It Governance In Indian Banking Industry
Banks constitutes a significant bond with a nation’s economic structure and thus their prosperity and wealth is critical for a healthy developing nation. Dramatic shift of financial markets is proof of remarkable makeover of Indian banking industry. Also globalization has added enhanced competition and consequently greater risks in the industry. In such situation, carrying out well framed corporate governance policies can assist banks to adjust successfully with the dynamic surroundings and ensures success.
In banking industry last few decades have witnessed dramatic changes in most of their business functions and operations. Banking industry has experienced quick changes because of different components with IT being the most significant. A huge shift from manual to automated in the deliverables of banks viz. commodity, services, methods, supply networks, etc. is also observed. Due to these banks now has arrived a stage, where IT is not only an empowering influence, but also amongst the most significant corporate initiative and additionally a critical element of the banking operations. Therefore, majority of ‘Internal Transformation’ of banking organizations from manual to automate could be attributed to IT adoption and governance. Also IT is smoothening and flourishing in banking sector day by day due to the adoption of more technology platforms by all stakeholders of the banks. Consequently, banking businesses assets these days possess significant portion of digital assets along with the physical assets, and these digital assets are also growing rapidly.
Information technology and digital transformation has emerged out to be a standout amongst the most essential key resources and a basic instrument in ensuring the sustainability and advancement of a business. It is contended that the commitment regarding planning, actualizing and maintaining lot of powers over any organizations business processes is reliant on Information Technology (IT). The IT work is liable for gathering, converting, reporting, guarding, preparing, providing and safely recovering data as required. Let me start the synopsis with a brief summary of the IT application and adoption by the Indian banks before coming to the main topic and central theme of IT Governance.
IT produces numerous prospects for organizations to gain competitive advantages, for example, it provides advantages like improved accuracy, quickness of transaction processing, cost savings, enhanced working efficiency and decline of human errors. It can add value to the stakeholders by increasing profitability and upgrade an organizations performance. But, if an inappropriate IT framework is embraced, many negative outcomes can influence the business destructively. In fact, the Information Technology Governance Institute (ITGI) communicated concern of the negative results of insufficient IT plan, for example, misrepresentation, misuse of PC resources, aggressive inconvenience, security infringement and inaccurate record keeping. As we all know that banking in India, has travelled miles and miles from the past years of physical work practices to automation, starting from data editing on desktop to advanced digital applications. Looking at the technological advancement today, it becomes almost impossible to visualize a banking system that run without implementing and leveraging over IT based advanced digital applications. Majority of the banking services and operations in banks viz. opening of account, transaction handling (funds transfer) or customer account and information safety and security are all functioning on IT based systems. Information technology has simplified banking operations to exceed the limitations imposed by geographical region, mushrooming transaction volumes and, to certain degree, human resources. This has been made possible due to the extended reach and capacity enables by IT.
Increased competition has forced banks to expand their scope and services to ensure customer satisfaction through digital payment systems, online access and latest service delivery methods. Not only this but also other important services of banks viz. loans, securities, Fixed deposits, currency markets, regulatory recording etc. are all working on procedures that are principally dependent on digital platforms. Also the internal work processes of banks that was based on manual processing, is now adopted computers and IT based communication mechanism for faster processing. Broadly, all banking systems are heavily reliant on IT governance for most of their routine functions, though the extent of complexity and modification in these systems may differ from bank to bank (commercial banks, cooperative banks etc. ). Therefore, we can now say that electronics and technical science application has been proved to be a boon for the banks and they soon gained significance as an essential component for customer, market and employee related activities in banks. Thus, if member banks failed to leverage on technology, they can never meet the requirements forced by timelines or volumes. As mentioned earlier for all data handling processes IT is necessary, also increased competition, budget and time limitations are forcing banks to count on information technology. All the backend jobs like store and retrieve big customer data, transaction data and business information etc. is not possible without the dynamism of digital systems. Furthermore, due to the increased pressure imposed by globalization, enhanced competition and regulatory requirements it becomes necessary for all financial institutions to progressively adopt applications developed by technology for almost all of their functions.
Along with backend and internal process, it has now become essential for banking to utilize advanced digital promotion techniques and troubleshooting tools to serve customers to sustain in a cutthroat rivalry atmosphere; which include enormous data gathering, profound examination and effective communication all of these are near to impossible if devoid of the adoption of IT.
