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FINAL PROJECT

REPORT

SUBMITTED TO:

Mr.Saeed Ahmed

SUBMITTED BY:

Danish Basit (14511)

M.Zeeshan (14040)

Shoaib Ahmed Baig (13969)

Date:

23/12/2010


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TABLE OF CONTENTS

S/NO CONTENTS PG/NO

1 LETTER OF AKNOWLEGDMENT 3

2 LETTER OF TRANSMISAL 4

3 WHAT IS E-BANKING 5

4 DEVELOPMENT OF EBANKING 6

5 TYPES OF E-BANKING IS VARIED 7

6 TYPES OF E-BANKING 8

7 ATM 9

8 TELE BANKING OR PHONE BANKING 10

9 ADVANTAGES OF PHONE BANKING 11

10 MOBILE BANKING 12

11 PC AND DIGITAL TV BANKING 13

12 INTERNET BANKING 14

13 THREE TYPES OF INTERNET BANKING 15

14 ADVANTAGES OF INTERNET BANKING 16

15 WIRELESS OR PDA BANKING 17

16 WIRELESS APPLICATION PROTOCOL 18

17 EBANKING SERVICES 20-21

18 BENEFITS AND DISADVANTAGES OF EBANKING 22-23

19 SCOPE OF EBANKING IN PAKISTAN 24-25

20 CONCLUSION 26


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LETTER OF ACKNOWLEDGMENT

It has been a pleasure to be SAEED AHMED's students. We would like to thank him for giving us

the chance to apply the theories of IT in business in the real world.

His lectures have been very interesting. We are extremely grateful to him and appreciate his

efforts for providing us full support, encouragement and valuable guidance.

Sincere regards

M.Zeeshan

Shoaib Ahmed Baig

Danish Basit


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LETTER OF TRANSMITTAL

17THDecember, 2009

Saeed Ahmed,

Project supervisor & Course Instructor Iqra

University

Dear Sir,

This is the final report based on the topic "Global Positioning System", as requested it is being

submitted to you on December 17, 2009. The report has been prepared keeping in mind the topic

that was the Global Positioning System.

The report is constructed by the group members if it lack something then we are sorry.

M.Zeeshan Danish Basit Shoaib Ahmed Baig

(14040) (14511) (13969)


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What is E-Banking?

E -banking is defined as:Electronic banking is an umbrella term for the process by which a customer may

perform banking transactions electronically without visiting a brick-and-mortar

institution. The following terms all refer to one form or another of electronic banking:

personal computer (PC) banking, Internet banking, virtual banking, online banking,

home banking, remote electronic banking, and phone banking. PC banking and Internet

or online banking are the most frequently used designations. It should be noted,

however, that the terms used to describe the various types of electronic banking are

often used interchangeably.

Various authors define E-Banking differently but the most definition depicting the

meaning and features of E-Banking are as follows:

Banking is a combination of two, Electronic technology and Banking.

Electronic Banking is a process by which a customer performs banking Transactions

electronically without visiting a brick-and-mortar institutions

Electronic banking is also called Cyber banking , virtual banking and online banking .


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Development of E-Banking

HISTORY:-

E-Banking made its debut in UK and USA during 1920s. It became prominently popular during

1960s through electronic funds transfers and credit cards. The concept ofWeb-based banking

came into existence, in Europe and USA in the beginning of 1980s.

1980s :

- Rapid development of the Internet

- E-commerce

Early 1980s :

- Access to their accounts with the computer of the bank

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

Hong Kong (September 1999):

y Bank of East Asia first launched internet banking

y Mortgage applications, personal loans and stock trading

y Basic banking function


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TYPES OF BANKNG IS VARIED

This is online

banking because

customer get

services from big

distance

This is a direct

banking because

customer gets the

service at the spot

This is a wireless

banking because no

wire is connected

in this type of

banking


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Types of E-Banking

Automated Teller Machine

(ATM)

Tele banking or phone

banking

Mobile banking

PC banking

Internet banking

Wireless or PDA baking


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1- ) Automated Teller Machine (ATM)

ATM: This system is known as

anytime money because with

this service the person having

the ATM card can withdraw

cash any time he want. Since

the ATM machine can be built

any where like near markets

and railway stations etc , so

one can easily with draw

money from it .

ADVANTAGES:-

y Environmenntal

y Communication

y Competitiveness

y Cost

y Convenience

1- ) Accepting deposits and

dispenses cash

2- ) Convenient in handling

accounts

3- ) First electronic channel

introduced


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2- ) Tele-banking or Phone Banking

WHAT IS TELE BANKING:

Telephone banking is a service feature offered by many banking institutions. The process

involves using the keypad on a touch-tone telephone to perform a variety of banking functions.

Along with traditional banks, phone banking is also utilized extensively by online

banking institutions, including banks that conduct business primarily with the use of telephone

technology.

The concept of telephone banking has been around for several decades. Initially, the process

required manual intervention by a bank employee. Customers would call into the bank, answer

questions to verify their identities, and submit queries to the service

representative. While somewhat labor intensive, this approach did make it

possible to conduct a number of banking transactions from the comfort of

home.

HISTORY:

It came into operation in the 1970s in the developed countries like the US. It is accessible for

corporate customers that have large volumes of payments to effect and dispose of a fully

automated accounting system. They can establish a Computer to Computer link with their

bank and in this way exchange truly paperless credit transfers which are handled all the

way

How Its Work:

This facility is available with the help ofVoice Response System (VRS or IVR). This systembasically, accepts only TONE dialed input. Like the ATM customer has to follow particular

process, initially account number and telephone PIN are fed for the process to start. Also

the VRS system provides the users within additional facilities such as changing existing

password with the new desire .


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Advantages of Tele-banking:-

i. Balance inquiry and transaction inquiry

ii. Inquiry of term deposit account

iii. Statement of account by Fax, e-mail or ordinary mail.

iv. Cheque book request

v. Stop payment which is on-line and instantaneous.

vi. Transfer of funds

vii. Utility Bill Payments

viii. Voice out of last five transactions.


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3- ) Mobile Banking

What is mobile banking:

Mobile banking comes in as a part of the banks initiative to offer multiple channel banking

providing convenience for its customer. A versatile multifunctional, free service that is

accessible and viewable on the monitor of mobile phone. Mobile phones are playing great

role in banking- both directly and indirectly. They are being used both as banking and

other channels.

SMS-banking:

The Short Message Service (SMS) is a GSM service to exchange text messages up to 140

byte (or 160 characters of 7 bit). The transmission of mobile-originated short messages is

carried out by the short message service center (SMSC) of the particular network operator.


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4- ) PC & Digital TV Banking

PC Banking:

PC Banking - The forerunner to Internet banking has been around since the late 1980's and is

still widely used today. Individual banks provide software which is loaded on to an SME's office

computer. The SME can then access their bank account via a modem and telephone link to the

bank. Access is not necessarily via the Internet.

PC banking makes things easier

You can access your account just from your home PC, 24 hours per day, 7 days per week. All

you need is a computer with an internet connection, and a card reader, which can be obtained

at your Fortis Bank. The card reader gives you unique codes based on your bank card and pin

number, so your account stays safe.

PC banking goes faster

Because you dont need to go all the way to your local bank office, you save a lot of time that

you dont want to be wasting in traffic. A lot of information and reports can be obtained with a

few clicks, and transactions can be done without signing papers. Most of your time will be

spend on going to the website and logging in, so it is advisable to do all your banking at acertain time. For example, Every Monday you log in and do your transactions and

administration. Now you just log in once and process all transfers and reports at once.


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Digital TV Banking:Digital TV Banking- Using the standard digital reception equipment (set top box and remote

control), users can access their bank account. Abbey National and HSBC services are available

via Digital TV providers. One of its main selling points is that no account details are transmitted

via the World Wide Web.

Advantages:

24 hour, 7 day a week access

No need to queue as you would at a bank

Disadvantages:

Limited use of your account compared to other methods

Costs are incurred when accessing your account (charged at local rate)

There is no personal interaction between yourself and the bank (employee/advisor)

You cannot deposit physical cash using TV banking i.e. cheques, cash in hand. This would

require a personal visit to the bank

If your Sky TV system fails to functio you cannot access TV banki


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5- ) INTERNET BANKING

Internet Banking lets you handle many banking transactions via your personal computer. For

instance, you may use your computer to view your account balance, request transfers betweenaccounts, and pay bills electronically. Internet banking system and method in which a personal

computer is connected by a network service provider directly to a host computer system of a

bank such that customer service requests can be processed automatically

The advent of the Internet and the popularity of personal computers presented both an

opportunity and a challenge for the banking industry. For years, financial institutions have used

powerful computer networks to automate million of daily transactions; today, often the only

paper record is the customers receipt at the point of sale. Now that their customers areconnected to the Internet via personal computers, banks envision similar advantages by

adopting those same internal electronic processes to home use. Banks view online banking as a

powerful value added tool to attract and retain new customers while helping to eliminate

costly paper handling and teller interactions in an increasingly competitive banking

environment

It generally implies a service that allows customers to use some form of computer to access account-

specific information and possibly conduct transactions from a remote location - such as at home or at

the workplace. The obvious advantage to the consumer is convenience--one bank recently used the

advertising motto "bank naked" to emphasize the customer's freedom to conduct routine banking

transactions from the comfort and security of his/her home 24X7.


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THREE TYPES OF INTERNET BANKING

INFORMATIONAL

This is the basic level of Internet or E-Banking.

Typically, the bank has marketing information

about the banks products and services

The risk is relatively low, as informational systemstypically have no path between the server and the

banks internal network.

COMMUNUCATIVE

This type of Internet banking systems is relatively more

riskier than the informational system, as banks share

some information to the clients also such as bankaccounts, loan applications and account enquiry etc.

Because these servers may have a path to the banks

internal networks that is why the risk is higher.

TRANSACTIONAL

This level of Internet banking allows customers to

execute transactions. Since a path typically exists

between the server and the bank or outsourcers

internal network, the risk is at its peak, for this bank

may also perform some sort of security applications to

lower the risk at transactional system


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y Convenience

y Transaction speed

y Efficiency

y Effectiveness

ADVANTAGES OF INTERNET BANKING

Unlike your corner bank, online

banking sites never close; theyre

available 24 hours a da .

Online bank sites generally execute

and confirm transactions at or quicker

than ATM processing speeds.

You can access and manage all of your

bank accounts, from one secure site.

Many online banking sites now offer

sophisticated tools, including account

aggregation, stock quotes, rate alert,

etc.


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6- ) WIRELESS OR PDA BANKING

With a phone number and a special PIN number a

customer can access to his account balance from his

cellular device.

Allows user to pay bills, transfer funds between

accounts and check accounts from anywhere.

Offers wireless banking.

Security is an important issue in Wireless Banking.

Newsbytes reports that wireless banking users will

number over 7 million in the US by 2005.


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The most widespread solution for mobile banking is based on micro-websites following

the WAP standard (Wireless Application Protocol). The function of WAP banking is in many

ways similar to the function of Electronic banking using http. The client sends a request

and gets a response with page content which is stored on or dynamically generated by a

standard web server. The main difference is in the usage of a WAP gateway for the

conversion of the protocols. At banks must be considered that very sensitive data isprocessed. While a normal content provider doesnt has to observe special security

precautions, and in some cases can even use the services of extern providers, has to

secure its web server and WAP Gateway especially against unauthorized access. This is

especially necessary because of the fact that inside the WAP Gateway the encryption

protocol is converted from SSL/TLS to WTLS with the effect that data is not encrypted

while it is processed. While authentication is assured via a PIN (personal identification

number) of the user, authorization for transactions is realized via transaction numbers

(TAN).

7- ) Wireless Application Protocol


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E-BANKING SERVICES

Bill payment service

Fund transfer

Credit card

Debit Card


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Bill payment service:Bill payment service Each bank has tie-ups with various utility companies, service providers and

insurance companies, across the country. It facilitates the payment of electricity and telephone

bills, mobile phone, credit card and insurance premium bills. To pay bills, a simple one-time

registration for each biller is to be completed. Standing instructions can be set, online to pay

recurring bills, automatically. One-time standing instruction will ensure that bill payments do

not get delayed due to lack of t ime. Most interestingly, the bank does not charge customers for

online bill payment.

Fund transfer:

Any amount can be transferred from one account to another of the same or any another bank.

Customers can send money anywhere in India. Payees account number, his bank and the

branch is needed to be mentioned after logging in the account. The transfer will take place in a

day or so, whereas in a traditional method, it takes about three working days. ICICI Bank says

that online bill payment service and fund transfer facility have been their most popular online

services.

Credit card:Credit card customers

A credit card is part of a system of payments named after thesmall plastic card issued to users

of the system. It is a cardentitling its holder to buy goods and services based on theholder's


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promise to pay for these goods and services. The issuerof the card grants a line of credit to the

consumer (or the user)from which the user can borrow money for payment toa merchant or as

a cash advance to the user.Credit card users have a lot in store. With Internet banking,

customers can not only pay their credit card bills online but also get a loan on their cards. Not

just this, they can also apply for an additional card, request a credit line increase and God forbidif you lose your credit card, you can report lost card online.

Debit Card:

Debit cards are also known as check cards. Debit cards look likecredit cards or ATM (automated

teller machine) cards, butoperate like cash or a personal check. Debit cards are differentfrom

credit cards. While a credit card is a way to "pay later," adebit card is a way to "pay now." When

you use a debit card, yourmoney is quickly deducted from your checking or savingsaccount.

Debit cards are accepted at many locations, includinggrocery stores, retail stores, gasoline

stations, and restaurants.You can use your card anywhere merchants display your card's brand

name or logo. They offer an alternative to carrying a checkbook or cash.

Debit Card Debit Card is an identity card issued by a bank to a customer, which the customer

can use to buy goods. The price of the goods is charged to customer's bank account.


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BENEFITS FOR SMALL BUSINESS:-

Benefits for Customers

BENEFITS OF E-BANKING

It enables a business;

To run its operations more

effectively

Lower cost than traditional

financial

Management mechanisms

Communication

- communicate easily

Environmental

- Abolishing the uses of paper

Others

- Offering one-stop-shop solutions


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Benefits for Banks

Banks have quickly leveraged the capabilities of and Web 2.0 technologies and adopted the

online banking model. Every mainstream bank now offers a host of banking services and

products to an ever increasing base of customers. Through online banking, banks have been

able to reach out to millions of customers not in their geographical area of operations and offer

more products and a relatively better, convenient and flexible banking experience than that

prevalent in traditional, fixed-location branches.

More CustomersThrough online banking, better service levels and strategic marketing initiatives, banks are able

to reach out to more customers than possible through traditional banking through physical

location branches.

Online Only Products and ServicesLeveragability--and amenability of new technologies, tools and widespread broadband Internet

acceptance--has made it possible for banks to offer a whole host of online only products and

services to customers, such as CDs, e-bank statements, financial calculators, and news feeds.

Broader Customer BaseBanking online has afforded customers user-friendly features of Websites, robust security

technologies, privacy protection measures, and mainstream Internet acceptance. Banks can

reach out to a broader customer base beyond the geographical confines of their locations or

base operations.

Attractive Rates and IncentivesBetter management practices, consolidated operations and streamlined savings from managing

and delivering online banking services allow banks to offer attractive rates and other incentives

to customers.

Cost SavingsBanks save a significant amount of operational capital from not having to open brick and

mortar branches in new locations and far-flung areas. These savings are passed onto the

consumer in the form of reduced or no fees for inter-bank and even intra-bank money.


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A need for customer skill to deal with computers and browsers.

E.g. Elderly, Housewives Inconvenient

It will make the customer have some confusion or delay.

Security Risk

Security Risk Of E-Banking

Increasing number of fraud net bank websites

Fake emails purporting to be sent from banks

Use of Trojan Horse programs to capture user IDs and passwords

DISADVANTAGE OF E-BANKING


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E-Banking in Pakistan Opportunities & Challenges

The State Bank Of Pakistan and other commercial banks are quite aware of the Changing needs

of customers in Pakistan. The SBP has promulgated Electronic Transaction

Ordinancein2002.This provides legal recognition for electronic settlement of transaction in

banking sector. At the present the 40% of the commercial bank branches have been automated

.The online banking which is the wave of future is now on the move in Pakistan and is

progressing is satisfactorily

Scope of E-Banking In Pakistan


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E-Banking in Pakistan Opportunities & Challenges

Generally speaking, three factors, quickness, easiness and cheapness have become the

catchwords for the competitiveness and usefulness of all the business operations. Particularly it

is commonplace today to say that banking is undergoing a radical transformation. The

symptoms are new products, new players, new channels etc. This transformation is taking place

across all sectors of the banking industry.Electronic banking is the wave of the future. It

provides enormous benefits to

consumers in terms of the ease and cost of transactions. But it also poses new challenges for

country authorities in regulating and supervising the financial system and in designing and

implementing macroeconomic policy. Electronic banking has been around for some time in the

form of automatic teller machines and telephone transactions. More recently, it has been

transformed by the Internet, a new delivery channel for banking services that benefits bothcustomers and banks. Access is fast, convenient, and available around the clock, whatever the

customer's location (see illustration above). Plus, banks can provide services more efficiently

and at substantially lower costs. For example, a typical customer transaction costing about $1 in

a traditional "brick and mortar" bank branch or $0.60 through a phone call costs only about

$0.02 online.

Liberalization, privatization and globalization have been recognized as the key elements

propelling the world towards the present era, characterized by rapid changes and increased


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challenges in various fields. In order to meet the challenges of competition unleashed in the

global arena, it has become an imperative on the part of captains of various segments of the

economy to open up to harvest the advantages that are forthcoming from such global

challenges. It is in this context, the most vibrant and important sector, the banking sector,

started gearing up to face the challenges of such ground realities. Accordingly, severalmeasures were initiated and implemented for improving and strengthening the competitive

position of the banking industry vis--vis the foreign banks. Such measures include e-Banking

entry into mutual funds and insurance sector business. Electronic banking also makes it easier

for customers to compare banks services and products, can increase competition among banks,

and allows banks to penetrate new markets and thus expand their geographical reach. Some

even see electronic banking as an opportunity for countries with underdeveloped financial

systems to leapfrog developmental stages. Customers in such countries can access services

more easily from banks abroad and through wireless communication systems, which are

developing more rapidly than traditional "wired" communication networks.

Banking is service-oriented industry, which has peculiarity to implement various social as well

as commercial objectives. It is an instrument for the development of the economy of the

country. Banks have two roles to play. They create a runway for the free flow of capital

necessary for the growth of the economy. At the same time it must attend to lending and

deposit mobilization in order to make profit for its survival and growth. Banking, though, is now

not a high profit service industry in most countries. In many countries banks are affected by

loan losses and this has a great impact on the health of the banks. This has resulted in the poor

quality of service. Complaints of deterioration in service are viewed in several quarters. Getting

customer patronage and goodwill are becoming a great task and a challenge for banks.The

flipside of this technological boom is that electronic banking is not only susceptible to, but may

exacerbate, some of the same risksparticularly governance, legal, operational, and

reputationalinherent in traditional banking. In addition, it poses new challenges. In response,

many national regulators have already modified their regulations to achieve their main

objectives: ensuring the safety and soundness of the domestic banking system, promoting

market discipline, and protecting customer rights and the public trust in the banking system.

Policymakers are also becoming increasingly aware of the greater potential impact of

macroeconomic policy on capital movements.


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CONCLUSION

With increased developments, we are seeing the demand for the traditional

service delivery points and branch networks diminishing, while that of internet

service based takes on the central role. But that does not mean that the whole of

the tradional system will be diminished or will be wiped out completely, because

there are several types of works which can be more effectively dont by the

tradional labor system rather than ebanking .

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