Research
in behavioral finance is growing and is helping in understanding
the relationship between the decision-making processes
and psychological aspects. The papers in this issue focus
on the psychological aspects with respect to the perceptions
of financial risk in behavioral finance. The first paper,
"Stochastic Processes in Finance and Behavioral Finance"
analyzes the preferences and psychology of agents who
play the most significant role in asset pricing. The author
Matjaz Steinbacher examines daily volatilities through
Brownian motion and Martingale models to define asset
pricing through a kind of a stochastic process. The paper
concludes with the finding that people usually do not
behave consistently and use different ways of strategic
thinking, which further complicates the understanding
of price movements.
With
the growth of the Indian economy and increase in the wealth
of the people, there is a growing demand for wealth management
functions. The amalgamation of wealth management with
behavioral finance is important to know customer behavior
and investors psychology so as to make financial decisions.
This concept is explained by the author Meenu Verma in
her paper, "Wealth Management and Behavioral Finance:
The Effect of Demographics and Personality on Investment
Choice Among Indian Investors". The author investigates
the effect of demographic profile and personality type
of the investor on investment choice. Further the paper
provides wealth managers with an idea as to how an investment
choice gets affected by the demographic variables.
The
last paper titled, "Perceptions of Financial Risk:
Axioms and Affect" authored by Robert A Olsen studies
a broader alternative approach in financial risk metrics,
such as variance and Beta, which are mathematical axiomatic
constructions. The paper focuses on financial risk which
is hypothesized as a response to potential loss that would
be modulated by an inborn dual decision-making process.
The author concludes with a note that the reawakened interest
in behavioral economics and the new `behavioral finance'
appears to have the necessary nourishment from its social
science roots while constructing an elegant but fragile
mathematical edifice.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
