What is the difference between modern banking and traditional banking?

Answer 1

In traditional Banking, borrowing money from the public and lending them to business units constituted the main functions of a bank.

When the banks became profit conscious and wanted to give more emphasis to profit generation, they started focusing on fee-based business. As a result, they started rendering different types of service oriented functions, which are called General Utility Services. These formed the subsidiary services of the bank. These included providing of safe locker facilities, Issuing of Letters of Credit, Dealing in Foreign Exchange, and underwriting loans floated by the Government,.

Modern day banks have been using the technology based services or electronic banking. The banking services are being rendered very fast and efficiently.

1. Telebanking services.

2. Net banking Services.

3. Issue of Credit and Debit Card services.

4. Bank assurance.

5. ATMs.

6. SMS Alert services.

7. Electronic Funds Tranfer system. (For ex. NEFT)

8. Electronic clearing services (RTGS)

Thus in traditional banking the services are slow, but personalised; whereas in modern banking, due to the introduction of technology, the services are rendered fast. The physical and space barrier are removed completely and one can do banking 24 X 7, that is all round the year on all days from anywhere. The services are also rendered fast. One need not physically go to a bank to withdraw money. One can draw money even at midnight.

Answer 2

Not answer