04-01-2013, 12:32 PM
ELECTRONIC BANKING
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ABSTRACT
On-line banking, e-banking, electronic banking, net banking over the internet are the buzzwords of business today. They are commonly used in the banking industry. It is the information technology which has revolutionized the way of the banking both at the local, national and international level. It is a cutting edge technology.
E-banking is a concept which will enable anyone to conduct business with a bank from the comforts of the home or office. The need hitherto is to personally visit the bank to conduct one’s business and with e-banking on the net, the working hours of the bank are done away with. Instead, all one will have to do is to tap a few keys, go to the bank’s site, identify himself and get on with his business at any time convenient to him.
INTRODUCTION
Information technology is considered as the key driver for the changes taking place around the world. Internet banking (IB) is the latest and most innovative service offered by the banks. The transformation from the traditional banking to e-banking has been a 'leap' change. The evolution of e-banking started from the use of Automatic Teller Machines (ATMs) and telephone banking (tele-banking), direct bill payment, electronic fund transfer and the revolutionary online banking. This study determines the consumer’s perspective on internet banking adoption.
Internet banking has become the self-service delivery channel that allows banks to provide information and offer services to their customers with more convenience via the web services technology. The new world of electronic banking is changing day by day. It is important to understand the customer’s perception on internet banking. Today, many financial services organizations are rushing to become more customer focused.
The challenging business process in the financial services pressurized banks to introduce alternate delivery channel to attract customers and improve customers’ perception. Many banks have implemented Internet banking to offer their customers a variety of online services with more convenience for accessing information and making transactions. Customer satisfaction and customer retention are increasingly developing into key success factors in e-banking. Online banking service allows customers to manage their accounts from any place at any time for minimum cost; it gives abundant compensation to the client in terms of price and ease.
NEED FOR COMPUTERIZATION
In recent years, banking and non-banking financial institutions have been experiencing several changes due to liberalization and financial sector reforms. The advancement in sophisticated information and communication technology is supporting power for the fast computerization of the banking operations. The online initiation of the banking sector is a new paradigm revolution form paper-based to online transaction. Thus, the Indian banking sector is moving towards computerization and is entirely dependent on computers. A large amount of accounting and financial transactions are now handled very efficiently and quickly with the help of computers.
Accordingly, thousands of bank branches are computerized, where the computers are centrally located. Today, more new operations in the financial institutions are done on computers. Operations by computers improve the service and efficiency and reduce transaction costs.
INTERNET BANKING OR ELECTRONIC BANKING (E-BANKING)
Internet banking is the latest in the series of technological wonders of the recent past. ATMs, Tele-Banking, Internet Banking, Credit Cards and Debit Cards have emerged as effective delivery channels for traditional banking products. Internet or Electronic or online banking is the newest delivery channel to be offered by retail banks in many developed countries, and there is a wide agreement that this channel will have a significant impact on the market.
Internet banking refers to systems that enable bank customers to get access to their accounts and general information on bank products and services through the use of bank’s website, without the intervention or inconvenience of sending letters, faxes, original signatures and telephone confirmations. It is the types of services through which bank customers can request information and carry out most retail banking services such as balance reporting, inter-account transfers, bill-payment, etc., via a telecommunication network without leaving their homes or organizations. It is a process of innovation whereby customers handle their own banking transactions without visiting bank tellers.
Bankers consider ‘minimizes inconvenience’, ‘minimizes cost of transactions’ and ‘time saving’ to be important benefits and ‘chances of government access’, ‘chances of fraud’ and ‘lack of information security’ to be vital risks associated with electronic banking. Due to increase in technology usage the banking sector’s performance increases day by day.
TYPES OF E-BANKING
The different forms of online banking are web-based banking where a customer can access his or her account(s) when he or she uses the Internet; second form of online banking is where a bank customer uses a modem to dial-up to a bank’s server to access his or her bank account(s). The later type of online banking is known as dial-up banking. A special type of dial-up banking is called an Extranet, a private network between a bank and its corporate customers.
The three functional level/kinds of e-banking that are currently employed in the market place are: Informational, Communicative and Transactional.
CONSUMER ATTITUDE TOWARDS INTERNET BANKING
Technological innovations are having significant importance in human general and professional life. This era can safely be attributed as technology revolution. The quick expansion of information technology has imbibed into the lives of millions of people. Rapid technology advancements have introduced major changes in the worldwide.
Research on consumer attitude and adoption of internet banking showed there are several factors predetermining the consumer’s attitude towards online banking such as person’s demography, motivation and behavior towards different banking technologies and individual acceptance of new technology. It has been found that consumer’s attitudes toward online banking are influenced by the prior experience of computer and new technology. The adoption of electronic banking forces consumers to consider concerns about password integrity, privacy, data encryption, hacking, and the protection of personal information. Electronic banking requires perhaps the most consumer involvement, as it requires the consumer to maintain and regularly interact with additional technology (a computer and an Internet connection). Interact with additional technology (a computer and an Internet connection). Consumers who use e-banking use it on an ongoing basis and need to acquire a certain comfort level with the technology to keep using it.
CONCLUSION
“The potential of “E-banking is huge. With the increase in connectivity, the number of users will explode”, says K.V. Kamat, the CEO of ICICI Bank.
• The strategy for banks is to provide value-added services to products to customers utilizing the Internet extensively.
• The conventional banking process takes time, cost and efforts. The cost of software is higher and banks in India still have to prove their credibility.
• In a country like India, private banking is directed towards welfare, social banking, risk prone rural activities where e-banking may not be successful.