. The Project, which has already worked with more than 40
bank customers around the world, enables banks to offer an ecosystem of third-party apps and services
to their customers. ―We provide banks with an open API (for partners and 3rd party developers), an
app store (through which end-customers discover the Apps made available by the bank) and a strong
community of 3rd party developers already familiar with the API,‖ the Project explains.
By enabling financial institutions to connect with businesses and consumers, to transfer information
securely and conveniently, and to boost the scope of products and services they can offer to a
potentially wider customer base, APIs could ultimately have a profound transformative effect on
the future of banking.

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The time when banks could control the whole customer experience through a monolithic system that
controlled everything from keeping records to every customer interaction is long gone. Both the
regulatory requirements and the revolving customer needs have turned this humongous system into
dinosaurs.

Today banks need to instead build ―banking stacks‖ that allow them to be a platform to which
customers and third-party service providers can connect to deliver a flexible and personalized
experience to the end user. To do so, they can use API platforms for banking.

API Banking Platform is designed to work through APIs that sit between the banks' backend
execution and front-end experiences provided by either the bank itself or third party partners.

This allows the banks to adopt completely new business models and use cases (for example, enabling
salary advances) and experiment with new technologies like blockchain at low cost. APIs also help
banks to future-proof their systems as the front-end is no more tightly coupled with the backend.

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 7. Prescriptive Security

The nature of cyber risk changes at a great speed. This makes the traditional approaches to risk
management obsolete. It is now clear that it is impossible for organizations to eliminate all possible
sources of cyber threats and limiting the attack footprint at the earliest is the best way to deal with
these. The banks will have to be nimble in the way they approach cybersecurity.
Increasingly banks are deploying advanced analytic, real-time monitoring and AI to detect threats and
stop them from disrupting the systems. The use of big data analysis techniques to get an earlier
visibility of threats and acting to stop them before they happen is called prescriptive security.

While the disruption brought by implementing the new technique may lead to an increase in
vulnerability at the start, this is the way forward to stop the ever increasing data breaches that various
organizations are reporting.

The global prescriptive security market is poised to witness significant growth during the
forecast period. Prescriptive security continues to create high growth perspective with

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growing concern towards the safety of financial institutions, due to rising cyberattacks and
cybercriminal activities. In spite of sustainable research and development, many financial, industrial,
and government information systems continue to be attacked by cybercriminals. Moreover,
enterprises are continually seeking the products incorporated with the perspective and predictive
analytics technologies.
In the age of digitalization for addressing the increasing safety concern, prescriptive security is vital.
This technology leverage the augmented variety and velocity of information to guide identity and
react to threats before they occur. Such factors are expected to play a significant role for market
growth. Nevertheless, there are some hindrances factor in the market expansion including cost, data
protection, and regulations. Moreover, there are specific rules and regulations enforced by the
government organizations mandating prescriptive standards for all market participants; this is
expected to become one of the restraining factors for the Perspective security market.
Perspective security is typically based on some measure of effectiveness using objective and subjective
indicators and prioritized to address security vulnerabilities based on severity and prevalence.
Prescriptive security managed services bring a comprehensive security ecosystem for or more
streamlined threat detection and accelerated security outcomes. Adobe Systems‘ Secure Product
Lifecycle2 (SPLC), Microsoft Security Development Lifecycle1 (SDL), and Safe Code‘s
―Fundamental Practices for Secure Software Development‖ are some of the prescriptive method
example used nowadays. This proactive method to safety uses
automation and big data analytics to detect security events more precisely. Prescriptive security
requirements include broad obligations regarding the use of multi-factor authentication and
encryption.
The Prescriptive security market can be segmented on the basis of application, and deployment mode
and industry vertical type. On the basis of application type, the market can be segmented as incident
detection, pattern recognition, surveillance and person of interest screening. The market is further
segmented on deployment mode including hosted and on premise. Industry verticals served by the
prescriptive security, are law enforcement and intelligent agencies, public transport security, critical
infrastructure security and border control. As there are numerous security problems detected in the
organizations owing to the potential security incidents, industries and vendors are opting for the more
advanced analytical capabilities.
Presently, North America is expected to remain a prominent region in prescriptive security market.
Significant investment in safety and security system in various organizations, by vendors and
consumers in U.S. and Canada is estimated to deliver positive growth outlook for the prescriptive
security market. Industrialization in European countries is projected to create sustainable traction
for prescriptive security market. Developing countries including China, India, and others in the
Asia Pacific region have shown significant demand for prescriptive security, owing to the
emerging trend of the common security framework in smaller and mid-sized organizations.
Key market participants of the Prescriptive security market include Hexagon, Cisco System Inc.,
IBM, NEC Corporation, SAS Institute Inc., Nice Systems Ltd., SAP ERP, ESRI, Splunk Inc., Verint
Systems Inc., ATOS amongst others.

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 8. Hybrid Cloud

One of the biggest challenges that the digital age has brought to banking is the need to respond
quickly. The constantly evolving market that banks operate in requires them to be as agile as possible.
They need to be able to provide resources across the enterprise in a timely manner to address business
problems faster.
High performing banks have discovered that the most cost-effective way of achieving this is through
an enterprise-wide hybrid cloud. This allows them to pick benefits of both public and private while
addressing issues like data security, governance, and compliance along with the ability to mobilize
large resources in a matter of minutes.
Hybrid cloud also allows banks to offer innovative new offerings to its customers. For example,
ICICI Bank has partnered with Zoho to allow businesses to automate the basic reconciliation
process through Zoho Books, a cloud accounting software. The partnership does away with the
need for data entry and also makes it easier to offer multiple payment options to the customers.

Abundant services (PaaS, SaaS Product services) are available at public cloud. Consumption of any
such services without the control of bank IT leads to major security breach. Careful decision needs to
be followed by the bank while adopting public cloud services. Applications which are truly hybrid
faces threats in terms of log analysis, key management, and data encryption by having multiple tenants
– few on premise and few on public cloud.
Though, there are plenty of encryption techniques available to adopt hybrid cloud, the banking system
faces significant challenges in performance. For example, search capabilities and business intelligence
capabilities are some areas of concern in adopting hybrid cloud while following strict encryption
methodologies/solutions.
Legality – Banks follow obligations imposed by the law of the land to ensure protection of citizen
rights. Every bank needs to adhere to local legislation right from data security to bookkeeping of
records (record maintenance for x number of years before it is purged/archived). Banks have good
control on who can access data and what they can do

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with it for applications hosted on-premise. However, tracking data access on public cloud is not
100% possible.
While meeting ever greater regulatory requirements, banking sub-systems such as payments and
transfers, financial reporting, as well as audit and taxes are the areas where banks prefer to operate in the
private cloud infrastructure. Customer credit analysis are nowadays outsourced to third party service
providers by keeping part of the data on premise and by providing secure connectivity to third party
service providers with the rest on public cloud to ensure legal compliance.
Currently, banks show increased appetite to use business process outsourcing (BPO) offerings using
hybrid cloud infrastructure by having core systems at their on-premise infrastructure and data for BPO
at public cloud infrastructure. This setup ensures all legalities are followed and met, while allowing
BPO call centers to operate from remote locations thereby cutting costs.
On mortgage and loans, systems such as loan booking, disbursal servicing, and collared management are
the areas where public cloud offerings are utilized by the banks. Foreclosure management and
associated systems are on premise considering the legal requirements that need to be followed by the
bank.
Standards- Banks need to adhere to the code and standards of the host country. Areas such as customer
awareness programs, credit counselling services, ‗customer matters‘, and customer forums to address
grievances are normally designed to use public cloud infrastructure. For data collection – from
signature capture and verification, document capture, document generation and account opening, the
natural choice is on-premise deployments.
Banks need to shed their legacy approach and build an iterative, design intuitive hybrid cloud
infrastructure, which will help them ultimately deliver simpler services to their customers.
Customer record bookkeeping (e.g. for x number of years) and physical deletion formalities need to be
verified by the bank‘s audit team and it evolves as a major risk since public cloud service providers
follow different deletion procedures. This forces bank‘s systems to adopt to on-premise cloud
infrastructure for those applications which must run through stringent audit procedures (e.g. credit
card data provisioning systems). Talent management and training, social media data analysis, and smart
customer/social analytics are the areas of work completely done on public cloud to leverage various
benefits of third party service providers and SaaS benefits of public cloud service providers.
Consumer banks get more benefits by adopting hybrid cloud in support services such as human
resources administration, and procurement services such as vendor and IT service management. Most
banks prefer public cloud in such areas which benefits them in terms of cost savings, leveraging
benefit of work/support from remote, and bringing new areas of innovation (innovative bots in
training and IT services)
Consumer banking systems now rely more on open banking standards to build APIs that share data
securely with third party applications; bringing more value to customers accessing bank data and
leveraging the benefits offered by these third party service providers. Naturally, hosting such APIs
goes to public cloud infrastructure.
Regulation – Success of hybrid cloud enablement purely depends on how bank identifies the risks and
manages them. There are regulations to hold the data and access them within a country. This forces the
banking industry to adopt hybrid cloud. Apparently, the cloud service

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provider is forced to host their servers locally and cost of maintaining them is passed on to the
bank. This further forces the bank to adopt slice-and-dice approach when deciding to move only
part of the application to public cloud infrastructure for meeting regulatory requirements. Hence,
international banks increase their footprints across the globe by adopting local data centers or
setting up data centers locally on their own.
Banks follow a closed approach by having systems and customer data, that need to follow regulatory
requirements, on premises. Host-to-host, point of sale corporate payment access, and SWIFT need to
follow the regulatory act of the country of operation and so the choice is private cloud for banks.
Consumer bank credit card subsystems such as account services, authorization and charge back,
claims settlement and billing are usually hosted in-house to meet regulatory requirements of the
bank.
Innovation such as artificial intelligence-driven fraud monitoring helps the bank in regulatory
compliance and many consumer banks adopt hybrid-based data analysis to improve fraud detection and
reporting.
Competition
To meet stiff competition, branding and marketing are designed in a way that some portion lies in
private cloud (rebrand positioning, customer/prospect marketing) and some in public cloud (e.g.
campaign delivery, surveys, advertising and branding communications). For benefit of the customer,
many banks have chosen to implement open APIs in areas such as interest rates, loan offerings etc. that
can be consumed by the third party application/service providers to give real benefit to the customers.
Today it has become a lifeline for banks to leverage technology so that both bank and the third party
application/service provider benefit from open APIs. Many banks prefer to host the APIs in the
public cloud rather than on- premise data centers due to various technical reasons including security
and scalability (scale up as and when needed).
Adopting new technological trends range from intelligent bots to artificial intelligence in digital
marketing, where consumer banking system relies mostly on hybrid cloud architecture. Business
process automation (RPA) in customer servicing (account payable, know your customer) and
various report automation are the areas where hybrid cloud architecture is being adopted. However,
to meet the compliance requirement, areas such as account pre-closure, fraud detection and credit
card processing are still largely on-premise data centers in closed proximity with the bank‘s IT
network.
Finally, designing and building a hybrid cloud should be an iterative approach, where the bank
enterprise needs to satisfy (rather than compromise) different IT teams and the user base. Hybrid
cloud is the right choice for the banks and with confidence in the ever-growing technology, it will
become a common practice in the banking system to use hybrid cloud infrastructure.
My final point: No Bank is ready to compromise customer (data) against cozy deployment of its
application/data either on premise or at public cloud.

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 9. Instant Payments

As the world moves towards a less-cash economy, the customer expectations around payments
have changed dramatically. Both customers and business expect payments to happen
instantaneously, and this is where instant payment systems step in.
Instantaneous online payments need to replace cash transactions. Therefore, banks around the world are
finding ways of providing their customers options for instant payment, even when the infrastructure
required payment is a must if for the service is lacking.

For example, banks in Kenya are partnering together to provide P2P payment experience to their
customer base. You would soon see banks combining their instant payment capabilities with third-
party e- and m-commerce solutions to develop a new portfolio of services.

Customer expectations have already shifted to a 24/7 mindset, expecting companies to move faster and
to be more decisive in customer support functions. With Instant Payments quickly becoming the new
normal this is now going one step further.
This year, many Dutch banks introduced the possibility for their customers to make ‗Instant
Payments‘. ING, ABN AMRO, Rabobank, SNS Bank, ASN Bank, Regio Bank and Knab all
have enabled their customers to send and receive payments in a matter of seconds. Within the
Netherlands the maximum amount for Instant Payments is

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uncapped and processing the payment will take around 5 seconds. For international Instant Payments
within European borders the maximum amount is € 15.000,- and processing will take around 10
seconds. This new service is available 24 hours a day, 365 days a year and allows the amount to be
credited immediately to a beneficiary. The beneficiary has access to the funds within seconds.

Consumers are increasingly expecting to get what they want quickly, round the clock and at the
push of a button. This also goes for their payments and that is why Instant
Payments will quickly become the new normal. Instant Payments have many benefits but also
bring about challenges for the organizations that provide these payments. Payment providers
should prepare themselves for the impact Instant Payments will have on their business.

Instant Payments worldwide

The Netherlands is not the only country that has been involved into creating an Instant Payments
scheme. Instant Payment schemes have been introduced in a wide range of countries, with very
different levels of integration and readiness. Currently, according to instapay.today, a website that
brings together the latest insights from across the payments world, there are 46 payment schemes
live, 12 planned, and 8 hybrid schemes. Insta pay categorizes a scheme as hybrid when there is a live
payments system but is not a true Instant Payments system. The worldwide frontrunner, according
to the annual Instant Payments report ranking by FIS, is India. Over 5.2 billion transactions were
recorded during 2018. For two years in a row, they have been recognized as the leading provider of
Instant Payments because of the system‘s standard, published API and strong participation from
third-party vendors. With the ‗go live‘ of several SEPA countries, we can clearly see that Instant
Payments are becoming the new normal and that now is the time for people
and companies to act to get the most out of the opportunity.

Benefits for both business and consumers

Let‘s start off with the business benefits. First benefit could be an even lower amount of cash
payments for merchants: customers can pay in-store through bank transfer, next to the regular card
options. The same is already happening in Sweden through a mobile
payment solution called ‗Swish‘, launched in 2012 by six large Swedish banks in which a
customer‘s phone number is connected to his/her bank account and payments can be transferred in
seconds. Another benefit is cashflow improvement: businesses will be able to receive payments
during the weekend and immediately spend and/or invest this money again. Furthermore,
businesses can serve their customers better by offering them an additional safe and quick way of
paying. Lastly, for certain B2B markets, doing
business over the weekend becomes a lot easier: the value of all kinds of raw materials (for example
grain) can now be determined during the weekend and sold based on this.

For consumers, one of the benefits is an instant bank transfer between you and your friends:
this can be convenient in many situations (for example splitting the bill in a

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restaurant). Also, purchases through platforms such as online auctions
website marktplaats.nl become easier and safer: it can be done on the spot. Both the buyer and seller
instantly know that the payment was processed. Another benefit is a reduced necessity for large
cash payments: creating new opportunities to pay on the spot for goods such as a car or even a house.
Lastly, in certain unexpected situations Instant
Payments can be of great value, think of using your travel insurance and needing an instant pay-out
to be able to pay for a hospital bill.

Challenges for organizations

Especially in the adoption phase of Instant Payments there will be considerable challenges for
organizations. The overarching challenge for both banks and organizations is to focus on safety,
integrity and trust. On the side of banks, the focus will be on screening and monitoring
transactions. We have summarized the top 3 challenges that organizations will face.

1. Increased pressure on Service Level Agreements: Pressure on SLA‘s, in terms

of invoices, where both companies and customers alike will be getting more and more used to
instant repayment (e.g. credit invoices). This also means that a company will have increased
pressure on cashflow and cash positions and because of that might have to rethink its cash
management.
2. Interoperability between payment schemes: Interoperability between the different Instant Payment
schemes is still quite a far away. For companies this means that the banks they choose can be of
strategic importance with regards to offering Instant Payments to their clients. A worldwide
coverage of Instant Payments for your multinational might require you to have a spread of
different payment schemes.
3. Fraud: It is considerably more difficult to deal with fraudulent payments if they are
irrevocable. For this reason, the UK has started a campaign designed to tackle financial fraud.
Furthermore, the interoperability and fragmentation of the different payment solutions can
become the cause of not meeting customer demands. Therefore, it should not come as a surprise
that a new study has shown that 93% of US companies fail to meet the consumer demands
regarding Instant Payments, with customer satisfaction suffering because of it.

Because there will still be many business solutions to follow the first steps into Instant Payments,
the ever-changing mindset of both the customer and companies should be considered. Customer
expectations have already shifted to a 24/7 mindset, expecting companies to move faster and to be
more decisive in customer support functions. With Instant Payments quickly becoming the new
normal this is now going one step further. Businesses need to be ready for this this change in order
to keep up with customer demands. Organizations need to act now and overcome the challenges
mentioned earlier to reap the full benefits of Instant Payments and catch up with the already shifted
mindset of retail and commercial clients.

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 10. Smart Machines

You must have already seen assistants like Amazon‘s Alexa and Google Home in action. Can you
imagine the impact these could have on banking applications
In fact, Bank of America has already developed Erica as a virtual assistant specifically for banking
operations. These smart machines are beginning to act as digital concierges for the customer in
interacting with banks as well.

Banks will have to invest in digital engagement to ensure long lasting relationships with the
customer. Remember that customers will gravitate towards banks that are easiest to work with when
they are using technologies that they have become habituated to.

Benefits of Machine Learning in Banking

Artificial Intelligence and Machine Learning are able to provide unprecedented levels of
automation, either by taking over the tasks of human experts, or by enhancing their performance
while assisting them with routine, repetitive tasks. But what are the main benefits of Machine
Learning in Banking? This question has many possible answers, and what is even more interesting,
the number of answers will continue to expand as the newest technological solutions hit the market.
Here is an attempt to highlight the most important ones:

1.Greater Automation and Improved Productivity

Artificial Intelligence and Machine Learning can easily handle mundane tasks, allowing
managers more time to work on more sophisticated challenges than repetitive paperwork.
Automation across the entire organization will ultimately lead to greater profits.

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2.Personalized Customer Service

Automated solutions with Big Data capabilities can track and store as much information about the
bank‘s customers as needed, providing the most precise and personalized customer experience.
Optimizing the customer footprint allows banks to leverage analytical capabilities of Artificial
Intelligence and Machine Learning to detect even the most subtle tendencies in customer behavior,
which helps create a more personalized experience for each individual client.

3.More precise Risk Assessment

Having an accurate digital footprint of each customer also can help banks reduce uncertainty for
managers working with individual clients. The automated system is more accurate than a human in
such areas as analysis of loan underwriting, eliminating any possible human bias.

4.Advanced Fraud Detection and Prevention

This is probably the top benefit of AI/ML for any financial institution because there has
historically been, and will continue to be, criminals who are devising methods to commit financial
fraud. Fortunately, there are currently a wide range of proven methods and techniques of ML-powered
Fraud Detection on the market. We will talk about all of them in greater detail in this article, and
you will find out how to make your bank even more secure thanks to these technological
innovations!

How Artificial Intelligence is Used for Fraud Monitoring in Banks

The data that banks receive from their customers, investors, partners, and contractors is dynamic and
can be used for different purposes, depending on which parameters are used to analyze them.
Basically, the scope of AI for banking can be grouped into five large groups.

1.Improving Customer Experience

When banks and other financial organizations got the opportunity to learn everything about a user and
his behavior on a network, they simultaneously gained the opportunity to improve the user experience
as much as possible.

2.Chatbots

For example, if a user has difficulty working with a website or application, chatbots are used to lead
him along the right path and at the same time reduce bank support staff‘s workload. In addition,
modern chatbots can perform simple operations such as locking and unlocking cards as well as send
notifications to the user if he has exceeded the overdraft limit — or vice versa if the account balance is
higher than usual.

3.Personalized Offers

Having a variety of information about user behavior allows financial companies to find out what
customers want at the moment, and moreover what they are willing and able to pay for. So, for
example, if a client was looking at ads from car dealers, then it might make sense to

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develop a personalized loan offer — of course, after analyzing his solvency and all possible risks.

4.Customer Retention

Modern AI systems working with big data in banking can not only analyze, but also can make
assumptions. For example, in a number of cases, it is possible to predict the intentions of the client if
he wants to refuse the services of a banking organization. The knowledge of this intention signals
that it is necessary to take additional retention measures, create even more targeted and personalized
offers, and as a result, improve the customer experience.

5.Banking Fraud Detection

Banking Fraud Detection is in the first place linked to the detection and prevention of
damaging operations that deal with transaction failures, returns, disputes, and money
laundering, among others. A much safer strategy for every payment service is to set a reliable
fraud prevention system rather than deal with the consequences of bad customer experiences
and fraud loss

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 SWOT Analysis of Banking Industry

Strength
Banking Industry is the Oldest Industry : Due to Technological advancement Industries are
changing their structure. Banking has also changed its structure and system. Banking Industry
has proved to be one of the wide spread and widely acknowledged industry. It has also
supported the human race. Banking has adapted and updated itself to suit the new needs. Banks
today play a critical and indispensable role in society, from inculcating the habit of savings
to helping people with financial instruments.
Financial Stability of Nation:In ensuring a nation‘s economic growth and financial
stability, the banking industry plays a vital role. By fostering prosperity, banks contribute
to the economy. They assist the masses to maintain their resources and become important
contributors to both the national and international economy.
Supplier of Financial Instruments:Banks have a wide range of financial instruments for
their customers. Fixed Deposits, Stocks, bonds, insurance and savings accounts

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 are some of the varied products sold by banks. Furthermore, to provide online banking
solutions, banks have also embraced and incorporated digital technologies.
Good Employment Source and Helps in GDP growth: There is a widespread consensus that
perhaps the improvement of the financial system leads to economic growth. Financial
development establishes encouraging conditions for growth by either supply-led
(financial development stimulates growth) or demand-driven
growth. It is this industry that works constantly to ensure financial stability, encourage
foreign trade , promote jobs and reduce poverty around the world.
Financial Assistance: whether natural calamity or man-made calamity banks alleviate the
after-effects of disaster by offering financial assistance to victims to rise up and lead a
peaceful life again.
Diversified services: the banking sector provides insurance, loan and investment
services from Current and Saving Accounts.
Connecting People: With the advent of a modern century, technological innovation Banks
have made life simpler for a common man. People can transact in many places on a real-time
basis.
Changing from the position of simple savings & credit facilitator: today‘s top bank
priorities include regulatory enforcement, improving asset quality, enhancing customer
focus, concentrating on digital convergence, and addressing competition
from non-banks. Banks are now investing in business and technology to improve their business
models.

Weakness
Global Economics Susceptibility: Due to Exchange Rate changes and changes in world
economy banking Industry is effected. It is also seen that slight shifts in the exchange rates of
currencies or the spending and saving patterns of the citizens of one major nation can directly
impact the entire banking industry.
Non Performing Assets: The major weakness of the banking sector is NPAs (Non-
Performing Assets). Typically, NPAs denote loans that are not recoverable. This leads to
financial losses for the bank, inevitably. For the banking sector and the economy as a whole,
NPAs can have a debilitating impact. Developing countries like India face instances of high
NPAs that have dealt a significant blow to the nation‘s banking industry.
Lack of coverage in rural areas: It has been observed that the banking industry focuses more on
urban areas in most countries, while rural regions are ignored. In the banking sector, this is a
considerable weakness. Villages are now home to a significant
majority of the world‘s population. In developed countries, this is more. Banks are working
in main stream don‘t want to concentrate on mainstreams. Banks must try to capture Rural
Markets.

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Opportunities
Advancements in Technology: The banking industry has always based on technology.
This is evident that digital services provided by banks today are totally based on
technology. However, banks should continue to adopt the latest technological advances. To
draw future generations, they should focus on putting out newer goods and services.
Opportunities for rural growth: One of the banking industry‘s weak points is its limited
presence in rural areas. But this vulnerability can actually be turned into an opportunity.
Banks will increase their customer base considerably by expanding into villages and
providing their services to the rural population.
Societal Evolution: Both economically and culturally, human society is changing. The needs
and demands of customers with increasing income levels are bound to change
in this complex landscape. It is necessary for banks to adapt to this changing society.
The sector will solidify its position in the future by offering better services.
Rising in the private banking sector: the banking industry around the world is highly
regulated by Public sector banks and their respective central banks. With the emergence of
private sector banks, this sector is experiencing structural and functional shifts, primarily due
to the adaptation of new technology and intensified competition, thereby benefiting end-
customers.

Threats
Lack of Cyber Defence Proper: The current banking industry relies entirely on the cyber-
world. Whether it is data storage, monetary transactions or personal information, everything
is stored digitally. This makes the banking sector a primary target for hackers who are
seeking to benefit financially by leveraging flaws in the banks digital infrastructure.
Unless banks take effective cybersecurity steps to safeguard their records, they will face a
significant cyberspace threat.
Competition Stiff: Worldwide, banks face stiff competition. Not only from other banks, but
also from institutions like Non-Banking Financial Companies that sell a range of financial
products that are not available to all banks. This has contributed to a change of the consumer
base from banks to NBFCs, which are more embraced by the new skilled breed.
Global Uncertainty in Economics: The world is going through difficult economic times at
present. The international banking sector has all been affected by trade wars, protectionist
policies, and economic downturns. If the world‘s economic conditions do not change, banks
will face a bleak future.
Recession: This is one of the biggest challenges to the nation‘s financial system. The
traumatic shock of economic crises and the collapse of a number of companies will impact
the banks and vice versa.
System stability: the failure of certain poor banks has also undermined the stability of the
system.
Government Regulations can directly effect the Banking Sector of a country

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 Challenges faced

They say buying an elephant is easier than owning it and this line fits perfectly well in Banking
Sectors. The banking industry is undergoing a radical shift, one driven by new competition
from FinTechs, changing business models, mounting regulation and compliance pressures, and
disruptive technologies.

The emergence of FinTech/non-bank startups is changing the competitive landscape in financial

services, forcing traditional institutions to rethink the way they do business. As data breaches
become prevalent and privacy concerns intensify, regulatory and compliance requirements become
more restrictive as a result. And, if all of that wasn‘t enough, customer demands are evolving as
consumers seek round-the-clock personalized service.

These and other banking industry challenges can be resolved by the very technology that‘s caused
this disruption, but the transition from legacy systems to innovative solutions hasn‘t always been an
easy one. That said, banks and credit unions need to embrace digital transformation if they wish to
not only survive but thrive in the current landscape.

These are few main challenges faced by the Banking Industry—

Increasing Competition. ...

A Cultural Shift. ...
Regulatory Compliance. ...
Changing Business Models. ...
Rising Expectations. ...
Customer Retention. ...
Outdated Mobile Experiences. ...
Security Breaches

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 Importance of latest Technology in Banking Sector
• Globalization:
Information Technology has brought the world closer and allowed for information to be shared
easily, quickly and effectively. Allowing for transactions to be performed regardless of where an
individual or business are located. Information Technology has broken down geographical
boundaries making the global village so small.

• Communication:

Information Technology has made communication easier, quicker, cheaper and more efficient.
People are now able to communicate with each other from anywhere around the world. For
example through video conferencing, email, texting, instant messaging, social networking, radio
on the go, television on the go, voice calls and VoIP.

• Cost Effectiveness and Operational Excellence:

Automation of processes for individuals and businesses means our daily lives have been
transformed. Our daily lives have been made so much easier and economically effective. Cost
effectiveness gives rise to profits realised and better pay for employees. Making daily lives easier
and less strenuous working conditions. Transactions are achieved in the less
amount of time compared to the days before automation. Fewer errors are made by the use of
IT.

• Bridging the Cultural Gap:

People from different nationalities and cultures are able to communicate amongst themselves and this
allows for exchange of views and opinions which could better their lives, increase awareness and
decrease prejudice.

• Longer Working Hours:

Business hours are extended from the normal Monday to Friday and 8-5 working days. The business
is virtually open 24 hours and 7 days a week. This applies to all businesses around the globe. The
extended hours allows for business transactions to be conducted from anywhere and anytime of day.
People are now allowed to purchase anytime and anywhere.

• Creation of New and Exciting Jobs in the Field of IT:

Creation of new and interesting jobs within the Information Technology field. For example, would
have computer programmers, system administrators, system analysts, technical specialists of hardware
and software, web development, computer engineering and network administration.

• Business Intelligence:

IT in banking gives competitive lead amongst other rivals. Crucial and essential information
obtained will be used in making strategic business decisions. Information attained from competitors,
individuals, business environment, internal operations and business partners.

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Limitations of Technology used in Banking Sector‘s
Mobile banking customers are at great risk of receiving fake SMS messages and scams from hackers
and scammers. The loss of a person‘s mobile device often means that the customer‘s information can
be accessed unlawfully. Gaining access to customer‘s mobile banking PIN and sensitive information.
In order to have better experience with mobile banking customers need to have access to more Modern
mobile devices such as Smartphone, PDA‘s and tablets. From the literature attained on Mobile
Banking Adoption there are several key problems that were stated in the research. There are various
problems customers face when using mobile banking. The problems being:

• Security and Risk:

Mobile customers are susceptible to scammers. A customer receives a fraudulent email or SMS from a
sender posing as a bank or financial institution. Requesting for the customer to send their bank account
details. If and when a mobile device is stolen the customer is at great risk. Most customers
automatically set their devices to save their personal information leaving the customers vulnerable to
scammers. As consistent with Chitungo and Munongo customers of mobile banking are uncertain
with issues such as loss and theft by hacking thus discouraging the customers to adopt mobile banking.

• Compatibility:

Banks offer the mobile banking services to all customers, some customers are limited to the number of
services offered as they do not have compatible devices, consistent with research conducted by Al-
Jabri and Sohail . Thus the customer is limited to several services only with the constraint of the type
of mobile they have. Mobile applications designed can also be exclusively available to certain
mobile phone brands.

• Cost:

The cost of mobile banking occur if the customer does not have a compatible device, though if the
customer does have a compatible device they may still incur data and text messaging costs. Extra costs
for mobile banking service, for software.

• Scalability and Reliability:

The banks need to ensure that mobile banking systems are working for customers to access the service
from anywhere and anytime. There can be loss of customer confidence if mobile banking services are
not met continuously, found to be consistent.

• Application Distribution:

Customers would expect that the mobile application would be updated, upgraded and downloads
being available. On the other hand, there are numerous issues to ensure that the upgrade, update and
downloads are implemented successfully.
\

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RESEARCH METHODOLOGY

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RESEARCH MEHODOLOGY
The study of awareness about Financial Planning among the people and particularly the
insurance sector covers data collection through observation, questionnaire and interview of
consumers.

STATEMENT OF THE PROBLEM

The statement of the problem is the public awareness of financial planning in the emerging
Indian market and it is the first step of researh methodology.

RESEARCH OBJECTIVE

 To study the awareness of Financial Planning among the people.

 To study the importance of Insurance in today‘s scenario.
 Brand awareness of various private insurance companies.
 Preference among different investment tools.
 Purpose of buying insurance.
 Preference in choosing channel for buying life insurance.
 Quality of service provided by agents and clients satisfaction
level.

SCOPE OF THE STUDY

A big boom has been witnessed in Insurance Industry in recent times. A large number of new

players have entered the market and are vying to gain market share in this rapidly improving

market. The study deals with HDFC Standard Life in focus and the various segments that it

caters to. The study then goes on to evaluate and analyse the findings so as to present a clear

picture of trends in the Insurance sector.

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SOURCES OF DATA

Data Collection:

 Primary data
 Secondary data
Data used for the research work was primary in nature.

Sample Design : -
The research process was done by interacting with number of customers during the activities
performed, which included, markets, cold calling, canopies, etc. Sample Design consists of
Random Sampling.

Sample size: - 100

Method of collection: -

Field procedure for gathering primary data included observation and interview schedule in
which the questionnaires were filed by the interviewer.

Personal interviews through self administered survey was done to collect the data, market
research was undertaken, that was accomplished by performing various activities designed.

Research Instrument:
Questionnaire

The questionnaire was formulated by keep in mind the following Points: -

 Giving the respondents clear comprehension of the question.

 Inducing the respondents to co-operate.
 Giving instructions as to what is wanted.
 Identifying the needs to be known.

Limitations:

The following were the limitations that were there during the course of the study:

1. Limited time period.

2. Less number of respondents.
3. Biasness of the respondents.

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SWOT ANALYSIS

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 SWOT ANALYSIS

Strength

The keys strength areas of HDFC Bank are its motivated and highly competent staff who are

aggressive in their pursuit for excellence in terms of employee competence it rivals the

highly rated foreign banks.

Weakness

Though HDFC Bank has wide coverage of ATM Network through out the country it is not

considered adequate keeping in view is wide customer base.

Opportunity

HDFC Bank has good opportunity in Rural area and offices etc. which are still untouched

by banks of such repute are considered virgin markets.

Threat

Other banks like ICICI, SBI, UTI, IDBI etc are expanding at a very fast rate and are

perceived as threat to HDFC Bank.

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DATA - ANALYSIS

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 DATA - ANALYSIS
BANKWISE DISTRIBUTION OF ACOUNT HOLDERS
Based on the response of 250 people following table has been made :

NAME OF THE BANK NO. OF ACCOUNTS %age

HDFC 70 28%

ICICI 110 44%

UTI 20 8%

IDBI 50 20%

UTI
IDBI 8% HDFC
20% 28%
HDFC
ICICI
IDBI
UTI

ICICI
44%

RANK IN ORDER OF BANKS WITH RESPECT TO NUMBER OF

CUSTOMERS HELD
1. ICICI
2. HDFC
3. IDBI
4. UTI

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 POPULARITY OF THE TYPES OF ACOUNTS

Based on the response of 250 people following table has been made

Used by people % age

Name of Account

SAVINGS 80 32%

CURRENT 70 28%

FIXED 40 16%

SALARY 60 24%

SALARY SAVINGS
24% 32%

FIXED
16%
CURRENT
28%

Types of accounts held by people ranked in order

1. Savings
2. Current
3 Salaries
4. Fixed
HENCE IT IS EVIDENT FROM THE DATA THAT SAVINGS ACCOUNTS ARE THE
MOST POPULAR ONES AMONG ALL TYPES OF ACCOUNTS. WHERE AS FIXED
DEPOSITS ARE LESS POPULAR AND SALARY ACCOUNTS COMES THIRD IN
RANKING>
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 MOST SOUGHT AFTER ATTRIBUTES OF A BANK

People ranked different attributes as 1,2 ,3 etc.,

Based on these responses mean rank has been calculated.

ATTRIBUTES MEAN RANK

ATM 2.6

FACILITIES 3.88

LOCATION 2.72

SERVICE 4.24

ATMOSPHERE 5.276

EMPLOYEE BEHAVIOUR 3.388

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 MEAN RANK

6
5.276
5
4.24
3.88
4
3.388

3 2.6 2.72

0
ATM FACILITIES LOCATION SERVICE ATMOSPHERE EMPLOYEE
BEHAVIOUR

NOW ARRANGING THE MEAN RANKS IN ASCENDING ORDER WE GET THE

OVERALL RANK WHICH IS AS FOLLOWS:

1. ATM

2. LOCATION

3. EMPLOYEE BEHAVIOUR

4. FACILITIES

5. SERVICE

6. ATMOSPHERE

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 SATISFACTION LEVEL OF CUSTOMERS

FROM THE RESPONSES OF CUSTOMERS OF DIFFERENT TYPES OF ACCOUNTS

CUSTOMER SATISFACTION LEVEL HAS BEEN GAUGED.

SAVINGS 70%

CURRENT 60%

SALARY 55%

FIXED 70%

100%

80%
60%
Series1
40%
180

160

140

120

100 20%
80

60

40

20
0%
0 SAVINGS CURRENT SALARY FIXED
1st Qtr
3rd

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POSSIBILITY OF EXPANSION CONSIDERING PRESENT CUSTOMER BASE

From the responses of question whether people would like to open another account

following table has been made

YES 45%

NO 55%

YES
45%

YES
NO

NO
55%

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CUSTOMER IN MEERUT USED ATMs FOR WHAT PURPOSE IN PERCENTAGE

2%
5%
8%

85%

Cash withdrawal Balance Inquiry

Cash deposit change of pin no.

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 FINDINGS

1. From the response of the Questionnaire gathered and findings the experience during the

survey from of people around, about the HDFC Bank, a lot of conclusion and findings

have been arrived at which are sufficient to unravel the mysteries and connotations of

customer behavior and their satisfaction.

2. Since HDFC Bank is number two in terms of number of account holders, and has a

positive image and enormous goodwill among masses elevates its position from niches

to runner in retail banking sector. It can very well take on the challenge posed by ICICI

Bank and try to improve its position by focusing on key strength areas and strategically

eliminating its weak points.

3. For expansion HDFC Banks should make forays into semi-urban and smaller cities and

also rural areas .In fact these days, rural income is increasing at a much faster rate then.

Urban income and also the market are considered virgin which makes the launching and

expansion prospects very good one. In this way the Bank can

4. Gain foothold over these territories and reap rich harvest in terms of booming account

numbers.

5. However it was felt during the survey that major constraint which may laggard the

growth of HDFC Bank is the inadequate number of ATMs across the country. The Bank

need to improve upon this front because in terms of customers consideration of

attributes in choosing a bank ATMs and location of it are of paramount importance.

6. Since saving account ate the most popular among masses, innovative ideas has to be

framed to inveigle new prospects into this venture. Possible targets could be school and

college going students, housewives and small businessmen who could easily put their

money from irregular source of income into this account.

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7. Now-a-days Banking is no more the way of only providing interest for the deposited

money, but they are the ways of accessing and transacting with them from anywhere and

anytime at any part of the world. Hence, flawless and effortless access of bank accounts

from mobile phones and Internet has to be made available.

8. It is also felt that in the era of e-banking where transaction is more on the IT highway

the success of bank will depend more on building information networks rather then

anything else. In the near future all existing banks including HDFC Bank may have to

rival Airtel and hutch network, which too might become Banks very soon rather then

competing among themselves. Hence vision for success in near future is building up of

information gathering and dissemination network base

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SUGGESTIONS AND RECOMMENDATIONS

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 LIMITATION

Mobile banking customers are at great risk of receiving fake SMS messages and scams from
hackers and scanners. The loss of a person mobile device often means that the customer
information can be accessed unlawfully. Gaining access to customers mobile banking PIN
sensitive information. In order to have better experience with mobile banking customers need
to have access to more Modern mobile devices such as Smartphone, PDA and tables. From the
literature attained on Mobile Banking Adoption there are several key problems that were
stated in the research. There are various problems customers face when using mobile banking.
The problems being:

SECURITY AND RISKS

Mobile customers are susceptible to scammers. A customers receives a fraudulent email or

SMS from a sender posing as a bank or financial institution. Requesting for the customer to
send their bank details. If and when a mobile device is stolen the customer is at great risk.
Most customers automatically set their device to save their personal information leaving the
customers vulnerable to scammers. As consistence with Chitungo and Munongo customers of
mobile banking are uncertain with issues such as loss and theft hacking thus discouraging the
customers to adopt mobile banking.

COMPATIBILITY

Banks offers the mobile banking services to all customers, some customers are limited to the
number of services offered as they do not have compatible devices, consistent with research
conducted by AI- Jabri and Sohail. Thus the customers is limited to several services only with
the constraint of the type of mobile they have. Mobile application designed can also be
exclusively available to certain mobile phone brands.

COST

The cost of mobile banking occur if the customer does not have a compatible device, though if
the customer does have a compatible devices they may still incur data and text messaging
costs. Extra costs for mobile banking service, for software.

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SCALABILITY AND RELIABILITY

The banks need to ensure that mobile banking system are working for customer to access the
service from anywhere and anytime. There can be loss of customer confidence if mobile
banking services are not met continuously, found to be consistence.

APPLICATION DISTRIBUTION

Customer would expect that the mobile application would be updated, upgraded and
downloads being available. On the other hand, there are numerious issues to ensure that
upgrade update and downloads are implementation successfully.

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 CONCLUSION

In conclusion, the banking sector is now using new technologies to provide better services to
customers. The banking sector realises that customers‘ needs have changed with the advancements in
technology and their own needs. IT has allowed for improved banking products, competitive markets,
implementation of consistent methods for control of threats and has aided mobile banking services to
reach geographic distance and varied markets. Extensive work needs to be done in the acceptance of IT
in the banking sector so that the risks are eradicated. Customers need to be informed on suitable
precautionary measures for
safety. To avoid failure regular security checks are also required. Back-up and recovery plans to restore
customer confidence in IT. For inclusive growth, the benefits of mobile banking should reach to the
common man at the remotest locations in the country. Mobile Banking is
a very powerful tool that is used to deliver payment services and account queries for those with
accounts

1.The mobile and wireless market has been one of the fastest growing markets in the world.
The arrival of technology and the escalating use of

2. mobile and smart phone devices, has given the banking industry a new
platform. Connecting a customer anytime and anywhere to their

3.money and needs is a must have service that has become an unstoppable necessity. This worldwide
communication is leading a new

4.generation of strong banking relationships. The banking world can achieve superior
interactions with their public base if they accommodate all

5. their customer needs. They have a unique challenge to keep their customer alliances and keeping
up with the new technologies, and

6.competitive strategies that other banks also have to offer the public. Conveniences of services
plus outside locations like ATMS are crucial to

7.every banks success. Meeting all challenges including safety and security are perfect
examples of good banking strategies. In order for the

8.financial institutions to effectively grow they must embrace the new technologies and
customize them to suit their economic success and the.

9.Online banking is certainly here to stay. Online banking is a necessity for the bank's that we studied
and others in order for them to stay in

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As we venture into the future, the internet will undoubtedly continue to change the banking industry.
Mobile Banking has brought-in enormous benefits to customers, banks, and staff particularly in terms
of increase in productivity, speedy and efficient service delivery, cost reduction and increased profits.
With the advancement of IT in the banking sector, customers do not always want to visit banks
branches. They are able to utilise the IT services provided
to make transactions. Banks now are facing serious challenges in stiff competition, security issues,
making potential customers aware of the mobile banking and also keeping the old customers
satisfied. More focus needs to be done on enhancing customer‘s awareness and intention to use
mobile banking services by more research being conducted using the
adoption theories. The mobile phone developers and the operating software providers need to design
more advanced technologies. The developers of the mobile banking applications need to be aware of
security, risk and trust issues that customers have. Solutions need to be developed to solve security and
trust issues customers may have with mobile banking issues.

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 SUGGESTIONS AND RECOMMENDATIONS

 Try to improve after sales services.

 To be some quality conscious.

 Try to install ATM‘s at more convenient places for their customers.

 Try to provide Complete/Actual information to the customers.

 Customers must have all the information regarding charges & fees.

 HDFC must issue at par cheques to all their customers.

MAKE STRONG PUBLIC RELATIONS:

The bank has to provide better services to satisfy the needs and wants of customers specially on

the occasion of deepawali and dashahara like festivals so that the customer has to satisfied with

their services of banks the bank is to provide loans, specially housing loans to the customer at

very low interest rates so that the every middle class family is to avail loans without any

problem.

CONTINUOUS MARKET FEED BACK:

To make the good relation with the customers, it is very important to take feed back time to

time to know about the problems and difficulties which are faced by the customers.

PROVID RECENT INFORMATION TO THE CUSTOMERs:

The bank is able to give as many as possible information‘s to our customers so that the

customer is able to understand which type of information is to be used in a particular sector.

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TRY TO INPROVE ON LINE TRADING:

Due to on line trading the customers are given way of opening and depositing their money on

the basis of on line services and make trading. Of shares and mutual funds

TRY TO INSTALL ATM’s AT MORE CONVENIENT PLACES:

This financial year bank also try to increase the ATMs so customers can avail their banks as

well as ATM‘s as many as possible places specially in commercial places like petrol pumps, in

market , in the hospital . So that the customer has convenience to Deposit and withdraw their

money without problems.

TRY TO OPEN EXTENTION COUNTER AT VARIOUS PLACES:

The bank has to open their extension counter in various places of their city so that the deposit of

bank is also increase and the turnover of bank during facilities which is provided by bank

cheaper rate.

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 CONCLUSION
1) HDFC BANK first and most successful private financial institute as it high level of
ethical and professional and commitment towards enhancing investors interest.

2) HDFC stands on its mission & vision statement not on the papers but in the activities
and practices.

3) One of the core reason behind its tremendous success is that it has the highly motivated
work force and is loyal to the company and its status.

4) HDFC BANK has variety of products and services that is set up for the maximum
development of the costumers.

5) Online banking services and details information to the products are listed over its site
and very advanced technology is adopted in every branch.

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 BIBLIOGRAPHY

BOOKS:-

1. MARKETING CHANNELS (fifth edition)

-By Stern-EL Anasary
2. MANAGEMENT INFORMATION SYSTEM (6th edition)
-by Lordon& Lordon

WEBSITE -

1. www.yahoo.com

2. www.hdfcbank.com

6. www.economictimes.com

NEWS PAPER-

1. THE FINANCIAL EXPRESS

1. BUSINESS STANDERED

MAGAZINE-

1-CAPITAL MARKET

2-EXPRESS COMPUTER

3-E-COMMERCE

4-BUSINESS INDIA

HDFC BANK CATALOUGE

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APPENDIX

QUESTIONNAIRES

1- DO YOU HAVE ANY A/C IN BANKS? IF YES GIVE THE NAME OF BANKING

ORGANIZATION.?

I------------------------------ II- -----------------------------

NO

2- HOW LONG RELATION YOU HAVE WITH YOUR BANK?

A- LESS THAN 1 YEAR. B-1-3 YEARS

C-3-5 YEARS. D-MORE THAN FIVE YEARS.

3-WHAT SATISFIED YOU MOST IN YOUR BANK?

A- RELIABILITY B- PERSONAL CARE C-FAST SERVICE

D-OTHERS (SPECIFY)…………………………………………………..

4-DO YOU LIKE 24 HOURS, 365 DAYS AND 7 DAYS WEEK BANKING IN THE

PRESENT DAYS.

A) YES B) NO

5-WHICH OF THE ELCTRONIC BANKLING CHANNELS YOU ARE USING.TICK

A-ATM B- PHONE BANKING C- MOBILE BANKING

D-INTERNET BANKING E - OTHERS (SPECIFIED) ----------------------

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6-DO YOU FIND E-AGE BANKING CHANNELS ARE HELPFUL FOR YOU.

A) YES B) NO

7-CAN E-AGE BANKING CHANNELS REPLACE TRADITIONAL BANKING.

A) YES B) NO

8- FOR WHAT PURPUSE YOU USE E-AGE BANKING CHANNELS.

A- CASH WITHDRAW B- BALANCE INQUIRY

C- CASH DEPOSIT D- OTHER THAN IT (Specify)

--------------------------------------------------------------------------------------.

9- DO YOU FIND YOURSELF COMFORTABLE WITH E-AGE BANKING

CHANNELS.

A) YES B) NO

IF NO ,WHY?…………………………………………………………………………..

10- DO YOU THINK E-AGE BANKING CHANNELS ARE.

A- COST EFFECTIVE B- INCREASES PRODUCTIVITY

C- TIME SAVING D- NONE OF THESE

11- WHICH BANK IS BETTER IN MANAGING E-AGE BANKING CHANNELS?

(RANK IN ORDER.)

A- ICICI B- HDFC C- IDBI

D- UTI E- SBI F- INDUS IND

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12- WHAT ATTRACTS YOU MOST? (RANK)

LOCATION

EMPLOYEE BEHAVIOUR

ATM

FACILITIES

SERVICE

ATMOSPHARE

13- ARE YOU SATISFIED WITH THE BANK

(YES/NO)

14- IF YES DO YOU WANT TO OPEN ANOTHER ACCOUNT

(YES/NO)

15- IF NO REASON FOR DISSATISFACTION

SUGGESTIONS AND FEED BACK (About e-age banking and challenges)

-…………………………………………….…………………………………………….

-…………………………………………….…………………………………………….

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