E Banking Project data as on 31-1-2016
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Transcript of E Banking Project data as on 31-1-2016
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1. INTRODUCTION
a. INTRODUCTION TO THE TOPIC 5-6
b. REVIEW OF THE STUDY7
c. OBJECTIVES OF THE STUDY8
d. METHODOO!Y OF THE STUDY
"
#. IMIT$TIONS OF THE STUDY"
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INTRODUCTION
The advent of Internet has initiated an electronic revolution in the global banking
sector. The dynamic and flexible nature of this communication channel as ell as itsubi!uitous reach has hel"ed in leveraging a variety of banking activities. #lectronic banking$also knon as electronic funds transfer %#&T'$ is sim"ly the use of electronic means totransfer funds directly from one account to another$ rather than by che!ue or cash. (ou canuse electronic funds transfer to)
*+ ,ave your "aycheck de"osited directly into your bank or credit union checking
account.
-+ ithdra money from your checking account from an /T0 machine ith a "ersonal
identification number %1IN'$ at your convenience$ day or night.
2+ Instruct your bank or credit union to automatically "ay certain monthly bills from
your account$ such as your auto loan or your mortgage "ayment.
3+ ,ave the bank or credit union transfer funds each month from your checking account
to your mutual fund account.
4+ ,ave your government social security benefits check or your tax refund de"osited
directly into your checking account.
5+ 6uy groceries$ gasoline and other "urchases at the "oint7of7sale$ using a check card
rather than cash$ credit or a "ersonal check. 8+ Use a smart card ith a "re"aid amount
of money embedded in it for use instead of cash at a "ay "hone$ ex"ressay road toll$ or
on college cam"uses at the library9s "hotoco"y machine or bookstores.
:+ Use your com"uter and "ersonal finance softare to coordinate your total "ersonal
financial management "rocess$ integrating data and activities related to your income$
s"ending$ saving$ investing$ recordkee"ing$ bill7"aying and taxes$ along ith basic
financial analysis and decision making.
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REVIEWOFTHE STUDY
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The study basically concentrates on the colossal revolution of #7banking and the Challengesthereof. #76anking has revolutioni;ed to days banking by making it very fast$ easy and farreaching. The ex"ectations are groing at very fast s"eed on the #76anking services. iththe result$ it is demanding more attention for study from various "eo"le around the globe.,uge volume of research has been done and is still going on different issues of #7banking.The research has hel"ed the customers$ the bankers$ and other de"endent institutions in
understanding various as"ects of #7banking. #76anking has over7"erformed all the obsolete banking "ractices and the threat of security measures has also been groing ith it.Researchers are trying to find out the ays to cover u" this risk in the #76anking and makeit more so"histicated for everyone. The "resent research study has been done in this contextonly. There ere huge amount of issues related to #76anking available on the internet. 6utour study has em"hasi;ed on threats and the "reventive measures to acce"t the challengingsituations. Due$ to the "resence of time constraint$ the study is based u"on limited "a"ers onthe same issue.
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RESEARCH METHODOLOGY
Internet banking has become very much "o"ular no a day<s throughout the globe. Ithas made the banking activities easier$ faster and more accessible. No "eo"le are tryingto learn more about the #7banking. The "rimary ob=ective of the research is to get the
full ac!uaintance of the internet banking and its benefits. To add more knoledge aboutinternet banking the folloing are the secondary ob=ectives of this research study.* To kno ho the internet banking has revolutionised the banking sector.- To hel" the leaner<s to kno about the current concerns in the internet banking.2 To kno ho challenging internet banking has become and ho the bankingsector a""lies different strategies to co"e u" ith the challenging environment.
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RESEARCH METHODOLOGY
The "rimary source of the information in this research study is the secondary data. The
available information on internet regarding the #) 6anking has been extensively used to
com"lete the dissertation re"ort. /ll the available >ournals$ /rticles$ "a"ers "rovided
necessary information to the grou" to finali;e the research study. The grou" orked hard to
collect all the necessary data to frame this re"ort.
LIMITATIONS
The folloing limitations have been found by the team
1 The research study has been done from a selective material on the internet.
2 Only selective =ournals$ "a"ers and articles have been "ut to use because of the timefactor.
3 There is the "ossibility of further u"dating of this research "a"er because of limitedsources.
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INTERNET BANKING:
Internet Banking lets you handle many banking transactions via your "ersonal com"uter. &or
instance$ you may use your com"uter to vie your account balance$ re!uest transfers
beteen accounts$ and "ay bills electronically.
Internet banking system and method in hich a "ersonal com"uter is connected by a
netork service "rovider directly to a host com"uter system of a bank such that customer
service re!uests can be "rocessed automatically ithout need for intervention by customer
service re"resentatives. The system is ca"able of distinguishing beteen those customer
service re!uests hich are ca"able of automated fulfillment and those re!uests hich
re!uire handling by a customer service re"resentative. The system is integrated ith the host
com"uter system of the bank so that the remote banking customer can access other
automated services of the bank. The method of the invention includes the ste"s of in"utting
a customer banking re!uest from among a menu of banking re!uests at a remote "ersonnel
com"uter? transmitting the banking re!uests to a host com"uter over a netork? receiving
the re!uest at the host com"uter? identifying the ty"e of customer banking re!uest received?
automatic logging of the service re!uest$ com"aring the received re!uest to a stored table of
re!uest ty"es$ each of the re!uest ty"es having an attribute to indicate hether the re!uest
ty"e is ca"able of being fulfilled by a customer service re"resentative or by an automated
system? and$ de"ending u"on the attribute$ directing the re!uest either to a !ueue for
handling by a customer service re"resentative or to a !ueue for "rocessing by an automated
system.
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AUTOMATEDTELLERMACHINES (ATM): /n automate te!!e"
ma#$%&e or automat%# te!!e" ma#$%&e(ATM) is an electronic com"uteri;ed
telecommunications device that allos a financial institution9s customers to directly use a
secure method of communication to access their bank accounts$ order or make cash
ithdraals %or cash advances using a credit card' and check their account balances ithout
the need for a human bank teller . 0any /T0s also allo "eo"le to de"osit cash or che!ues$
transfer money beteen their bank accounts$ to" u" their mobile "hones9 "re7"aid accounts
or even buy "ostage stam"s. On most modern /T0s$ the customer identifies him or herself
by inserting a "lastic card ith a magnetic stri"e or a "lastic smartcard ith a chi" that
contains his or her account number. The customer then verifies their identity by entering a
"asscode$ often referred to as a 'IN %'ersonal Identification Number' of four or more
digits. U"on successful entry of the 1IN$ the customer may "erform a transaction. The
groth of /T0<s has ra"idly gron in the "ublic "laces around the globe.
TELE BANKING:
Undertaking a host of banking related services including financial transactions from the
convenience of customers chosen "lace anyhere across the @AO6# and any time of date
and night has no been made "ossible by introducing on7line Telebanking services. 6y
dialing the given Telebanking number through a landline or a mobile from anyhere$ the
customer gets the folloing facilities
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/utomatic balance voice out for the default account.
6alance in!uiry and transaction in!uiry in all
In!uiry of all term de"osit account
Btatement of account by &ax$ e7mail or ordinary mail.
Che!ue book re!uest
Bto" "ayment hich is on7line and instantaneous
Transfer of funds ith C6B hich is automatic and instantaneous
Utility 6ill 1ayments
Reneal of term de"osit hich is automatic and instantaneous
oice out of last five transactions.
SMARTCARD:
/ smart card usually contains an embedded :7bit micro"rocessor %a kind of com"uter chi"'.The micro"rocessor is under a contact "ad on one side of the card. Think of the
micro"rocessor as re"lacing the usual magnetic stri"e "resent on a credit card or debit card.
The micro"rocessor on the smart card is there for security. The host com"uter and card
reader actually talk to the micro"rocessor. The micro"rocessor enforces access to the data
on the card. The chi"s in these cards are ca"able of many kinds of transactions. &or
exam"le$ a "erson could make "urchases from their credit account$ debit account or from a
stored account value that9s reload able. The enhanced memory and "rocessing ca"acity ofthe smart card is many times that of traditional magnetic7stri"e cards and can accommodate
several different a""lications on a single card. It can also hold identification information$
hich means no more shuffling through cards in the allet to find the right one 77 the Bmart
Card ill be the only one needed.
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Bmart cards can also be used ith a smart card reader attachment to a "ersonal com"uter to
authenticate a user. Bmart cards are much more "o"ular in #uro"e than in the U.B. In #uro"e
the health insurance and banking industries use smart cards extensively. #very @erman
citi;en has a smart card for health insurance. #ven though smart cards have been around in
their modern form for at least a decade$ they are =ust starting to take off in the U.B.
DEBITCARD:
Debit cards are also knon as check cards. Debit cards look like credit cards or /T0
%automated teller machine' cards$ but o"erate like cash or a "ersonal check. Debit cards are
different from credit cards. hile a credit card is a ay to "ay later$ a debit card is a ay
to "ay no. hen you use a debit card$ your money is !uickly deducted from your
checking or savings account.
Debit cards are acce"ted at many locations$ including grocery stores$ retail stores$ gasoline
stations$ and restaurants. .
ECHEUE:
/n e7Che!ue is the electronic version or re"resentation of "a"er
che!ue. The Information and Aegal &rameork on the #7Che!ue is
the same as that of the "a"er che!ue<s. It can no be used in "lace
of "a"er che!ues to do any and all remote transactions.
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/n #7che!ue ork the same ay a che!ue does$ the che!ue riter rites the e7
Che!ue using one of many ty"es of electronic devices and gives the e7Che!ue to the "ayee
electronically. The "ayee de"osits the #lectronic Che!ue receives credit$ and the "ayee9s
bank clears the e7Che!ue to the "aying bank. The "aying bank validates the e7Che!ue and
then charges the check riter9s account for the check
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OTHERFORMS OF ELECTRONIC BANKING
Direct De"osit #lectronic 6ill 1ayment #lectronic Check Conversion Cash alue
Btored$ #tc.
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BENEFITS*CONCERNS OF EBANKING
BENEFITS OF EBANKING
Fo" Ba&+,:
1rice7In the long run a bank can save on money by not "aying for tellers or for managing branches. 1lus$ it9s chea"er to make transactions over the Internet.
Customer 6ase7the Internet allos banks to reach a hole ne market7and a ell off one
too$ because there are no geogra"hic boundaries ith the Internet. The Internet also "rovides
a level "laying field for small banks ho ant to add to their customer base.
#fficiency76anks can become more efficient than they already are by "roviding Internet
access for their customers. The Internet "rovides the bank ith an almost "a"er less system.
Customer Bervice and Batisfaction76anking on the Internet not only allo the customer to
have a full range of services available to them but it also allos them some services not
offered at any of the branches. The "erson does not have to go to a branch here that service
may or may not be offer. / "erson can "rint of information$ forms$ and a""lications via the
Internet and be able to search for information efficiently instead of aiting in line and
asking a teller. ith more better and faster o"tions a bank ill surely be able to create better
customer relations and satisfaction.
Image7/ bank seems more state of the art to a customer if they offer Internet access. / "erson may not ant to use Internet banking but having the service available gives a "ersonthe feeling that their bank is on the cutting image.
Fo" Cu,tome",:
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6ill 1ay) 6ill 1ay is a service offered through Internet banking that allos the customer to
set u" bill "ayments to =ust about anyone. Customer can select the "erson or com"any hom
he ants to make a "ayment and 6ill 1ay ill ithdra the money from his account and
send the "ayee a "a"er check or an electronic "ayment
Other Im"ortant &acilities) #7banking gives customer the control over nearly every as"ect of managing his bank accounts. 6esides the Customers can$ 6uy and Bell Becurities$ Check Btock 0arket Information$ Check Currency Rates$ Check 6alances$ Bee hich checks arecleared$ Transfer 0oney$ ie Transaction ,istory and avoid going to an actual bank. The
best benefit is that Internet banking is free. /t many banks the customer doesn9t have tomaintain a re!uired minimum balance. The second big benefit is better interest rates for thecustomer.
CONCERNS WITHEBANKING
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/s ith any ne technology ne "roblems are faced.
Cu,tome" ,u--o"t 7banks ill have to create a hole ne customer relations
de"artment to hel" customers. 6anks have to make sure that the customers receive
assistance !uickly if they need hel". /ny ma=or "roblems or disastrous can destroy the banks
re"utation !uickly an easily. 6y shoing the customer that the Internet is reliable you are
able to get the customer to trust online banking more and more.
La., 7hile Internet banking does not have national or state boundaries$ the la does.
Com"anies ill have to make sure that they have softare in "lace softare market$
creating a mono"oly.
Se#u"%t/) customer alays orries about their "rotection and security or accuracy. There
is alays !uestion hether or not something took "lace.
Ot$e" #$a!!e&0e,) lack of knoledge from customers end$ sit changes by the banks$etc.
EBANKING GLOBAL 'ERS'ECTIVE
The advent of Internet has initiated an electronic revolution in the global banking sector. The
dynamic and flexible nature of this communication channel as ell as its ubi!uitous reach
has hel"ed in leveraging a variety of banking activities. Ne banking intermediaries
offering entirely ne ty"es of banking services have emerged as a result of innovative e7
business models. The Internet has emerged as one of the ma=or distribution channels of banking "roducts and services$ for the banks in UB and in the #uro"ean countries. Initially$
banks "romoted their core ca"abilities i.e.$ "roducts$ services and advice through Internet.
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Then$ they entered the e7commerce market as "rovidersEdistributors of their on "roducts
and services. 0ore recently$ due to advances in Internet security and the advent of relevant
"rotocols$ banks have discovered that they can "lay their "rimary role as financial
intermediate<s and facilitators of com"lete commercial transactions via electronic netorks
es"ecially through the Internet. Bome banks have chosen a route of establishing a direct eb
"resence hile others have o"ted for either being an oner of financial services centric
electronic market"lace or being "artici"ants of a non7financial services centric electronic
market"lace. The trend toards electronic delivery of banking "roducts and services is
occurring "artly as a result of consumer demand and "artly because of the increasing
com"etitive environment in the global banking industry. The Internet has changed the
customers9 behaviors ho are demanding more customi;ed "roductsEservices at a loer
"rice. 0oreover$ ne com"etition from "ure online banks has "ut the "rofitability of even
established brick and mortar banks under "ressure. ,oever$ very fe banks have been
successful in develo"ing effective strategies for fully ex"loiting the o""ortunities offered by
the Internet. &or traditional banks to define hat niche markets to serve and decide hat
"roductsEservices to offer there is a need for a clear and concise Internet commerce strategy.
6anking transactions had already started taking "lace through the Internet ay back in *FF4.
The Internet "romised an ideal "latform for commercial exchange$ hel"ing banks to achieve
ne levels of efficiency in financial transactions by strengthening customer relationshi"$
"romoting "rice discovery and s"end aggregation and increasing the reach. #lectronic
finance offered considerable o""ortunities for banks to ex"and their client base and
rationali;e their business hile the customers received value in the form of savings in time
and money.
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CHALLENGES OFTHE 1E
BANKING REVOLUTION1
#lectronic banking is the ave of the future. It "rovides enormous benefits to consumers interms of the ease and cost of transactions. 6ut it also "oses ne challenges for countryauthorities in regulating and su"ervising the financial system and in designing andim"lementing macroeconomic "olicy. #lectronic banking has been around for some time inthe form of automatic teller machines and tele"hone transactions. 0ore recently$ it has beentransformed by the Internet$ a ne delivery channel for banking services that benefits bothcustomers and banks. /ccess is fast$ convenient$ and available around the clock$ hateverthe customer9s location %see illustration above'. 1lus$ banks can "rovide services moreefficiently and at substantially loer costs. &or exam"le$ a ty"ical customer transactioncosting about G* in a traditional brick and mortar bank branch or GH.5H through a "honecall costs only about GH.H- online. #lectronic banking also makes it easier for customers to
com"are banks9 services and "roducts$ can increase com"etition among banks$ and allos banks to "enetrate ne markets and thus ex"and their geogra"hical reach. Bome even seeelectronic banking as an o""ortunity for countries ith underdevelo"ed financial systems tolea"frog develo"mental stages. Customers in such countries can access services more easilyfrom banks abroad and through ireless communication systems$ hich are develo"ingmore ra"idly than traditional ired communication netorks. The fli" side of thistechnological boom is that electronic banking is not only susce"tible to$ but may exacerbate$some of the same risks"articularly governance$ legal$ o"erational$ and re"utational inherent in traditional banking. In addition$ it "oses ne challenges. In res"onse$ manynational regulators have already modified their regulations to achieve their main ob=ectives)ensuring the safety and soundness of the domestic banking system$ "romoting market
disci"line$ and "rotecting customer rights and the "ublic trust in the banking system.1olicymakers are also becoming increasingly aare of the greater "otential im"act ofmacroeconomic "olicy on ca"ital movements.
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NEWCHALLENGES FORREGULATORSThis changing financial landsca"e brings ith it ne challenges for bank management andregulatory and su"ervisory authorities. The ma=or ones stem from increased cross7bordertransactions resulting from drastically loer transaction costs and the greater ease of
banking activities$ and from the reliance on technology to "rovide banking services ith thenecessary security. Re0u!ato"/ R%,+) B#ca%&# '(# I)'#*)#' a++,& &#*/c#& ',
b# 0*,/d#d *,2 a)3(#*# /) '(# ,*+d4 '(#*# /& a da)#* '(a' ba)& /++'*3 ', a,/d *#%+a'/,) a)d &%0#*/&/,). W(a' ca) *#%+a',*& d, T(#3ca) *#%/*# ##) ba)& '(a' 0*,/d# '(#/* &#*/c#& *,2 a *#2,'# +,ca'/,)'(*,%( '(# I)'#*)#' ', b# +/c#)&#d. /c#)&/) ,%+d b# 0a*'/c%+a*+3a00*,0*/a'# (#*# &%0#*/&/,) /& #a a)d c,,0#*a'/,) b#'##) a /*'%a+ba) a)d '(# (,2# &%0#*/&,* /& ),' ad#%a'#. /c#)&/) /& '(# ),*24 ,*#9a20+#4 /) '(# U)/'#d S'a'#& a)d 2,&' , '(# c,%)'*/#& , '(# E%*,0#a)U)/,). $ /*'%a+ ba) +/c#)&#d ,%'&/d# '(#&# :%*/&d/c'/,)& '(a' /&(#& ',,;#* #+#c'*,)/c ba)/) &#*/c#& a)d 'a# d#0,&/'& /) '(#&# c,%)'*/#&2%&' <*&' #&'ab+/&( a +/c#)&#d b*a)c(. D#'#*2/)/) (#) a ba)=&#+#c'*,)/c &#*/c#& '*/#* '(# )##d ,* a +/c#)&# ca) b# d/>c%+'4 b%'
/)d/ca',*& &(,/) (#*# ba)/) &#*/c#& ,*//)a'# a)d (#*# '(#3 a*#0*,/d#d ca) (#+0. F,* #9a20+#4 a /*'%a+ ba) +/c#)&#d /) c,%)'*3 ? /&),' &##) a& 'a/) d#0,&/'& /) c,%)'*3 Y / c%&',2#*& 2a# '(#/* d#0,&/'&b3 0,&'/) c(#c& ', a) add*#&& /) c,%)'*3 ?. I a c%&',2#* 2a#& ad#0,&/' a' a) a%',2a'/c '#++#* 2ac(/)# /) c,%)'*3 Y4 (,##*4 '(a''*a)&ac'/,) ,%+d 2,&' +/#+3 b# c,)&/d#*#d d#0,&/' 'a/) /) c,%)'*3 Y.R#%+a',*& )##d ', #&'ab+/&( %/d#+/)#& ', c+a*/3 '(# *a3 a*#a& b#'##)'(#&# ', ca&#&. Le0a! R%,+: E+#c'*,)/c ba)/) ca**/#& (#/('#)#d +#a+*/&& ,* ba)&. Ba)& ca) 0,'#)'/a++3 #90a)d '(# #,*a0(/ca+ &c,0# ,'(#/* &#*/c#& a&'#* '(*,%( #+#c'*,)/c ba)/) '(a) '(*,%( '*ad/'/,)a+ba)&. I) &,2# ca&#&4 (,##*4 '(#3 2/(' ),' b# %++3 #*&#d /) a
:%*/&d/c'/,)=& +,ca+ +a& a)d *#%+a'/,)& b#,*# '(#3 b#/) ', ,;#*&#*/c#& '(#*#4 #/'(#* /'( a +/c#)&# ,* /'(,%' a +/c#)&# / ,)# /& ),'*#%/*#d. W(#) a +/c#)&# /& ),' *#%/*#d4 a /*'%a+ ba)@+ac/) c,)'ac'/'( /'& (,&' c,%)'*3 &%0#*/&,*@2a3 <)d /' ##) 2,*# d/>c%+' ', &'a3ab*#a&' , *#%+a',*3 c(a)#&. $& a c,)&#%#)c#4 /*'%a+ ba)& c,%+d%)),/)+3 /,+a'# c%&',2#* 0*,'#c'/,) +a&4 /)c+%d/) ,) da'ac,++#c'/,) a)d 0*/ac34 a)d *#%+a'/,)& ,) &,+/c/'/). I) d,/) &,4 '(#3#90,&# '(#2&#+#& ', +,&&#& '(*,%( &%/'& ,* c*/2#& '(a' a*# ),'0*,&#c%'#d b#ca%&# , :%*/&d/c'/,)a+ d/&0%'#&.
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0oney laundering is an age7old criminal activity that has been greatly facilitated by
electronic banking because of the anonymity it affords. Once a customer o"ens an account$
it is im"ossible for banks to identify hether the nominal account holder is conducting a
transaction or even here the transaction is taking "lace. To combat money laundering$
many countries have issued s"ecific guidelines on identifying customers. They ty"ically
com"rise recommendations for verifying an individual9s identity and address before a
customer account is o"ened and for monitoring online transactions$ hich re!uires great
vigilance. In a re"ort issued in -HHH$ the Organi;ation for #conomic Coo"eration and
Develo"ment9s &inancial /ction Task &orce raised another concern. ith electronic banking
crossing national boundaries$ hose regulatory authorities ill investigate and "ursue
money laundering violationsJ The anser$ according to the task force$ lies in coordinating
legislation and regulation internationally to avoid the creation of safe havens for criminal
activities. O-e"at%o&a! R%,+: T(# *#+/a)c# ,) )# '#c(),+,3 ', 0*,/d#
&#*/c#& 2a#& &#c%*/'3 a)d &3&'#2 aa/+ab/+/'3 '(# c#)'*a+ ,0#*a'/,)a+
*/& , #+#c'*,)/c ba)/). S#c%*/'3 '(*#a'& ca) c,2# *,2 /)&/d# ,*
,%'&/d# '(# &3&'#24 &, ba)/) *#%+a',*& a)d &%0#*/&,*& 2%&' #)&%*#
'(a' ba)& (a# a00*,0*/a'# 0*ac'/c#& /) 0+ac# ', %a*a)'## '(#
c,)<d#)'/a+/'3 , da'a4 a& #++ a& '(# /)'#*/'3 , '(# &3&'#2 a)d '(#
da'a. Ba)&= &#c%*/'3 0*ac'/c#& &(,%+d b# *#%+a*+3 '#&'#d a)d *#/##d
b3 ,%'&/d# #90#*'& ', a)a+3A# )#',* %+)#*ab/+/'/#& a)d *#c,#*3
0*#0a*#d)#&&. Ca0ac/'3 0+a))/) ', add*#&& /)c*#a&/) '*a)&ac'/,)
,+%2#& a)d )# '#c(),+,/ca+ d##+,02#)'& &(,%+d 'a# acc,%)' , '(#
b%d#'a*3 /20ac' , )# /)#&'2#)'&4 '(# ab/+/'3 ', a''*ac' &'a; /'( '(#
)#c#&&a*3 #90#*'/ a)d 0,'#)'/a+ d#0#)d#)c# ,) #9'#*)a+ &#*/c#
0*,/d#*&. Ma)a/) (#/('#)#d ,0#*a'/,)a+ */&& )##d& ', b#c,2# a)
/)'#*a+ 0a*' , ba)&= ,#*a++ 2a)a#2#)' , */&4 a)d &%0#*/&,*& )##d
', /)c+%d# ,0#*a'/,)a+ */&& /) '(#/* &a#'3 a)d &,%)d)#&& #a+%a'/,)&.
Re-utat%o&a! R%,+: B*#ac(#& , &#c%*/'3 a)d d/&*%0'/,)& ', '(# &3&'#2=&
aa/+ab/+/'3 ca) da2a# a ba)=& *#0%'a'/,). T(# 2,*# a ba) *#+/#& ,)
#+#c'*,)/c d#+/#*3 c(a))#+&4 '(# *#a'#* '(# 0,'#)'/a+ ,* *#0%'a'/,)a+
*/&&. I ,)# #+#c'*,)/c ba) #)c,%)'#*& 0*,b+#2& '(a' ca%&# c%&',2#*&
', +,&# c,)<d#)c# /) #+#c'*,)/c d#+/#*3 channels as a hole or to vie bank
failures as system ide su"ervisory deficiencies$ these "roblems can "otentially affect other
"roviders of electronic banking services. In many countries here electronic banking is
becoming the trend$ bank su"ervisors have "ut in "lace internal guidance notes for
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examiners$ and many have released risk7management guidelines for banks. Re"utational
risks also stem from customer misuse of security "recautions or ignorance about the need
for such "recautions. Becurity risks can be am"lified and may result in a loss of confidence
in electronic delivery channels. The solution is consumer educationa "rocess in hich
regulators and su"ervisors can assist. &or exam"le$ some bank su"ervisors "rovide links on
their ebsites alloing customers to identify online banks ith legitimate charters and
de"osit insurance. They also issue ti"s on Internet banking$ offer consumer hel" lines$ and
issue arnings about s"ecific entities that may be conducting unauthori;ed banking
o"erations in the country.
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REGULATORYTOOLS TO
OVERCOME CHALLENGESThere are four key tools that regulators need to focus on to address the ne challenges "osed
by the arrival of #7banking. Aa-tat%o&: I) +/(' , (, *a0/d+3 '#c(),+,3 /&c(a)/) a)d (a' '(# c(a)#& 2#a) ,* ba)/) ac'//'/#&4 ##0/)*#%+a'/,)& %0 ', da'# (a& b##)4 a)d c,)'/)%#& ', b#4 a a*-*#ac(/)4'/2#-c,)&%2/)4 a)d c,20+#9 'a&. I) Ma3 14 '(# Ba) ,*I)'#*)a'/,)a+ S#''+#2#)'& /&&%#d /'& R/& Ma)a#2#)' P*/)c/0+#& ,*E+#c'*,)/c Ba)/)4 (/c( d/&c%&&#& (, ', #9'#)d4 ada0'4 a)d 'a/+,* '(##9/&'/) */&-2a)a#2#)' *a2#,* ', '(# #+#c'*,)/c ba)/) &#''/).F,* #9a20+#4 /' *#c,22#)d& '(a' a ba)=& b,a*d , d/*#c',*& a)d &#)/,*2a)a#2#)' *#/# a)d a00*,# '(# #3 a&0#c'& , '(# &#c%*/'3 c,)'*,+0*,c#&&4 (/c( &(,%+d /)c+%d# 2#a&%*#& ', a%'(#)'/ca'# '(# /d#)'/'3 a)da%'(,*/Aa'/,) , c%&',2#*&4 0*,2,'# ),)*#0%d/a'/,) , '*a)&ac'/,)&4
0*,'#c' da'a /)'#*/'34 a)d #)&%*# &#*#a'/,) , d%'/#& ithin #7bankingsystems$ databases$ and a""lications. Regulators and su"ervisors must also ensure that theirstaffs have the relevant technological ex"ertise to assess "otential changes in risks$ hichmay re!uire significant investment in training and in hardare and softare.Le0a!%2at%o&: N# 2#'(,d& ,* c,)d%c'/) '*a)&ac'/,)&4 )#/)&'*%2#)'&4 a)d )# &#*/c# 0*,/d#*& /++ *#%/*# +#a+ d#<)/'/,)4*#c,)/'/,)4 a)d 0#*2/&&/,). F,* #9a20+#4 /' /++ b# #&&#)'/a+ ', d#<)# a)#+#c'*,)/c &/)a'%*# a)d /# /' '(# &a2# +#a+ &'a'%& a& '(# (a)d*/''#)&/)a'%*#. E9/&'/) +#a+ d#<)/'/,)& a)d 0#*2/&&/,)&@ &%c( a& '(# +#a+d#<)/'/,) , a ba) a)d '(# c,)c#0' , a )a'/,)a+ b,*d#*@/++ a+&, )##d', b# *#'(,%('. Ha"mo&%2at%o&: I)'#*)a'/,)a+ (a*2,)/Aa'/,) ,
#+#c'*,)/c ba)/) *#%+a'/,) 2%&' b# a ',0 0*/,*/'3. T(/& 2#a)&/)'#)&/3/) c*,&&-b,*d#* c,,0#*a'/,) b#'##) &%0#*/&,*& a)dc,,*d/)a'/) +a& a)d *#%+a',*3 0*ac'/c#& /)'#*)a'/,)a++3 a)dd,2#&'/ca++3 ac*,&& d/;#*#)' *#%+a',*3 a#)c/#&. T(# 0*,b+#2 ,
:%*/&d/c'/,) '(a' a*/&#& *,2 b,*d#*+#&& '*a)&ac'/,)& /&4 a& , '(/& */'/)4/) +/2b,. F,* ),4 #ac( c,%)'*3 2%&' d#c/d# (, (a& :%*/&d/c'/,) ,#*#+#c'*,)/c ba)/) /),+/) /'& c/'/A#)&. T(# 'a& , /)'#*)a'/,)a+(a*2,)/Aa'/,) a)d c,,0#*a'/,) ca) b# /##d a& '(# 2,&' da%)'/) /)add*#&&/) '(# c(a++#)#& , #+#c'*,)/c ba)/). I&te0"at%o&: T(/& /& '(#0*,c#&& , /)c+%d/) /),*2a'/,) '#c(),+,3 /&&%#& a)d '(#/*acc,20a)3/) ,0#*a'/,)a+ */&& /) ba) &%0#*/&,*&= &a#'3 a)d
&,%)d)#&& #a+%a'/,)&. I) add/'/,) ', '(# /&&%#& , 0*/ac3 a)d &#c%*/'34,* #9a20+#4 ba) #9a2/)#*& /++ a)' ', ), (, #++ '(# ba)=&2a)a#2#)' (a& #+ab,*a'#d /'& b%&/)#&& 0+a) ,* #+#c'*,)/c ba)/). $&0#c/a+ c(a++#)# ,* *#%+a',*& /++ b# &%0#*/&/) '(# %)c'/,)& '(a' a*#,%'&,%*c#d ', '(/*d-0a*'3 #)d,*&.
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LOOKING FORWARD/n old Chinese saying goes) If you don't know where you are going youwill never get there. @lobally$ the financial sector is metamor"hosing under the
im"act of com"etitive$ regulatory and technological forces. The banking sector is currentlyin a transition "hase ith re7alignment$ mergers and entry of ne "layers from different
industry is becoming common. 0any countries including are de7regulating their bankingsector and government "olicies no longer form an entry barrier to banks com"etitors.Technology has leveled the "laying field) the bargaining "oer of consumers is increasing$sitching costs are becoming loer and consumer loyalties are harder to retain. 1rimarygoal of the banking sector including every 6ank is mainly to make "rofit$ hich in turn is
"loughed back to increase business and reach$ and "ay dividends or share "rofits to thestakeholders. This is "erfectly correct$ yet generic goal. 0ore over the "roduct %schemes'differentiation is very difficult for banks as most of the "roducts sold are constrained bylegal or industry regulations. No$ if you are already thinking about Technology as a tool in6anking you could "robably set some of these goals)
Belling financial "roducts and services
Cutting o"erational costs6randing K 0arket recognition
Lee"ing "rofitable customers #very day more and more "eo"le are turning to the
Technology for their "ersonal banking. It is a safe$ convenient ay to sho" for financial
services$ maintain bank accounts and conduct business -3 hours a day. #very one of us has
alays en=oyed a s"ecial relationshi" ith their neighborhood bank. hy are so many
"eo"le suddenly choosing their "ersonal com"uters as the ne ay to vie and manage
their moneyJ Muite sim"le 7because it is a valuable o"tion to have. 6ank customers can save
time by banking online. There is no need to stand in one more line to "erform the most basic
transactions hen they can be done !uickly from the deskto" 1C anytime$ day or night. 6ut
even ith more com"licated transactions or investment decisions$ "eo"le like having direct
control over their finances themselves. They find it convenient to access all of their financial
information in one "lace. #ase of use is one of the most im"ortant factors. Navigation
through online banking should be sim"le and intuitive. 6anks need to a""eal to customers
ho may not be technologically so"histicated$ and should not re!uire an engineering degree
to get started or use the service. Customers also choose banks hose online services are
reliable. 0ost 6anks no offers a com"rehensive range of financial "roducts and services$
including a &R## checking account and internet bill "aying services. In addition$ an array of
checking accounts is available in hich you may also re!uest a &R## check card. ,ence
most 6anks of folloing #lectronic 6anking or Internet 6anking &R## have folloing
services) @et your balance details$ Obtain your last 2 transaction details$ Re!uest a che!ue
book$ Bto" a che!ue "ayment$ #n!uire che!ue status$ Re!uest an account statement$ @et
&ixed De"osit details$ 6ill "ayment details for electricity$ mobile "hone and tele"hone
services$ Convenience of setting an o"erative account$ Designate a "articular account linked
to your customer id as the o"erative account. Customer Bervice available -3 hours a day$ 8
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days a eek #7banking 6enefits
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6enefits for the bank should alays reflect benefits for the customer of banking services.
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CONCLUSION &rom all of this$ e have learnt that information technology
has em"oered customers and businesses ith information needed to make betterinvestment decisions. /t the same time$ technology is alloing banks to offer ne "roducts$o"erate more efficiently$ raise "roductivity$ ex"and geogra"hically and com"ete globally. /more efficient$ "roductive banking industry is "roviding services of greater !uality and
value.
#7banking has become a necessary survival ea"on and is fundamentally changing the
banking industry orldide. Today$ the click of the mouse offers customers banking
services at a much loer cost and also em"oers them ith un"recedented freedom in
choosing vendors for their financial service needs. No country today has a choice hether to
im"lement #7banking or not given the global and com"etitive nature of the economy. The
invasion of banking by technology has created an information age and commoditi;ation of
banking services. 6anks have come to reali;e that survival in the ne e7economy de"ends
on delivering some or all of their banking services on the Internet hile continuing to
su""ort their traditional infrastructure.
The rise of #7banking is redefining business relationshi"s and the most successful banks
ill be those that can truly strengthen their relationshi" ith their customers.
ithout any doubt$ the international sco"e of #7banking "rovides ne groth "ers"ectives
and Internet business is a catalyst for ne technologies and ne business "rocesses. ith
ra"id advances in telecommunication systems and digital technology$ #7banking has become
a strategic ea"on for banks to remain "rofitable. It has been transformed beyond hat
anyone could have foreseen -4 years ago.
To years ago$ #7banking as a strategic advantage$ noadays? it is a business reality$ if nota necessity.
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BIBLIGRA'HY:
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* 7 Obaid$ 0agda %-HH8'. #76/NLIN@. /mman$ Dar Bafa to "ost.
- 7Rousan$ &arouk %-HH2'. Introduction to the #76/NLIN@$ Oman$ ,ouse thought of
"rinting and "ublishing.
2 7#l$ /mal %-HH-'. Bociety and the ays of the #76/NLIN@. Cairo$ Dar /l7/rab Thought.
3 70arina$ Lamal %*FFF'. Reference in the #76/NLIN@$ Cairo$ the "ublisher of the
universities.
5 7Robert Aafon7@ramon$ #76/NLIN@$ translated by Nadia Labbani$ Revie)
@eorge /;i;$ the "ublisher of the /rabic edition) Tradxim", 1977.