Among the financial service industry, the banking sector was one of the first to embrace rapid globalization and benefits significantly from technology development. The technological revolution in banking started in the 1950s, with the installation of the first automated bookkeeping machines at banks. This was well before the other industries became tech savvy. The first Automated Teller Machine (ATM) is reported to have been introduced in the USA in 1968 with only a cash dispenser. Automation in banking have become widespread over the past few decades as banks quickly realized that much of their labor intensive information-handling processes could be automated the use of computers. Against this background the paper examines the Technology driven banking services reference to the present and future of Technology driven banking in Bangladesh.

1. 1
Surma Tower, Sylhet
An Assignment on
Use of technologies in the banking sector of Bangladesh
Course title: Technology and Innovation Management
Course code: TIM-533
Submitted to:
Prof.Dr.Bashir Ahmed Bhuiyan
Professor
Department of Business Administration
Leading University, Sylhet
Prepared by:
Torch Bearers
ID Name
1611017014 Mahmudul Hasan
1611017047 Romana Begum
1611017049 Farhana Jahan Liza
1611017051 Tahfim Ahmed Chowdhury
1611017008 Md.Yeasir Arafath
1611017021 Masum Hussain
Section: C
Semester: 3rd
Program: MBA
Department of Business Administration
Leading University, Sylhet
Date of Submission: 2 May, 2016

2. 2
Executive summary
Among the financial service industry, the banking sector was one of the first to
embrace rapid globalization and benefits significantly from technology development.
The technological revolution in banking started in the 1950s, with the installation of
the first automated bookkeeping machines at banks. This was well before the other
industries became tech savvy. The first Automated Teller Machine (ATM) is reported
to have been introduced in the USA in 1968 with only a cash dispenser. Automation
in banking have become widespread over the past few decades as banks quickly
realized that much of their labor intensive information-handling processes could be
automated the use of computers. Against this background the paper examines the
Technology driven banking services reference to the present and future of Technology
driven banking in Bangladesh.
Presently banks are thinking to offer door-to-door services, 24 hours banking
services Technology, pay and cash management through internet services. Moreover,
to introduce intensive banking of the multinational banks in Bangladesh. Customer
always demands better services, security and round the clock banking. Multinational
banks are considering customers needs and demand in the first line of preference.
Moreover, trying to offer and introduce the demanded services by the Bank and
changing their offering based on the needs of present and potential customers. Up to
date banking has unbelievable tools to encourage and give confidence to their
customers. In the customers viewpoint, things is to be very easier that is why, they
buy the product or take the service, which is newly incepted. Electronic banking is
one that such product which helps the customer to prompt thinking and can able to get
cash any time within the 24 hours day schedule in a day.
Technology has not been a smooth sailing for banks keen to jump onto the
technology bandwagon. There have been impediments in the path like the obduracy
once shown by trade unions who felt that technology could turn out to be a threat to
secure employment, further. The banks face difficulties to expand technologies branch
networks in remote areas due to lack of facility of technologies. Another challenge the
banks have had to face corners the inability of using technology of banks to retain the
trained and talented personnel, especially those who have a good knowledge in
technology.
The tech based banking products can be made more cost effective to make
them more attractive to mass people. If the mass people can avail these banking
services then the profit of the banks will increase from volume rather than single
transaction. The management of the private commercial banks and nationalized
commercial banks might allocate a part of their yearly profit for ICT penetration in
banking activities and human resources development. They may also extend those
services to the rural people of Bangladesh so that the rural people can also get the
benefit of technology driven banking.
Therefore, the banking system needs upgradation and urgent measures are
needed to create a level playing field for rapid expansion of technology driven
banking in the country. Despite all constraints, efficient use of existing facilities can
improve the recent condition of technology driven banking in Bangladesh.

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AcknowledgementAcknowledgementAcknowledgementAcknowledgement
At first, we are grateful to Almighty Allah for creating us
in such a beautiful country like Bangladesh and also for
controlling our life. For the mercy of Him, we have got
such courage to start this assignment on Use of
technologies in the banking sector of Bangladesh
After that we would like to give thanks to our
honorable Head of the Department Prof.Prof.Prof.Prof. Dr. TofayelDr. TofayelDr. TofayelDr. Tofayel
AhmedAhmedAhmedAhmed for giving us the opportunity to study in this
subject. We would like to express our thanks to the
librarian of Leading University for all his help that we
have received.
Our respected parents who gave us mental support and
inspiration for our assignment, there is a special thanks for
them. We also would like to give a lot of thanks to our
honorable course teacher, Prof.Dr.Bashir Ahmed
Bhuiyan for giving us a wonderful opportunity to make
such an interesting and valuable assignment and giving us
a clear concept about the assignment.
At last but not the least, without the help of our
friends and classmates it was quite impossible to prepare
such kind of assignment. They gave us some necessary
information about this topic which was unknown to us.
So, we would like to give thanks to all of them.

4. 4
Contents
Subjects pages
1. Introduction 5
2. Objectives of the Assignment 6
3. Rationale of the report 6
4. Limitations of the assignment 6
5. Development & use of Technology 6
6. E-banking 7
7. Use of Technology facilities 7
8. Technology Driven Banking in Bangladesh 8
9. Real-time fund transfer 9
10. Real-time utility bill payments 9
11. View FDR and deposit scheme information 10
12. SWIFT 10
13. Easy Pay Machine 11
14. Use of technology in Banking and their performance 11
15. Benefits of Technology use in banks 12
16. Impact of technology on Banking System 12
17. Impact of technology on Privacy 13
18. The challenges for technology driven banking 13
19. Findings 14
20. Recommendations 15
21. Conclusion 16
22. References 17

5. 5
Introduction:
For over a decade, the rapid advancement in information and communication
Technology has significantly affected the banking industry. Banks and other financial
institutions have improved their services as financial intermediary through adopting
various Information Technologies. Technology has become a tool that facilitates
technology banks' organizational structures, business strategies, customer services and
related functions. The recent "Information Technology revolution" has exerted far-
reaching impact on economics, in general, and the financial service industry, in
particular.
Within the financial service industry, the banking sector was one of the first to
embrace rapid globalization and benefits significantly from technology development.
The technological revolution in banking started in the 1950s, with the installation of
the first automated bookkeeping machines at banks. This was well before the other
industries became tech savvy. The first Automated Teller Machine (ATM) is reported
to have been introduced in the USA in 1968 with only a cash dispenser. Automation
in banking have become widespread over the past few decades as banks quickly
realized that much of their labor intensive information-handling processes could be
automated the use of computers. Against this background the paper examines the
Technology driven banking services reference to the present and future of Technology
driven banking in Bangladesh.
In Bangladesh, Banking industry is mature to a great extent than earlier period.
Technology has developed superb image in their various activities including
Technology in banking. Now modern banking services have launched by some
multinationals and new local private commercial banks. Technology in banking is one
of the most demanded factors in banking sector. Through this assignment we have
tried to describe the use of different Technology in banking sectors from our
internship experience of graduation we have tried to unearth the present status of
Technology in banking in banking sector in Bangladesh.
In Bangladesh, multinational banks are operating for long besides our
nationalized, private and specialized banks. However, much of the resulting research
has concentrated on providing evidence of the association between consumers’ usage
patterns of ATMs and their demographic profiles and, more recently, consumer
psychographic profiles. Besides, the banking services of nationalized, private, and
multinationals are different by quality technology of their services. Multinational
banks are offering better services than others. They offer better customer services,
personal financial services, corporate facilities, trade services with the help of
efficient operational department, credit department, information Technology
department and the most important department is the marketing department. Presently
they are thinking to offer door-to-door services, 24 hours banking services
Technology, pay and cash management through internet services. Moreover, to
introduce intensive banking of the multinational banks in Bangladesh. Customer
always demands better services, security and round the clock banking. Multinational
banks are considering customers needs and demand in the first line of preference.
Moreover, trying to offer and introduce the demanded services by the Bank and
changing their offering based on the needs of present and potential customers. Only a
few studies regardless of research context have been conducted which focus on the
attributes of innovations, as perceived by potential users this assignment tries to
highlight the present condition Technology of Technology in banking in Bangladesh.

6. 6
As part of our internship program we the members of the assignment group
have worked in Pubali Bank Limited, Prime Bank Limited, Dutch Bangla Bank
Limited, Brac Bank Limited& Dhaka Bank Limited. This report describes the
knowledge we have gathered from our internship.
Objectives of the Study:
This report has taken into consideration to accomplish the following objectives:-
1. To unearth the development of e-banking in Bangladeshi banking sector
2. To explore the Structure of use of Technology banking in Bangladesh
3. To explore the use of Technology services offered by various bank in Bangladesh
4. To find out the common features of use of Technology banking in Bangladesh
Rationale of the report:
Today’s world is service oriented in every sector. Those who are giving much more
services rather than others are giving; he will be well ahead of competition because of
getting better competitive advantages. There are 53 different banks working together
in Bangladesh. The competition is going up day by day by giving better services and
they are trying to develop their own services every now and then. Use of Technology
banking is known to us since 1990.Technology in banking has got tremendous
importance in banking sector and banking customer as well. This is why; technology
is a lucrative issue to talk about.
Limitations of the assignment:
We have designed the study majorly based on our experience with the bank during
our internship program, by understanding the 6 banks Technology use we have tried
to draw a bigger picture of the whole banking sectors. We also have collected much
information from the secondary data, which may have some mistakes & may miss
situations as banking is dynamic sector.
Development & use of Technology in Bangladeshi banking sector of Bangladesh:
Use of Technology Banking is transforming the financial services industry through
various impossible innovations. The quantity of cross-border trading and other
financial activities is increasing geometrically make possible by Technology.
Technology has been made possible by Technology, particularly information
Technology to generate, collect and process information about bank operation and
bank customers efficiently and effectively. Technology provides the ability to create
more effective systems of controls in individual institutions and in the market
themselves. Compared to the paper based operation, Use of Technology Banking
Systems, in Technologies most proficient form, offer instant verification and transfer
and reduces the flow of costly paper in the record keeping process. Application of
technology in banking offer opportunity Technology for reduction of both paper and
people. Banks have developed EBS for three main reasons.
1. To protect and increase market share
2. To reduce operating cost by subtracting physical capitalizing and Technology
for labor
3. To generate new revenue use of technology banking allow banks to expand
their markets for trade & deposits taking and credit extension activities & to
offer new products and services or strengthen their competitiveness by
positioning in offering existing payment services.

7. 7
In addition, use of Technology banking could reduce operating costs for banks. More
broadly, the continued development of use of Technology banking and use of
Technology money may contribute to improving the efficiency of the banking and
payment system and to reducing the cost of retail transactions nationally and
internationally. Although many financial instrument and systems are now considered
as “Use of Technology Banking” came into the terminology of the financial world in
the late 1980s, with the possibilities of emergence of true use of Technology money.
All sorts of back-office information management Technology and financial services
using use of Technology devices can be included into the term “Use of Technology
Banking”. The development in information Technology has contributed to economic
growth through several channels. ICT has led to a productivity growth through the
impact on active processes. Banks have been increasing their own size and financial
strength and expanding the scope of their products lines to meet the growing demand
of on-line real-time financial services.
E-banking:
It is a general term referring to various computer-based technologies for delivering
banking services. Use of Technology banking systems can be divided into two
categories by the functional characteristics, back-office use of Technology banking,
and use of Technology financial instruments or front-office use of Technology
services. Back-office use of Technology banking provides information management
services, and quick fund transfer facilities both for traditional banking and financial
instruments and use of Technology financial instruments. Science inception of
primary forms of use of Technology banking Technology has been passed through a
comprehensive evolution process. Use of Technology banking services can be
grouped into three generations of evolution:
Categorization of use of Technology banking services
First Generation: use of Technology banking back-office Front-office first
generation Ledger Cash management, MIS Cash dispensers.
Second generation: Transaction Processing[offline] ACHs Generation of information
for record keeping ,Fund transfer, Telephone bill payment, POS systems,
Check verification, ATMs Authorization.
Third generation: On-line transaction processing, Centralized processing at country
level, Internet banking, Interbank transaction processing, Automatic Fund Transfers,
On-line Banking Home Banking use of Technology, Direct Deposits, Check
Truncation, Lock Box, Check Truncation Use of Technology Fund Transfer Internet
Banking Source.
Use of Technology facilities by our internship providing bank & other different
banks in Bangladesh:
The following Use of Technologies are providing by different Foreign and Private
Commercial banks (PCBs) in Bangladesh.
Bank accounts: Savings, Current, FDR, PDS, Term Deposit Scheme all these
accounts are maintained in using technology for the sake of customer satisfaction in
Bangladesh. People can deposit their money through use of tech devices and also can
withdraw their money using such way. These are the common bank accounts which
maintained by the bank customer every now and then and bank is also given high
priority in this regards to their customer.

8. 8
Special Services: Some Banks render special services to the customers attracting
other banks.
Any Branch Banking: Any branch banking is the service where an account is
accessible from any branch of a particular bank. In Bangladesh the term is widely
popularized as online banking
Core Banking: Core banking is a general term used to describe the services provided
by a group of networked bank branches. Bank customers may access their funds and
other simple transactions from any of the member branch offices. Internet Banking
the Internet Banking provides a secure medium for transferring funds electronically
between bank accounts and also for making banking transaction over the Internet.
Mobile Banking Mobile banking involves the access to, and provision of, banking and
financial services through mobile devices. SMS Banking Short Message Service
(SMS) is the formal name for text messaging. SMS banking allows customers to make
simple transactions to their bank accounts by sending and receiving text messages.
Electronic Funds Transfer Electronic Funds Transfer (EFT) is a system of transferring
money from one bank account to another without any direct paper money transaction.
Any Branch Banking Any branch banking is the service where an account is
accessible from any branch of a particular bank. In Bangladesh the term is widely
popularized as online banking. Automated Teller Machine (ATM) ATM means
computerized machine that permits bank customers to gain access to their accounts
and permit them to conduct some limited scale banking transactions with a
magnetically encoded plastic card and a code number. Point of Sale (POS) Point of
Sale (POS) service is an innovative electronic money transferring system that allows
the customers of banks to pay for their purchases through their ATM and credit card
at any POS enabled retailer.
Technology Driven Banking in Bangladesh: Present Status, Future Prospects
and Challenges
Credit & Debit Cards: Cards are linked directly to the bank account of its holder.
The holder of debit card can use it to buy goods or withdraw cash and the amount is
taken from the bank account right away. Credit Cards A credit card is a form of
borrowing. Credit cards allow its holder to 'buy goods now and pay later' - called
'buying on credit'. They aren't linked to the bank account of the customers.
MICR: MICR (Magnetic Ink Character Recognition) is a character recognition
technology adopted mainly by the banking industry to facilitate the processing of
cheque.
KIOSK: KIOSK Banking offers customers the flexibility to conduct their banking
transactions via the KIOSK machine. The customer must have a Debit Card and a
PIN. When one inserts the debit Card into the Kiosk, he/she will be prompted to enter
the PIN. He/she can then begin using KIOSK Banking.
Internet Banking: Customers need an Internet access service to handle this type of
banking. As an Internet Banking customer, he/she will be given a specific user ID and
a confidential/secret or secured password so that they can access to their own account.
Here customer can able to see the ledger balances, transfer his money, request
something towards bank, etc.

9. 9
Home Banking: Home banking frees customers of physical branches and most
transactions will be automated to enable them to check their account activities transfer
fund and to open L/C in their own desk with the help of a PC and a telephone. For
example: HSBC is giving Hexagon facilities to their individual and corporate
customer.
Automated Teller Machine (ATM): Full abbreviation of ATM is “Automated Teller
Machine” which acts like a teller point in a bank who takes and gives money over the
counter. ATM is same as teller point but Technology run automatically through
identity like card and password. Technology does not need any slip or Cheque but
Technology is very much based on A/C holder’s ATM card and Technology’s
Password. Those who are entitled for ATM card, bank has provided them a password
against every single card. This is like a debit card. People can deposits their money in
a bank account and they have entry or withdraw their money through ATM card,
which is applicable for 24 hours a day and 365 days in a year. Technology has
different name such as ATM, 24 hours banking card, money link card, e-cash, ready
cash etc. In Bangladesh, some multinationals incepted the ATM booth in Dhaka since
1992-93. The Grind lays Bank was the pioneer in Bangladesh then after Standard
Chartered Bank, American express Bank, HSBC, Bank Asia and seven others local
private banks are the followers.
Tele Banking: Tele-Banking customers to get access into their respective banking
information 24 hours a day. Subscribers can update themselves by making a phone
call. They can transfer any amount of deposits to other accounts irrespective of
location from home or office. Now a day Mobile Phones are the easiest channels by
which customers can reach the bank to access their account 24 x 7. So, banks
generally have introduced following SMS Services this service, a customer can enjoy
the following:
Verify payment, receive status anywhere;
Get alert automatically on an individual basis when loan installment falls due
and becomes overdue;
Save time & cost as this will minimize their visits their respective branches for
simple queries.
Real-time fund transfer:
With the help of online banking service customer can transfer funds to any prime
bank account in real time. In addition to that customer can transfer fund to their
continuous loan account through online service and can avoid the crowd and hassle of
going bank.
Real-time utility bill payments
Commercial banks generally have limited utility bill pay services enables the
customers to pay postpaid cell phone bills easily. Customers can get this service at
banks ATM booths or information kiosks round the clock. These bank ATM/Master
Debit Card holders are eligible to enjoy these services.

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The lists of services are given bellow:
Grameen post-paid cell phone bills only
Robi post-paid cell phone bills only
Banglalink post-paid cell phone bills only
Airtel post-paid cell phone bills only
Utility bills pay service provides 24/7 support and has the following features:
Card holder can make payments any time at any Prime Bank ATM booth
Customers will receive auto generated advice slips after the bills are paid
The customer will need ATM card and pin code to access the Technology and
the procedure is absolutely secured
View FDR and deposit scheme information:
With the help of banks websites customers can easily know about the detail
information of different deposits schemes and FDR.
View loan information:
Bank’s website also contains loan features of most banks. Through website customer
can know about the lending offerings of Prime Bank Limited.
Transaction search:
Transaction made by customers in different times can be checked out through online
service.
Statement downloads:
Rather going to bank now customers can view and download transaction A/C, FDR
and scheme statement through online service. Thus it will save time, money and
energy of people.
Charges and Fees:
All these services are provided free of charge.
Credit Card Bill Payments:
Banks has both Credit card and Debit card through which customers can pay bills
SWIFT: SWIFT is a bank owned non-profit co-operative based in Belgium servicing
the financial community worldwide. It ensures secure messaging having a global
reach of 6,495 Banks and Financial Institutions in 178 countries, 24 hours a day.
SWIFT global network carries an average 4 million message daily and estimated
average value of payment messages is USD 2 trillion. SWIFT is a highly secured
messaging network enables Banks to send and receive Fund Transfer, L/C related and

11. 11
other free format messages to and from any banks active in the network. Having
SWIFT facility, Bank will be able to serve its customers more profitable by providing
L/C, Payment and other messages efficiently and with utmost security. Especially it
will be of great help for our clients dealing with Imports, Exports and Remittances
etc.
Easy Pay Machine: It is a mechanical device which can accepted utilities bill like
land phone bills, cell phone bills, Gas bills, WASA-DESA bills etc. The day after
tomorrow bank will report to the particular authority to give acknowledgement on
behalf of their customer. Some other electronic services like TV Banking, Mobile
Banking; SMS Banking through cellular phone, Mail Banking etc is practicing
ignorable way. But banks are trying hard to develop new products which can be done
through electronic device like internet, telephone including cellular and mechanical
devices.
Use of technology in Banking and their performance: Up to date Banking has
unbelievable tools to encourage and give confidence to their customers. In the
customers viewpoint, things is to be very easier that is why, they buy the product or
take the service, which is newly incepted. Electronic banking is one that such product
which helps the customer to prompt thinking and can able to get cash any time within
the 24 hours day schedule in a day. Plastic or artificial card development would
appear to lay with the smart card and in particular its use as an electronic purse. The
smart card has been defined by Worthington (1998b, p. 137) as ``a payment card that
carries an embedded computer chip with memory and interactive capabilities, that
allow it to exchange data at an electronic point of service (POS) terminal''. Smart card
technology was developed over 35 years ago but its low acceptance into mainstream
markets has been blamed upon a lack of supporting infrastructure and universally
accepted standards. However, there is little doubt that smart cards have huge potential
in terms of their application and recent evidence seems to show that predicted growth
rates will continue as more application of smart card technology to electronic
commerce is realized (McKechnie et al., 1998; 1999). The card may also contain
personal information such as healthcare records; it can act as a security pass, and be
used for specific payments, for example in meters, telephones and transport. While
there are clearly consumer privacy and protection issues, the bundling of applications
on to one card may offer advantages for consumers in the long run in that a multi-
application card may be perceived as more useful than just an additional card.
Worthington (1995) refers to cards used as electronic purses as ``pay before cards''
and suggests that they will challenge cash and low-value cheque transactions. Such
cards should offer benefits to cardholders and retailers in terms of security,
convenience and to issuers in reduced handling costs. There are a number of such
cards now in use, the best known in the UK being Mondex and Visa Cash. Consumers
can load cash onto their card from their bank, an ATM machine or, if they have the
appropriate equipment, over the telephone.
The common features of electronic banking in Bangladesh are as follows: - Electronic
banking idea developed in Bangladesh since 1992 through several multinational
banks. But most of the local and foreign banks are maintained electronic banking in
their all branches. Here are some common features we have found on the banks in
term of tech use banking in Bangladesh:
1. 24- hours cash deposit & withdrawal facility
2. Quick cash withdrawal without having queue
3. Account activities enquiry in any moment

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4. Statement request through ATM/Debit/Credit Card
5. Transfer own funds to other account number in same bank
6. Present Balance enquiry
7. More than16-hours shopping facilities
8. Deposit or Mail cash or cheque(s) (Cross cheque) through mechanical device.
9. Changing Personal Identity Number
10. Cash deposit which will originally deposit very next day of deposit that means
do not need to go to the branch for every occasion.
11. Mini statement which contain 8-10 previous transaction records
12. Can able to pay utilities bill
13. Withdraw money by using VISA, PLUS, MASTER, MAESTRO and other
credit card
14. Withdraw money from dollar account which gives taka by converting foreign
currency
Benefits of Technology use in banks:
To the Customer:
1. Anywhere Banking no matter wherever the customer is in the world. Balance
enquiry, request for services, issuing instructions etc., from anywhere in the
world is possible.
2. Anytime Banking Managing funds in real time and most importantly, 24
hours a day, 7days a week according to convenience of the customers.
3. Brings down “Cost of Banking” to the customer over a period of time.
4. Cash withdrawal from any branch / ATM. On-line purchase of goods and
services including online payment for the same.
To the Bank:
1. Innovative, scheme, addresses competition and present the bank as
Technology driven in the banking sector market.
2. Reduces customer to the branch and thereby human intervention. Inter-branch
reconciliation is immediate thereby reducing chances of fraud and
misappropriation.
3. On-line banking is an effective medium of promotion of various schemes of
the bank, a marketing tool indeed. Integrated customer data paves way for
individualized and customized services.
Impact of technology on Banking System
The banking system is slowly shifting from the Traditional Banking towards
relationship banking. Traditionally the relationship between the bank and
technology’s customers has been on a one-to- one level via the branch network. This
was put into operation with clearing and decision making responsibilities concentrated
at the individual branch level. The head office had responsibility for the overall
clearing network, the size of the branch network and the training of staff in the branch
network. The bank monitors the organization’s performance and set the decision
making parameters, but the information available to both branch staff and their
customers was limited to one geographical location.
The modern bank cannot rely on branch network alone. Customers are now
demanding new, more convenient, delivery systems, and services such as Internet

13. 13
banking have a dual role to the customer. They provide traditional banking services,
but additional offer much greater access to information on their account status and on
the bank’s many other services. To do this banks have to create account information
layers, which can be accessed both by the bank staff as well as by the customers
themselves. The use of interactive electronic links via the Internet could go a long
way in providing the customers with greater level of information about both their own
financial situations and about the services offered by the bank.
Impact of technology on Privacy:
Data being stored in the computers is now being displayed when required on through
internet banking mobile banking, ATM‟s etc. all this has given rise to the issues of
privacy and confidentially of data are:
1. The data processing capability technologies of the computer, particularly the
rapid throughput, integration, and retrieval capability technologies, give rise to
doubts in the minds of individuals as to whether the privacy of the individuals
is being eroded.
2. So long as the individual data technology are available only to those directly
concerned, everything seems to be in proper place, but the incidence of data
being cross referenced to create detailed individual dossiers gives rise to
privacy problems. Customers feel threatened about the inadequacy of privacy
being maintained by the banks with regard to their transactions and link at
computerized systems technology suspicion.
The challenges for technology driven banking:
Technology has not been a smooth sailing for banks keen to jump onto the technology
bandwagon. There have been impediments in the path like the obduracy once shown
by trade unions who felt that technology could turn out to be a threat to secure
employment, further. The banks face difficulties to expand technologies branch
networks in remote areas due to lack of facility of technologies. Another challenge the
banks have had to face corners the inability of using technology of banks to retain the
trained and talented personnel, especially those who have a good knowledge in
technology. Increasing use of technology in banks has also brought up it’s security
concerns. The passing of technology act has come as a boon to the banking sector and
banks should now ensure to abide strictly by technology covenants. An effort should
be also made to cover e-business in the country’s consumer’s laws. The choice of
right channel, justification of tech investment on ROI, E-Governance disclosures,
customers relationship management, penetration of tech in rural areas, outsourcing of
tech operations are the major challenges and issues in the use of tech in banking
operations.
The challenges for technology driven banking are:
1) Inefficient and inadequate knowledge of the bank management about the
technology driven banking.
2) Lack of proper strategic plan to gain and retain market share of the indigenous
banks.
3) Lack of international standard communication channel. High cost of
establishing technology driven banking system. Inadequate back and front

14. 14
office management. Lack of integrated plan among the banks and the Central
Bank authority.
4) Inefficient clearing house facilities.
5) Inappropriate software and less trust by the bank authorities on local software.
6) Biasness of the management of bank towards foreign software.
7) Legal barriers and inappropriate policy framework.
8) Besides these, major impediments and risks associated with the
implementation of innovative technology are: Data being stored in the
computers is now being displayed when required on through internet banking,
mobile banking, ATM etc. All these are threats for confidentiality of data.
Cost associated with adoption of new technology might not bring cash flows
required to cover that cost. So banks could face cost overrun or cost control
problem.
9) Another problem banks face with implementation of latest technology is
integration of existing system with the new one. In the field of IT, new
technology is coming every day. The one which is very popular today might
get obsolete tomorrow.
So to have a competitive edge over the competitors the banks must always update
their services. The movement towards technology driven banking might marginalize
the customers who do not have internet access or who are not technologically sound
(Khalil, Ahmed & Khan). The coverage of the private commercial banks and foreign
commercial banks is concentrated mainly in urban and semi-urban areas. The rural
parts of Bangladesh still remain outside of their services. According to Ali (2010), the
major risk of internet banking includes operational risks (e.g. security risks, system
design, implementation and maintenance risks); customer misuse of products and
services risks; legal risks (e.g. without proper legal support, money laundering may be
influenced); strategic risks; reputation risks (e.g. in case the bank fails to provide
secure and trouble free e-banking services, this will cause reputation risk); credit
risks; market risks; and liquidity risks.
Findings:
1) The commercial banks in Bangladesh are using technology extensively
these days.
2) The use of technology allows bank to keep their workforce in minimal
level.
3) Because of the increasing use of technology in banking sectors customers
are getting more faster & quality service than ever.
4) The transactions of the customers now are more secure than any time of
the past.
5) People do not have to visit physical locations of the bank because of the
bank’s virtual presence.
6) It is evident that many bank management & job holders do not have the
proficiency to use the highest utility of technology.

15. 15
Recommendations:
The recommendations of this study are mentioned below. For the scheduled banks, it
is important to: Review their business strategy and create the required space for
adopting technology driven banking. Fortify ICT department through providing
training to IT employees and procuring essential hardware and software. Create
separate unit in each branch for rendering ICT related operational activities under the
supervision of the ICT department. Train all staff about the basic ICT related matters.
The tech based banking products can be made more cost effective to make them more
attractive to mass people. If the mass people can avail these banking services then the
profit of the banks will increase from volume rather than single transaction. The
management of the private commercial banks and nationalized commercial banks
might allocate a part of their yearly profit for ICT penetration in banking activities
and human resources development. They may also extend those services to the rural
people of Bangladesh so that the rural people can also get the benefit of technology
driven banking. In order to improve the growth in technology driven banking services
banks can also take the following steps: To increase awareness of the consumers,
benefits of technology driven banking can be promoted through advertising in print
and electronic media. Most of the aged persons are reluctant to use the new
technology. For them technology based banking is troublesome. So before designing
any Technology Driven Banking in Bangladesh: Present Status, the banks must think
about this type of consumers and try to introduce the service that can be used easily.
The banks can give few incentives to the customers for using the technology driven
services such as low service charge for maintaining the account of those customers. In
order to detect and minimize the security risk the banks can take some security
counter measures, such as, preventive measures or deterrent efforts. Preventive
measures include using sophisticated security software and controlling the access such
as advanced access control, intrusion detection, firewall and inspection mechanisms
etc. Deterrent efforts include: educating the users of tech based banking services how
to use those services and what will be the consequence of misuse, educating the IT
personnel of banks about the security measures and developing security policy
statements and guidelines. Besides all these, the government may provide assistance
for reducing the cost of providing the technology driven banking services, organize
training facilities with private partnership, widen multiple access facilities like web,
telephone, ATM etc., and initiate motivation programs for the users and the target
population. Moreover, adequate legal and environmental framework is essential for
flourishing tech based banking.

16. 16
Conclusion:
This assignment is a descriptive study where the main purpose was to highlight the
present status, future prospects and challenges of technology driven banking.
Technology Driven Banking in Bangladesh: Present Status, Future Prospects and
Challenges 70 Now-a-days technology driven banking services are not 'nice to have'
but an 'impossible to survive without' for all banks. It has changed the traditional
banking system drastically and made banking service easy and accessible. But
Bangladesh is a developing country with limited infrastructure facility and limited
skilled manpower. Computer literacy of the people is very poor and information
technology is in the infant state. A well functioned tech based banking system is
dependent on the availability of a backbone network connecting the whole country;
reliable and secure information and telecommunication infrastructure; ICT
penetration in the banking sector; skilled operational personnel; and legal and
regulatory framework. Both individual and joint efforts are needed to overcome the
constraints in promoting the technology driven banking in the country.
Therefore, the banking system needs upgradation and urgent measures are needed to
create a level playing field for rapid expansion of technology driven banking in the
country. Despite all constraints, efficient use of existing facilities can improve the
recent condition of technology driven banking in Bangladesh.

17. 17
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