|
Malathy.K. Assistant Professor Dept. of Commerce, G.F.G.C. Haleyangadi &Research Scholar, Department of commerce Mangalore University, Mangalagangothri Email: malathyk93@gmail.com |
Dr. Subhashinisrivatsa Associate Professor,Dept. of Commerce University College,Mangaluru.(A Constituent College of Mangalore University) 80000Osmaniye/TURKEY Email: subhashinisrivatsa@gmail.com |
INTRODUCTION:
We
are living in a world of great uncertainty. Scientific and technological
innovations are creating uncertainty and bringing about unforeseen changes in
every segment of the economy, significantly in the banking sector. Banking
Industry being highly influenced by digital transformation, is trying to
embrace new technologies to manage the risk created by digital economy.
Up-skilling of existing banking staff has become an absolute necessity on the
part of bankers. According to KPMG’s recent Global CEO survey report, 99
percent of CEOs were taking actions to develop existing or future talent. 50
percent of CEOs reported that there is some level of skill gap emerging in
their business on account technological transformation. Technology is expected
to revolutionise the entire banking practices in the 21st century.
Technology will have a great impact on bank workforce, while it may not lead to
reduction in workforce, but staff performance will undoubtedly enhanced by
supporting technology. Core Banking Solutions and its innovative customized
products are instrumental for bringing massive changes in the banking sector.
Customised products of CBS have created unprecedented opportunities to change
and improve banking services.People are using Core Banking channels regularly,
due to which their bank visits, have been reduced drastically. More over
approximately 50% of Indian population represents youngsters and hence their
behaviours and preferences will have a deep impact on the future of banking
industry in the 21st century. The era of rethinking and reformation
of banking sector has been already started and receiving greater momentum in
recent times. Fire of innovation is being fuelled by Core Banking Solutions.
OBJECTIVES OF STUDY:
1. To
study how and to what extent Core Banking Solutions have contributed to
rethinking and reformation of banking sector in 21st century in
Dakshina Kannada District.
2. To
study the challenges faced by the bankers in 21st century due to
transformation brought about by CBS
3. To
identifythe most customised innovative products of CBS Era in Dakshina Kannada
District
4.
To
analyse the parameter that how CBS products are perceived as profitable by the
bank customers and employee category.
SIGNIFICANCE
OF STUDY:
The survival
and prosperity of banks in 21st century depends upon how do they
respond to the transformation taking place in the banking field. For this they need to rethink, redesign and
reform their strategies. This study focuses mainly on Core Banking Solutions
and its implications on bank customers and employees in the 21st
century, which is more relevant considering the momentum that CBS is providing
to the banking sector at present.
LITERATURE
REVIEW:
·
Philip Strahan (2008)
in his article on “Liquidity Production in 21st century Banking” opined that in
21st century, banks’ deposits are less important, but funding
liquidity from lines of credit and loan commitments have become more important.
According to him banks dominate in producing funding liquidity when compared to
many other institutions because of their comparative advantage in managing
funding liquidity risk due to their access to government guaranteed deposits
and central bank-liquidity.
·
Dr. A .Jayakumar, G. Anbalagan
(2014) in their research article on the topic “Banking In 21st Century:
Challenges of Innovative Banking Technology of the Banking Industry – Modern
Approach” explained the various services provided through advanced Core Banking
techniques like Magnetic Ink Characters Recognition, Any Time Banking, Electronic
Fund Transfer, Debit and Credit cards, Smart cards etc. Their study was mainly
aimed at understanding the network system nature of smart cards and challenges
of smart cards as a system innovation in the banking industry.
·
Dr. Jitendra K. Sharma
(2017) in his research paper on the topic “A Study on Innovation in Banking and
its Impact on Customer Satisfaction” attempted to compare the impact of
innovative technology on customers satisfaction of public and private sector
banks in Bhopal city and found that private sector banks have an edge in terms
of success in innovation when compared to public sector banks.
·
David T. Llewellyn(2018)
in his article on “Banking in the 21st Century: The Transformation of an
Industry” opined that banks will retain their powerful core competencies in 21st
Century. But they may be required to radically review, rethink and reform the
businesses before they get into them. How core competencies can be exploited
for their competitive advantage will depend upon the tactics adopted by them
for restructuring of banking firms.
Several research studies were undertaken
by eminent scholars about innovations in the field of banking in 21st century
and its impact on bank employees and customers. But no research work is
undertaken regarding the role of CBS in rethinking and reformation of banking
sector 21st century. Hence this study is undertaken by considering the opinions
and perceptions of 100 bank employees of Dakshina Kannada District.
RESEARCH
METHODOLOGY:
The study is both empirical and
descriptive in nature. 100 Bank employees ofDakshina Kannada Districtare
surveyed with the help of a questionnaire to collect primary data. Convenience
sampling method is used for selecting the employees. Both public sector and private sector bank
employees have been considered for the purpose of study. Secondary data is incorporated
from working papers, newspapers, journals and internet.
HYPOTHESES:
1. Literacy
level, Education and awareness of the respondents in Dakshina Kannada District does not have any
bearing on CBS Contribution towards rethinking and reformation of banking
sector
2. There
is no significant degree of relationship between gender of therespondents and
their perception regarding contribution of CBS towards reformation of banking
sector in 21st century.
3. There is no significant relationship between public sector and private sector bank employees and their opinion regarding the contributions of CBS in bringing out rethinking and transformation in banking sector.
4. There is no significant degree of differencesbetween male and female employees as regards theirunderstanding towards profitability of CBS to customers and bankers.
LIMITATIONS
OF STUDY:
Employees were asked to give general opinions
regarding various aspects of CBS and its impact on their working style, on bank
profitability and about the changes noticed by them in the preferences, likes,
dislikes and attitudes of the customers.
Detailed study on this topic can be undertaken by including specific
questions on market trends, technology infrastructure design and about the
recent developments taking place in the field of banking.
DATA
ANALYSIS:
Data collected by conducting a survey among 100
bank employees of Dakshina Kannada District is analysed by using statistical
tools to derive meaningful information. SPSS (20 version) is used for
statistical purpose. To know the opinions and perceptions of bank employees
about the impact of Core Banking Solutions on Rethinking and Reformation of
banking sector,5-point
Likert type scale questions were included in the
questionnaire. Statistical tools like percentage analysis, Mean, Standard
deviation, % Mean, Chi square tests and ANOVA are used for the purpose of
interpretation of results.
Table
1: Demographic profile of Respondents
|
Demographic
factors |
Classification |
Number
of Respondents |
Percent |
|
Gender |
Male |
56 |
56 |
|
Female |
44 |
44 |
|
|
Age group |
20 to 30 years |
22 |
22 |
|
30 to 40 years |
48 |
48 |
|
|
40 to 50 years |
19 |
19 |
|
|
50 years to 60 years |
11 |
11 |
|
|
Designation of respondents in banks |
Clerk/ Office Assistant |
30 |
30 |
|
Officers |
54 |
54 |
|
|
Assistant General Manager |
08 |
08 |
|
|
Manager |
08 |
08 |
|
|
Years of experience |
Less than 5 years |
10 |
10 |
|
5 -10 years |
30 |
30 |
|
|
10 – 15 years |
35 |
35 |
|
|
15 and
above |
25 |
25 |
|
|
Number of hours respondents work on computer |
Less than 5 hours per day |
04 |
04 |
|
5 – 8 hours per day |
80 |
80 |
|
|
More than 8 hours per day |
16 |
16 |
|
|
Type of Bank where serving |
Public sector bank |
58 |
58 |
|
Private sector bank |
42 |
42 |
Source: Primary data
Table 1 reveals that
both male and female employees of both public sector and private sector Banks
have been surveyed and male employees form 56 percent of total respondents. 58
percent of respondents are working in public sector banks. 48 percent of
respondents belong to the age group of 30 to 40 years. 54 percent of
respondents are officers. 35 percent of respondents have 10 to 15 years of work
experience. And80 percent of respondents work on computer for 5 to 8 hours per
day.16 percent of respondents work on computer for more than 8 hours per day.
It means that Banking operations are fully computerised and manual entry system
is vanished from the banking floor after the adoption of CBS.
Table
2: Distribution of respondents on the basis of their perception regarding the
contribution of CBS towards Rethinking and Reformation of Banking sector in
21st century
|
Perception
of respondents regarding contribution of CBS towards rethinking &
reformation of banking sector in 21st century |
Strongly
Disagree |
Disagree |
Neither
agree nor disagree |
Agree |
Strongly
Agree |
Mean/ SD |
%Mean |
|
00 (0%) |
00 (0%) |
00 (0%) |
68 (68%) |
32 (32%) |
4.32±.46883 |
86.4% |
Source: primary data
Table 2 clearly reveals that, none of
the respondents disagree or strongly disagree,68 percent of respondents agree
and 32 percent of respondents strongly agree that CBS has contributed to the
Rethinking and Reformation of Banking sector in 21st century.The percentage
mean shows that 86.4% (4.32±.46883
Mean and Standard Deviation) respondents strongly opine that CBS is responsible for Rethinking and
Reformation of Banking sector in 21st century.
Table 3: Perceptions of respondents about factors
leading to Rethinking &
Reformation
of Banking sector in 21st century brought about by CBS
|
Sl
No |
Statements |
Strongly
Disagree |
Disagree |
Neither
agree nor disagree |
Agree |
Strongly
Agree |
Mean/ SD |
%Mean |
|
1 |
Literacy level, education and awareness level of
customers have a bearing on the contribution of CBS in rethinking
&reformation banking sector in 21st century |
00 (0%) |
00 (0%) |
08 (8%) |
75 (75%) |
17 (17%) |
4.09±.49431 |
81.8% |
|
2 |
Long
queues of customers in the bank counters for dealing with the
Banks are not found |
00 (0%) |
00 (0%) |
11 (11%) |
68 (68 %) |
21 (21%) |
4.1±.55958 |
82% |
|
3 |
Generic customer services offered by the bank
employees are no longer preferred. |
00 (0%) |
00 (0%) |
00 (0%) |
87 (87%) |
13 (13%) |
4.13±..33800 |
82.6% |
|
4 |
Customers are less willing to take the advice of
the bankers for secondary products like mortgages and investments, instead
they prefer to research themselves. |
00 |
00 |
05 |
45 |
50 |
4.45±.59246 |
89% |
|
5 |
Customers expect a more tailored and personalised
experience, when they rarely need to contact their banks in person at
branches |
00 (0%) |
00 (0%) |
00 (0%) |
13 (13%) |
87 (87%) |
4.87±.33800 |
97.4% |
|
6 |
Because of cyber security issues, keeping
financial information safe has become a biggest challenge for both bankers
and customers |
00 (0%) |
00 (0%) |
03 (03%) |
27 (27%) |
70 (70%) |
4.67±.53286 |
93.4% |
|
7 |
Banks make huge investment on data protection. |
00 (0%) |
00 (0%) |
00 (0%) |
37 (37%) |
63 (63%) |
4.63±..48524 |
92.6% |
|
8 |
Information technology is playing a dominant role
in Banking |
00 (0%) |
00 (0%) |
00 (0%) |
5 (5%) |
95 (95%) |
4.95±.21904 |
99% |
|
9 |
Globalisation has opened up the banking horizon
very wide, leading to severe competition among domestic and foreign banks. |
00 (0%) |
00 (0%) |
00 (0%) |
79 (79%) |
21 (21%) |
4.21±.40936 |
84.2% |
|
10 |
Many new players with strong muscle powers are
entering into Indian banking Industry with their own innovative products |
00 (0%) |
00 (0%) |
00 (0%) |
02 (2%) |
98 (98%) |
4.98±.14071 |
99.6% |
|
11 |
Because of complete automation, banks are giving
preference to domain experts and technology specialists in their recruitment |
00 (0%) |
00 (0%) |
00 (0%) |
14 (14%) |
86 (86%) |
4.86±.34874 |
97.2% |
|
12 |
Employees without technical knowledge are already
trained or are being trained. |
00 (0%) |
00 (0%) |
00 (0%) |
16 (16%) |
84 (84%) |
4.84±..36845 |
96.8% |
|
13 |
Employees sitting with large bound ledger books in
Banks are out of scene now. |
00 (0%) |
00 (0%) |
00 (0%) |
2 (2%) |
98 (98%) |
4.98±.14071 |
99.6% |
|
14 |
Complexities of banking have risen, there is a
paradigm shift from “conventional banking” to “convenience banking”, and from
“mass banking” to “class banking.” |
00 (0%) |
00 (0%) |
00 (0%) |
30 (30%) |
70 (70%) |
4.70±.46057 |
94% |
|
15 |
Submission of MIS reports to the top management
and various other reports to the RBI, other regulators and Government is done
online to ensure efficiency and to reduce the cost of operations. |
00 (0%) |
00 (0%) |
00 (0%) |
11 (11%) |
89 (89%) |
4.89±.31447 |
97.8% |
|
16 |
Banks
recruit more number of officers with high computer and technical knowledge
& less number of clerks at banks as CBS has reduced clerical works |
00 (0%) |
00 (0%) |
00 (0%) |
18 (18%) |
85 (85%) |
4.82±.38612 |
96.4% |
|
17 |
Adoption of
CBS is profitable to both bankers as well as customers |
00 (0%) |
00 (0%) |
00 (0%) |
20 (20%) |
80 (80%) |
4.8±..40402 |
96% |
Source: Primary data
Testing
of Hypothesis:
1.
Literacy
level, Education and awareness of the respondents in Dakshina Kannada District does
not have any bearing on the amount of
CBS Contribution towards rethinking and reformation of banking sector
From table 3, it is
very clear that, 8 percent of respondents neither agree nor disagree, 75
percent of respondents agree 17 percent of respondents strongly agree and none
of the respondents disagree and strongly disagree that Literacy level,
education and awareness level of customers have a bearing on the contribution
of CBS in rethinking &reformation of banking sector in 21stcentury.
The percentage mean shows that 81.8% (Mean and Standard Deviation4.09±.49431) respondentsstrongly opine,
that Literacy level, education and awareness level of customers have a bearing
on the contribution of CBS in rethinking &reformation banking sector in 21st
century as it falls in the category of 81% to 100%.
Hence
null hypothesis is rejected and alternative hypothesis is justified. We
therefore conclude that Literacy level, Education and awareness of the respondents
inDakshina Kannada Districthave an impact on the amount of CBS Contribution
towards rethinking and reformation of banking sector.
Table
3 reveals Mean, Standard deviation and Percentage mean calculated on the
perceptions of respondents on various factors leading to Rethinking &Reformation
of Banking sector in 21st century.Percentage mean on each factor
falls in the category of 81% to 100% which clearly shows that respondents
strongly opines that CBS is responsible for Rethinking &Reformation of
Banking sector in 21st century. Mean and Standard deviation
presented in table 2 on various factors also justify the same.
|
Table 4:Gender-wise Opinion of respondentsregarding the contribution of
CBS towards rethinking and Reformation Banking sector in 21st century |
||||
|
|
||||
|
Gender |
Opinions
of respondents regarding the
contribution of CBS toward rethinking and Reformation Banking sector in 21st
century |
Pearson Chi-
square value |
||
|
Neither
agree nor disagree |
Agree |
Strongly
agree |
||
|
Male Female |
00 |
24 |
32 |
|
|
00 |
44 |
00 |
36.975 |
|
|
|
|
|
|
|
Source:
Primary data
Testing
of Hypothesis:
2.
There
is no significant degree of relationship between gender of the respondents andtheir
perception regarding contribution of CBS towards rethinking and reformation of
banking sector in 21stcentury.
Table 4 reveals that the calculated value of
chi square is36.975 which is greater than the
table value, that is 13.816 in the 0.001 level of significance in the
chi-square table, so we reject null hypothesis and accept the alternative
hypothesis. Table 4 also reveals that, majority (32) male respondents and no
(0) female respondents strongly agree, while only 24 male respondents, but all
44 female respondents agree that Core Banking Solutions contribute towards
rethinking and reformation of banking sector in 21st century.Male
respondents strongly agree, while female students just agree that Core Banking
solutions play an important role in the reformation of banking sector.We therefore conclude that there
issignificant difference in the opinion of male and female respondents regarding
the role of Core Banking Solutions in the reformation of banking sector.
Table 5:Perceptions of public sector and private sector bank employees
regarding the
|
contributions
of CBS in bringing out rethinking and transformation in banking sector |
||||
|
|
||||
|
Type of
Bank |
Opinions
of respondents regarding the
contribution of CBS toward rethinking and Reformation Banking sector in 21st
century |
Pearson Chi-
square value |
||
|
Neither
agree nor disagree |
Agree |
Strongly
agree |
||
|
Public sector Private sector |
00 |
26 |
32 |
34.077 |
|
00 |
42 |
00 |
|
|
|
|
|
|
|
|
Source: Primary data
Testing
of Hypothesis:
3.
There is no
significant relationship between public sector and private sector bank
employees and their opinion regarding the contributions of CBS in bringing out
rethinking and transformation in banking sector.
Table 5 reveals that the calculated
value of chi square is34.077 which is greater
than the table value, that is 13.816 in the 0.001 level of significance in the
chi-square table. So, we reject null hypothesis and accept the alternative
hypothesis. Table 5 also reveals that, majority (32) respondents of public
sector banks strongly agree and 26 respondents agree that CBS is responsible
forbringing out rethinking and transformation in banking sector. But all
respondents (100%)of private sector banks agree that Core Banking Solutions
contribute towards rethinking and reformation of banking sector in 21st
century. Respondents of public sector banks strongly agree, while respondents
of private sector banks just agree that Core Banking solutions play an
important role in the reformation of banking sector. We therefore conclude that there is significant difference in the opinion
of public and private sector respondents regarding the role of Core Banking
Solutions in the reformation of banking sector.
Table
6.1:Gender-wise Opinion of respondentsregarding their
understanding
towards
profitability of CBS to customers and bankers
|
|
||||
|
|
||||
|
Gender |
Opinions
of respondents regarding their understanding towards profitability of CBS to
customers and bankers. |
Pearson Chi-
square value |
||
|
Neither
agree nor disagree |
Agree |
Strongly
agree |
||
|
Male Female |
00 |
20 |
36 |
|
|
00 |
00 |
44 |
19.643 |
|
|
|
|
|
|
|
Source:
Primary data
|
|
|||||
|
Table
6.2: Gender wise opinion of respondentsregarding their understanding towards profitability of CBS to
customers and bankers. ANOVA |
|||||
|
|
Sum of Squares |
df |
Mean Square |
F |
Sig. |
|
Between Groups |
3.143 |
1 |
3.143 |
23.956 |
.000 |
|
Within Groups |
12.857 |
98 |
.131 |
|
|
|
Total |
16.000 |
99 |
|
|
|
Source
: Primary data
Testing
of Hypothesis:
4. There
is no significant degree of differences between male and female employees as
regards their understanding towards profitability of CBS to customers and
bankers.
From
table 6.1 it is clear that calculated value of chi square is 19.643 which is greater than the table value, that
is 13.816 in the 0.001 level of significance in the chi-square table, so we
reject null hypothesis and accept the alternative hypothesis.
From table number 6.2,it is very clear that The
Sig. value in this study is 0.00. This value is less than .05. Because of this,
we may conclude that null hypothesis stating that there is a statistically no
significant difference between male and female employees
as regards their understanding towards profitability of CBS to customers and
bankersis rejected.ANOVA (0.005)
shows that there is relationship and significant degree of differences between male and female employees as
regards their understanding towards profitability of CBS to customers and
bankers.
FINDINGS:
·
Banking operations are
fully computerised and manual entry system is vanished from the banking floor
after the adoption of CBS
·
The percentage mean
shows that 86.4% (4.32±.46883
Mean and Standard Deviation) of respondents strongly opine that CBS is responsible for Rethinking
and Reformation of Banking sector in 21st century.
·
Percentage mean on each
factor leading to Rethinking & Reformation of Banking sector in 21st
century falls in the category of 81% to 100% which clearly shows that
respondents strongly opine that CBS is responsible for Rethinking
&Reformation of Banking sector in 21st century.
·
Literacy level,
Education and awareness of the respondents inDakshina Kannada District have a bearing on the amount of CBS
Contribution towards rethinking and reformation of banking sector
·
There is a significant
degree of relationship between gender of the respondents and their perception
regarding contribution of CBS towards rethinking and reformation of banking
sector in 21stcentury.
·
There is a significant
relationship between public sector and private sector bank employees and their
opinion regarding the contributions of CBS in bringing out rethinking and
transformation in banking sector
·
There is relationshipand significant degree of
differences between male and female employees as regards their understanding
towards profitability of CBS to customers and bankers.
SUGGESTIONS:
·
There is a need to
create more awareness among customers, particularly among illiterate customers
of rural areas regarding the usage of CBS channels.
·
It is found from the
study that, among various Core Banking channels, ATMs alone are most commonly
preferred and used by the customers. There is a need to create more awareness
about other channels like, Internet Banking, Mobile Banking, UPI etc.
·
Rethinking and
reformation of banking sector should be in line with the requirements of
customers. Unless customers accept the changes positively, bankers rethinking
strategy would be a big failure.
CONCLUSION:
CBS is instrumental for changing the
banking industry by contributing to digitalisation of banking sector. Banks
which support innovation and adoption of new technologies have unprecedented
opportunities to change and improve their financial services.Restructuring the
business model, Design thinking, making the customers focal point of the
decision making process would bring novel approach to the creation of financial
products and services of tomorrow.
REFERENCES:
·
A .Jayakumar, G. Anbalagan (2014)
“Banking In 21st Century: Challenges of Innovative Banking Technology of the
Banking Industry – Modern Approach” Proceedings of the Second International
Conference on Global Business, Economics, Finance and Social Sciences (GB14
Conference) Chennai, India, 11-13 July 2014 Paper ID_C4109 1
www.globalbizresearch.org
·
David T. Llewellyn (2018)
“Banking in the 21st Century: The Transformation of an Industry”EconPapers
17-12-2018 Örebro University School of Business.
·
https://assets.kpmg.com/content/dam/kpmg/.../transformation-in-the-banking-sector.pdf
·
https://www.digitalistmag.com/customer-experience/2018/02/21/embracing-digital-transformation-future-of-banking-05880240
·
Jitendra K. Sharma (2017) “A Study on Innovation in Banking and
its Impact on Customer Satisfaction” IOSR Journal of Economics and Finance
(IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925. PP 70-74
·
Philip Strahan (2008) “Liquidity Production in 21st century
Banking”Working Paper13798 http://www.nber.org/papers/w13798 February 2008.
