Modern Banking System
Overview, Evolution, Advantages &
Technologies
Introduction to Modern Banking
• Modern banking has evolved from traditional
in-person transactions to digital platforms,
providing 24/7 access to financial services.
What is Modern Banking?
• Modern banking, also known as e-banking, is a
comprehensive digital solution that includes
Internet Banking, Mobile Banking, and more.
Benefits of Modern Banking
• • Convenience & Accessibility
• • Reduced Risk of Cash Handling
• • No Time Limitations
• • Online Bill Payments & Fund Transfers
History of Modern Banking in India
• • Bank of Hindustan (1770)
• • State Bank of India origins (1806)
• • Establishment of Reserve Bank of India
(1935)
• • Nationalization of banks (1969, 1980)
Indian Banking System Structure
• • Scheduled vs. Non-Scheduled Banks
• • Nationalized Banks & Private Banks
• • Regional Rural Banks (RRBs) & Foreign Banks
• • Commercial & Cooperative Banks
Evolution of Banking Sector
• • Shift from traditional to digital banking
• • Introduction of online, mobile, and
omnichannel banking
• • Integration of AI & Virtual Assistants
• • Focus on security & innovation
Advantages of Modern Banking
• • Time Efficiency
• • 24/7 Access & Online Transactions
• • Cost-Effective Operations
• • Increased Security through Biometrics &
Encryption
Disadvantages of Modern Banking
• • Cybersecurity Risks
• • Digital Literacy Barriers
• • Dependence on Internet Connectivity
• • Technical Failures & System Downtime
Open Banking
• • Uses APIs for secure data sharing
• • Enhances customer financial experience
• • Personalizes banking services
Digital Wallets
• • Facilitate easy money transfers & online
payments
• • Used for e-commerce & daily transactions
• • Examples: Google Pay, Apple Pay, Paytm
Near Field Communication (NFC)
• • Enables contactless payments
• • Used in smartphones & smartwatches
• • Provides a secure & fast transaction
experience
Digital Account Opening
• • Eliminates the need for physical visits
• • Speeds up the account registration process
• • Many banks now offer paperless onboarding
Biometric Technology in Banking
• • Uses fingerprints, iris scans, voice
recognition
• • Enhances security compared to PINs &
passwords
• • Prevents fraud & unauthorized access
Conclusion
• Modern banking has transformed financial
services, offering convenience, security, and
efficiency. However, cybersecurity and
accessibility remain challenges.
