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ebanking OVERVIEW

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INTERNET BANKING (E-BANKING) IS THE LATEST IN THIS SERIES OF TECHNOLOGICAL WONDERS IN THE RECENT PAST INVOLVING USE OF INTERNET FOR DELIVERY OF BANKING PRODUCTS & SERVICES.  

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Why e-Banking? Important banking projects these days -such as Internet Banking, easily come in this price range. ATMs (Automated teller machine) 24 hour access Easy online applications for all s, including personal loans and mortgages

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THE SIX PRIMARY DRIVERS OF INTERNET BANKING IN ORDER OF PRIMACY ARE:      

Improved customer access Facilitate the offering of more services Increased customer loyalty Attract new customers Provide services offered by competitors Reduce customer attrition

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FACTS TO KNOW 

Throughout the country, the Internet Banking is in the nascent stage of development (only 50 banks are offering varied kind of Internet banking services).

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In general, these Internet sites offer only the most basic services. 55% are so called 'entry level' sites, offering little more than company information and basic marketing materials. Only 8% offer 'advanced transactions' such as online funds transfer, transactions & cash management services.

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Foreign & Private banks are much advanced in of the number of sites & their level of development.

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EMERGING CHALLENGES

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Demand pressure due to increasing access to low cost electronic services.

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Growing customer awareness and need of transparency.

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Global players in the fray

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Close integration of bank services with web based E-commerce or even disintermediation of services through direct electronic payments (E- Cash).

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More convenient international transactions due to the fact that the Internet eliminate geographic boundaries.

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STRATEGIES TO BE ADOPTED BY INDIAN BANKS 

For long term success, a bank must follow:

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Adopting a web mindset

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Catching on the first mover's advantage Recognizing the core competencies Ability to deal multiplicity with simplicity Senior Management’s initiative to transform the organization from inward to outward looking Acquiring new capabilities through strategic alliances. e- Banking

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INTERNET BANKING IN INDIA (A)

In June 2001 banks were advised to seek prior approval of Reserve Bank of India before offering transactional services on the Internet. The position has since been reviewed and RBI has advised on 20th July 2005, that while the offering of Internet Banking services will continue to be governed by the provisions of the above circular, no prior approval of the Reserve Bank of India will be required by banks for offering Internet Banking services.

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Banks should, however, ensure compliance with the (B)following conditions: The Internet Banking policy must be approved by the Bank’s Board. The policy fits into the bank's overall IT and Information Security policy and ensures confidentiality of records and security systems. The policy takes into operational risk. The policy clearly lays down the procedure to be followed in respect of "Know Your Customer" requirements, The policy broadly meets the parameters laid down in the earlier circular.

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NEW BANKING OPTIONS 

Automated teller machine (ATMs) De La Rue developed the first electronic ATM, which was installed first in Enfield Town in North London on June 27, 1967 by Barclays Bank

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NEW BANKING OPTIONS

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Electronic funds transfer-point of sales terminals

 Installed at Airlines, Hotels, Railways, Super bazaar etc.

No need to carry cash. Security features of personal identification number (PIN).

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NEW BANKING OPTIONS

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Electronic funds transfer system Computerized clearing of cheques Electronic clearing service (ECS) Credit cards/Debit cards Electronic book Home banking Corporate electronic banking Anywhere banking Tele banking Banking through internet

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APPLICATIONS OF E-BANKING     

Product and services. Business to business applications. Retail banking Advisory services through branches. Payment services.

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EXAMPLES 

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For the Lucas-TVS staff in Chennai, the online payment of shipping bills is now a hassle-free job. With a mouse click, the company saves transaction time and cuts down on costs Software enterprise Polaris has backed up its huge retail network and supply chain with e-banking facilities. Bills from vendors are processed online thrice a month. The cash surplus gets automatically re-allocated overnight, explains a finance department official from Polaris, adding that e-banking has reduced the cost of logistics. Marico made headway in online banking with the launch of ‘e-collections’ this August. The scheme entails the online transfer of funds from distributors, instead of cheque collections. Online collections will definitely reduce the cost of cash management services

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EXAMPLES 

The Bank of Punjab Ltd (BoP), with 135 banking offices is expanding its e-banking facilities, namely - Internet banking, ealerts, kiosks, ATMs and mobile banking, mobile wallet, family e banking, and e-payment direct debit. The bank bas started processing of retail loans application forms through the Internet.

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PROBLEMS FACED BY INTERNET BANKING

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Customers resistances.

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Expenses incurred on ment.

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THANK YOU

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