The candidate confirms that the work submitted is their own and the appropriate credit has been given where reference has been made to the work of others.

I understand that failure to attribute material which is obtained from another source may be considered as plagiarism.

(Signature of student)____________________

Critical Assessment of E-Banking in Oman

Asila Al-Harthi

Information Systems (BSc)

Session (2003/2004)

II

Summary

Objectives

The principle aim of this project is to explore e-banking in Oman. This can be

achieved through researching existing documents on e-banking and fundamental

methodologies of deploying e-banking in Oman. In order to illustrate the case study of the

Sultanate of Oman and the progress of e-banking in Omani banks, the comparison with the

UK case study is critical.

Project Requirements To address the aim, the following requirements were selected:

§ To conduct literature search on e-banking.

§ To conduct and analyze a questionnaire to assess public opinion as to whether they

trust the Internet to deal with their banking transactions in Oman or not.

§ To conduct interviews with bank managers on how they provide e-banking services

in Oman.

§ To report the benefits of e-banking.

§ To conduct a case study discussion in order to compare the situation of e-banking in

Oman and the UK.

§ To study the effect of e-banking transactions on various parties.

§ To evaluate various suggestions to improve e-banking in Oman.

§ To use PL1 Ethical issues in computing and IS23 E-Commerce System.

Overview

The main intent of this report is to investigate one of the most recent IT technologies.

The motivation, data resources and the methodology are outlined in Chapter One. An

introduction to "E-banking" will be presented in Chapter Two along with its definitions and

functions. A brief history of e-banking will be declared in Chapter Three. Chapter Four will

investigate the benefits, risks and security of e-banking. Further an empirical study of e-

banking in Oman will be explored in Chapter Five. In addition, highlighting the e-banking

situation in the UK will be presented in Chapter Six. The effect of e-banking service in the

community will be declared in Chapter Seven. Chapter Eight will present the

III

recommendations to improve the e-banking service in Oman. Evaluating the report will be

presented in Chapter Nine. Conclusions of the whole report will be in Chapter Ten.

"O my Lord! Let my entry be by the Gate of Truth and Honour, and likewise my exit by the Gate of Truth and Honour; and grant me from

Thee an authority to aid (me)." (Holy Quraan 017.080)

Dedication

I dedicate this report to honour Mr. Nasser Al-Harthi and Mrs. Saleema Al-Harthi,

my loving and adoring parents, for their support and encouragement throughout my studies. I

also, dedicate this report to my loving grandfather Mr. Abdullah Al-Harthi (May God

Almighty rest his soul in peace).

IV

Acknowledgement

If I am at all successful in this project, it is because I have been very fortunate in having

loving parents, adoring sisters and brothers and wonderful friends and classmates. Therefore,

I would like to thank each individual person in my family for their great support and

encouragement they been providing me throughout the duration of my studies in the UK.

Appreciation is due to persons who intensely in circulating the questionnaires for this project;

Miss Aisha Al-Harthi, Mr.Nsr Al Harthi and Miss Aml Al Harthi.

Special thanks to Dr.Muneer Al-Masskari and Mrs. Julie for their support to go and learn in a

second language and editing the language style in this report.

Further, a special thanks to all my friends and classmates in the UK and Oman.

Appreciations to everyone contributed directly or indirectly in this piece of work.

V

Table of Contents

SUMMARY I

OBJECTIVES II PROJECT REQUIREMENTS II OVERVIEW II

DEDICATION III

ACKNOWLEDGEMENT IV

CHAPTER 1: Introduction - 1 -

1.1 MOTIVATION - 1 - 1.2 SOURCE OF DATA - 1 - 1.3 RESEARCH METHODOLOGY - 1 - 1.4 CONCLUSION - 2 -

CHAPTER 2 : Introduction to E-Banking - 3 -

2.1. INTRODUCTION - 3 - 2.2. DEFINITIONS - 4 - 2.3 CONCLUSION - 4 -

CHAPTER 3: History of E-Banking - 5 -

3.1 INTRODUCTION - 5 - 3.2 HISTORY - 5 - 3.3 CONCLUSION - 6 -

CHAPTER 4: Benefits, Risks and Security in E-Banking - 7 -

4.1 INTRODUCTION - 7 - 4.2 BENEFITS - 7 - 4.3 E-BANKING RISKS - 8 - 4.3.1 TRANSACTIONAL/OPERATIONAL RISKS - 8 - 4.3.2 CREDIT RISK - 9 - 4.3.3 LIQUIDITY, INTEREST RATE, PRICE/MARKET RISKS - 9 - 4.3.4 COMPLIANCE/LEGAL RISK - 9 - 4.3.5 STRATEGIC RISK - 10 - 4.4 E-BANKING SECURITY - 10 - 4.4.1 CRYPTOGRAPHY - 10 - 4.4.2 DIGITAL CERTIFICATES - 11 - 4.4.3 SECURE SOCKETS LAYER (SSL) - 11 - 4.5 CONCLUSION - 12 -

VI

CHAPTER 5: An Impirical Study of E-Banking in Oman - 13 -

5.1 INTRODUCTION - 13 - 5.2 QUESTIONNAIRE ANALYSIS - 13 - 5.2.1. OBJECTIVES - 13 - 5.2.2. PARTICIPANTS - 13 - 5.2.3. PROCEDURES - 13 - 5.2.4. MATERIALS - 14 - 5.3 INTERVIEW ANALYSIS - 14 - 5.3.1. OBJECTIVES - 14 - 5.3.2. PARTICIPANTS - 14 - 5.3.3. PROCEDURES - 15 - 5.3.4. MATERIALS - 15 - 5.4 CASE STUDY OF OMAN. - 15 - 5.4.1 INTRODUCTION TO SULTANATE OF OMAN. - 15 - 5.4.2 OMAN CONNECTIVITY - 16 - 5.5 DISCUSSION - 16 - 5.5.1 CURRENT SITUATION - 17 - 5.5.2 MANAGERS' FORESIGHT - 22 - 5.5.3 FUTURE OF E-BANKING IN OMAN - 23 - 5.6 CONCLUSION - 24 -

CHAPTER 6: E-Baking in the UK - 25 -

6.1 INTRODUCTION - 25 - 6.2 HISTORY OF E-BANKING IN THE UK - 25 - 6.3 INTERNET CONNECTIVITY IN THE UK - 25 - 6.4 FORCES DERIVED TO E-BANKING IN THE UK - 26 - 6.5 FACTORS AFFECTS E-BANKING IN THE UK - 27 - 6.6 CURRENT STATISTICS OF E-BANKING IN THE UK - 28 - 6.7 INDIVIDUAL EXPERIENCES - 30 - 6.7.1 STUDENT PERSONAL EXPERIENCES - 30 - 6.7.2 AUTHOR’S PERSONAL EXPERIENCES - 31 - 6.8 CONCLUSION - 32 -

CHAPTER 7 : The Effect of E-Banking Service in the Community - 33 -

7.1 INTRODUCTION - 33 - 7.2 FINANCE ORGANIZATIONS - 33 - 7.3 NEW REGULATIONS AND ETHICS - 33 - 7.4 ECONOMICS - 34 - 7.5 CONSUMER BEHAVIOR - 34 - 7.6 CONCLUSION - 34 -

CHAPTER 8: Recommendations for Improving E-Banking Service in Oman - 36 -

8.1 INTRODUCTION - 36 - 8.2 COMPARISON BETWEEN UK E-BANKING AND OMAN E-BANKING SERVICES - 36 - 8.3 GUIDANCE TO IMPROVE E-BANKING IN OMAN - 37 - 8.4 CONCLUSION - 37 -

VII

CHAPTER 9: Evaluation - 38 -

9.1 INTRODUCTION - 38 - 9.2 EVALUATED ANGLES - 38 - 9.3 PROPOSED SOLUTION AND OTHER POSSIBLE SOLUTIONS - 40 - 9.4 EVALUATION RESULTS - 41 - 9.5 FURTHER RESEARCHES AND INSPIRATIONS - 41 -

CHAPTER 10: Conclusion - 42 -

10.1 SYNOPSIS - 42 -

REFERENCES - 44 -

BIBLIOGRAPHY - 46 -

APPENDICES - 47 -

APPENDIX A: "REFLECTION OF PROJECT EXPERIENCE" - 47 - APPENDIX B: "E-BANKING QUESTIONNAIRE" - 49 - APPENDIX C: INTERVIEW WITH BANK MANAGERS REGARDING E-BANKING IN OMAN - 52 -

Chapter 1

Introduction

1.1 Motivation

Living in a technological world encourages us to keep an eye on the recent technology

and get the most benefit from it. Chaffy stated "we are witnessing an era of everything"

(Chaffey, 2002), where most of the services are conducted online. Most of the modern nations

consider applying an online service occurrence as the foundation of success and development

of their countries. Therefore, the interest in focusing more on this modern phenomenon has

appeared rapidly to the author.

Moreover, e-banking is a new concept in the IT world. At the present time the author's

country (Oman) is in the process of applying e-banking within its banks. A lot of discussion

has been made as to whether the public should trust e-banking as a secure method or not.

1.2 Source of Data

This study is mainly based on information retrieved from various resources. There is

a shortage of books relating to this topic since the concept of e-banking is a ground-breaking

issue. Most of the information retrieved from the Internet requires sensible attention as there

is an enormous deal of untrustworthy and non-academic information. In addition, this

research is based on a number of journal articles which discuss e-banking issues from

different aspects.

1.3 Research Methodology

The research methodology is conducted through circulated questionnaires and personal

interviews and is based on their collective and analytical information. Each methodology has

a different reason for being adopted. Questionnaires are required to assess public opinion and

to illustrate the practical aspects and recent matters related to Oman's case study resources.

Interviews with bank managers are essential to understand how far they use the service and

how they assure its security within Omani banks. Furthermore, collecting information and

declaring them in an analytic method was necessary to present all theoretical aspects related

to e-banking.

1.4 Conclusion The main motivation for this research is to review and study one of the modern IT

concepts which could influence many nations. The main sources used are the journal articles

and the Internet. The methodologies used are circulated questionnaires, interviews and on a

collective as well as on an analytical information basis.

Chapter 2

Introduction to E-banking

2.1. Introduction

Information System is the core and the fundamental base for any organization.

Information System is known as “the combination of information technology, people, data

resources, and other tools and techniques that collect, transform, and disseminate information

within an organization. Anyone who uses information technology or the information

produced by information systems is referred to as an end user.” Thus in order to reach an

enhancement level in the organization, a dynamic improvement in IS will be required.

(Coastal Union Online Banking Problem Document, 2002)

Due to the number of inventions and appearances of new machines and technologies,

the definition of Information Systems has changed. This is because modern innovations and

machines have improved the process of information systems. Joint progression of information

system and information technologies can largely affect the organization’s position in the

business field, whether to gain competitive advantage ahead of their competitors or to sustain

their positive position in the field. (Coastal Union Online Banking Problem Document, 2002)

Banks are considered to be one of the main business cases, which use information

system technologies and information to perform their business. As the existing financial

organizations and the banks, they corresponded in a face-to-face manner or regular mail with

their customers and clients. As information technologies evolve, organizations transformed its

channels of communication and started using electronic means, for example e-mail. The

gained added value in doing so was in speeding the process of sending and receiving

transactions. “The most advanced enhancement in the electronic procedure with respect to

financial organizations and banks is the e-banking. This term is widely used to indicate the

electronic bank transactions, which can be performed online”. (History of Online Banking,

2002), (Guide to online banking, 2003)

This project holds a discussion on various definitions and concepts with regard to e-

banking, and will also examine the history of electronic banking. Observing the benefits and

risks of this brand new service will be ultimately explored. Security is a huge concern for the

customers and therefore a few steps or actions will be pointed out while performing an

electronic bank transaction. The project explores e-banking in Oman and the UK. Then it

investigates the effect of e-banking transactions in the community. Finally, it attempts to

evaluate and analyze the current situation in Oman and suggest improvements.

2.2. Definitions

E-banking is the abbreviation for "electronic banking". This term has several other

abbreviations and phrases, for instance, digital banking, internet banking or online finance

transactions. However, e-banking is the most common abbreviation.

A straightforward definition for e-banking is that it offers customers all the traditional

banking facilities and services any bank provides with the added value of managing it online

or virtually. (What is online banking?, 2003), (Electronic Banking Basics, 2003), (Internet

Banking - An Overview, 1998).

In addition, e-banking is defined as “the automated delivery of new and traditional

banking products and services directly to customers through electronic, interactive

communication channels.” (Bakos, Y.,1998), E-banking includes the system that authorises

financial institution customers, individuals or businesses, to access accounts, and obtain

information on financial products and services through a public or private network, including

the Internet.

The bank transactions which are available for the bank customers and clients online

are normally: viewing balances and statements, transfer of funds between accounts if they are

more than one, paying bills and setting up standing orders for check books or additional cards.

Also customers will be able to check and repay their outstanding credit card balances online.

(Online Banking Marketspace and Trends, 2002).

The alternative service to e-banking is "Telnet Banks". These banks allow

communication via telephone as well as the Internet to their customers. Examples of Banks

which include this "Intelligent Finance" are Halifax, Abby National and the Co-operative

Bank (Guide to online banking, 2003).

2.3 Conclusion The aim of this chapter was to present an introductory flavour on the issue of e-

banking. It achieved this aim through the brief definitions of e-banking. The next chapter will

briefly outline the history of e-banking and its roots.

Chapter 3

History of E-banking

3.1 Introduction

This chapter will explore the early beginnings of e-banking’s enormous world.

Hence, ascertaining how the e-banking issue has been introduced to the world is crucial as

well as interesting.

3.2 History

Most of the banks in the 1980s advertised their services on the Internet. For example,

they advertised for special loan offers, investments, checking, deposit and credit card

accounts. (Coastal Union Online Banking Problem Document, 2002), (Guide to online

banking, 2003).

By the 1990s, a Californian Bank in the USA, Wells Fargo Bank, introduced the

ultimate new set of online banking services. After seven years, Nationwide Building Society

in the UK introduced the same initiatives. After these two countries triggered the electronic

banking, many countries have started similar services. As an advanced enhancement to e-

banking, countries or finance organisations have improved the access of the e-banking via

various approaches, for example, through mobile phones or interactive TVs. The main reason

for providing such approaches is to stay ahead of their competitors and to attract new

customers and clients. (Coastal Union Online Banking Problem Document, 2002), (Guide to

online banking, 2003) (Internet Banking - An Overview, 1998)

Online banking is still in its early stages. According to FDIC (Federal Deposit

Insurance Corporation) statistics, only 376 banks offer transactional Internet banking from

10,623 banks and thrifts in the U.S., which have a website.

Figure [3.1] estimated e-banking usage From (http://www.presidential.com/pk_marketspace.htm#history )

IDC estimates that by 2003, 15,845 banks will offer online services mostly via the

web. Nearly 6.6 million US households banked online in 1998, a number expected to

increase to more than 32 million by 2003.

(http://www.presidential.com/pk_marketspace.htm#history )

3.3 Conclusion

This chapter explored the birth of e-banking as a modern feature in IT technology and

how it started. Also, it estimated the growth in number from different years. In the next

chapter the author will discuss the e-banking issue from various aspects such as benefits, risks

and security.

Chapter 4

Benefits, Risks and Security in E-banking

4.1 Introduction

The main aim of this chapter is to investigate the e-banking issue from various

aspects in order to gain the advantages and drawbacks of it. E-banking is one of the most

important technologies at present that had a major impact in the banking industry as well as in

security and technological tools. This chapter will explore the benefits, risks and security in e-

banking.

4.2 Benefits

The traditional way of doing banking applications for any client or customer will

mean long queues or long waiting periods over the phone. Therefore, the major benefit of e-

banking is measured by the ease of access to the accounts for the account holders to perform

the bank transaction virtually. Thus any banking requirement can be managed easily online.

The availability of such services is not limited to the working hours or bank holidays. It is

available all the time 24/7. (Guide to online banking, 2003)

This online service also provides appropriate means for businessmen for when any

sudden matters occur to their financial situation while they are out of contact with their local

bank. The speed of online banking transactions is relatively fast when compared with the

traditional way, except for the formalities of registering for the service. Moreover, e-banking

is considered effective as many bank websites offer advance tools which can aggregate many

applications at one go. Furthermore it is efficient as the bank websites are reliable and operate

from one secure website. (What is online banking?, 2003), (Internet Banking - An Overview,

1998).

From the bankers’ perspective, great benefit received from e-banking is in reducing

the cost of overheads whether they are fixed or variable ones. The savings from the overheads

reflect positively in the competitive nature of the service or product the bank offers. It could

affect in lowering the interest rate on credit card, producing sensible personal loans and good

prices for the mortgages (Guide to online banking, 2003), (Internet Banking - An Overview,

1998). Thus the key advantage of e-banking is to increase convenience and functionality and

to ensure customer satisfactions (Daniel, 1999), (Bradley and Stewart,2003).

There are few drawbacks along with this sophisticated service. Clients must contact

their local branch in order to register for e-banking as an initial step. They will attempt,

sometimes, to complete a form and provide any authentication ID. For a first visitor

navigating the bank’s website might be confusing. In electronic transactions, customers

cannot observe the promptness in that bank branch or contact any employees (Lee and

Turban, 2001). Therefore, they cannot assess the quality of the bank service and its products

before making any transaction decision (Mukherjee and Nath, 2003). A review of bankers

show that e-banking is believed by some to be expensive to distribute, unprofitable, open to

fraud and potentially negative to customer relationships (Bradley and Stewart, 2003). All

these negative points are easy to avoid, and getting the people to trust the virtual service from

the beginning is the crucial factor in e-banking services (What is online banking?, 2003),

(Electronic Banking Basics, 2003).

4.3 E-Banking Risks

The following section will discuss the main e-banking risks, which are,

transactional/operational risks, credit risks, liquidity; interest rates; price/market risks,

compliance/legal risks and strategic risks.

4.3.1 Transactional/Operational Risks

Transactional/Operational risks occur from fraud, processing errors, system

disruptions, or other unexpected events resulting in the institution’s inability to deliver

services or products. These risks exist in every product and service offered. Moreover, the

level of transaction risk is affected by the structure of the institution’s processing

environment, as well as the types of services offered and the complexity of the processes and

supporting technology (Eze, 2001).

In most cases, e-banking activities will increase the complexity of the institution’s

activities and the quantity of its transactional/operational risks, especially if the institution is

offering new services. Since customers expect e-banking services to be available 24 hours a

day, 7 days a week, financial institutions should ensure their e-banking infrastructures contain

sufficient capacity and redundancy to ensure reliable service availability (Eze, 2001).

In addition, the key to control transactional risks lies in adapting efficient policies,

procedures, and controls to meet the new risk introduced by e-banking (Eze, 2001). In

particular, information security controls become more important requiring additional tools,

processes, expertise and testing. Institutions should determine the suitable level of security

controls based on their assessment of the sensitivity of the information to the customer and to

the institution.

4.3.2 Credit Risk

Generally, a financial institution’s credit risk is not increased by the simple fact that a

loan is originated through an e-banking channel. However, management should consider

additional safety measures when originating and approving loans electronically. The

following aspects of on-line loan origination tend to make risk management of the lending

process more challenging. If not properly managed, these aspects can increase credit risk

(Eze, 2001).

4.3.3 Liquidity, Interest rate, Price/Market Risks

Funding and investment-related risks could increase with an institution’s e-banking

initiatives depending on the pricing of the acquired deposits. The Internet provides institutions

with the ability to market their products and services globally. Internet-based advertising

programs can effectively match productive investors with potentially high revenue deposits.

But Internet based deposits have the prospect to attract customers who focus on tariff and may

provide funding source with risk characteristics similar to insolvent deposits. An institution

can control this expanded geographic reach through its deposit agreement and account

opening polices, which might involve the exchange of contracts or face-to-face meetings

(Eze, 2001). The institution should modify its policies as necessary to address the following

e-banking funding issues:

ü "Potential increase in dependence on brokered funds;

ü Potential acquisition of funds from markets where the institution is not licensed to

engage in banking;

ü Potential impact of loan or deposit growth from an expanded Internet market, as

well as the impact of such growth on capital ratios." (Eze, 2001)

4.3.4 Compliance/Legal Risk

Compliance and legal issues arise out of the rapid expansion in usage of e-banking

and the differences between electronic and traditional ways of processes. E-banking is a new

channel where the laws and rules governing the electronic delivery of certain financial

institution products or services may be unclear or still evolving. (Eze, 2001).

Institutions that offer e-banking services, both transactional and informational,

assume a higher level of compliance risk. That is due to the changing nature of technology,

the speed at which errors can be redundant, and the frequency of regulatory changes to

address e-banking issues. The potential for abuse is a further sensitive concern and highlights

the need to ensure consistency between paper and electronic advertisements, acknowledgment

and notices.

4.3.5 Strategic Risk

A financial institution’s management should understand the risks associated with e-

banking services and evaluate the resulting risk management costs against the potential funds

on investment before offering e-banking services. Inadequate e-banking planning and

investment decisions can increase the bank’s strategic risk. Early adopters of new e-banking

services can consider themselves as innovators who try to meet the needs of their customers

without paying higher costs and increasing operation complexity. On the other hand, "late

adopters may be able to avoid the higher expense and added complexity, but do so at the risk

of not meeting customer demand for additional products and services" (Stickel, 1998). In

managing the strategic risk associated with e-banking services, financial institutions should

develop visible and definable e-banking objectives by which the institution can evaluate the

success elements of its e-banking strategy.

4.4 E-banking Security

The Internet is still undergoing development therefore security is a huge issue and the

highest priority concern from the end user. Furthermore, banks are organisations which base

their business on the security aspect. Therefore e-banking must be secured and protected in

order to protect the secrecy of their clients' information and data. Terms which are largely

used with respect to security in Internet banking are:

4.4.1 Cryptography

It is one type of computer encryption which has widely been used before the digital

decades. The major users of this device were governments for military reasons. It has been

known that forms of cryptography mostly rely on computers since the human code is fairly

easy to crack. Any computer encryption system must fall under one of these categories:

§ Symmetric-key encryption

§ Public-key encryption

(Coastal Union Online Banking Problem Document, 2002), (Technical Specifications, IBM),

(Whyte, 2001).

The first type of encryption implies that every computer has a secret code, which is

used to encrypt information before sending it to another computer via a network. This key

requires knowing each communicated computer before installing the keys in each one of

them. The method in which this key performance is similar to is a secret piece of code which

any two communicated computers must know, before the communication, in order to decode

the sending packet of information. This symmetric - key is essential in order to decode the

message. (Coastal Union Online Banking Problem Document, 2002), (Whyte, 2001).

Public key encryption is much easier in the concept, which uses the combination of

private and public keys. The communicated computers will keep the private keys and send the

public ones to the corresponding party, with which it wishes to communicate securely. In the

decoding process of an encrypted message, computers must use both generated keys (public

and private ones). The most popular public key encryption is Pretty Good Privacy (PGP),

which allows the user to encrypt most of the receiving encrypted messages (Coastal Union

Online Banking Problem Document, 2002), (Whyte, 2001).

4.4.2 Digital Certificates

The digital certificate is mainly a recommendation by a third party who is normally

known as Certificate Authority, which produces a piece of digital document. This document

works then as a certificate to authorise a trust to a web server or electronic organisation.

Certificate authority confirms to each party the corresponding authentication and sends their

public key across each other (Coastal Union Online Banking Problem Document, 2002),

(Technical Specifications, IBM), (Whyte, 2001).

4.4.3 Secure Sockets Layer (SSL)

This socket was developed by Netscape. It is an Internet security protocol, which is

largely used by the internet browsers and servers in order to act as a channel in transporting

secret and sensitive information. It becomes an essential part to the security protocol

Transport Layer Security (TSL). SSL is largely used in e-banking website and servers. An

ordinary user can notice that he has entered this socket by viewing the change of "http" to

"https" along with the appearance of a small padlock in the status bar at the bottom of the

browser window (Coastal Union Online Banking Problem Document, 2002) (Technical

Specifications, IBM), (Whyte, 2001).

Encryption of public-key usually takes a long computing process. Therefore most of

the applications tend to use joint keys, which combine the public key with the symmetrical

ones. In each secure session between any two computers, one of them generates a

symmetrical key and sends it to the other computer using the encryption from the public key.

Then the conversation continues using the symmetric key encryption only. Once the

conversation session ends, each computer rejects the symmetrically used key. For any further

encryption, a new com must be created and so on and so forth. (Coastal Union Online

Banking Problem Document, 2002)

Most of the banks protect their clients' interest by producing a double key encryption.

This procedure will use a pin number generated by the bank and a piece of information, which

is uniquely used for their customers, like their birth date. (Personal Experience)

The previous section handled the technical aspects with regards to security in general and

how each of the keys can affect the secrecy of e-banking. The following paragraph will

emphasise the various steps and simple actions an individual can attempt in order to protect

himself and his financial transaction from fraud:

§ Individuals must have the latest version of trusted Internet browsers. For example,

Microsoft Internet Explorer or Netscape Navigator.

§ Customers must make sure that they have the latest version of the released security

updates.

§ The customer must use the Secure Socket Layer while he/she is conducting e-banking

transactions.

§ Do not expose your e-banking pin number or password

§ Always close the browser after each e-banking session so that no one can track your

actions and access your account details.

(Guide to online banking, 2003), (Coastal Union Online Banking Problem Document,

2002) (Electronic Banking Basics, 2003)

4.5 Conclusion

E-banking is a very advanced technology. It has a vast number of benefits and

advantages as well as disadvantages. This chapter emphasizes the main e-banking risks,

which are, transactional/operational risks, credit risks, liquidity, interest rates, price/market

risks, compliance/legal risks and strategic risks. This chapter also presented the main security

tools and devices which are largely used by the finance organisations that implement e-

banking services. The subsequent chapter will discuss an empirical study of e-banking in

Oman.

Chapter 5

An Empirical study of E-Banking in Oman

5.1 Introduction

This chapter will provide an empirical study of e-banking in Oman. It is chosen

because it is the home country of the author who holds the desire to study the situation of e-

banks. Both the questionnaire and interview were used to provide a real data to enhance the

report. It has helped to find out public opinion through the simple questionnaire as well as

observe the bank managers’ point of view through arranged interviews.

5.2 Questionnaire Analysis

5.2.1. Objectives

In order to analyze the e-banking situation in Oman, public opinion was essential.

The main objective of the questionnaire was to assess public opinion on whether or not they

trust the internet to deal with their bank transactions in Oman.

The main objective of the questionnaire is:

§ To become familiar with citizen's opinion with regards to the issue of online banking.

§ To recognise the preferable banking tasks or services that citizens would like to

conduct online.

§ To find out to what extent online banking is acceptable in Oman.

5.2.2. Participants

Different groups participated in the questionnaire. Mixed genders, different levels of

education and different age groups are used as the main scope of the circulated questionnaire.

Each group had a unique style in answering the questions according to their interest, judgment

and attitude. Therefore, having these distinguished criteria among the participants was an

advantage. It allowed receiving a wide range of opinions as well as helpful guidelines to

improve the required service in the future.

5.2.3. Procedures

The techniques used in circulating the questionnaire were "electronic distribution"

and "Handing Over".

The first technique used was by sending the organized set of questionnaire to Miss

Amal Al Harthi who took care of making several copies. The second technique was

distributing it to the public. Three people were involved in the process, namely, Miss Aisha

Al Harthi, Mr. Nsr Al Harthi and Miss Amal Al Harthi. They used "Handing Over" technique

in order to circulate it. The first group that attempted this consisted of sixty (60) but the

necessity of having more data forced the author to seek more response. As a result of this, 20

more questionnaires were circulated. The final number of participants who answered the

questionnaire is seventy-eight (78).

After receiving the completed questionnaire, the process of tabulating and analysing

the results initiates.

In order to keep all the retrieved information and data confidential, the author used

short abbreviations to refer to the participants. For example, "P1" was used to refer to

Participant One, and assigning a number next to the abbreviation was essential to identify the

first participant and so on.

5.2.4. Materials

The questionnaire involved 12 questions. Two of them were ranking questions aimed

at finding out the most common task and to capture the preferable ones. Nine of them were

closed questions and the last one was an open question. The main reason of having mixed

types of questions was to capture different views and issues related to e-banking in Oman

with respect to the participants.

5.3 Interview Analysis

5.3.1. Objectives

In order to analyze the e-banking services in Oman, an interview with different bank

managers is important. The main objective of the interviews is aimed at gaining a closer look

on how they provide e-banking services in Oman.

5.3.2. Participants

• Mr. Aiman Iqbal – Credit Manager (Bank Dhofar). • Miss Ahlam Ali- Bank Manager, Main Branch (Bank Muscat). • Mr. Asaad Al Habib-IT Manager (National Bank of Oman)

5.3.3. Procedures

The form of interviewing used with each person differed according to their situation.

The first meeting was with Mr. Aiman Iqbal in his office in Bank Dhofar, Muscat Branch.

The interview was enjoyable and interesting. The second meeting was with Mrs. Ahlam Ali.

For this interview, a different procedure was performed. The author contacted her by phone

and electronic mail due to her lack of availability to have a face-to-face interview. Mrs.

Ahlam’s quick response and valuable information is appreciated. The third manager, from

NBO (National Bank of Oman), was Mr. Assad Al Habib who deals with Internet banking

transactions. Efforts to secure an interview proved fruitless due to his workload.

5.3.4. Materials

The materials of the interview questions comprised of a variety of open / closed

questions along with personal predications from each bank manager. The main reason of

having mixed types of questions was to capture different views and issues related to e-

banking policies and services in Oman.

5.4 Case study of Oman.

5.4.1 Introduction to Sultanate of Oman.

The Sultanate of Oman occupies the south-eastern angle of the Arabian Peninsula. It

is surrounded by sea on two sides, the Gulf of Oman to the north-east and the Indian Ocean to

the south-east. Its coastline stretches 1700 kilometers. The Kingdom of Saudi Arabia has a

border it to the west and Yemen to the South, while the United Arab Emirates borders Oman

to the north. The majority of the country is an open desert consisting of large areas of sand

dunes (Baldwin 2002, UK Trade & Investment 2003).

His Majesty Sultan Qaboos bin Said set to modernizing Oman's economy by

repealing his father's oppressive social restrictions. Oman's comparatively modest oil

revenues were used to build roads, hospitals and schools, which had all been in short supply.

His Majesty also opened the country to tourism in 1987, which has since then become an

important sector of the economy. In 1998, Oman was one of several oil-producing countries

that declared slight cuts in output, touching off a rise in oil and petrol prices.

In less than a quarter of a century a modern infrastructure has been created in the

Sultanate. In creating a modern Oman, His Majesty Sultan Qaboos bin Said has built upon the

country's ancient heritage, culture and Islamic principles.

Development has not been forced - people have not had to give up their traditional

ways of life, but are, instead, free to make their own adaptations to modernization.

Development has been wisely guided to ensure that resources are channeled in an effective

manner. With a sound infrastructure in place, investment is now being directed towards

developing the skills of the citizens through education (Baldwin 2002, UK Trade &

Investment 2003).

To ensure future prosperity His Majesty's Government is expanding the economy

away from dependence on oil into a more varied industrial base that will provide long term

employment opportunities for its population.

5.4.2 Oman Connectivity

Oman Telecommunication Company (Omantel) is the service provider for the

Internet and communications. Omantel provides Global Network Services (GNS), Digital

Data Network, GSM and Internet. It allows the Sultanate of Oman to establish a vital link

with the rest of the world.

Figure [5.1] OmanTel

(From: http://www.omantel.net.om/ )

Getting connected to the Internet is necessary to be up-to-date with technology. There

are two ways to connect to the Internet, either by a registered account or through a pre-paid

card (Al-Ufuq). According to the statistics in Omantel, there are 350,000 registered users with

a user name and password. Unfortunately the author could not get a fixed number for the

users with Al-Ufuq pre-paid card. Various ways allow the user to be online in any convenient

modes they prefer.

5.5 Discussion

The discussion will illustrate different angles such as current situation, managers'

foresight and the future of e-banking in Oman. Current situation will be based upon the

analysis from the questionnaire, whereas the mangers’ foresight will be based on the

interviews. The final angle, the future of e-banking will capture the analysis from both the

questionnaire and interviews. As appropriate, in each section the discussion will present the

perspective of the participants’ questionnaires and the managers’ responses.

5.5.1 Current situation

Awareness of using the internet is increasing in Oman. 73% of the participants of the

questionnaire agreed that they do connect to the Internet. However, most of them are

considered to be very light users of the Net. See figure [5.2].

Q.5 What is the average number of hours, which you spend on the Internet every week?

41.67%

Very Heavy User, 8.33%

Heavy User, 6.49%

Standardt User, 13.89%

Light User, 29.17%

Very light userLight userStandardHeavy userVery heavy user

Figure [5.2] Number of Internet Usage per Week

Even for the heavy users (8.33% and 6.49%) they prefer to deal with their bank

transactions physically as they only connect to the net for work reasons.

With respect to the level of education most of the participants of the questionnaire

were very well educated. Fifty-two participants out of seventy-eight hold a Bachelor’s degree.

This can emphasize that a lack of education is not necessarily the main barrier for not using

the net. It also highlights the fact that they must be aware of such virtual service being

available within reach. See figure [5.3].

Q.3 Level of Education

716

52

20

10

20

30

40

50

60

Secondary School

College University Others

Education Phases

Num

ber o

f Par

ticipan

ts

Figure [5.3] Level of Education of Questionnaire Participants

Because of almost seven percent of the participants who use more than sixteen bank

transactions and services through the net, this figure is unpredicted after the high level of

education percentage received by them. See figure [5.4].

Q8. What is the average of Bank Transactions or services you have conducted online?

73.61%

15.28%4.17% 6.94%0%

20%40%60%80%

Non

e til

l now

.

3-10

tran

sact

ions

/ser

vice

11-

15

tran

sact

ions

/se

rvic

es

Mor

e th

an 1

6tr

ansa

ctio

ns/

serv

ices

.

Figure [5.4] Average of Bank Transactions or Services Conducted Online

The most frequent transactions and services conducted by the participants while using

the Internet can be summarized as e-mail, search for data or information for academic/work

reasons, search for best places to take a vacation, purchase of a product online, book airline

tickets/Hotels, online banking and other activities. See figure [5.5].

05

101520253035404550

1

Q4.2 Rank by numbering 1 to 7 the following purposes based on the main reason to the least one in using the Internet.

E-mail.

Search for data or informationfor academic/workingreasons.Search for best places to takevacation.

Purchase a product online.AND Search for best placesto take vacation.Book airline tickets/Hotels.

Online Banking.

Other

Figure [5.5] The most Transactions or Services Conducted Online

Furthermore, the most preferable bank tasks the responders would choose if they

had the chance to perform online can be summarized as checking current account balance,

viewing bank statements, viewing the last 10 payments out of their account, conducting

transactions of money, contacting the bank staff for further details about their account status

and canceling checks. See figure [5.6].

Q9. Please rank the following online banking services according to the most frequent service you perform OR think you will perform if you have

the chance to.

0 5 10 15 20 25 30

Checking current account balance.

Conducting transactions of money.

Canceling checks

Figure [5.6] The Most Preferable Transactions or Services Conducted Online

Moreover, the results of questions six and seven showed an optimistic opinion and

encouraging sight towards the future of e-banking services being more operative within the

coming years. Thirty three percent showed their acceptance to use e-banking as secure

transaction for their money. Even though forty percent hesitate to declare their point of view,

the negative side of refusing the service is low compared to the acceptance percentage. See

figure [5:7].

Q6. Do you agree that "Online Banking" offers secure transactions for your money?

5.56%

33.33%

40.28%

18.06%

2.78%0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%

StronglyAgree

Agree Undecided Disagree StronglyDisagree

Figure [5.7] Acceptance of responders to e-banking as secure transactions for their money

From figure [5.8], it is obvious that participants believed that technology is a vital

matter in their day-to-day tasks. Their main concern to save time and effort has encouraged

them to expend their knowledge and expectations of received services.

Q7. Do you think Online Banking has a positive impact on the Banking service provided in Oman?

9.72%

56.94%

25.00%

6.94%

1.39%

Strongly Agree

Agree

Undecided

Disagree

Strongly Disagree

Figure [5.8] E-banking as positive impact in Oman

From the circulated questionnaire, people were aware about e-banking service and its

related threats and security issues. Fear of hacker/hacking is the major barrier from getting the

most out of the e-banking service. Having solid security could increase the penetration of e-

banking users as the money issue is sensitive to most users. It is human nature to care about

their wealth as much as they care for their health. View table [5.9].

Public Comments regarding hackers and security in e-banking P 6 If the online banking is totally secure, I would advice everyone to do online

banking P30 Very low security and anyone can get entry to the online--- stealing P50 Online banking is a good idea but I think it is not secure and trustable and to be

fair, it will not be applicable in Oman for the next 10 or 15 years. P 56

I had heard and read many articles on online banking and noted that it not secure to do transactions through the net even for checking your current balance or statement.

P 58

Some people cannot trust online banking even if it is safe especially in transferring money or using the credit cards.

P 62

Online banking is a very convenient way to do transaction on your account. However this will not take a major effect unless it is completely secured and insured at the same time.

P 77

I feel that online banking is still insecure. I personally think it is insecure to my transactions by using online banking.

Table [5.9] Public comments regarding hackers and security in e-banking service

On the other hand, many participants insist on the recognition and trust of e-banking

service in Oman. As P57 stated " … in Oman people are still not trusting online banking nor

are aware of how easy their lives would be if they used it. So basically awareness level is still

not in a satisfactory level." Participants suggest involving a lot of advertisement and

awareness sessions with regard to e-banking, in order to gain more knowledge of progressive

technologies which can save their time and effort. Furthermore, they would like to acquire

additional information concerning secure finance transactions. View table [5.10].

Public Comments regarding knowledge and trust of e-banking P 12

Lots of Ads on the online banking services should be done so people know more and then use them.

P 13 3 things must be considered: 1] Trusting the services 2] security 3] customer awareness

P 23

Online banking is good to simplify the life… It is of more benefit for companies

P 54

Online banking is a nice and good idea if and only if the trust is there from the citizens to the online banks. Also, this will take time to rise up in Oman because of many reasons: 1] Level of education among the citizens. Even the well educated people still hesitate to conduct this kind of service on line, because of lack of trust and sensitivity to money issue. 2] in spite of the service provided by the banks, people still prefer the old method of going and queuing up even though it takes time. At least they can view their transaction being taking care of, not virtually where a simple message from the bank won't be sufficient.

P 57

… in Oman people still do not trust online banking nor are aware of how easy their lives would be if they use it. So basically awareness level is still not satisfactory.

P 58

Some people cannot trust online banking even if it is safe, especially in transferring money or using the credit cards.

P 64

Online banking can help the bank and their customers in a way that the bank will provide services (secure) without having extra overheads employee wise, services of employee rehabilitations etc. And for customers it provides an online 24/7 service which will not hold the customer for any reason

Table [5.10] Public Comments regarding knowledge and trust of e-banking

Furthermore, many among the public address the connection to the Internet as one of

the reasons for not having e-banking services on a large scale . They emphasize on obtaining

more advanced access service than the existing one. View table [5.11].

Public Comments regarding Internet connection P 26

I think the major requirement is for households to have computers/ current access at home. For most homes in Oman to have this facility it may take a few years.

P 39

It is a good idea but not all people in Oman have access to the internet. Services in Oman are too slow/server is down most of the time. This will put negative pressure on the services. They will not perform effectively.

P 76

I find it a revolutionary idea if security is well explained in such a project. Also, I think it won’t be fully effective, unless the internet becomes more advanced.

Table [5.11] Participants’ comment regarding Internet services

5.5.2 Managers' foresight

Surprisingly Bank Dhofar does not provide internet banking but only online banking.

Mr. Aiman clarified the difference between online and internet banking. He stated that online

banking can have different types of banking such as ATM machines and SMS banking or

even call centres, whereas e-banking (Internet banking) means performing bank transaction

through Internet. Even though Bank Dhofar has a website, it does not provide Internet

banking to its customers yet. The only reason for the website is for advertising purposes.

During the interview, Mr. Aiman stated that the bank’s the future plan by 2005, is to provide

Internet banking to their customers with sensible security services. He also mentioned that

there are a few barriers for e-banking such as public resistance and the Internet infrastructure

in Oman.

The second interview was with Mrs. Ahlam Ali who deals with Internet Banking at

the main branch of Bank Muscat. She pointed out that e-banking services started at Bank

Muscat in July 2002. Four percent of e-banking usage exists at present within Bank Muscat.

In addition, she expects the percentage to rise up to ten percent in the near future. In her

opinion, ignorance of the Internet itself is the main reason that prevents the public from using

e-banking. She also added "out of a 2,760,000 population in Oman, only twelve percent

connect to the Internet". This shows that the majority of the people in Oman are not familiar

with the concept of the Internet and its virtual services such as e-banking. As most of the

questionnaire responders suggested, Mrs. Ahlam highlights the importance of advertisement.

She mentioned that advertising about the e-banking services is vital in order to increase the

number of e-banking users. "E-banking in Oman is still at an infant stage", Mrs. Ahlam

commented, which means that not many transactions can be conducted online even within the

same account, due to less awareness among the public.

5.5.3 Future of e-banking in Oman

The development of Oman’s future depends on an in depth study of recent

technologies in order to generate a progress and step forward in the present community. The

positive feedback from the questionnaire participants, figure [5.12], shows that forty-two

percent agreed with the statement "Online banking will play a major role in the future of

Omani economy".

Q10.What is your opinion about the following statement: "Online Banking will play a major role

in the future of Omani economy "

26.03%

42.47%

20.55%

10.96%

0.00%

0.00% 10.00%

20.00%

30.00%

40.00%

50.00%

Strongly Agree

Agree

Undecided

Disagree

Strongly Disagree

Figure [5.12] E-banking in the future of Omani economy

Furthermore, the general idea for the future of e-banking in Oman is fairly optimistic.

As nearly as sixty-seven percent of the public think it’s a sensible idea. See figure [5.13].

Q11. In general, would you consider the idea of “Online Banking” as:

16.67%

66.67%

11.11%

4.17%

1.39%

0.00%

A revolutionaryidea.

A good idea.

Just fine.

Not a bad idea.

A bad idea .

Do not Know. Figure [5.13] The idea of e-banking in Oman.

As mentioned previously, Mr. Aiman’s expectations for his bank are to enter the e-

banking facility by next year. In parallel thought, Mrs. Ahlam predic ted that the number of e-

banking users will increase eventually.

The next table [5.14] will present various opinions with regard to e-banking’s future

in Oman.

Public Comments regarding the future of e-banking P 67

It’s a very good idea to do online banking here in Oman, and I have seen that just two banks have started doing it. I hope others will do so in future. But it is very risky even if it has high security.

P 76

I find it a revolutionary idea if security is well explained in such a project. Also, I think it won’t be fully effective, unless the internet becomes more advanced Table [5.14] Participants’ comments regarding the future of e-banking

5.6 Conclusion

In order to emphasise the features of e-banking services in Oman, an empirical study

was conducted. The feedback from the questionnaire and interviews was to provide a real data

towards e-banking issue in Oman. The discussion introduces the piece of evidence and

genuine data in Oman. The following points summarize the analysis of the empirical studies;

ü Awareness of using the Internet is vital in Oman.

ü The level of people’s education is not a huge barrier for not using the net.

ü The public showed positive feedback for using e-bank services in the future.

ü The public welcomed the new technologies which will save cost and time.

ü Security and trust are the most important issue regarding e-banking service.

ü Having an advance Internet connection will encourage public to try e-banking service.

ü Advertisement is essential to inform people about the recent services and

technologies to be used.

The next chapter will present the UK case study with respect to e-banking in order to

compare it with Oman’s e-banking.

Chapter 6

E-Banking in the UK

6.1 Introduction

E-banking is a universal technology. Every nation would try to implement it as the

presence of a modernized country. Based upon journal reviews, this chapter will briefly

investigate the status of e-banking and its usage in the UK. The discussion will outline the

history of e-banking, Internet connectivity and forces that derived e-banking in the UK.

Further, it will examine the factors affecting e-banking and illustrate some statistics with

regard to different banks in the UK.

Moreover, this chapter will present a real personal experience from individuals

engaged in e-banking and its utilities.

6.2 History of E-banking in the UK

In the early 1980, the first electronic banking services were first time initiated in the

UK for the first. The first two banks that launched this service were Bank of Scotland and

Nottingham Building Society. Unfortunately, not many people approved of it, and thus it

caused a major failure for the two banks. When the episode of Internet started and the concept

of e-services flourished, customers renewed their concern in electronic banking. Therefore,

many local banks in the UK launched and improved their digital services in the form of e-

banking. (Daniel, 1999)

6.3 Internet Connectivity in the UK

The number of people connected to the Internet is a primary factor to determine the

level of the demand for e-banking. In 1998, the estimated connectivity in the UK was 4 to

10.6 million users. Such diversities in the connectivity are mainly related to the fundamental

perception of the users. Based on many studies conducted by various organizations such as

GVU and Zona in the UK, it shows that the majority of the users are relatively young, well

educated, professional and males. The most recent research shows that the proportion of

females has increased since 1996 but the Internet is still dominated by males (Jayawardhena

and Foley, 2000).

Due to the expense of Internet accessing in the UK, high requirements of entire lay

out and high monthly bills for the net connections charges, Internet access in the UK is still

dominated by certain categories in the population (Jayawardhena and Foley, 2000).

E-banking seems to be the future approach for the coming generations to perform

finance transactions. At present, students are the major Internet users. After assigning to be

employed, students are likely to earn above average salaries. Consequently, they are likely to

remain connected to the Internet. Further, the finance sector is also affected by this in a way.

A new market of highly educated, young and the wealthy segment appear to perform internet

banking transactions (Jayawardhena and Foley, 2000).

6.4 Forces derived to E-banking in the UK

This section will briefly outline the four main forces that derived the UK community

to install e-banking services within it. These forces are:

Change in political environment The regimes involved in public and private sector strategies compete in order to

provide efficient services with modernized features for their consumers. Thus, the internal

political competition drives both to use latest technologies such as smart cards, e-government

and e-banking (Jayawardhena and Foley, 2000).

Change in technological environment

The expansion of virtual connection in the technology paved the way for new

technological innovation. That triggered to shape the digital community which helped the

concept of e-banking to evolve. The enhancement of new technology in the UK has a

remarkable appearance compared to other European countries (Jayawardhena and Foley,

2000).

Change in social environment

The coming generations in the UK are raised up with technology and mainly internet.

Therefore, when they reach their middle age and have a positive impact in the community as

productive workers, they will still depend mainly on the Internet to perform their daily

transactions. Thus, introducing e-banking was essential to meet the needs of these foreseen

future social segments (Jayawardhena and Foley, 2000).

The change in the working pattern such as part time, temporary and home based jobs,

has had a large influence in the community to have a substitute service provider to the finance

institute. Hence, electronic banks in the UK have this golden target to achieve (Jayawardhena

and Foley, 2000).

Change in economic environment The last few decades in the UK faced an increase in the globalization of the capital

flows and the financial organisations. Such a change created a demand for a reasonable ease

of the proliferation for the new products and services. Therefore, consumer demand for the

best and efficient quality of the services fire up the need to acquire finance transactions

electronically. Competitive pressure is a further economic force which encourages

competitors to seek for optimum productivity and improve efficiency and to empower their

customers and sustain their loyalties. E-banking can assure all these matters and grant extra

utilities for the benefit of the users (Jayawardhena and Foley, 2000).

Figure [6.1] The banking services sector and interaction with forces http://www.emerald-library

6.5 Factors affects E-banking in the UK

There are many elements affecting e-banking in the UK. These elements can affect in

either increasing or decreasing the diffusion of electronic finance institutions. Based on

Jayawardhena and Foley (2000) survey of the UK Internet banking facilities, it has been

discovered that Internet banking is diffusing at a very slow speed, which remain ambiguous.

Thus highlighting some of these factors is necessary in this section.

Supply and demand factors impact on the decision whether to adopt e-banking

facility or not. From the supply perspective, there are sub-factors involved in influencing the

diffusion of e-banking such as " protection of reputation, competition, cost savings, mass

customisation, enhancement of marketing and communication activities, and retention and

attraction of consumers" (Daniel and Storey, 1997; Sheshunoff, 2000).

One of the main reasons for delaying e-banking is the security concerns (McCahon,

1999; Long, 2000). Lack of suitable skills from the consumer, along with lack of user-friendly

technology are acting as other reasons in delaying electronic banks in the UK (Bradley and

Stewart, 2003).

Moreover, there are crucial issues that can have a positive or negative impact on e-

banking. Some of them are trust concerns, reputation of the finance institute, customer

satisfaction, internet connectivity and reliability of the web browsers and the banks’ websites

(Bradley and Stewart, 2003).

6.6 Current statistics of e-banking in the UK

Based on a research conducted by Jayawardhena and Foley, 12 Internet banking

systems were selected for extensive study. These banks are Bank of Scotland-HOBS (Home

and Office Banking Service), BankNet Electronic Banking Service, Barclays, Citibank, Co-

operative Bank, Egg, First Direct, Lloyds On-line, Nationwide Online Banking, NatWest

Bank, Norwich and Peterborough BS (Netmaster) and Royal Bank of Scotland. The entire 12

banks have the utility of bank transactions and offer current and saving account facilities

online. However, even when the finance institute Egg was not able to provide the current

account facility, due the great popularity of this institute. Since it has up to 150,000 users,

Egg Bank has not been excluded (Jayawardhena and Foley, 2000), (Daniel, 1999).

The United Kingdom is considered to be among the first eight western European

countries that took the lead of implementing Internet banking. Though Germany had the most

internet banks, the UK was considered to have much smaller number of e-banks websites that

hold the highest quality websites and functionality. Thus having the UK as a case study in this

report is a remarkable idea (Jayawardhena and Foley, 2000), (Daniel, 1999).

Few banks do charge for their electronic finance service. For example, NatWest has a

1 off charge of 30 pounds and NPBS (Norwich and Peterborough BS (Netmaster) charges

2.99 pounds per month after an orientation period of six months. The main concept behind the

availability of e-banking services is to provide the finance transactions and facilities 24 hours

regardless of the location of the customer. Bank of Scotland customers can only operate their

accounts within a limited timing. They can view their accounts between 6 am and 1 pm on

weekdays and between 6 and 12 noon on weekends. The bank shuts down its websites by

apologising for further maintenance along with back office operations (Jayawardhena and

Foley, 2000), (Daniel, 1999).

Several studies confirmed that more than sixty percent of the customer enquiries

concern details about balances and the last few transactions made by the customer (Gandy,

1998). Since most customers' accounts are more active, it makes them want to keep a track of

each transaction they made in the last 2 weeks. E-banking in the UK, with no exception,

provides the view which functions only for the account balances (See Table [6.2]).

Consequently, the work load for the staff in these banks had a significant reduction. By this

virtual service, UK customers have been assured of having a private, quick and efficient

service in 24/7 days (Jayawardhena and Foley, 2000).

With regard to action account control function, they provide a fast range of access

and control to the customer over their account. The more rapid increase of such functions

over the internet the more customer satisfaction increases. Almost all banks in the UK offer

the ability to transfer funds between accounts. On the other hand, the utility of paying bills to

a third party is available within all banks except two (Egg and BankNet Electronic Banking

Service). Based on the table below ten banks allow creation and adjustment of standing

orders. Ordering of statements facility is available within eleven banks, however only three

allow ordering of check books. These three banks are Co-operative Bank, NatWest Bank and

Royal Bank of Scotland. Users in the UK are getting used to the concept of Internet Banking.

Hence, it was essential for most banks to provide the facility to communicate in order to

takeaway any difficulties as easily as possible. Sending messages, thus, within account

control facility is widely provided among nine banks from the researched ones (Jayawardhena

and Foley, 2000). View table [6.2]

In order to maximize the benefits from e-banking, customers must be able to conduct

application for the core banking services such as open new accounts, saving accounts, loans,

insurance, applying for credit cards, and mortgages. Few banks offer such facilities of

applying and enabling new services due to regulatory barriers. The absence of this feature is

considered to be an opportunity loss to attract new customers and to sustain existing ones.

Bank of Scotland-HOBS (Home and Office Banking Service), Norwich, Lloyds On-line and

Peterborough BS (Netmaster) and Royal Bank of Scotland do not offer new service features

to their customers yet. The other banks fluctuate in providing this facility. Only CitiBank,

First Direct and NatWest Banks have the integration facility with software packages for

account reconciliations (Jayawardhena and Foley, 2000). See table [6.2].

Table [6.2] Current Internet Banking Providers in the UK

(Jayawardhena and Foley, 2000)

6.7 Individual Experiences

This section will investigate few student personal experiences with e-banking service.

The first student was a final year student from Leeds Metropolitan University. The second

student was from Leeds University. Then it will highlight the author’s personal experience in

the UK and Oman.

6.7.1 Student Personal Experiences

Conducting a simple interview with few students was important to investigate the

way they deal with e-bank accounts and to find out the reasons behind approaching such

services. The first user was an international student (H), who heard about the term "e-

banking" while studying in the UK. She holds an account with NatWest Bank. She explained

that applying for on-line banking account through her bank website and filling in the

application were simple. Then the bank sent her the pin number and the password through a

phone call and adjusted all the security enquiries with her. Consequently, she was able to

check her account online within less than 24 hours. In order to check the credit card another

registration was required. She had to call the Customer Service in her bank (NatWest Bank)

and request them to include the credit card in the on-line banking system. This step was

crucial in order to assure security to her credit card details. She added that her e-bank can also

provide other services such as print statement, bill payment which pays the credit card,

transfer of money to e-saving account or to the personal account. She stated "…using e-

banking system made my life easy. Being a student, getting the time to visit the local branch is

not convenient, and therefore e-banking service is an excellent facility".

Approaching virtual finance services was derived by many reasons for this student.

Being a final year student with a tight timetable, if she wanted to check her account while she

was busy with her workload or even while she was traveling to her original country it was

possible to do this. In addition, she wanted to be able to make transactions, to check her

balance in both current and saving account and to pay her credit card bills from remote places.

Another user is a British student (K) who has an account with HSBC. His bank

established the online banking account for him through the post. Nevertheless he had to call

them and to arrange the pin number. The main transactions he prefers to conduct online are

viewing transactions, ordering statements and credit card pay off forms. Despite the fact of

having credit card service availability, he cannot pay off his credit card bill online while he is

outside the country. In the future, the user wishes to conduct his credit card bill payment

online and not just by a form ordering. He commented that "…in general, e-banking is easy

and quick and gives the user accurate details".

6.7.2 Author’s Personal Experiences

Since the author has an experience of maintaining online accounts in the UK and

Oman, explaining the registration process in the two countries' banks will be worthwhile .

NatWest e-account

In order to have an electronic account, visiting NatWest Bank website was necessary.

The author filled up an application form online, printed it and then sent it to the address

shown on the website. After three weeks, the customer services section called up the author to

give her the user name and the password as well as the pin number. The author was able to

view the details of her account online within no time. Checking the balance, viewing

transactions and bank statements are the only activities experienced by the author so far.

Bank Muscat e-account

Similar to NatWest Bank, visiting the Bank Muscat website was the initial step. After

24 hours, the author received an e-mail from Bank Muscat online service with a user name

and password. However, the author could not perform any transaction until the pin and post

numbers were physically collected from the home branch in Oman. Consequently, the author

got disappointed because by the time this action had been made she was in the middle of her

final year in the UK. An authorized letter from the account holder can be a practical solution

to this problem. Yet again it must hold the account holder’s signature. Unfortunately, the

home branch will hold the pin and post number for three months only. If it has not been

collected within this period, it will return to the main branch and will get cancelled as a

security policy.

6.8 Conclusion

This chapter reached its aim by outlining the history of e-banking service in the UK.

Further, it highlighted the current Internet situation in the UK as well as it presented the

forces which played a major role in forming e-banking in the UK. Factors that affect e-

banking were mentioned along with a brief comparison of statistics among UK banks. Finally,

this chapter presented real incidents from different individuals along with the author’s

experience regarding obtaining e-banking service. The following chapter will outline the

effect of e-banking service in the community.

Chapter 7

The effect of e -banking service in the community

7.1 Introduction

The appearance of virtual finance organizations has a major effect in the community.

This chapter will explore various aspects of factors affected by e-banking service. It will

illustrate the internal change in the finance organizations and the new breed of regulations

with ethics with regard to e-banking. Further, it will highlight the major change in the

economic segment. Finally it will examine how consumers' behavior has changed accordingly

to electronic banks.

7.2 Finance Organizations

E-banking existence has brought a series of changes within the finance organizations.

Banks have started to focus more on technological innovations and technical issues. New

technology like smart cards, software cryptography, digital certificates and secure socked

layer (SSL) found their way into pure finance organizations like banks (Coastal Union Online

Banking Problem Document, 2002), (Technical Specifications, IBM), (Jayawardhena and

Foley, 2000). Thus banks nowadays are more interested to keep an eye on the new

development in the technological field.

Introducing e-banks had a major change in the business flow of these banks. For

instance, they reduce the number of employees by empowering customers virtually. Also,

banks cut down number of branches whilst substituting it by one website (Guide to online

banking, 2003), (Internet Banking - An Overview, 1998). Furthermore, these finance

organisations demand sophisticated skills and advance aptitudes from their staff in order to

serve the e-banking concept (Jayawardhena and Foley, 2000).

7.3 New Regulations and Ethics

New brand of legislations, regulations and ethics concept flourish along with

electronic banking existence. Ethics in banking sector is an important element to gain

customer trust. Keeping customer information confidential through the net and not revealing

it to a third party is one of the top concerned manners as well as emphasising security issues

(Huemer, 1998). This is because internet is an opening atmosphere for a different kind of

surfing desires.

With regard to legislations and regulations, banks had to establish a new generation

of them in order to protect the customers’ rights as well as the organizations’ reputation.

Setting new managerial and regulatory policies along with new rules to ensure the safety and

reliability of e-banking operations was a crucial element for bank organizations, in order to

manage high potential risks (Union Arab Banks, 2004).

7.4 Economics

A remarkable increase in the market share for any bank, which distributes electronic

finance service, engaged such organisation to obtain an extensive revenue approach for the

bank shareholders (Jayawardhena and Foley, 2000).

With respect to the supply chain of the industry, banks are faced with the challenge of

achieving the right balance between decreasing staffing levels and providing expertise

investment in technology and branch networks (Jayawardhena and Foley, 2000).

A wide range of potential new entrants has increased consequently because of the

attractiveness of the e-banking sector. Low barriers to entry, promising revenues and

manageable high risks are the main motives behind the entry of non-banking organisations.

Hence, new non banking competitors will discover and experience the unique features of

electronic network and control their own assets through web based approach and take over the

profitable elements from the banking business (Jayawardhena and Foley, 2000).

7.5 Consumer behavior

"The customer is king" (Hagle et al., 1997) is a statement which is widely spread

along with e-banking services as customers are being able to access more information and

switch between different financial institutes and products. This will influence the growth and

the need for more sophisticated abilities with the users. Customers' behavior will change as

they have to contact "intelligent agents" in the e-bank websites in order to accomplish several

transactions in the comfort of their homes. Thus, they will be able to change banks at the

press of a button and get used to e-banking as they check their daily electronic mail

(Rogerson et al., 1999).

7.6 Conclusion

In order to emphasis the major effect of e-banking in the community, this chapter

outlined various aspects of factors affected by electronic banking services. It investigated the

internal change in the finance organizations and the new kind of regulations along with the

ethics for e-banking service. Moreover, this chapter has briefly noted down the major change

in the economic sector as well as it has illustrated how customers' behaviour has changed as a

result of the e-banking presence. The forthcoming chapter will discuss the recommendations

for improving e-banking service in Oman. It will also compare e-banking services between

the UK and Oman.

Chapter 8

Recommendations for improving E-Banking service in Oman

8.1 Introduction

E-banking is a significant service because it is dealing directly with people’s money.

This chapter will illustrate a comparison between the e-banking situations in the UK and

Oman. Also, it will briefly outline various suggestions for improving e-banking services in

Oman.

8.2 Comparison between UK e-banking and Oman e-banking services As has been mentioned earlier in Chapter Five and Chapter Six, obviously there is a

significant difference between the UK e-banking service and the corresponding service in

Oman. It is reasonable to compare the two services in order to identify the e-banking position

in Oman.

With respect to Internet connectivity, the UK Internet position seemed to be more

developed and has more choices than in Oman. Whereas in Oman, the Internet connectivity is

controlled by a monopoly company (Omantel), in the UK there is more than one Internet

service provider. Opening up the market would increase efficiency, thus reducing operation

costs and pricing, increase quality of service and provide customer choice.

Based on the interview analysis in Chapter Five, the interviews revealed out that there

are only two banks currently offering e-banking facilities in Oman. In the UK, there are more

than twelve banks that already provide the service and have been in this industry for a long

time (Chapter Six).

Furthermore, requesting an e-account within the UK banks is easier and more flexible

than in Oman, as is shown by individual experiences in Chapter Six. Collecting the pin

number and the post code of the account holder physically from the branch in Oman is

considered to be one of the security policies while in the UK the authentication of the account

holder is done through a simple phone call. In some banks providing the pin number is instant

via a phone call as in NatWest or within a few days as in HSBC bank (6.7Individual

Experiences, Chapter Six).

As far as the account control functions are concerned, the UK banks seems to be

more advanced in this area whereas in Oman only one bank (Bank Muscat) provides such

high level functions. Bank Muscat provides "account to account transfer (for the same

account holder), reporting of lost ATM cards, utility bill payment, demand draft or cheque

book request (conditioned to collect physically from the bank), inquiry account statement and

balance, and credit card payment" (Bank Muscat, 2004). However in the UK, almost all the

twelve banks provide these services and other extensive ones such as viewing historical

records, account amendment, applying for loans, applying for insurance, transfer of funds and

reconciliations or integrations with software packages. View table [6.2] in Chapter Six.

8.3 Guidance to improve e-banking in Oman

In order to boost the degree of e-banking services in Oman, the following points are

guidelines and recommendations for the sake of enhancing the level of this facility.

Improving the Internet connectivity is a fundamental step to develop e-banking in

Oman. Along with this is increasing the level of awareness among the public with regard to

Internet and e-banking service which is yet a crucial factor.

Furthermore, increasing the number of banks that provide the e-banking and online

banking services is a basic requirement to enlarge the service of electronic base banking. Each

bank has to start by publishing a website in order to encourage their customers to step forward

and apply for an e-account.

Banks in Oman must focus on making their e-bank utility more reliable, trustable,

user friendly and with convenient speed, so that more clients can be involved in electronic

transactions. Also, the security issue has to be updated with recent technology, because of the

hackers' hazard, to ensure that the details of the account holder are kept confidential.

In order to provide extensive facilities with regard to e-banking, Omani banks should

provide a record hold of all transactions conducted electronically for each customer.

Furthermore, they must extend the access to their e-banking websites almost everywhere

along with providing free contact phone numbers in case of emergency (Joseph, M., McClur,

C. Joseph, B., 1999).

A long term recommendation for the Omani banks is to provide customisation for the

service provided electronically (Bradley and Stewart, 2003). Further, as Oman is considered

as being one of the Islamic world countries, it is essential to have Islamic e-banking service

available on the Internet base which does not deal with interest rates.

8.4 Conclusion Highlighting the comparison between the e-banking situations in the UK and Oman

was explored in this chapter. Finally, it suggested various recommendations in order to

improve the current situation of electronic banking in Oman. The next chapter will present the

evaluation for this academic research.

Chapter 9

Evaluation

9.1 Introduction

The primary problem which has been handled throughout this research was to

propose a justified study which addresses the e-banking situation in Oman compared with the

UK. The case study of Oman was the central point in this academic research along with the

intention of illustrating e-bank’s theoretical outcomes.

9.2 Evaluated Angles

In order to present an extensive evaluation, the author developed sections related to

the overall project to be evaluated to facilitate the interpretation of this chapter.

Written Report

The overall chapters included in this research are Ten chapters. Chapters Two to

Eight each focused on one fundamental objective of the project. The remaining chapters were

introductory to the entire project, the final evaluation and the conclusion for it. Organizing the

report that way provided a reasonable, sensible and consistent flow of the resources presented.

With regard to the available case studies the structure was identified in order to

accomplish two principle objectives. The first objective was to present background facts of e-

banking and the internet situation as suitable in the adopted countries. The second objective

was to introduce e-banking related attributes such as benefits, security and risks. Providing

evaluation in e-banking websites for each presented case would have been a reasonable idea,

but, it is time-consuming. Therefore, the author preferred to focus on the main objectives of e-

banking rather than evaluating the usability of its websites.

The applied methodologies in this report were sensible for such a type of research.

They provide a widespread coverage for the addressed problem by expanding the available

resources and empirical study. This report was written in order to be a reference as

compatible as possible, and maximize the usage of available data, information, diagrams, and

statistic analysis.

The limitation in the report took different forms; language, style, shortage and

reliability of resources and accurate analysis. The most crucial one is regarding the style and

language within the report. As the author's first language is not English, writing the accurate

phrases and presenting the right style was a challenge. Furthermore, the style of e-banking

subject is more likely to be in a business format and language rather than a computing one.

Regarding Chapter Six, the author feels the retrieved information was not adequate due to

lack of reliable resources and shortage of recent ones. Thus, the author depended mostly on

posted articles, personal experience and knowledge to accomplish the addressed chapter.

Due to the lack of accurate raw materials and data captured from the empirical study,

there are few sections in the report where the author feels she did not provide a complete and

extensive analysis for it, as in the case studies discussion and in the empirical study of Oman.

Questionnaire

Different types of questions were used in the questionnaire in order to capture and

assess public opinion with regard to e-banking in Oman. The collection of the overall

representative group was appropriate for such a study. However, the feedback was

unsatisfactory because of the mistakes made in answering the ranking questions (Questions

[4.2 and 9], See Appendix B). In addition, some participants did not mention their own

personal opinion in the open question which prevented the author from gaining their general

point of view with respect to e-banking. Thus, the gathered information was descriptive up to

a limit.

Interviews

Arranging different appointments with different bank managers was time consuming

for the author. Setting up the right questions accordingly to each bank position and bank

manager was an unexpected step for the author. In addition, seeking to meet a third bank

manager at the National Bank of Oman was difficult to arrange. Due to the lack of convenient

time between the author and the manager it ended in the situation of not having the aimed

interview. Hence, the conducted interviews were satisfactory and sufficient up to a limit.

Generally, the interviews had a supplementary value experience in the author's life.

Milestone

Having a constant timetable for the project was one of the major challenges the

author faced throughout the final year. There were many circumstances which had a strong

influence in the work progress and writing up the final year projects. One of them was AUT

(Association of University Teachers) strike. This resulted in dealing with lectures and

coursework submission deadlines, due to which some primary work and deadlines for this

project were delayed. As far as interviews were concerned, the author had to travel back home

(Oman) in order to conduct them. However, the author could not perform this journey until

Easter time, and consequently, this affected the initial milestone schedule. See table [9.1]

Task Initial

Deadline Revised Deadline

Project title, objectives and minimum requirements 24/10/2003 24/10/2003 Writing the Questionnaire 10/11/2003 10/11/2003 Distributing the questionnaire 26/12/2003 26/12/2003 Chapter 1 12/12/2003 25/03/2004 Chapter 2 07/02/2004 28/03/2004 Chapter 3 14/02/2004 30/03/2004 Chapter 4 28/02/2004 02/04/2004 Conducting Interviews and writing 26/03/2004 07/04/2004 Chapter 5 05/04/2004 09/04/2004 Chapter 6 10/04/2004 12/04/2004 Chapter 7 12/04/2004 13/04/2004 Chapter 8 13/04/2004 13/04/2004 Chapter 9 15/04/2004 14/04/2004 Chapter 10 15/04/2004 14/04/2004 Editing the report 15/04/2004 15/04/2004 Appendices 16/04/2004 16/04/2004 Layout of the report 25/04/2004 17/04/2004 CD writing 26/04/2004 17/04/2004 Final Year Project submission 28/04/2004 28/04/2004

Table [9.1] modified plan schedule

9.3 Proposed solution and other possible solutions

The proposed solution in solving the problem starts by reviewing the e-banking

concepts and definitions, then, it provides a snapshot of the history and the initial start of e-

banking. After that, it presents the main benefits, major risks and the fundamental security

elements in e-banking. An empirical study is carried out in Oman in order to focus in the

current situation of electronic banking. Then it highlights the e-banking case study in the UK,

in order to provide a comprehensive contrast between the situation of electronic banking in

Oman and the UK. Theoretically, this report addresses the various effects of e-banking in the

community. Finally, it provides a short guidelines and recommendations in order to boost the

level of e-banking in Oman.

This solution can be different if it is targeted by different organisations. For instance,

if the exact study is carried out by an IT consultant company or a professional business

institute, the methodology will differ as well as the outcomes. In addition, this company or

institute might find other reliable resources or could carry out either short term or long term

research in one of the European or Gulf State countries. Hence, it will retrieve information

and raw data to compare and evaluate facts between several countries. This might grant the

company and the institutes an explicit research.

9.4 Evaluation Results

After evaluating almost each section in this report, it is obvious that the author tried

to meet all the objectives and requirements for this research. However, the limitations which

the author unexpectedly performed may become significant drawbacks which consequently

may lead to depreciate the overall mark for the report.

9.5 Further researches and inspirations

As this report was based upon many articles and journals as well as other student

researches, it can form the base for further studies and inspirations. For instance:

♦ Assessment of deploying electronic banking.

♦ A comprehensive research regarding e-community.

♦ E-purse analytical study in Oman.

♦ A general assessment of theoretical and practical aspects in e-banking.

♦ Extensive study and analysing information system strategy plan for e-banking

policies.

♦ Reviewing broad issues affecting e-banking.

Chapter 10

Conclusion

10.1 Synopsis

The Banking Sector occupies an essential position in the community. Nowadays

technologies, in particular the Internet, is the key driving force massive change in how these

banks operate. The main benefit of utilizing technology in such industry is to reduce costs and

to eliminate ambiguity (Joseph, M., McClur, C. Joseph, B., 1999), (Jayawardhena and Foley,

2000).

Electronic banking for customers refers to several types of banking activities through

the Internet base channel. Customers can request information and carry out most retail

banking services such as balance reporting, inter-account transfers and bill-payment, without

leaving the comfort of their homes or organisations. It is the newest delivery channel to be

adopted by retail banks in many countries and there is wide agreement that this channel will

have a significant impact in the market. (Mukherjee Nath 2003), (Daniel, 1999).

An introductory flavour of the issue on e-banking was presented in Chapter Two. It

highlighted the brief definitions and abbreviations of e-banking. The common definitions for

e-banking is the facility that offers customers all traditional banking utilities and services with

an added value of managing it online or virtually (what is online banking?, 2003).

The initial start of e-banking was in the 1990s in a California Bank in U.S.A. This

bank (Wells Fargo Bank) introduced an ultimate set of online banking followed by a

Nationwide Building Society in the UK with the same scope. Chapter Three explored the

birth of e-banking as a modern feature in IT technology and how it started. Also, it estimated

the growing number from different years.

E-banking is a very advanced technology. It has a vast number of benefits and risks at

the same time. The main benefits are to eliminate cost and save time for customers. On the

other hand, the fear from hackers keeps rising up even with the secure technology that is

implemented. With respect to security, banks secure their investment through a number of

tools such as cryptography, digital certificates and secure socket layer. The details of benefits,

risks and security in e-banking were mentioned in Chapter Four.

Empirical study in the form of a questionnaire and interviews are conducted in order to

identify the public opinion with regard to electronic banking as well as to identify the status

of e-banking in Oman. Based on the genuine data and raw materials collected, plotting a

comprehensive analysis was adequate. Chapter Five handles the empirical study and

their outcomes. The summarized analytical points are:

ü Awareness of using the Internet is vital in Oman.

ü The level of people’s education is not a huge barrier for not using the net.

ü The public showed positive feedback for using e-bank service in the future.

ü The public welcomed the new technologies which save cost and time.

ü Security and trust are the most important issues regarding e-banking service.

ü Having an advance Internet connection will encourage the public to try e-banking

service.

ü Advertisement is essential to inform people about the recent services and

technologies in use.

The UK e-banking case study was investigated in terms of history, current internet

situation, forces derived from it and factors that have a positive or negative impact over it

which were all presented in Chapter Six. A clear static presentation with regard to the number

of banks using e-banking facility was declared in the same chapter. Live experience from

different individuals was described at the end of Chapter Six.

Based upon the shifting to e-banking, factors that can influence the community in a

positive or negative way were exposed briefly in Chapter Seven. These factors were

examined in terms of finance organisations, economic situation, regulations and policies and

consumer behaviour.

Comparison between the e-banking situations in the UK and Oman was explored in

Chapter Eight. It suggested various recommendations in order to improve the current situation

of electronic banking in Oman. The major suggestion was to build up solid internet

connectivity by improving the service from the Internet Service Provider in Oman. Also,

increasing the awareness level among the public with regard to e-banking facilities was

suggested. With respect to hardware and software security packages, Omani Banks should be

aware of the best ways of using them in terms of implementation and deployment.

E-banking service is still in its infant stage in Oman, which will require a huge

effort to deploy it and make it active from the public, as well as the finance

organisation’s side.

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APPENDICES

Appendix A: "Reflection of Project Experience"

Having my final year project in the desired topic gave me a strong motivation for going forward in accomplishing it. Studying e-banking was a very interesting topic in which I gained wide knowledge in e-banking and personal lives. Further, the experience I gained will help me to deal with my e-bank account in satisfactory matter. In general, I am pleased by what I have achieved in this project and if I had the chance to do it again, I will follow the same structure. However, I believe I had many limitations in this project which will require deep considerations in the next time. This project had negative points which I will mention in the next sections. Early Stages

Selecting area which I hold an interest in was so easy; however, defining the title was more difficult. Therefore, I had to investigate more about the field I am keen for took a while. My initial title holds the idea of investigating e-banking in Gulf States, unfortunately, due to the lack of time I had to narrow it to be focused on Oman and UK. In addition, I had to search for resources in very early stages in the project duration, in order to identify what possible resources I could rely on. My investigation resulted on that most resources are 5-3 years old, despite the electronic website resources ones. What went right?

Meeting all my deadlines successfully was a positive point for the final project. These deadlines allowed me to have extensive preparation for the ultimate writing. Also it allowed me to identify the structure and the layout for the final submission.

Conducting the questionnaire as early as possible was a wise step to do. It helped me to have enough time in analysing the outcomes in Excel format.

Arranging the interviews with different bank managers allowed me to gain experience about each bank policy and the way of planning the future. Also it helped me how managers reach the customers when new technology involved and find out their customers' expectations accordingly. What went wrong?

There are many things went wrong which caused a limitation in writing the report. The crucial matter is regarding filling up the ranking questions in the questionnaire (Q4 and 9). Moreover, meeting the bank manager in Bank Dhofar was not relating to internet banking even though he said they deal with online banking in the phone call. Also, one of the interview limitations is not having suitable time to meet the NBO bank manager isolate myself from having a closer opinion with regard their policy in providing e-banking services. Moreover, AUT strike caused me stress while submitting the first draft. This caused rushing in searching and typing to meet this deadline as there was other modules deadline at the same date. What I would do differently?

In order to overcome the limitations and any potential drawbacks in the future, I would like to do few things differently. For example, I would like to start earlier and not leaving the massive work to be done in April. In addition, I will personally perform and circulate the questionnaire in order to make sure to gain representative participants with accurate answers as possible.

Further, I will make sure that the bank mangers that I am approaching have a clear idea about the purpose of the project to avoid the misunderstanding as much as possible. Also, conducting them as early as possible will be a wise step to consider. Problem and difficulties had been facing

Arranging meetings and contacting my supervisor was the major difficulty I faced due to his increasingly workload. This affected my progress in the project in a negative way. Receiving feedback and guidelines from him was a crucial point to me as I am an overseas student. My stress in this point was escalating whenever I see my colleagues' progress in their work based upon their supervisors' feedback and comments. Lessons Learnt Out this Project Lessons I learnt from this entire project experience:

• Keeping the faith and confident that you can do the work, is very important step regardless of how hard or tough it is.

• It is a wise idea to start early and to take time in the finishing stage. • It is a unique experience to learn and to write a project in a different language. • No matter how disorganized you are, you can be an organized person when you have

workload. • Dividing the workload into smaller segments will lead you to perform well in each

one. Hopefully this will guarantee good results in overall. • Reading many articles was pleasant experience when there is spare time but its

stressing when there is no time to spare. • There is a new idea in every article I read. Even if not related directly to the topic it

helped me to gain knowledge and experience. • Working with Excel files was a wonderful experience and amazing how many

functions and charts can be made using few cells. Asila Al – Harthi 28/04/2004

Appendix B: "E-Banking Questionnaire" Hello, I am a student at Leeds University who is conducting a brief questionnaire with regard

to online banking. I appreciate if you spend few moments in answering the following questions. The results of this brief questionnaire will help with my final year project and will allow me to have the real opinion of ordinary citizens. Please note that the answers provided

would be treated in a confidential way. The main objectives of this questionnaire are: § To be familiar with citizen's opinion with regards the issue of online banking. § To recognise the preferable Banking tasks or services that citizens would like to

conduct online. § To find out to what extent online banking is acceptable in Oman. § To provide a real data in order to enrich the analysis in my final year project.

Thank you in advance for your further co-operation.

A.AlHarthi

1. Gender: Male [ ] Female [ ] 2. Your age is between:

[ ] 20-25. [ ] 26-30. [ ] 31-35. [ ] 36- 40. [ ] 41- 45. [ ] 46- 50. [ ] 51-55. [ ] 56-60. [ ] Above 61.

3. Level of education: [ ] Secondary School [ ] College [ ] University

[ ] Others: …………………………………..

4. Do you connect to the Internet?

[ ] Yes [ ] Sometimes [ ] No If No, thanks for your time you may quite the survey.

If Yes, please rank by numbering 1 to 7 the following purposes based on the main reason to the least one in using the Internet. [For what do you use it for?]

[ ] ?Purchase a product online. [ ] Book airline tickets/ Hotels. [ ] Search for best places to take vacation. [ ] E-mail [ ] Online Banking [ ] Search for data or information for academic/working reasons [ ] Other …..

If other please mention it …………………………………………….. 5.What is the average number of hours, which you spend on the Internet every week?

[ ] 0-5 hours. [ ] 5-10 hours. [ ] 11-15 hours. [ ] 16-20 hours. [ ] More than 20 hours.

6. Do you agree that "Online Banking" offers secure transactions for your money?

[ ] Strongly Agree [ ] Agree [ ] Undecided [ ] Disagree [ ] Strongly Disagree

7. Do you think Online Banking has a positive impact on the Banking service provided in Oman?

[ ] Strongly Agree [ ] Agree [ ] Undecided [ ] Disagree [ ] Strongly Disagree

8. What is the average of Bank Transactions or services you have conducted online?

[ ] None till now. [ ] 3-10 transactions/services. [ ] 11-15 transactions/services. [ ] more than 16 transaction/services.

9. Please rank the following online banking services according to the most frequent

service you perform OR think you will perform if you have the chance to. [Please put 1 is the highest to 7 the lowest]

[ ] Checking current account balance. [ ] Viewing bank statement. [ ] Viewing the last 10 payments out of your account. [ ] Cancelling checks. [ ] Conducting transactions of money. [ ] Contacting the bank staff for further details about your account status. [ ] Pay your bills online. 10. What is your opinion about the following statement: "Online Banking will play a major role in the future of Omani economy": [ ] Strongly Agree. [ ] Agree. [ ] Undecided. [ ] Disagree. [ ] Strongly Disagree.

11. In general, would you consider the idea of “Online Banking” as: [ ] A revolutionary idea. [ ] A good idea . [ ] Just fine. [ ] Not a bad idea. [ ] A bad idea . [ ] Do not Know.

12. Please provide any further comments with regard to Online Banking:

Many Thanks for your time. Your assistance is greatly appreciated A.Al-Harthi

E-mail: iszana@comp.leeds.ac.uk

Appendix C: Interview with Bank Managers regarding e-banking in Oman

1. Do you believe e-banking is important for the future of commerce in Oman? Why?

2. Do you believe people in Oman will welcome e-banking services?

3. What percentage of customers use e-banking at present?

4. Does your bank have target percentage?

5. What are the problems with e-banking?

6. Does your bank have a policy on e-banking?

7. Do your employees understand your bank's strategy on e-commerce, products and

services and how they can help you achieve your strategy?

8. Are there any fees charged for use of the e-banking Service?

9. How do customers apply for e-banking? Phones/ from the main branch/ online form

10. What facilities and features Internet Banking can provide to the customers?

11. What security measures has the bank put in place to protect customer data?

12. What can the customer do to ensure the protection of their banking details?

13. What should customer do if he/she thinks somebody else is accessing his or her

accounts without permission?

14. Do the customers need any special software or hardware to enable access?

15. What details are required to make payments to another person's, or business' account?

16. How long does it take for a Bill Payment to reach a Biller?

17. Can customer send a payment overseas?

18. Can customer make payments using e-banking even when he is overdraft?

19. How often is customer account details updated?

20. Can customer open / close new accounts using e-banking?