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Technology and
Banking
• Banking and Financial Services
1
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THE NEED FOR TECHNOLOGY AND
INNOVATION IN BANKING
• Increased demand for efficiency from
• Consumers
• Government
• Corporations
• Global competition
• Increased complexity of banking
• Increased demand for “green” processes in banking
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BENEFITS OF DATA MINING IN MARKETING
• Technology in banking can create more effective data
mining of banking customers
• Leads to increased number of customers and increased
profits
• More personalized service through:
Also referred to as
“data mining” –
uncovering patterns in
data and making
meaning out of that
data
• Demographic data – statistical data relating
to different groups of people
• Psychographic data – data regarding
attitudes, values, and interests
• Identification of target markets
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TIMELINE OF MAJOR BANKING TECHNOLOGY
MICR1950s
ATM1960s
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EFT1970s
ONLINE
BANKING
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MICR
• Magnetic Ink Character Recognition
• Aids in processing checks
• Aids in sorting checks
• MICR readers can scan the numbers at the
bottom of a check and process them more
quickly
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ATM
• Automated Teller Machine
• An electronic machine that allows banking
customers to access their accounts and perform
many basic banking functions
• Earlier versions were in limited use as early as
the 1930s, but the one most like what is used
today was released in 1969.
• Services
• Cash withdrawals
• Deposits
• balances
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EFT
• Electronic Funds Transfer
• A transfer of funds from one account to
another through electronic means
• Electronic Funds Transfer Act
• Protects individuals who transfer money
electronically, whether it is through
• ATMs
• Telephone payment systems
• Point-of-sale terminals
• And other electronic transfers
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ONLINE BANKING
• Conducting transactions
• Viewing information
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CONSUMER TOOLS
Mobile deposit app
What is an “App”? –
a software
application that can
be installed on a
Smartphone
Photo bill payment app
Credit card scanner
Teleconferencing
Mobile payment app
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MOBILE DEPOSIT APP
• Check use on the decline in the last decade
• If you do get a check, it can be scanned with the mobile
deposit app and deposited without any paper
• Banks reducing the size and number of new branches
due to less face-to-face transactions
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PHOTO BILL PAYMENT APP
•Uses Smartphone to take a picture of a bill or invoice
•Information is sent to the bank from the app
•Bank can generate a payment for that bill electronically
from your account
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CREDIT CARD SCANNER
• More spent with credit cards than with cash
• Scanner attaches to mobile device
• Card is swiped and payment is made electronically
• Lower cost to the vendor than traditional credit card
acceptance methods
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TELECONFERENCING
• Teleconferencing has been done for a while, but is on
the increase in the financial industry
• Typically done through conference calling with more
than two individuals
• Now video-conferencing is a very popular way to
conduct meetings through phone lines and a monitor
• Reduces costs and time
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MOBILE PAYMENT APP
• Stores debit and credit card information right on the
phone
• No need for the actual card
• At the point of sale, customer opens the app, locates
the appropriate card, and a reader that a store has
reads the information
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15
MOBILE BANKING
Text
Messaging
Online Bill
Payments
P2P and A2A
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TEXT MESSAGING
• Checking balances on accounts
• Receive text message alerts for notices such as:
– Payment reminders
– Low balance
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ONLINE BILL PAYMENT
• Pay bills online
• Do not have to go to a bank lobby
• Do not have to use the bank’s drive-through service
• Can use the bank’s website
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P2P AND A2A
• P2P – peer-to-peer; online payments to another
person, usually through using the same bank or
electronic funds transfer
• A2A – account-to-account; usually a customer’s
account number must be known for this kind of
transaction
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TRENDS IN BANKING
• What does “trend” mean in banking?
– Changes over time that are directed by the
needs of a bank’s customers and businesses
• Using social media to aid in marketing
• Changes in fee structures due to changes in
processing of bank services
– The Durbin Amendment calls for lower fees
for debit card purchases but keeps fees for
credit card purchases the same
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OUTCOMES OF BANKING TRENDS
Increases number of
customers
Decreases processing time
of transactions
Increased variety of services
Increased amount of
information that can be
processed
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Independent Practice Assignments
•
•
•
Banking Technology Timeline Assignment #1 – Students will create a
timeline of at least 10 events in banking technology. They will include
dates and inventors. They may use a computer-created timeline (where
they locate a site that can make a timeline but the student types in all of
the information) or they may design their own. Include appropriate
graphics.
Banking App Assignment #2 – Students will research the different banking
apps that are available at several different banks. They will create a
professional-looking brochure that shows the different apps that are
available and what services can be conducted with these apps.
Banking PSA Assignment #3 – Students will get into groups of three to
four and create their own Public Service Announcement video. They are
to create the name of a bank, decide what current or futuristic
technologically-advanced services that their bank will offer, and create a
“commercial” advertising their services. They must include at least five
different services, provide appropriate graphics or visuals, and keep their
video less than one minute.
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