76f4Internet Banking (2)

8/3/2019 76f4Internet Banking (2)

1/23


2/23

What is Internet banking?What is Internet banking?

y A system allowing individuals to perform banking

activities at home, via the internet.

y The automated delivery of new and traditional banking

products and services directly to customers through

electronic, interactive communication channels.

y Some online banks are traditional banks which also offer

online banking, while others are online only and have no

physical presence.


3/23

Development of EDevelopment of E--bankingbankingy

The concept of Internet banking has been simultaneouslyevolving with the development of the world wide web.

y Programmers working on banking data bases came up with

ideas for online banking transactions, some time during the

1980's.

y The online shopping promoted the use of credit cards

through Internet.

y The first online banking service in United States was

introduced, in October 1994.


4/23

Development of EDevelopment of E--bankingbanking

ContdContdy The service was developed by Stanford Federal Credit

Union, which is a financial institution.

y In May 1995 : Wells Fargo - the first bank in the world to

offer customer access to their accounts over the

internet(allows customer to see their accounts online)

y The online banking services are becoming more and more

prevalent due to the well developed systems


5/23

Development of EDevelopment of E--bankingbanking

in Indiain Indiay ICICI was the first bank to initiate the Internet

banking revolution in India as early as 1997

under the brand name 'Infinity.

y ICICI Bank kicked off online banking way

back in 1996 . But even for the Internet as a

whole, 1996 to 1998 marked the adoption

phase, while usage increased only in 1999-

due to lower ISP online charges, increased

PC penetration and a tech-friendly

atmosphere


6/23


7/23

Information Only SystemInformation Only System

y General purpose information like interest

rates, branch location, bank products and

their features, loan and deposit

calculations are provided in the banks

website.

y There exist facilities for downloading

various types of application forms.

y The communication is normally done

through e-mail.


8/23

Contd..Contd..y There is no interaction betweenthe customer and bank's

application system.

yNo identification of the

customer is done. In this

system, there is no possibility

of any unauthorized person

getting into production systems

of the bank through internet.


9/23

Electronic InformationElectronic Information

Transfer SystemTransfer Systemy The system provides customer- specificinformation in the form of account balances,

transaction details, and statement of accounts.

y The information is still largely of the 'read

only' format. Identification and authentication

of the customer is through password.

y

The information is fetched from the bank'sapplication system either in batch mode or off-

line.

y The application systems cannot directly access

through the internet.


10/23

Fully Electronic TransactionalFully Electronic Transactional

SystemSystemy This system allows bi-directional capabilities.y Transactions can be submitted by the customer for online

update.

y This system requires high degree of security and control. In this

environment, web server and application systems are linked

over secure infrastructure.

y It comprises technology covering computerization, networking

and security, inter-bank payment gateway and legal

infrastructure .


11/23

Automated Teller MachineAutomated Teller Machine

(ATM)(ATM)y ATM is designed to perform the most

important function of bank.

y It is operated by plastic card with its

special features.

y The plastic card is replacing cheque,

personal attendance of the customer,

banking hours restrictions and paper

based verification


12/23

Different services providedDifferent services provided

under eunder e--bankingbankingy ONLINE BILL PAYMENT

y SHOPPING

y TICKET BOOKING

y PRE PAID MOBILE

RECHA

RG

E

y INVESTMENT SERVICES

y ONLINEAPPLICATIONS


13/23

Service Provided By SBIService Provided By SBIy Self-account funds transfer across India.

y Third party transfers in the same branch

y New account opening

y New Cheque-book request

y Railway tickets booking

y Utility bill payments

y LIC and other insurance premium payments

y Credit card dues payments

y Deposit your taxes

y Donations to Red Cross and such other organisations

State Bank Of India


14/23

Service Provided By ICICIService Provided By ICICI

y BILL PAYMENT

y FUND TRANSFER

y ACCOUNT INFORMATION

y SMART MONEYORDER SERVICE REQUEST

y CONVERT TO EMIA/C TO CARD TRANSFER

y PREPAID MOBILE RECHARGE

y ACCOUNT TRANSFER


15/23

Advantages of EAdvantages of E--bankingbanking

yBenefits for Banks

yBenefits for Small to Medium

Businesses

yBenefits for Customers


16/23

B

y Larger customer coverage

Reducing the costs of operations

y Promoting their services and

products internationally

y

Increasing the customersatisfaction and providing a

personalized relationship with

customers

Benefits for BanksBenefits for Banks


17/23

Benefits for Small to MediumBenefits for Small to Medium

BusinessesBusinessesy To run its operations more

effectively

y Lower cost than traditional

financial management

mechanisms


18/23

Benefits for CustomersBenefits for Customers

y Convenience 24 hours a day, seven days a week

y Cost Reducing transfer fees

y Speed Faster circulation of assets

y Competitiveness - Fostering competition in financial market

y Communicate easily

y Abolishing the uses of paper

y Offering one-stop-shop solutions


19/23

D

isadvantages OF ED

isadvantages OF E--bankingbankingy A need for customer skill to deal with computers and

browsers.

y Many people who are not comfortable with computers and

the Internet, often find it difficult to use internet banking

y For beginners, internet banking is really time consuming

y In many instances, a simple mistake, like clicking a wrong

button, may create a big problem.


20/23

Security RiskSecurity Risk

y Increasing number of fraudulent bank websites

y For Eg.A suspicious bank

website:www.sbionline.com Original bank

websitewww.onlinesbi.com

y Fake emails purporting to be sent from banks

y Email send from Fraudulent bank

y Verify the personal information

y Guide customer enter the fraud link

yDisclosing theirATM card numbers and their passwords


21/23

Persecutions For BankPersecutions For Bank

y Should provide specific guidance to their

customers

y Should take the adequate measures to

ward off any problems related to the

security of internet banking

y Online banking tutorials should be

provided to help familiarize people with

internet banking


22/23

PersecutionsPersecutions For CustomersFor Customers

y Should not disclose their customer IDs

(e.g., account numbers) or passwords to

anyone else.

y Periodically change their passwords

y Should promptly log out from the service

y Should regularly check their account

balances and statements to identify

unusual transactions.


23/23

Documents

76f4Internet Banking (2)