Professional Documents
Culture Documents
Customer Perception of Online Banking
Customer Perception of Online Banking
This chapter takes into consideration the background of the study, sources of information,
objective of the study, research question, scope of the project, and limitation of the study and
research methodology.
BACKGROUND OF THE STUDY
Modern banks play an important role in promoting economic development of a country. Banks
provide necessary funds for executing various programs underway in the process of economic
development. They collect savings of large masses of people scattered throughout the country,
which in the absence of banks would have remained ideal and unproductive. These scattered
amounts are collected, pooled together and made available to commerce and industry for
meeting the requirements.
As a servicing industry, the Banks are customers oriented. Customers are the driven power of a
Bank and it earns profit by providing services to customers. Customers are the person or
institutions which deal with the Bank. In general, he, who has an account in a Bank, may be
treated as a customer. In broad sense, customers may be seen from the two wings Depositors
and Borrowers. Beside these, other short-term served customers may exist in a Bank. As the
Banking area is very hard and competitive, in order to survive and successfully compete with
other Banks, a Bank has to serve its customers very carefully. Now, in Bangladesh more than 50
scheduled Banks are operating their activities to serve customers.
To fulfill the demand of time and impress the customer most of the banks are now trying to make
their whole banking operation through online.
Online banking is the demand of time. It is now no longer a nice to have but an impossible to
survive without for all banks. IFIC Bank Ltd performs many of its operation in on line and trying to
include rest of the operations.
Online banking comes with huge benefits. Many customers warmly adopt the habit of online
banking. Some eagerly wait for new online services. But some still prefer traditional banking.
They find traditional banking easy, hassle free and more trustworthy than online banking.
IFIC Bank Ltd is continuing to begin new online services one by one. During my project period I
got the opportunity to observe customer closely. I found that many customer want more online
services to save their time and cost. Many customers are happy with traditional banking. Some
customers have no faith on online banking.
Online banking makes life easier, there is no doubt. But introducing a new system is not easy
because it brings some difficulties with it. In case of starting full online banking; the bank has to
introduce some new system/products. In that situation both employees and customers face some
problem to adopt that new system/product.
Sources of the Information
Information collected to furnish this report is both from primary and secondary sources.
Secondary data was derived from various sources including banks papers, different circular sent
by Head Office of IFIC Bank and Bangladesh Bank, other related researcher reports, website,
previous seminar papers etc. Primary information was obtained from the specific person dealing
certain products, interview with customers, interview with banking staffs, own observation,
working experiences with banking staffs. For the industry related, legal, infrastructure related
information internet was a good source.
OBJECTIVE of the Study
A Bank operates its activities not only to earn profit, but also to serve its clients in accordance
with their needs and demands. Online banking is the demand of time as well as the demand of
customer. IFIC Bank is popular for its better customer services. The main objectives of the study
are to evaluate the customer expectations in term of online banking, their problems with online
banking, etc. However, besides this, the study is an attempt to fulfill the following objectives:
To find out the facilities of online banking available in IFIC Bank Ltd.
To find out the level of customer satisfaction with the available online banking facilities.
To analyze the customers opinions towards different online services of IFIC Bank Ltd.
To identify the customers reactions when suddenly they asked for some extra rules to make the
system online.
To analyze the employees opinions towards different online system of IFIC Bank Ltd.
Research question
The research questions are:
1. What are online banking products and services that IFIC Bank Ltd offers to their customers?
2. What are the upcoming online banking products and services that IFIC Bank Ltd is going to offer
their customers?
3. What is the perception of customers of online banking?
A study that encloses interviews of very few clients can not conclude anything accurately.
A Bank has some restriction to present all the real data of the bank to the general people, so all
relevant data and document collection is difficult.
It was very much hard to collect information. Customers are very much busy. So they are not so
interested to give genuine information.
The authority was very busy, so they could not give me enough time for discussion about various
problems.
Personal barriers like inability to understand some official terms, office decorum etc. creates a few
problems to me.
Research Methodology
Firstly I made a plan about what to do. Then check out some banking activities of the bank staffs.
Gather some practical banking knowledge from some banker of IFIC Bank Ltd.Then working few
days with them and acquire some experiences. After learning some work I gave some customer
services. When I became easy with customers I collect some primary data from them. I also talk
with few bank staffs personally to collect more primary data. I collect my secondary data from
different sources like bank website, brochures, commercials etc. After collecting necessary data I
made the project.
The whole project was prepared through the following seven steps:
Step 3 Work few bays like a banker and gather some experience
Step 5 Data collection from different sources of bank (primary and secondary)
Literature Review
Introduction
This chapter seeks to analyze relevant research documentation and findings essential to improve
this research and its capacity to analyze the concerns it seeks to accomplish. Several researches
have been carried out on online banking and it is important to examine them in relation to this
research topic. This will enhance effectiveness and stimulate an all inclusive analysis and
discussions of critical issue in relation to the topic under consideration. The content of this
chapter comprise the theoretical framework. El-Sherbini et al. (2007) investigated the customers
perspectives of online banking, their perceived importance for it, usage patterns and problems
rising on its utilization. The paper discussed the strategic implications of the research findings.
Empirical data were gathered from bank customers in Bangladesh to achieve the research
objectives. All bank customers in Bangladesh were considered as population of research interest.
The results showed the perceived importance of online banking services by customers, current
and potential use of IB services in Bangladesh and problems perceived by bank customers in
using IB. The researchers main hypothesis tested that top five services considered relative
important in IFIC Banks were Review account balance, Obtain detailed transactions histories,
Open accounts, Pay bills and Transfer funds between own accounts. Akinici et al. (2004)
developed an understanding of consumers attitudes and adoption of Internet banking among
sophisticated consumers. Based on a random sample of academicians, demographic, attitudinal,
and behavioral characteristics of Internet banking (IB) users and non-users were examined. The
analyses revealed significant differences between the demographic profiles and attitudes of users
and non-users. IB users were further investigated, and three sub-segments were defined
according to a set of bank selection criteria. Finally, based on the similarities between various
Web-based bank services, four homogeneous categories of services were defined.
Online banking
Online banking is the practice of making bank transactions via the Internet. Online banking allows
us to make deposits, withdrawals, pay bills etc all with the click of a mouse. Online Banking is
one of the few web applications where benefits to customers and banks are already widely
proven. It is now no longer a nice to have but an impossible to survive without for all
banks. Online banking means a kind of self-help financial services provided by the bank for its
clients by the medium of Internet, including account information inquiry, account transfer &
payment, online payment, agency services, etc.
The benefits are many.
For the online banking customer, the convenience factor rates high. No longer does a person
have to wait for the bank statement to arrive in the mail to check account balances. One can
check the balance every day just by logging onto ones account. In addition to checking balances
and transactions, one can catch discrepancies in the account right away and deal with them
swiftly. The best part is that this can be done anywhere! As long as one has Internet access, one
can practice online banking. All the online banking facilities are not till available in Bangladesh.
Since bills are paid online, the necessity of writing checks, affixing postage and posting the
payment in the mail is eliminated. Once the amount is entered and the payee is checked off, the
funds are automatically deducted from the payers choice of account.
Since the cost to the bank is minimal, the cost to the consumer, in many cases, is also minimal.
While there is usually a fee for online banking, it can be extremely low. Those who partake in
online banking all agree its worth every penny.
Online banking also eliminates paper waste, which is a plus not only for those who have to
handle all the paper work, but also for the environment.
Of course, there are also cons.
Banking sites can be difficult to navigate at first. Plan to invest some time and/or read the tutorials
in order to become comfortable in your virtual lobby.
Security is always an issue with Internet transactions. Although information is encrypted, and the
chances of your account being hacked are slim, it happens. Banks pay big bucks to install high
tech firewalls.
Youre also missing the personal service. No smiling teller or representative hands you a receipt.
Instead, except for whats printed into your account, all the paperwork is up to you. Always print
copies of important transactions.
If you have to deposit cash or checks, youll still have to spend time at the ATM. unless a
payment to you is directly deposited; this is one thing youll always have to handle manually.
Sound management of banking products and services, especially those provided over the
internet, is fundamental to maintaining a high level of public confidence not only in the individual
bank and its brand name but also in the banking system as a whole. Key components that will
help maintain a high level of public confidence in an open network environment include:
Security: Banks must have a sound system of internal controls to protect against security violate
they know the identity of the person they are dealing with.
Trust: Public and Private Key cryptographic systems can be used to secure information and
authenticate parties in transactions in cyberspace. A trusted third party is a necessary part of the
information.
Availability: The bank should maintain their service at every moment. The customers of online
banking are time conscious and time is much more important to them. So the service should be
available all the time.
Cash management
Balance inquiry
Funds transfer
Loan applications
Investment activity
Other internet banking services may include providing internet access as an Internet Service
provider (ISP). Historically, banks have used information systems technology to process checks
(item processing), drive ATM machines (transaction processing), and produce reports
(management information systems). In the past, the computer systems that made the information
systems operate were rarely noticed by customers. Today, websites, electronic bill presentment
and payment systems are an important way for banks to reach their customers.
What is a Customer?
In general terms, a customer is a person or organization that a marketer believes will benefit from
the goods and services offered by the marketers organization. As this definition suggests, a
customer is not necessarily someone who is currently purchasing from the marketer. In fact,
customers may fall into one of three customer groups:
Former Customers This group consists of those who have formerly had relations with the
marketing organization typically through a previous purchase. However, the marketer no longer
feels the customer is an Existing Customer either because they have not purchased from the
marketer within a certain time frame or through other indications (e.g., a Former Customer just
purchased a similar product from the marketers competitor). The value of this group to a marketer
will depend on whether the customers previous relationship was considered satisfactory to the
customer or the marketer. For instance, a Former Customer who felt they were not treated well by
the marketer will be more difficult to persuade to buy again compared to a Former Customer who
liked the marketer but decided to buy from someone else who had a similar product that was
priced lower.
Potential Customers The third category of customers includes those who have yet to purchase
but possess what the marketer believes are the requirements to eventually become Existing
Customers. Locating Potential Customers is an ongoing process for two reasons. First, Existing
Customers may become Former Customers (e.g., decide to buy from a competitor) and, thus, must
be replaced by new customers. Second, while we noted above that Existing Customers are the
best source for future sales, it is new customers that are needed in order for a business to
significantly expand. For example, a company that sells only in its own country may see less room
for sales growth if a high percentage of people in the country are already Existing Customers. In
order to realize stronger growth the company may seek to sell their products in other countries
where Potential Customers may be quite high.
Competition: The competitive pressure is the chief driving force behind increasing use of online
banking technology, ranking ahead of cost reduction and revenue enhancement. Banks see
online banking as a way to keep existing customers and attract new ones to the bank.
Geographical Reach: Online Banking allows expanded customer contact through increased
geographical reach and lower cost of delivery channels. In fact some banks are doing business
exclusively via the internet they do not have traditional banking offices and only reach their
customers online.
Branding: Relationship building is a strategic priority for most banks. Online banking technology
and products can provide a means for banks to develop and maintain an ongoing relationship
with their customers by offering easy access to a broad array of products and services. By
capitalizing on brand identification and by providing a broad array of financial services, banks
hope to build customer loyalty, and enhance repeat businesses.
Customer Demographics: Online banking allows banks to offer a wide array of options to their
banking customers. Some customers will rely on traditional branches to conduct their banking
business. Other customers are early adopters of new technologies that arrive in the marketplace.
The challenge to banks is to understand their customer base and find the right mix of delivery
channels to deliver products and services profitably to their various market segments.
As use of the internet continues to expand, more banks are using the web to offer products and
services or otherwise enhance communications with consumers. The internet offers the potential
for safe, fast, and convenient new ways to shop for financial services and conduct banking
business, any day, any time.
Global scenario of online banking
Online banking has grown gradually in the UK over the past decade and is now used by 39% of
adults, or 17 million people. But growth has slowed in the past couple of years. Thats odd
because only46% of UK Net users access their bank accounts online, yet 74% regularly shop
online. By 2012, it is expected that 44% of adults to use online banking in the UK, or nearly 22
million people. It is hoped that between 2009 and 2014, the total number of US online bill
payment households will increase from 48 million to 63 million. Online banking has grown steadily
in France over the past decade, boosted by the growth in Net use overall, and is now used by
31% of adults, or 15 million people. Growth to continue at a similar rate for the next five years
because French Net users are becoming increasingly confident with the channel and because
banks can still do more to persuade customers to bank online, starting with reducing or
eliminating the charges that many still impose on customers who bank online. By 2013, it is
expected that 42% of adults to use online banking, or more than 22 million people. With only 12%
of Swedish banking customers using branches, Sweden has the lowest branch use in Europe.
Swedish banks have successfully migrated the majority of their customers to ATMs and online
banking 83% and 71%, respectively. It is projected that, by 2012-2013, 81% of Dutch and 47% of
German consumers will use Internet banking.
THE SUPPORTING IT INFRASTRUCTURE
Though the first main frame computer came to Bangladesh in 1964, but the usage of PC became
popularize very late to the common people. Several large banks and private entrepreneurs in
industrial sectors are the path makers of achieving benefits from computer and computerized
applications. Bureau of Statistics and a few nationalized banks are the leaders in using computer
in government sector by processing data and information, while industrial concerns in private
sectors are the leaders in applying computer for their accounting, payroll and inventory related
applications.
Today the people are getting more technology conscious. They are well aware of the benefits of
the technology. This made many people a user of the internet facilities. The number of users
increased fast over the years.
Internet Usage and Population Statistics:
YEAR
No. of Users
Population
2000
100,000
134,824,000
0.1
2007
450,000
137,493,990
0.3
2009
556,000
156,050,883
0.4
2010
617,300
158,065,841
0.4
2011
5,501,609
158,570,535
3.5
Underdeveloped IT industry
Widespread poverty
Bangladesh has a nationwide fiber-optic network established by Bangladesh Railway. This facility
can provide excellent backbone for nationwide voice and data communication.
As we have no direct access to the information super highway the only option is to communicate
through satellite. Satellite communication is costlier than fiber optic.
To avoid satellite communication and its high cost, we can establish the missing link to the
information super highway if the nation-wide fiber-optic network is allowed to link up with the high
speed fiber-optic backbone in India.
Availability of telephone lines and reduction in service fee will attract many professionals into
internet arena.
MasterCard and VANIK. Some foreign banks provide electronic fund transfer (EFT) services. It is
at an early stage and used on a very limited scale. Microchips embedded Smart Card is also
becoming popular in the country, particularly for utility bill payment. Automated teller machine
(ATM) is expanding rapidly in major cities. A group of domestic and foreign banks operate shared
ATM network, which drastically increase access to this type of electronic banking service. The
network will gradually be extended to other parts of the country.
The e-banking services provided by the banks in Bangladesh could be divided in three groups:
ATM Services, Internet Banking (i-Banking), and SMS Banking. The scopes of these services are
vast, but the banks in Bangladesh do not provide all of these services. Some of the banks provide
these or other services and charges fees for ATM transaction, SMS and i-Banking while the
western banks inspire clients to do ATM banking without fee or a minimum fee to reduce banking
expense.
Last couple of years shows dramatic improvement in the awareness situation in the banking
sector regarding the comprehensive application of ICT. Local software companies have been
starting competition to supply useful complete banking software with all the basic features of
banking module. However, many forms of electronic banking services are not possible to offer in
Bangladesh
at
this
moment
due
to
the
technology
backwardness,
infrastructural
underdevelopment and legal infrastructure. Those products would be very useful for exportoriented industry to reduce lead-time in export and keep comparative advantage in the
international market.
PROBLEM OF ONLINE BANKING SYSTEM IN BANGLADESH
Numerous problems have been identified in the field of on line banking system in Bangladesh.
Some of them are in the followings:
Inefficiency and inadequate knowledge of the bank management about the on line banking.
Lack of proper Strategic plan to gain and retain market share of the indigenous banks.
Lack of international standard communication channel.
High cost of establishing on line banking system.
Inadequate back and front office management.
Lack of integrated plan among the banks and the Central Bank authority.
Inefficient Clearing House Facilities.
Inappropriate software and less trust by the Bank authorities on local software.
Biased-ness of the management of bank towards foreign software.
Legal barriers and appropriate policy framework.
SWOT ANALYSIS
To find out the viability of a particular product we must perform a SWOT Analysis of the product.
This will analyze the Strengths, Weaknesses, Opportunities, and Threats of the particular
product. For analyzing the performance of Online Banking in Bangladesh we the following SWOT
Analysis is considered.
STRENGTH
Online Banking is new in our market. Only a few banks are now offering online services in solving
banking problems. Most of the banks are offering only accounting information online. Actual fund
transfer and fund disbursement is not possible in all the banks that are offering online services. So
this product will enjoy the benefit of a first mover.
It is cheap both for the banks and the customers. The bank will be able to lower down the
overhead costs and make more profit out of it. Online banking will require less manual workers.
Again the customers will be able to save time as well as money for their transaction needs.
Internet banking is convenient as the service is available all the time at just a click away.
WEAKNESSES
Security breakdown: The system will have a problem with the identification of the individual who is
initiating the transaction. In Bangladesh, the identification of an individual is not yet supported
digitally. So there will be a problem in moving to the Internet era for banking purposes just now.
First we will have to develop a digital database of the users of the internet banking services.
The transaction can be cancelled only via internet. The internet infrastructure of our country is not
that much supportive to provide all time access to the web. So there will be a problem in executing
the service with its full functionality.
OPPORTUNITIES
Non-branch banking is becoming popular in our country. Many banks are now offering non-branch
banking facilities. A person can withdraw or deposit money in any branch of the bank he has
account with. So moving to online banking will allow the banks to offer non-branch banking
facilities.
The internet services are becoming very common to us. So a service offered through the internet
will be widely accepted in the near future.
THREATS
People have concern about security and privacy. They like to feel their money with their hand.
They actually dont believe in virtual money transfer.
In the field of IT new technology is coming every day. The one which is very popular today might
get obsolete tomorrow. So to have a competitive edge over the competitors the banks must always
update their services.
The movement towards online banking might marginalized the customers who do not have internet
access or who are not technologically sound.
Account Summary: The Customer will be able to view the list of Current, Saving, Term Deposit and
Loan accounts with the current balance.
Account Details: The Customer can choose a particular account and see the account details
including unclear fund, limit, interest accrued etc.
Account Activity: The customer can see or print his transaction activity in a given account for a
particular period.
Transfer Funds: The customer can transfer funds from one of his accounts to another of his
accounts within the bank.
Standing Instructions: The customer can setup, modify or delete standing instructions for
transferring fund from one of his account to another account (his account or 3rd party).
Open/Modify Term Deposit: The customer can open a term deposit by transferring funds from one
of his current or savings accounts with the bank. He can also modify the TD and redeem / partredeem it.
Loan Repayments: The customer can make payment of the loan installment from his CASA
account.
Statement Request: The customer can make a request for account statement for a required period.
The bank will manually service this request.
Cheque Book Request: The customer can make a request for a Cheque book.
Cheque Status Inquiry: The customer can choose an account and enter the Cheque number for
which the status should be viewed.
Stop Payment Cheque: The customer can mark his Cheque leaf as stop payment.
Interest Rate Inquiry: The customer can query on the interest rates on CASA & Term Deposit
Products.
Foreign Exchange Rate Inquiry: The customer can query on the Foreign Exchange (FX) Rates
using this function.
Refill Pre-Paid Card: The customer can buy a refill number for his pre-paid mobile phone or ISP
link.
Change Password: The customer can change his Internet Banking Password using this function.
Letter of Credit: The customer can initiate the LC application through Internet Banking.
Bank Guarantee: The customer can initiate the Bank Guarantee through Internet Banking.
Limits Query: The customer can view his Loan Limits and Limits Utilization through Internet
Banking.
Pay bills
o
BTCL
GRAMEEN PHONE
AIRTELL LTD.
HSBC
Internet Banking service manage customers finances. They can take control of their account
whether at home or abroad. They can access their accounts anytime, from anywhere in the
world! Other services include:
Online Bill Payments Make life easier. Pay your bills online
Update your email address, contact telephone numbers and other personal information
Statements View, print and download your Statements to track your transactions.
Total Banking Portfolio, Net worth & Account Summary Check/update your personal
information/account.
Time Deposits Placement of new time deposit, check or update your personal information and
accounts.
Mercantile Bank
Clients can access their personal and business accounts and manage their money 24/7 hours a
day. The highest level of encryption protection safeguards each and every ones account
information. Through electric banking one can easily avail following services:
Information Reporting
Easy-to-use application
SCB
Standard Chartered offers the client a comprehensive range of Cash Management services.
Whether it is a financial institution, a multi-national corporation or a domestic company, Electronic
Banking application has the capability to support full range of Cash Management reporting and
transaction initiation needs. It provides the secure, reliable and effective link between the client
and clients accounts anywhere across the Standard Chartered network. Electronic Banking
provides various types of support through a wide range of operating systems, sweeping
transaction accessories with the provision of reporting features or other special functions. There
are 10 offices and 50 employees under this division, which operates in 26 countries.
COMPANY OVERVIEW
INTRODUCTION
This study is based on customer perception of online banking. And the customers who participate
in this study as respondent are from IFIC Bank Ltd. So, it is necessary to know the bank. This
chapter discuss about the bank from different angle.
HISTORICAL BACKGROUND OF IFIC BANK LTD.
International Finance Investment and Commerce Bank Limited (IFIC Bank) is banking company
incorporated in the Peoples Republic of Bangladesh with limited liability. It was set up at the
instance of the Government in 1976 as a joint venture between the Government of Bangladesh
and sponsors in the private sector with the objective of working as a finance company within the
country and setting up joint venture banks/financial institutions aboard. In 1983 when the
Government allowed banks in the private sector, IFIC was converted into a fully fledged
commercial bank. The Government of the Peoples Republic of Bangladesh now holds 32.75% of
the share capital of the Bank. Directors and Sponsors having vast experience in the field of trade
and commerce own 8.62% of the share capital and the rest is held by the general public. Initially,
the banks authorized capital was Tk 100 million divided into 1 million ordinary shares of Tk 100
each. IFIC conducts all types of commercial and investment banking functions.
VISIONS OF IFIC BANK LIMITED
To cope with the challenge of the new millennium, it hired experienced and well-reputed banker
of the country from the inception. The bank has efficient and dedicated professional and
equipped with modern technology to provide the best service in the need of the people and thus
realize its vision. So its vision: to be the most efficient bank in terms of customer service,
profitability and technology application.
MISSION OF IFIC BANK LIMITED
To provide service to their clients with the help of a skilled and dedicated workforce whose
creative talents, innovative actions and competitive edge make their position unique in giving
quality service to all institutions and individuals that bank care for.
The bank is committed to the welfare and economic prosperity of the people and the community.
Bank wants to be the leader among banks in Bangladesh and make our indelible mark as an
active partner in regional banking operating beyond the national boundary.
In an intensely competitive and complex financial and business environment, bank particularly
focuses on growth and profitability of all concerned.
GOALS & OBJECTIVES OF IFIC BANK LIMITED:
A Bank operates its activities not only to earn profit, but also to serve its clients in accordance
with their needs and demands. In this sense, customer service is one of the important jobs of the
Banks. The main objectives of the study are to evaluate the efficiency and effectiveness of the
IFIC Bank Ltd. officials in servicing their customers.
Maximization of profit through customer satisfaction is the main objective of the Bank .in addition
.the others relevant objectives are:
1. To develop saving attitude and making acquaintance with banking facilities.
Legal Form
IFIC Bank Limited was incorporated in Bangladesh and registered with Joint Stock Companies
and Firms as a public company limited by sharesCompany Registration Number4967,Dated
October 08,1976Listing StatusListed with Dhaka stock Exchange Ltd. (DSE) and Chittagong
stock Exchange Ltd. CSE In 1986 $1995 Respectively.Market CategoryA categoryTax Payer
Identification
Number
TIN)210-200-0537,LTU,DHAKAVat
Registration
Established as an Investment & Finance Company under arrangement of joint venture with the Govt. of
Bangladesh.
1980
1982
Obtained permission from the Govt. to operate as a commercial Bank, Set up its first overseas joint venture
(Bank of Maldives Limited) in the Republic of Maldives (IFICs share in Bank of Maldives limited was
subsequently sold to Maldives Govt. in 1992)
1983
1985
Set up a joint venture Exchange Company in the Sultanate of Oman, titled Oman Bangladesh Exchange
Company (Subsequently renamed as Oman International Exchange, LLC)
1987
1993
1994
Set up its first joint venture in Nepal for banking operation, titled Nepal Bangladesh Bank Ltd.
1999
Set up its second joint venture in Nepal for lease financing, titled Nepal Bangladesh Finance & Leasing Co.
Ltd. (Which was merged with NBBL in 2007)
2003
Set up a new Bank in Pakistan, NDLC-IFIC Bank Ltd. (Subsequently renamed as NIB Bank Ltd.) and the
Overseas Branches of IFIC and a local leasing company, NDLC were amalgamated with and into it.
2005
Acquired MISYS solution for real time online banking application Core Risk Management implemented
2007
Launched VISA branded Credit Card (completed full range of Cards i.e. Debit, Credit & Prepaid by 2010)
2010
2011
Established a fully owned subsidiary exchange company named IFIC Money Transfer (UK) Ltd.
2012
th
th
TECHNOLOGY
Since the beginning of its journey as a commercial bank in 1983, IFIC Bank has been giving great
emphasis on the adoption of modern technology. It became the pioneer in the field of automation
by introducing computerized branch banking right in the same year. Subsequently, all the
branches were brought under similar automated platforms with upgraded software applications to
offer all the critical banking features. At present all 100 domestic branches are fully computerized
under networked environment.
The Bank has taken up a new project with Misys International Banking System Inc. (UK) to
further upgrade its banking operation to state-of-art world class on-line banking solutions to
provide faster and even more convenient centralized services to the clients.
Besides, the Bank is also operating fully on-line Automated Teller Machine (ATM) services under
the banner Q-Cash at a number of locations in Dhaka and Chittagong. The ATM facilities are
available to the customers at Q-Cash booth.
Since the importance of Web presence in the Internet is absolutely critical, IFIC Web Site
www.ificbankbd.com has long been launched for the convenience of the customers, where all the
activities and information are constantly being posted and updated. A Central Mailing System is
operational at the Head Office to let the customers have direct electronic access to the selected
staff.
SOFTWARE USE BY IFIC BANK
Service
Software Use
Vendors Name
Core Banking
Misys International
CODE
BRANCH NAME
ONLINE FROM
2030
AGRABAD BRANCH
26-06-08
2056
28-12-10
2155
ASHUGANJ BRANCH
29-12-10
1197
ASHULIA BRANCH
26-11-07
1112
BAJITPUR BRANCH
23-04-09
1096
BANANI BRANCH
02-04-08
6187
BANESHWAR BRANCH
04-02-10
1011
BANGSHAL BRANCH
08-10-08
1070
BASHUNDHARA BRANCH
31-07-11
10
5064
BARISAL BRANCH
12-11-09
11
3138
23-10-08
12
6188
BELKUCHI BRANCH
29-10-09
13
4166
BENAPOLE BRANCH
14-01-10
14
5202
BHOLA BRANCH
26-12-11
15
1177
09-11-08
16
6082
BOGRA BRANCH
27-11-08
17
4067
12-02-09
18
2034
BRAHMANBARIA BRANCH
12-03-09
19
2054
22-01-10
20
6086
19-03-09
21
2040
10-07-08
22
2050
CHOUMUHANI BRANCH
28-01-10
23
2035
COMILLA BRANCH
13-11-08
24
2148
COMPANYGANJ BRANCH
09-04-09
25
2044
26-02-09
26
2157
CHANDINA BRANCH
28-11-11
27
1193
DANIA BRANCH
28-12-08
28
1178
12-12-10
29
1006
DHANMONDI BRANCH
17-04-08
30
6083
DINAJPUR BRANCH
30-07-09
31
1014
31-07-08
32
1023
FARIDPUR BRANCH
03-12-09
33
2152
FATIKCHARI BRANCH
25-03-09
34
1008
FEDERATION BRANCH
13-09-07
35
2041
FENI BRANCH
13-11-08
36
1109
GHORASAL BRANCH
20-11-08
37
3151
23-10-08
38
1002
GULSHAN BRANCH
24-05-07
39
2137
HATHAZARI BRANCH
25-03-09
00
9900
HEAD OFFICE
23-02-08
40
1005
ISLAMPUR BRANCH
12-06-08
41
4061
JESSORE BRANCH
19-02-09
42
6058
JOYPURHAT BRANCH
23-12-10
43
4168
01-03-08
44
6189
11-10-10
45
1017
01-03-08
46
1195
KERANIGANJ BRANCH
30-11-08
47
2031
KHATUNGANJ BRANCH
10-07-08
48
4060
KHULNA BRANCH
12-02-09
49
1121
KONABARI BRANCH
16-10-08
50
4062
KUSHTIA BRANCH
19-11-09
51
1025
LALMATIA BRANCH
31-07-08
52
2153
22-01-10
53
1118
MADHABDI BRANCH
08-10-08
54
1019
MALIBAGH BRANCH
28-08-08
55
1013
MIRPUR BRANCH
27-12-10
56
1094
MOHAKHALI BRANCH
28-12-08
57
1001
MOTIJHEEL BRANCH
08-11-07
58
1004
15-05-08
59
3046
30-10-08
60
1115
MUKTARPUR BRANCH
12-02-10
61
1022
MYMENSINGH BRANCH
09-04-09
62
1201
MOHAMMADPUR BRANCH
05-12-11
63
6085
NAOGAON BRANCH
19-03-09
64
1003
NARAYANGANJ BRANCH
22-05-08
65
1110
NARSINGDI BRANCH
20-11-08
66
1175
14-06-10
67
1029
12-06-08
68
1020
28-08-08
69
1016
NETAIGANJ BRANCH
29-05-08
70
4163
NOAPARA BRANCH
19-02-09
71
1028
11-09-08
72
6084
PABNA BRANCH
19-11-09
73
1027
PALLABI BRANCH
30-04-08
74
1173
PANCHABOTI BRANCH
18-11-09
75
4169
PORADAH BRANCH
11-10-10
76
1072
23-12-09
77
6080
RAJSHAHI BRANCH
04-02-10
78
6081
RANGPUR BRANCH
27-11-08
79
1198
RUPGONJ BRANCH
08-10-08
80
4065
SATKHIRA BRANCH
14-01-10
81
1171
26-10-09
82
2042
17-07-08
83
1007
SHANTINAGAR BRANCH
11-09-08
84
1092
SHARIATPUR BRANCH
23-04-09
85
2132
SHEIKH
MARKET
BRANCH
(OLD)/
25-03-09
6179
SHETABGONJ SME/KRISHI BR
15-12-10
87
2045
17-07-08
88
3047
SHREEMONGAL BRANCH
30-10-08
89
1090
07-10-09
90
3043
14-08-08
91
3033
SYLHET BRANCH
07-08-08
92
1126
TAKERHAT BRANCH
03-12-09
93
1091
TANBAZAR BRANCH
02-09-09
94
1076
TANGAIL BRANCH
11-10-10
95
2036
17-08-08
96
1174
27-12-10
97
3139
TULTIKAR BRANCH
07-08-08
98
3049
UPOSHOHAR BRANCH
14-08-08
99
1024
UTTARA BRANCH
24-04-08
100
1203
24-06-12
EXCHANGE HOUSE
01.
02.
03.
04.
05.
06.
07.
08.
09.
POS: Point of Sales Service for the customer who wants to withdraw money from any branch
using their card.
Card Transaction: This product allow customer to withdraw money anytime from ATM booth.
Here, customer can do account transaction, balance enquiry etc. They dont need to carry much
cash with them.
Cash and Cheque Deposit and Withdraw: Customer can deposit cash and cheque in any
branch of the bank. A customer can also withdraw money from any branch whether he has an
account in that branch or not.
Internet Banking: This service allow customer to do some banking activities through internet
from his home or office or anywhere of the world. The services are as follows
View Statement
Results
INTRODUCTION
Here I present the data collected from the two samples, i.e, and the interviews with the online
banking staff of IFIC Bank Ltd and the collective response to the questionnaires by the
customers. The presentation will be in two parts, data collected from the bank staff and that
collected from the customers.
BACKGROUND OF THE BANK
Before I sort out and analyzed the data collected, I present a background of the bank with
regards to what the online products and services they offer. This information was gathered from
their websites and brochures and compared with what was gathered from the interview with bank
staffs and what customers confirmed they received from online banking.
BACKGROUND OF THE RESPONDENTS
Staff members of bank represent the bank. They were made up of three female and two male
respondents. All the five respondents have worked in their banks for over three years and were
quite familiar with the operations of online banking. All of the respondent customers has at least
an account in Progoti Sarani Branch of IFIC Bank and also familiar with all the online product and
services offered by the bank.
MAJOR ONLINE BASE PRODUCTS AND SERVICES PROVIDED BY THE BANK
Deposit Product: Savings Account, Smart Savings Account, Super Saving Plus More Money,
Current Account, Special Notice Deposit SND Account, Pension Savings Scheme (PSS),
Double Return Deposit Scheme (DRDS), Millionaire Dream Plan (MDP)
SMS Banking: This service allow customer to do some banking activities through SMS from their
mobile. The services are as follows
POS: Point of Sales Service for the customer who wants to withdraw money from any branch
using their card.
Card Transaction: This product allow customer to withdraw money anytime from ATM booth.
Here, customer can do account transaction, balance enquiry etc. They dont need to carry much
cash with them.
Cash and Cheque Deposit and Withdraw: Customer can deposit cash and cheque in any
branch of the bank. A customer can also withdraw money from any branch whether he has an
account in that branch or not.
Internet Banking: This service allow customer to do some banking activities through internet
from his home or office or anywhere of the world. The services are as follows
View Statement
In contrast to traditional banking products/services, all the product and services of online banking
can be obtained from the traditional channel. The difference here therefore rests solely on the
difference in channel delivery.
DATA COLLECTED FROM INTERVIEW WITH BANK STAFFS TO ADDRESS THE
RESEARCH QUESTION
1. What are online banking products and services that IFIC Bank Ltd offers to their customers?
2. What are the upcoming online banking products and services that IFIC Bank Ltd is going to offer
their customers?
3. What is the perception of customers of online banking?
Answer: Live Branch position, Customers flexibility to enjoy banking facilities from any branch of
the bank all over Bangladesh by opening accounts in one branch. Customers are very happy with
that. The respondents indicate that online banking has increased the productivity of their bank as
well as that of their customers. Both the bank and its customer save more time and cost, and in
addition, they save more man-hour for the bank. As customers are spared long queues in the
bank and the trouble they have to take in going through heavy traffic and long distances to reach
their bank, corresponding, and the pressure on traditional banking outlets are reduced thereby
improving services for a fewer number of customers.
3. What kind of feedback do you receive from your customers on online banking
services?
Answer: According to respondents, customers have a mixed reaction about online banking
services. Some are satisfied with existing online services and some are not. They want more
services. Some complain about slow uploading of banking website and links. A recent event
depicts a clear picture of the mixed reaction of customers. According to respondents, their PSS
(Pension Savings Scheme) account was not online. But recently they transform the account into
online product. A new customer will get this facility from the first day of account opening. He or
she can deposit his or her money into a savings account in any branch of the bank. Every month
a certain amount of money (written in A\C opening form)
account to PSS account. They dont need to come to bank every month to deposit money, they
dont need to remember the date of depositing money, they dont need to go to a branch where
they opened the account, need not to worry about late fees etc. This online product (PSS) surely
comes with solution of many problems. Whenever any customer come to open a PSS account
and know that he has to open a saving account also, many of them become happy to know that
they can enjoy the benefits described above. But some are not interested to this new online
product. They are alright with the problems that can be solved by this online PSS. In case of old
customer, the respondents face more problems. Whenever they asked their old PSS holder that
they have to open a new account to transfer their PSS into online product, some are happily
ready to do that to enjoy the facilities of online banking. But most of the customers become very
angry and not ready to do that. Some argued that the bank should tell the customer about all the
rules before starting a new account not after opening an account. If any new system emerges,
that should not apply on old customers a customer said that.
4. What products/services do you plan to introduce into the online banking in the future?
Answer: The bank is going to introduce more online products and services to their customers.
These include:
Mobile banking
Card Cheque
Deposit in ATM
5. What are the challenges that your bank is facing in providing online banking services?
Answer: The responses to this question are itemized as follows:
The respondents said that high cost of establishing on line banking system is one of the main
challenges for the bank in providing online banking services. Because the bank has to be sure that
the savings from online banking technology is more than the cost of conducting business in
cyberspace.
The interviewees reveal that there is a clear sense of misgiving about online banking among some
customers who were offered online services. Some of them use internet only in office and some of
them never do.
DATA COLLECTED FROM ONLINE BANKING CUSTOMERS FROM THE QUESTION POSED
IN THE QUESTIONNAIRES
I asked about 100 people. Many of them dont use internet, so they cant enjoy the full benefit of
online banking. They use cards which is also an online product. But they are unfamiliar with many
other online products/services. Here the entire 50 respondents who participate in this study use
internet banking (a part of online banking) that means use internet either in office or home or both
place.
I first present the distribution of online banking customers based on sex, account type and age
distribution. 50 customers participate in it and among them 27 were male respondent and 23
were female respondent. 25 respondents run a saving account, 10 current account and 15
respondents run both current and saving account. 18 were below 25 years, 25 were above 25
years and 7 were above 50 years.
1. Why did you subscribe online banking? And what are the products/services that you
access online from your bank?
Answer: Respondents indicated that they subscribed online services because they use the
internet at home or office, or because they perceived it as modern. Some customers use it
because their bank introduces it.
Regarding the question on the kinds of products and services that the respondents access from
online banking, they enumerated all the products and services that the banks offer online
confirming what I gathered from the interviews, websites, brochures and advertisements.
2. How do the online products and services differ from traditional banking products and
services that you know?
Answer: The respondents did not perceive much difference between online products and
services and those of traditional banking except in the self service dimension of online banking
and the vast information that were readily available online. They also focused on the time and
cost saving advantage of online services. But some customer added that in spite of using online
banking they like traditional banking more than online banking. Because in traditional banking
they can inquiry a matter from bank staffs until it becomes clear to them. In online banking
everything depends on customer to understand a matter by himself. They also prefer to feel their
money with their hand not virtually.
3. How reliable or good is your internet connectivity and how does online banking save
you in terms of monetary and time costs?
Answer: Many of the respondents have problems with internet connectivity. Nonetheless all
respondents felt that they were saving costs from using the internet in terms of time and money.
They explain that for many banking activities they dont need to go bank, it saves both money and
time.
4. What benefits do you get or problems do you encounter with online banking?
Answer: Respondents reiterated the benefits of saving time and cost. Some mentioned about
self service advantages.
Answer: Most of the customers run account in more than one bank. They complained that they
get more online services facility in another bank than IFIC Bank.
In case of ATM, some customers complain about unavailability and some customers about
network.
After any kind of transaction, customers want sms notification. But their banks sms notification
alert is irregular. Some feel insecurity for that.
Some customers mentioned that in case of balance transfer to some branches of the bank out of
Dhaka city, the bank takes a online charge, it should be free.
Introducing new rule after opening an account is also disliked by most of the customers. They
think in case of introducing any new rule the bank should consider about old customers. Some
customers requirement is small and they are quite happy with their bank.
8. To what degree has your expectations and requirements been met? How satisfied are
you?
a. Extremely satisfied
b. Satisfied
c. Somehow satisfied
d. Dissatisfied
e. Extremely dissatisfied
Answer: The chart below gives the satisfaction distribution of the respondents:
Description of Results
INTRODUCTION
In this chapter, I discuss the result of the data I collected in relation to the frame of references,
concept and theories that underpin the study. The discussion is presented in three parts
according to the research questions.
RESEARCH QUESTION 1
What are online banking products and services that IFIC Bank Ltd offers to their customers?
Online banking becomes a way of attracting new customer and also impresses the existing
customer. Many researchers view customer value as a key element in achieving company
success. This study tries to identify the kind of product and services IFIC Bank Ltd is offering to
deliver customer value and also the upcoming product and services that are coming to increase
customer value and finally the customers perception who access such product and services.
The study revealed that online banking is a complementary service to traditional banking in
Bangladesh. In indentifying the products and services, we took a number of approaches. I
examined the website of the bank, read through their brochures and other advertising devices,
interviewed bank staffs and matched the information gathered with customers responses
regarding the product and services. Short list of online products and services is listed below:
SMS Banking
Card Transaction
Internet Banking:
View Statement
The services that are not offered by the bank include full transactions such as Fund transfer from
one account to other accounts, bill payments etc. Cross-selling is one of the key models of the
internet platform. The present product and services provided by the bank is limited compared to
what pertained in other parts of the world even in some other banks of Bangladesh. Thus, the
bank has a wide range of offering they can offer as they consolidate existing product and
services.
RESEARCH QUESTION 2
What are the upcoming online banking products and services that IFIC Bank Ltd is going to offer
their customers?
The bank staffs said that in case of providing online banking services their bank faces the
challenge of high cost. We also saw in case of online banking the main challenge is to make sure
the savings from online banking technology more than the costs and risks associated with
conducting business in cyberspace. So, the bank could not offer full rang online banking products
and services till now. But the existing online products and services is also attracting new
customers and in recent time the customer increase rate is 300%, according to respondents. The
bank has about 4, 60,000 accounts, among those accounts 1, 75,000 are active account. The
bank staffs think that online banking is one of the reasons behind this increase in account
number. As the customers are the driver of a bank asset, the bank is now ready to introduce
some more online products and services to its customers very soon. Including:
Mobile banking
Card Cheque
Deposit in ATM
RESEARCH QUESTION 3
What is the perception of customers of online banking?
It indicated already that the essence of online banking increase customer value. Although the full
range of online banking facilities is not yet available but it is available to some extent. But all the
customers are not using it. One of the main problems is lack of awareness. People still think that
their money is safer in their hand than online. When I described the benefit of online PSS A/c to
some client, I found different point of view of them. Online PSS A/C has many advantages
including: a customer need not to come to bank every month. One customer who was a
housewife said that she loved to come to bank every month. She also felt secure to deposit her
money physically. This is not her point of view only; many customers shared the same statement.
It is very hard to change such mentality.
Some customers said that traditional banking is easy to carry out. Some internet banking users
also support that traditional banking is easy to carry out than online banking because they are not
much familiar with these services.
A huge number of customers taking banking services does not capable to bear the cost of
additional equipments like computer, computer accessories , Internet etc. from their own
organization or at home. Using Internet facility still very costly and people has little knowledge in
operating computers. A few numbers of cyber caf is available but for banking purpose
customers do not feel safe to use these facilities. As a result total numbers of customers who are
habituated in on line banking systems are limited.
Some customers come and asked the bank staff to write the deposit slip for them because they
cant write properly. It is very difficult to take those customers under the umbrella of online
banking.
A different picture is also available. Some customers said that they need to inquiry their account
statement frequently and it is difficult to visit the bank so frequently. Now they can get their
necessary information from their home or office through internet. They enjoy all the available
services provided by their bank. Moreover, they want the additional services available in other
banks and not yet available in their bank.
At one point, all the customers are agreed that in case of introducing any new rule (whether it for
online banking or traditional banking) the bank should be careful. It should take right decision so
that the old customers do not suffer for that new rule.
As the customers have a mixed reaction of online banking, the banks latest product online PSS
A/C also gets a mixed reaction. Some customers adopt it happily. And some customers close
their account because they dont want to grant the new rule. They dont want to open another
saving account to make their PSS A/C online. It is clear that for them the benefits of online
banking is less worthy than other factors.
Summary, recommendation and conclusion
INTRODUCTION
This discussion will now turn to summary, conclusion and recommendation.
SUMMARY
The study revealed that online banking is a complementary service to traditional banking in
Bangladesh. Because customers till depend on traditional banking more than online banking. For
many reasons they prefer traditional banking. They like to feel their money with hand. They think
it is more secure form than virtual form. The sense of security is of great importance. In
Bangladesh most of the people are illiterate and obviously they are technology ignorant. Again,
among the literate portion many of them have computer phobia. So these people cant trust on
the online banking services. To gain the confidence on online banking the overall computer
literacy must be developed. With that goal government has taken initiative even in the root level
to develop it literacy in the country. This would be a perfect ground for the development of online
banking.
Bank must also create the environment that will encourage customers to hook up. Many potential
customers who cannot purchase personal computer can be encouraged to acquire them through
special bank loans payable through small monthly deduction from the customers account.
Nonetheless, some customers enjoyed the advantages of the online services and expressed the
desire for more services online.
RECOMMENDATION
Online banking became an impossible to survive without for all banks. In mission statement the
bank states that it wants to provide better service to their clients with the help of a skilled and
dedicated workforce. To do so, the bank must give more concentration on online services. Here, I
have come up with some recommendation which IFIC Bank Ltd can use for their advancement.
These are:
If it is feasible for bank than online charge (i.e. for balance transfer) should be removed.
Some important online services (like mobile banking) that are already introduced by other banks
should be started as early as possible. Otherwise valuable customers can be switched to another
bank.
As the number of customers is increasing, the number of ATM booths should increase.
Before introducing any new product or service, train your staffs about that product or service. It will
make staffs performance better and quick. Therefore, the customer service will improve.
CONCLUSION
It is reasonable to predict that online services will improve; many more banks will go fully online
and competition will increase in this area. Wu et al (2006) strongly suggest from their findings that
online banking will prove disruptive to traditional banking and therefore core competencies and
new ways of serving the customer must be developed. Hope that this work will set the stage for a
rigorous approach to online banking.
WEB RESOURCES
1. http://www.ificbank.com.bd [accessed on 06.05.2012]
2. http://www.recommendedsystemrequirements.com/site/ific-bank [accessed on 10.05.2012]
3.
4.
5.
6.
7.
8.
9.
on
03.06.2012]
13. [13] http:// www.ijcit.org/ijcit_papers/vol2no1/IJCIT-110737.pdf [accessed on 15.05.2012]
14. [14] http://www.ebl.com.bd/home/Internet_Banking [accessed on 15.06.2012]
15. [15] http://www.hsbc.com.bd/1/2/retail-banking/services/internet-banking/pay-bills
16. [accessed on 15.06.2012]
17. [16]
http://www.dutchbanglabank.com/electronic_banking/internet_banking.html
[accessed
on
15.06.2012]
REFFRENCE BOOKS
1. Kenneth C. Laudon and Carol G. Traver, E-commerce: Business, Technology,
th
Society,