Technology trends in Banking, e-RUPI, Fintech - RegTech, SupTech, Hashtag banking etc | PAPER II – PRINCIPLES & PRACTICES OF BANKING | MODULE C: BANKING TECHNOLOGY
Technology Trends in Banking
1. e-RUPI
e-RUPI is a digital voucher-based payment system initiated by the Government of India. It is a prepaid digital instrument that enables cashless and contactless transactions. e-RUPI ensures targeted and leak-proof delivery of welfare services, such as health and education benefits, directly to the beneficiaries without intermediaries.
Example:
Suppose a government provides a healthcare voucher worth ₹1,000 to a beneficiary for medical treatment under a government scheme. The beneficiary receives an SMS or QR code with the voucher, which they can use to redeem at a hospital or healthcare provider that accepts e-RUPI.
2. Fintech, RegTech, and SupTech
Fintech (Financial Technology) refers to the integration of technology into offerings by financial services companies to improve their use of financial services. Examples of Fintech include mobile wallets, digital payments, and online lending.
RegTech (Regulatory Technology) refers to technology that helps businesses comply with regulations efficiently and at a lower cost. RegTech helps automate compliance, reporting, and monitoring systems.
SupTech (Supervisory Technology) refers to technologies used by regulators to supervise financial markets and institutions effectively. It includes the use of artificial intelligence, machine learning, and data analytics in regulatory functions.
Example:
Fintech companies like Paytm and Razorpay provide digital wallets and payment solutions, while regulatory technologies such as IBM's Watson help automate regulatory compliance in financial institutions. On the supervisory side, the Reserve Bank of India uses SupTech tools to monitor financial stability.
3. Social Media Banking and Hashtag Banking
Social Media Banking refers to the use of social media platforms (like Facebook, Twitter, Instagram) by banks for customer service, marketing, and providing financial updates. Hashtag Banking allows users to perform basic banking operations like balance checks, fund transfers, or bill payments through social media posts or hashtags.
Example:
Banks like HDFC and ICICI offer customer support on Twitter, where users can tweet their queries. Similarly, banks use hashtags like #PayWithX to allow users to perform transactions or receive promotional offers.
4. Account Aggregators and Open Banking
Account Aggregators are platforms that consolidate financial information from multiple banks, enabling customers to access and manage their financial data in one place. Open Banking allows third-party developers to build applications and services that can access financial data through APIs (Application Programming Interfaces) provided by banks.
Example:
An Account Aggregator app might pull together your savings account, loan details, insurance policies, and other financial data into a single platform. Open Banking allows third-party fintech apps to offer services like budgeting, personalized investment advice, or loan applications based on your banking data.
Multiple Choice Questions (MCQs)
-
What is the main purpose of e-RUPI?
- A. To provide loans
- B. To facilitate cashless transactions for targeted welfare services
- C. To enable online payments globally
- D. To serve as a mobile banking application
Answer: B. To facilitate cashless transactions for targeted welfare services
-
Which of the following is a key function of RegTech?
- A. To provide investment services
- B. To assist in regulatory compliance
- C. To offer digital payments solutions
- D. To manage customer data security
Answer: B. To assist in regulatory compliance
-
Which technology helps financial regulators supervise financial markets?
- A. Fintech
- B. SupTech
- C. RegTech
- D. AI
Answer: B. SupTech
-
What is the primary benefit of Hashtag Banking?
- A. It allows customers to open bank accounts
- B. It enables users to perform banking operations via social media
- C. It provides financial advice
- D. It helps in financial planning
Answer: B. It enables users to perform banking operations via social media
-
Which platform is an example of Fintech?
- A. Razorpay
- B. Reserve Bank of India
- C. RBI
- D. IRDA
Answer: A. Razorpay
-
What is the role of Account Aggregators?
- A. To offer financial advice
- B. To consolidate financial data from multiple sources
- C. To assist in loan sanctioning
- D. To provide digital wallets
Answer: B. To consolidate financial data from multiple sources
-
Which of the following is true about Open Banking?
- A. It is a platform for digital payments
- B. It involves sharing banking data via APIs with third-party services
- C. It only works with mobile banking applications
- D. It does not allow third-party developers
Answer: B. It involves sharing banking data via APIs with third-party services
-
Which of the following is a feature of Social Media Banking?
- A. It enables social media accounts to perform banking operations
- B. It only involves customer support through social media
- C. It allows customers to trade shares on social platforms
- D. It is limited to online banking transactions only
Answer: A. It enables social media accounts to perform banking operations
-
What is the key focus of Fintech?
- A. Regulating financial markets
- B. Providing digital banking solutions
- C. Creating software for managing accounts
- D. Improving the user experience of banking apps
Answer: B. Providing digital banking solutions
-
What is e-RUPI primarily used for?
- A. To facilitate peer-to-peer lending
- B. To provide targeted cashless welfare benefits
- C. To offer insurance services
- D. To transfer funds internationally
Answer: B. To provide targeted cashless welfare benefits
Comments