Embed Size (px)
Citation preview
WHAT IS E-BANKING?
In a broad sense, it is the use of electronic means to transfer funds
directly from one account to another, rather than by cheque or cash.
The term online banking was first started in 80’s
E-banking is a delivery of banking services and products through
electronic channels, such as the telephone, the internet, the cell
phone, etc.
E-banking is an upshot of Globalization.
E-BANKING VIS-A-VIS TRADITIONAL BANKING
Speed
Accessibility
Electronic documentation
Time saving
Satisfaction to the customer
Complimentary to traditional banking
Geographical boundaries surpassed
Scince rather than art
WHY E-BANKING?
From the banking point of view; Differentiation of products from the others. A combination of regulatory and competitive reasons. Stress on branchless banking. Increasing volumes of banking transactions. Providing customers with cost effective services
From customer point of view; Convenience Low cost banking
GENERAL TYPES OF E-BANKING(RBI)
Fully electronic transactional
system
Electronic information
transfer system
Information only system
MODES OF E-BANKING Automated teller machine Tele banking Plastic cards E-cheque Internet banking Virtual banking
Specific technology discussed, ATM Internet banking Mobile banking Telephone banking Debit cards
HOW ATM’S WORK?
Bank computer
Host computer ATM
THE FUTURE OF
ATMsInstant cash
deposit
Pay income tax
Virtual cash on your mobile
phone
Braille on keyboards
Print on Demand
Instant cheque deposit
Voice aided MachinesMore
secure transaction
INTERNET BANKING
HOW MOBILE BANKING WORK?
BANK DATABASE
PLASTIC CARDS
TELE BANKINGCustomerBank
Enquiry
Request facility
Loans
Cheque Status
Fixed Deposit details
MULTIDIMENSIONAL ROLE OF RBI
Electronic Clearing Service (ECS)
Electronic Funds Transfer (EFT)
Real Time Gross Settlement (RTGS)
National Electronic Funds Transfer (NEFT)
Cheque Truncation System (CTS)
ADVANTAGES OF E-BANKING
Transparency and disclosure practices
Facilitate the offering of more services
Increase customer satisfaction and loyalty
Competitive advantage for banks
Reduce customer attrition
Reduces the time, cost and effort in the interaction
RISKS AND ISSUES INVOLVED IN E-BANKING
Risk factors
Transaction and security risk
Technology risk
Strategic risk
Legal risk
Cross border risk
Issues
Legal issues
Regulatory issues
Supervisory issues
RISK MANAGEMENT PRINCIPLES BY BASEL COMMITTEE RECOMMENDATION
Board and management oversight Establishment of a comprehensive security control process Due diligence and third party dependencies
Security controls Authentication of e-banking customers Non repudiation and accountability for e-banking systems Establishment of clear audit trails for e-banking transactions Confidentiality
Legal reputational risk management Privacy of customer information Appropriate disclosure for e-banking services Capacity and continuity
DEVELOPMENTS IN E-BANKING IN THE WORLD:
Sweden
South Korea
Finland
FUTURE CHALLENGES AHEAD FOR INDIAN BANKS
Lack of Education-on the part of staff
Customer involvement
Global banks competition
Demand side pressure due to low cost products
CONCLUSION
Technology advances and increasing number of internet users.
Increasing usage of mobile phones is going to revolutionize the banking
culture in near future.
E-banking has become a necessary survival weapon and is fundamentally
changing the banking industry worldwide.
Decades ago, E-banking was a strategic advantage, nowadays; it is a
business reality, if not a necessity.
