internetbanking-131124032348-phpapp01

8/13/2019 internetbanking-131124032348-phpapp01

1/12

D.A.V.V.

School Of Economics

3rd Internal Assignment

IT FOR MANAGERS On

Internet Banking

Submitted By:Ashutosh Kaurav

Dhiresh ChawlaSunil ChichraVivek Pandey


2/12

Internet BankingIntroduction Internet banking mixes with 2 words i.e. Electronic technology andBanking. It is Process by which a customer performs bankingtransactions electronically via internet.

The automated delivery of new and traditional banking productsand services directly to customers through electronic, interactivecommunication channels.

Its also known as online banking or E -banking.This new andconvenient way of banking has set a boom in our day to day life

The concept of Internet banking has been simultaneously evolvingwith the development of the World Wide Web (www). The onlineshopping promoted the use of credit cards through Internet. The automated delivery of new and traditional banking productsand services directly to customers through electronic, interactivecommunication channels.

Internet Banking offers consumers and business alike the ease ofmanaging banking and financial tasks from home. Online bankinghas become a lifeline for those who cannot leave the house, or livein rural areas where access to banks can be limited.

Online banking facilities offered by various financial institutionshave many features and capabilities in common.

The remote delivery of new and traditional banking products andservices through electronic delivery channels.


3/12

The common features fall broadly into several categories:

A bank customer can perform non-transactional tasks throughonline banking, including -

Viewing account balances Viewing recent transactions Downloading bank statements Viewing images of paid cheques New Cheque Book ordering Download periodic account statements Depositing Taxes

Downloading applications for M-banking, E-bankingetc. Funds transfers between the customer's linked accounts Paying third parties, including bill payments Investment purchase or sale i.e. investment services Loan applications and transactions, such as repayments

of enrollments Shopping

Ticket Booking Prepaid Mobile Recharge LIC & other insurance premium payments Donations to NGOs Self-account funds transfer across India

Internet/Online banking is easy, reliable and convenient way tofulfil our banking needs. This robust banking facility connects uswith our bank at our convenience, we dont have to plan our dayaccording to bank hours, no more waiting in queue and even youcan check your balance whenever and wherever you want. Most ofthe time online banking and internet banking are often usedinterchangeably.


4/12

In this method, customer gets his bank account ID and passwordand he can check his account, pay his bill and print his receiptthrough his home personal computer which is connected withInternet. E-banking is development of today banking system.

It refers to the provisions of electronic banking services viainternet through personal computer (PC) or other access deviceswith internet capabilities.

From an economic perspective, information technology andcomputer networks have enhanced the automation, speed andstandardization in communications and internal administration,increasing customer convenience and functionally and reducingcosts in back-office and front desk banking functions.

Internet banking gives customers the ability to access virtually anytype of banking services in any place and at any time.

Many depository institutions contract with third party firms forinternet banking support services they choose not to providethemselves.

ICICI was the first bank to initiate the Internet banking revolutionin India as early as 1997 under the brand name 'Infinity

ICICI Bank kicked off online banking way back in 1996. But evenfor the Internet as a whole, 1996 to 1998 marked the adoption

phase, while usage increased only in 1999- due to lower ISP onlinecharges, increased PC penetration and a tech-friendly atmosphere

The Reserve Bank of India constituted a working group on InternetBanking. The group divided the internet banking products in Indiainto 3 types based on the levels of access granted.

They are:- i) Information Only System ii) Electronic InformationTransfer System iii) Fully Electronic Transactional System


5/12

Information Only System

General purpose information like interest rates, branchlocation, bank products and their features, loan and deposit

calculations are provided in the banks website. There exist facilities for downloading various types ofapplication forms.

The communication is normally done through e-mail. There is no interaction between the customer and bank's

application system. No identification of the customer is done. In this system,

there is no possibility of any unauthorized person getting into

production systems of the bank through internet

Electronic Information Transfer System

The system provides customer- specific information in theform of account balances, transaction details, and statementof accounts.

The information is still largely of the 'read only' format.Identification and authentication of the customer is through password.

The information is fetched from the bank's applicationsystem either in batch mode or off-line.

The application systems cannot directly access through theinternet.

Fully Electronic Transactional System

This system allows bi-directional capabilities. Transactions can be submitted by the customer for online

update.


6/12

This system requires high degree of security and control. Inthis environment, web server and application systems arelinked over secure infrastructure.

It comprises technology covering computerization,networking and security, inter-bank payment gateway andlegal infrastructure.

Automatic Teller Machine (ATM) ATM is designed to perform the most important

function of bank. It is operated by plastic card with its special features. The plastic card is replacing cheque, personal

attendance of the customer, banking hours restrictionsand paper based verification

HISTORY

Online services started in New York in 1981 when four of the citys

major banks (Citibank, ChaseManhattan, Chemical and Manufacturers Hanover) offered home

banking services

First internet banking service start in the UK 1983,Bank of Scotlandoffers Nottingham Building Society (NBS) known as home linkconnecting via a telephone and television to send transfers and pay

bills.

The first online banking service in United States was introduced, inOctober 1994. The first online website was Stanford FederalCredit Union, which is a financial institution.

In 2001, 19 million users start accessing bank accounts online


7/12

In 2005, Debit and credit was launched

In 2007, Apple launches I-phone and shifting of banking services via personal computer or Smartphone begins

Technology has enabled numerous advantages and overcome thetraditional banking, offering the best of banking experience onyour fingertips.

Advantages Of Internet Banking

1. Convenience

2. No lines3. Availability

4. Innovation

5. Easy to Operate

6. Friendlier Rates

7. Transfer Service

8. Ease of Transactions

9. Less Time Consumption (Speed)

10. Multiple Operations In Single Shot

11. Performance

12. Shop & Payment

13. Banking from anywhere in the world

14. Inexpensive


8/12

Disadvantages Of Internet Banking

1. Legal Issues2. Setting up an account may take time

3. Site changes and Updates

4. Customer Services

5. Ease Internet Access

6. Security Concerns (Risks, Hacking)

7. Technical Breakdowns

8. Switching Banks

9. Money Usage (req. ATM)

10. Learning Difficulties

11. Computer Skills and Internet Knowledge Required

12. Required Hardwares to operate (PC, han dsets)

13. Banks himself dont trust their own security systems

14. Relevant Operating system required (98, 2000, vista)


9/12

Online Banking versus Traditional Banking: A ComparisonTraditional Banking

* Traditional banking is great because you can develop relationshipswith your bank representatives. This is helpful when youre

borrowing money, looking for sound advice or just like to know the people who are managing your money.* In traditional banking transactions you do not need any type ofsecurity.* Traditional banking also offers the convenience of easy depositsand withdrawals. You know that your deposit will be in your accountthe same day or the next day. And you can withdraw money duringregular banking hours.* Traditional banks offer a number of features like money orders,wire transfers and travelers checks, often without a fee. You can stillget these from banks where you dont have an account but there isusually a high fee involved to process.* The only matters that you have to keep your bank papers of

bankbook safe .

* Traditional banks have security in the form of surveillance camerasand occasionally they employ security guards.* If you are having any problem related to the bank, you canimmediately go to the bank and solve your doubts .

* You can get any information related to bank and still have anydoubts you can immediately ask.

The downside to traditional banks is that you have to stick to their

business hours, which arent always convenient. You cannot accessyour bank account wh en youre out of town, and every time you needto process a transaction you have to go to the bank.* If the papers of bank are lost you may also lose the right of your

bank properties .


10/12

* In traditional banking sometimes your work may remainuncompleted which is wasted of time.

*If employees are busy with their bank it is not possible that they may

give you the proper answer.*Your bank papers are not secured through traditional banking

Online Banking

* Online banking means you can access your account from anywhereat any time. You can get into your account, transfer money, pay a bill,and make withdrawals and deposits from other accounts.

* Online banking is fast. You dont have to leave your couch to process a transaction.

* Online banking is often cheaper. In addition to being able to offercompetitive rates, many online banks dont charge hefty fees and youdont have to pay for the gas to get there. And you save money on

postage if youre paying bills electronically.

* Most online banks also send notices and statements via email,which saves paper and notifies you immediately if there is any funny

business with your account.

However, the downside to online banking is that you need an internetconnection to interact with your account. You also have to becomfortable using the computer. Finally, online banking poses some

security and identity theft risks. Most online bank accounts offeradvice, assistance and protections to keep your information and yourmoney safe.* In online banking services one needs to count with an internetservice provider.*Hackers may access your bank account


11/12

Switching banks can be more cumbersome online than one person.

In online banking services one need original setup for paying time istime consuming but will ultimately be a time saver.


12/12

CONCLUSION

E-banking transactions are much cheaper than branch or even phone transactions. This could turn yesterdays competitive

advantage a large branch network into a comparativedisadvantage, allowing e-banks to undercut bricks and mortar

banks. This is commonly known as the Beached Dinosaur theory.

E-banks are easy to setup, so lots of new entrants will arrive . Oldworld systems, cultures and structures will not encumber thesenew entrants. Instead, they will be adaptable and responsive. E-

banking gives customers much more choice. Consumers will beless inclined to remain loyal. Portal providers are likely to attractthe most significant share of banking profits. Indeed banks could

become glorified marriage brokers. They would simply bring two parties together e.g. buyer and seller, payer and payee.

The products will be provided by monoclines, experts in their field.Traditional banks may simply be left payment and settlement

business even this could be cast into doubt.

Traditional banks will find it difficult to evolve, not only will they be unable to make acquisitions for cash as opposed to being able tooffer shares, they will be unable to obtain additional capital fromthe stock market. This is in contrast to the situation for internetfirms for whom it seems relatively easy to attract investment.

Documents

internetbanking-131124032348-phpapp01