The financial world is undergoing a major change in the way
the business is defined, conducted and settled. Information
technology has played a major part in transforming the entire scene. A decade
ago, the cheque clearing mechanism was the area which was looked at by the
general public in awe.
They were amazed as to how the cheques reached the other
bank branches and how there was hardly any issue related to receiving the
payment. The settlements were straightforward since the timelines were defined
and most of the settlements were simple.
Complexities were slowly introduced with the expansion of ATM
and credit cards. The banks started having tie-ups, co-branding of cards
was started, multiple partners were introduced, intercity acceptance of
cards started, and then the Core Banking Solutions (CBS) were implemented.
Introduction of CBS was a trigger that raised the expectations, and
the technology was driven to deliver the `improbable' of the earlier decade.
Payable at par cheques and ATM network introduced automated
reconciliation amongst the branches, which was further extended to ATM
payments through the other bank ATMs. This introduced the element of
interbank settlements.
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