Before going to Industry Revolution, let us recap our situation, the revolution of banking technology in our country.
Before going to Industry Revolution, let us recap our situation, the revolution of banking technology in our country.
Late 80’s, our banking operation was decentralized, banking process was manual. Few 2nd generation Banks were started to adopt technology using computer in branches. It was PC Bank or Bexibank era. Later, couple of banks like Eastern Bank, Dhaka Bank, City bank, Dutch Bangla Bank, BRAC Bank they started to introduce centralized banking operation. As a result, centralized core banking software came in to market. Online banking got popularity, internet banking introduced. Meantime, DBBL started deployment of ATM network. By 2003-2004, we stated getting benefits of modern banking which were actually introduce in 90’s in America and Europe. By that time they had embraced the third tier of Banking Technology. However, DBBL deployed massive nationwide ATM network. This was a revolution. People used the Dutch Bangla account to get this service. While other banks had 200 booths, Dutch-Bangla had 400 to 500 booths. This is because our Generation changed in the early 2000 and people would not even imagine an ATM system. People had started to use ATMs. Then debit card, credit card got huge popularity. Technology adoption in banks continues. At UCB total 387 ATMs, 243 CRMs, 70 Agent Booths, 215 Branches and 14150 POS terminals today, banks are focusing on large service network. Specially to enhance the alternate delivery channel. As a result, we are seeing the mass expansion of agent banking network, MFS and sub branch network. In fact these revolutions are not happening alone here in Bangladesh. Rather, it’s a part of global revolution which we call industrial revolution.
Let’s see how these revolution started.
First Industrial Revolution- The primary Industrial Revolution started in Great Britain after 1750. There were a few factors that consolidated to make Great Britain an optimal spot for industrialization. To begin with, the Agricultural Revolution of the eighteenth century established a positive environment for industrialization. These mechanical changes presented novel methods of working and living and changed the ways of society. The principle highlights engaged with the first Industrial Revolution were technological, financial, and social. The technological changes incorporated the following: the utilization of new essential materials, primarily iron and steel, the utilization of new energy sources, including the two powers and rationale power, like coal, the steam motor, power, petrol, and the gas powered motor, the innovation of new machines allowed a more modest use of human energy, significant advancements in transportation and correspondence, including the steam train, steamship, vehicle, plane, broadcast, and radio, and the expanding use of science to industry. These mechanical changes made conceivable a hugely expanded utilization of normal assets and the large scale manufacturing of produced products.
Second Industrial Revolution- The first eighty years passed like that when somewhere in the range of 1820 and 1860, the visual map of the United States was changed by urbanization and quick regional development. These progressions commonly powered the Second Industrial Revolution which topped somewhere in the range of 1870 and 1914. The Second Industrial Revolution was a period of enormous economical, modern, and innovative technological occurring between the end of the American Civil War and the beginning of World War I. Second industrial revolution considered to have been set off by the development of the Bessemer interaction for the efficient production of steel and the related extension of the U.S. railroad framework. This period brought about an exceptional expansion in modern creation. Advancements in factory workflow, such as mass production, electrification, and automation contributed to economic growth during this time. The Second Industrial Revolution also gave rise to the first workplace safety and work hours laws, including the prohibition of child labor.
Third Industrial Revolution– The digitization of manufacturing transformed the way goods are made and changed the politics of jobs too. There has not been much improvement across and got stable at one stage. However, huge changes are taking place economically and geographically. Presently, the Communication Internet is joining with the digitized sustainable power Internet and the digitized Transportation and Logistics Internet, making an Internet of Things stage for a Third Industrial Revolution. The Third revolution used electronics and information technology to automate production. In this extended computerized economy, private endeavors associated with the Internet of Things can utilize enormous information and examination to foster prescient calculations that can speed proficiency, increment efficiency, and significantly bring down the peripheral expense of delivering and conveying items, making organizations more aggressive in the worldwide commercial center. The disseminated, shared nature of the IoT stage permits many unique players-little and fair size organizations, social endeavors and people to meet up and deliver and trade labor and products straightforwardly with each other, disposing of the excess middle men that kept peripheral costs high in the Second Industrial Revolution.
Fourth Industrial Revolution– Presently the Fourth Industrial Revolution is expanding on the Third, the advanced unrest that has been happening since the center of the last century. It is portrayed by a combination of innovations that is obscuring the lines between the physical, computerized, and organic circles. There are three motivations behind why the present changes address not only a prolongation of the Third Industrial Revolution but instead the appearance of a Fourth and unmistakable one: speed, degree, and frameworks sway. The speed of current leap forwards has no chronicled point of reference. When compared with past modern transformations, the Fourth is developing at a remarkable rather than a straight speed. Moreover, it is impacting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. The prospects of billions of individuals associated by cell phones, with extraordinary handling power, stockpiling limit, and admittance to information, are limitless. Furthermore these potential outcomes will be increased by arising innovation forward leaps in fields like computerized reasoning, advanced mechanics, the Internet of Things, independent vehicles, three dimensional printing, nanotechnology, biotechnology, materials science, energy stockpiling, and quantum registering. As of now, Artificial intelligence is surrounding us, from self-driving vehicles and robots to menial helpers and programming that interpret or contribute. Great headway has been made in AI lately, determined by remarkable expansions in registering power and by the accessibility of tremendous measures of information, from programming used to find new medications to calculations used to anticipate our social advantages. Computerized manufacture innovations, in the meantime, are communicating with the organic world consistently.
Banks- Since we are here to talk about the situation of banks and NBFIs, lets talk about the challenges of Banks and NBFIs. From online installments and advanced advances to cryptographic money and online forex exchanging, the fourth IR vows to reform the manner in which the banking and money area works. But, with that comes several challenges. The first and foremost challenge during the 4th IR is the cyberattacks and security.
Cyberattacks and security- If concerns over cyber-crime is a red-hot topic in most if not every industry, it’s the most important one in banking and finance. Cuber-threats get increasingly modern, with alarming stories of ransomware, phishing, data leaks and information breaks in the news consistently. What’s more, with the fourth IR bringing an expanded utilization of innovation into the banking and finance industry, the danger of organizations experiencing a digital attack is developing. For example, 34% of monetary organizations are impacted by insider dangers consistently and phishing assaults represent 14% of all information breaks.
Next challenge for banks and NBFIs are increased competition. The fourth IR and the fast progress in computerized advances have unavoidably prompted an expansion in contest in the banking area. It has constrained banks and monetary associations to reevaluate their working method. They’re moving forward and rival creative computerized administrations, associated web-based contributions and versatile frameworks and so forth. Customers are anticipating better encounters, consistent exchanges, on-request help and totally associated advanced contributions from their banks and financial institutions.
Lastly, I think the challenge most organizations are facing in the 4th IR is that building trust. Trust in banking is basic: 95% of clients say that believing an organization expands their loyalty to it. Yet, trust is hard-procured. It requires some investment, exertion and a human touch to fabricate compatibility procure, trust and assemble solid, dependable connections. But, with the fourth industrial revolution and the move towards a world where everything is digitalized and nothing will involve human contact, building that trust will start to become more and more difficult.
Other than the significant challenges the fourth IR is bringing to banking and finance it is also opening doors of game-changing. One opportunity the fourth industrial revolution is bringing to banking & finance is increased security and efficiency. Justlike the web changed interchanges everlastingly, Blockchain will change banking for eternity. Blockchain advancements record all exchanges in a straightforward and safe manner: It permits individuals to send cash very quickly, to anyplace on the planet, for a minimal price. Furthermore in light of the fact that it doesn’t utilize any outsiders, and every exchange is cryptographically secured, it definitely limits the danger of hacking.
Another opportunity we can see in the 4th IR is Enhanced customer experiences. Innovation is making it feasible for organizations to upgrade their clients experience by miles. It’s making it workable for them to offer natural, individual and associated encounters. With enormous information, organizations have more admittance to inside and out experiences into how their clients act, what they like, what they don’t like, and what they need than any time in recent memory.
