E-Banking

What is it? The provision of

banking service through electronic channels and the customer can access the data without any time and geographical limitation.

What are time an Limitations?

Traditional banking hours are from 9am to 5pm.

BUT E-channels enable

financial transactions from anywhere and allow non-stop working time.

a) Internet.b) WAP based mobile

network.c) Automated

telephone.d) ATM network.e) SMS and FAX

messaging.f) Web TV.

Forms of E Banking.

E-Banking Strategy

12%

12%

6%

25%

45%

Attracting New Customer Cost Reduction Other Reasons

Moder Image Customer Relationship

1. Non-Transactional Tasks.2. Transactional Tasks.

Types of activities.

viewing account balances

viewing recent transactions

downloading bank statements.

viewing images of paid cheques

ordering cheque books Downloading

applications for M-banking, E-banking etc.

Funds transfers between the customer's linked accounts

Paying third parties, including bill payments (see, e.g., BPAY) and telegraphic/wire transfers

Investment purchase or sale

Loan applications and transactions, such as repayments of enrollments

Transaction approval process

Transactional Non-Transactional

Types of E Banking.

Types of E banking.

Informational Internet Banking

Communicative Online Banking

Transactional Internet Banking

Informational Internet Banking

This fundamental level of banking does not allow patrons to view or maintain accounts, nor does it allow for communication between the financial institution and customers.

Informational Internet banking simply means the bank provides basic information about its products and services, much like a brochure.

This is meant for marketing purposes only, and there is no connection to the bank's main computer systems.

Communicative Online Banking

Communicative online banking allows for some communication between the patron and bank.

However, this is typically limited to fundamental interactions such as account inquiries, new account updates, loan or mortgage applications, contact information updates and balances.

Communicative online banking may connect with the bank's main computer systems.

Transactional Internet Banking

The most popular online banking type, transactional Internet banking offers all of the benefits of a traditional brick-and-mortar institution.

This includes full control over your accounts---deposits, withdrawals, transfers, updates and online payments.

Increased security measures now make Internet banking safe, secure and convenient, especially in the case of mobile online banking.

Advantages And Disadvantages

Advantages Very convenient.  Online banking is a totally easy thing to do.  In the

comfort of your home or offices. Unlimited service. The services and various features of your bank are

always available seven days a week and 24 hours daily. No time constraint. Online banking is also stress free because it never

closes unlike the traditional banking that has cut-off time. Easy way of payment. Bill payments can also be handled properly and

smartly.  Instead of waiting for certain due dates, you can easily pay all your transactions using your computer and in coordination with your bank.

Smart.  Online banking is also ubiquitous or simply put smart.  This enables you to do troubleshooting regarding any problem that may arise from your business.

Higher interest rate. Another great advantage of online banking is the interest rates which basically range between 5% to 3.40% annually.   Unlike the traditional banking, online banking can earn you a better interest or return of investment both in your savings and checking account.

Disadvantages Understanding the usage of internet banking might be difficult for

a beginner at the first go. Though there are some sites which offer a demo on how to use internet banking, but all does not offer this facility. So, a person who is new to internet baking might face some difficulty.

You cannot have access to internet banking if you don’t have an internet connection.

Security of transactions is a big issue. Your account information might get hacked by unauthorized people over the internet.

Password security is a must. After getting your net banking password, do change it and memorize it otherwise your account may be misused by someone who gets to know your password inadvertently.

You cannot use internet banking, in case, the bank’s server is down.

Another issue is that sometimes it becomes difficult to note whether your transaction was successful or not.

Issues With E-Banking

Problems of Electronic Banking

Security One of the biggest problems with electronic

banking is security. Regardless of what type of security is in place for on line banking sites or ATMs, people are able to obtain customer information.

Through so-called phishing, where someone tries to trick a customer into revealing sensitive information, or pharming, where malicious code is introduced into a computer, customers can become victims to identity theft.

These issues are often beyond the bank’s control, as criminals try many tactics to obtain customer information.

At ATMs, thieves can also hack the system, so your personal identification number (commonly called a PIN number) and card number are stolen after you use them.

Fraud

Electronic banking also lacks the one thing most bank institutes thrive on: customer service.

Electronic banking is conducted by the customer instead of a bank teller, so there is no face-to-face interaction.

The customer must seek any additional services or help on by pro-actively contacting the bank.

Some customers refuse to use these services because they feel they are entitled to in-person customer service.

Customer Service

Electronic banking also lacks the one thing most bank institutes thrive on: customer service.

Electronic banking is conducted by the customer instead of a bank teller, so there is no face-to-face interaction.

The customer must seek any additional services or help on by pro-actively contacting the bank.

Some customers refuse to use these services because they feel they are entitled to in-person customer service.

Three reasons not to use online bank accounts. Customer Service With Online

Bank Accounts

Online Bank Accounts and Speed of Clearing

You Can’t Spend It From Your Online Bank Account

Customer Service With Online Bank Accounts One reason to avoid online banks is

that you may run into bad customer service.

With a brick-and-mortar bank, you’ll likely have some familiarity with the staff. At a small credit union, the staff might know you well.

Why does this matter? It’s easier to get good service if you know the staff and they know you. You can pick and choose who you deal with. However, if your online bank account offers any phone service, you have to take your chances with the “1-800 Lottery”. You might get somebody helpful and knowledgeable, or you might not.

Online Bank Accounts and Speed of Clearing

The internet is supposed to make things faster.

However, you might have to wait a long time for checks to clear. You certainly can’t ask for a cashier’s check if you’re in the middle of a crisis and you need settled money yesterday.

Likewise, deposits to your online bank account can be really slow. If you get a big check and want to start earning interest, you can expect to wait.

 You Can’t Spend It From Your Online Bank Account

You can’t take it with you when you go, so why not use some of that money? Online bank accounts make it hard to spend your money. You really have to plan on keeping your money in the account.

Few Steps to avoid problems with e-banking.

Security Tips

Step 1/3

Make sure your transmissions are encrypted before doing any online transactions or sending personal information.

E-mail is usually not secure.

Do not send sensitive data via e-mail (unless you know it is encrypted).

Change all passwords and PIN codes received via e-mail that is not encrypted.

Make sure you are on the right website.

Step 2/3 Make sure that the financial

institution isproperly insured.

Be “password smart” (use mix of letters and numbers; change pw regularly; keep your pw and PIN codes to yourself; avoid easy to guess pw like first names, birthdays, anniversaries, social security numbers...)

Keep good records. Save information about banking transactions. Check bank, debit and credit card statements thoroughly every month. Look for any errors or discrepancies.

Step 3/3 Report errors, problems or

complaints promptly

Keep virus protection software up-to-date. Back-up key files regularly.

Exit the banking site immediately after completing your banking.

Do not have other browser windows open at the same time you are banking online.

Do not disclose personal information such as credit card and Social Security numbers unless you know whom you are dealing with, why they want this information and how they plan to use it.

You should not ignore online bank accounts.

You may never run into these problems, and your overall experience will probably be great. However, you now have an idea of what can go wrong when using these services.

Should You Avoid Them?

5 Great Internet Banks

Ally Bank ING Direct PerkStreet Connexus

Credit Union Bank of

Internet USA

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