c


 

 

 



   

 !!

The techno-revolution governs the changes in economy. With high rate of change of
technology, existing management practices and policies, marketing strategies need to be changed.
IT is playing dominant role in today¶s business, in order to meet those opportunities, there is need
of ensure, stable and conducive economy.

Keeping this challenge in mind it is an attempt to rediscover the power of upcoming

technologies of digital revolution in the field of banking sector ± the challenges and their impact
on future economy.

Simultaneously, Customers Relations Management (CRM) helps in maintaining

customer database and providing better services. The present level of MIS covers,

basically, information needed for control, performance monitoring, decision making etc. and
encompasses activities in administrative offices like processing of statutory returns,
monthly/quarterly performance reports from branches, credit information personnel inventory,
profit and loss accounts, funds management, and branch maintenance etc. The purpose of research
is to elucidate the familiarity of the Internet by Bank customers (E-Governance).

To understand the use of CRM in the banks. To know about the various aspects of analytic
CRM and shows how can be best use to manage the customer life cycle more cost effectively.

"#$
%

CRM (customer relationship management), ERP (enterprise resource planning),

E(electronic), ATM (automated teller machine), M (money)


ð !&'(!ð& %

Humans are very good at transforming ages. From the beginning of the Stone age, development
through Pre-Medieval period«medieval period to the industrial age, then to the Aviation age, the
Atomic age, the Space age... all of these so-called 'ages' are history.

After 40 years of computing power, it's very clear that computer¶s have become history. Today
we live in the 'Information age'. The information age has accomplished great work during its span
on historical stage: dissolving jobs, transforming industries, crazily building and destroying great
fortunes.

This information age has given us a plethora of new technologies to work with. The
technologies like bio-informatics, wireless networks expert systems, human machine interaction,
robotic vision among others, though not fully evolved have the potential to drive the future. To
keep away from being the victim of obsolescence and to keep an eye on the future, it¶s necessary
to be aware of these technologies and exploit them to their excellence.

The techno-revolution governs the changes in economy. With high rate of change of technology,
existing management practices and policies, marketing strategies need to be changed. Existing
businesses have to be prepared for future shock. Awareness of the cutting edge of knowledge in
each field is of supreme importance. The global geographical boundaries have disappeared for
business, with the use of cyber space. We have to learn faster how the integration of IT can be
quickly understood and brought into each aspect of business. What we can see clearly is
expanding opportunities. To meet these opportunities, we will have to ensure a stable and
conducive economy.

Keeping this challenge in mind it was an attempt to rediscover the power of upcoming
technologies of digital revolution in the field of banking sector ± the challenges and their impact
on future economy.

")& *!ð
    (ð' %

a). To elucidate the familiarity of the Internet by Bank customers

(E-Governance).

b). To understand the use of CRM in the banks.

c). To understand the various aspects of analytic CRM and shows how can be best use to manage
the customer life cycle more cost effectively


!

 '
 

Information technology and the communication networking systems have a crucial bearing on
the efficiency of money, capital and foreign exchange markets and have manifold implications for
the conduct of monetary policy. In India, banks as well as other financial entities have entered the
world of information technology and computer networking with INFINET.

The Indian Financial Network (INFINET), a wide area satellite based network using VSAT
technology, was jointly set up by the Reserve Bank and Institute for Development and Research in
Banking Technology (IDRBT) at Hyderabad to facilitate connectivity within the financial sector.
The network was inaugurated in June 1999.

It was established to serve as the communication backbone of the proposed Integrated

Payment and Settlement System (IPSS). The Reserve Bank constituted National Payments
Council in 1999-2000 to focus on the policy parameters for developing an IPSS with a real time
gross settlement (RTGS) system as the core. INFINET initially comprised only the public sector
banks was opened up for participation by other categories of members. 26 public sector banks
achieved the level of 70 per cent of business captured through computerisation by June 2001.

The Information Technology Act, 2000 has given legal recognition to creation,trans-mission
and retention of an electronic (or magnetic) data to be treated as valid proof in a court of law,
except in those areas, which continue to be governed by the provisions of the Negotiable
Instruments Act, 1881.

+ 


  
%

Based on the norms worked out by Rangarajan Committee (II), 7827 branches of the Public
Sector banks were identified for full branch computerisation up to March 2000. It was found with
immense need of existing ± computerized branches to be inter ± connected in order to provide
better services to customers. Some of the Banks have started inter-connecting their computerized
branches using leased telephone lines or Very Small Aperture Terminals (VSATS), creating
better±centralised control and more comprehensive service to customers. As of now, New Private
Sector and Foreign Banks have an edge over Public Sector Banks as far as implementation of
technological solutions is concerned. However, the latter are in the process of making huge
investments in technology.

Services and products like "Anywhere Banking" "Tele-Banking" "Internet banking" "Web
Banking´, e-banking, e-commerce, e-business etc. have become the buzzwords of the day and the
Banks are trying to cope with the competition by offering innovative and attractively packaged
technology-based services to their customers.
 Simultaneously, CRM helps in maintaining customer database and providing better services.
The present level of MIS covers, basically, information needed for control, performance
monitoring, decision making etc. and encompasses most activities in administrative offices like
processing of statutory returns under Reserve Bank of India Act, monthly/quarterly performance
reports from branches, credit information personnel inventory, provident fund accounting, profit
and loss accounts, cash and investment management, stationery stock accounting, and branch
house keeping etc.

Ã! ! !!( 

Total no. of branches in India 45,837

No. of branches partially computerized 13,802

No. of fully computerised branches 5,514

No. of PCs/Nodes at banks 95,090

Total ATMs installed at corporate customer sites installed 1,202

Credit cards issued 10,14,400

Debit cards issued 90,050

Branches covered under RBI's EFT scheme 3,944

Branches connected to SWIFT 680


V ?  !+ð  &(+Ã ð ,+-%

With the allure of the ERP a new mantra has taken in corporate world that is Customer
Relationship Management (CRM) even banks are not left affected by it as are one of the core
service sector industry engaged in the development of the nation. Until recently, most CRM
software focused on simplifying the organization and management of customer information. Such
software, called operational CRM, focuses on creating a customer database that presents a
consistent picture of the customer¶s relationship with the company and providing that information
in specific applications.

Data mining can help to select the right prospects on whom to focus, offer the right additional
products to your existing customers and identify good customers who may be about to leave. This
results in improved revenue because of a greatly improved ability to respond to each individual
contact in the best way and reduced costs due to properly allocated resources. CRM applications
that use data mining are called analytic CRM.

This paper describes the various aspects of analytic CRM and E-Banking that shows how it is
used to manage the customer life cycle more cost effectively.

The ERP applications helped to optimize and restructure their internal business support
system. SCM is a component of ERP you¶ve built your customer information and marketing data
warehouse. CRM helps companies improve the profitability of their interactions with customers,
while at the same time; makes the interactions appear friendlier through individualization. To
succeed with, banking companies need to match services and campaigns to prospects and
customers - in other words, to intelligently manage the customer life cycle.

Instead of looking at the internal processes the orientation come to look outside the business and
even more towards customers. Until recently, most CRM software focused on simplifying the
organization and management of customer information. Such software, called operational CRM,
focuses on creating a customer database that presents a consistent picture of the customer¶s
relationship with the company and providing that information in specific applications. These
include sales force automation and customer service applications, in which the company
³touches´ the customer. However, the sheer volume of customer information and increasingly
complex interactions with customers has propelled data mining to the forefront of making
customer relationships profitable.

³Data mining is a process that uses a variety of data analysis and modeling techniques to
discover patterns and relationships in data that are used to understand what your customers want
and predict what they will do.´

As a common trend customers used to call a clerk as a µSir¶ requesting for prompt service but
now he calls us as a µSir¶ by the bankers considered really as µCustomer is a king¶. Earlier a
customer who is the guest of the bank had to stand in front of the clerk for his account operations
but now the trend had changed the host and the guest are sitting opposite to the table and the guest
is welcomed by a pleasing smile.
 




It is a bundle of sales, Marketing and Customer support applications. Integration

of the applications through the web makes the CRM applications really attractive.

Transactions are tracked through CRM and integrated with ERP and Data mining

is used for the analysis of data.

.& !&..ð

The Channels of communication indicates the various possibilities of the customers contracting
an organization for information and help vide through telecom, Internet or meeting through a
person.

The sales applications may typically contain functionally relating to sales force management,
scheduling, account management, reporting. It the facilities are web enabled, facilities customers
to log and access the site directly and gather information browsing through theinformation
provided in the web as in private sector banks like ICICI Bank Ltd. UTI Bank Ltd. HDFC Bank
Ltd.

The marketing applications may contain information related to its activities of the organization
like service details, pricing, distribution management etc. It should be closely related to sales
applications and managed by sales force.

The support applications contain information about service contracts, after sales services. This
activity is to be considered more crucial as the success of the organization largely depend upon
managing customer dissatisfaction. It is said a satisfied customer brings 5 more, but a dissatisfied
customer takes away 10 potential customers.The ERP system plays the role of fulfillment of the
orders, which flow from CRM applications to them. The circuit is completed thus providing
effective solution for addressing business issues comprehensive way.

 &.!$ &Ã(!ð& .&

Siebel systems had developed software for addressing CRM, Oracle/, the world¶s second largest
software company, had developed a CRM solution using Internet technologies and only provider
of ERP solutions to integrate them.
INTERNET BANKING:

Internet banking is a cost-effective delivery channel for financial institutions. Consumers are
embracing the many benefits of Internet banking. Access to one's accounts at anytime and from
any location via the World Wide Web is a most convenience effort.

ð ! !  "ð &..  ( .(Ã &Ã(!ð& 

ҏ24 hours Account access.

ҏExceptional rates on Savings, CDs, and IRAs

ҏ hecking with no monthly fee, free bill payment and rebates on Automated Teller Machine
C
(ATM) surcharges

ҏCredit cards with low rates

ҏDealing with Bills & discounting.

ҏEasy online applications for all accounts, including personal loans and mortgages

ҏQuality customer service with personal attention

ҏNow balance enquiry is also available on Mobile Phone by SMS.

The benefits of Internet banking can be dealt as :-

_ Improves customer access.

_ Facilitate the offering of more services.

_ Increase customer loyalty towards the bank.

_ Attract new customers

_ Provide services offered by competitors

_ Reduce customer attrition

_ M-banking eliminates visits at ATM¶s except for withdrawal and

deposits.

_ SMS is the best option can wake anywhere in the world.

_ Cost of transactions reduces drastically leads to the better profitability.

_ Can promote saving habits even among in children¶s.

±
   #

0

Penalty due to non-payment of bill is not new to anyone of us. And quite obviously, who likes
the long procedure of writing a cheque, standing in a long queue and then ensuring that the
particular amount is available in your bank account? Similarly, Mr Sharma, who is on business
tour for at least 25 days a month, finds it difficult to clear his dues on time because of his busy
schedule.

He, like many of us, was possibly not aware of the online services, banks are offering these
days. With just a click, all his dues would have been cleared long back. However, it's never too
late to mend.

Indian banks are trying to make your life easier. Not just bill payment, you can make
investments, shop or buy tickets and plan a holiday at your fingertips. In fact, sources from ICICI
Bank [ Get Quote ] tell us, "Our Internet banking base has been growing at an exponential pace
over the last few years. Currently around 78 per cent of the bank's customer base is registered for
Internet banking."

To get started, all you need is a computer with a modem or other dial-up device, a checking
account with a bank that offers online service and the patience to complete about a one-page
application--which can usually be done online. You can avail the following services.

 # 

Each bank has tie-ups with various utility companies, service providers and insurance
companies, across the country. You can facilitate payment of electricity and telephone bills,
mobile phone, credit card and insurance premium bills.

To pay your bills, all you need to do is complete a simple one-time registration for each biller.
You can also set up standing instructions online to pay your recurring bills, automatically. One-
time standing instruction will ensure that you don't miss out on your bill payments due to lack of
time. Most interestingly, the bank does not charge customers for online bill payment.

.
 

You can transfer any amount from one account to another of the same or any another bank.
Customers can send money anywhere in India [ Images ]. Once you login to your account, you
need to mention the payees's account number, his bank and the branch. The transfer will take
place in a day or so, whereas in a traditional method, it takes about three working days. ICICI
Bank says that online bill payment service and fund transfer facility have been their most popular
online services.
  

 

Credit card users have a lot in store. With Internet banking, customers can not only pay their
credit card bills online but also get a loan on their cards. Not just this, they can also apply for an
additional card, request a credit line increase and God forbid if you lose your credit card, you can
report lost card online.

  # 

This is something that would interest all the?
?  . Indian Railways has tied up with ICICI
bank and you can now make your railway pass for local trains online. The pass will be delivered
to you at your doorstep. But the facility is limited to Mumbai [ Images ], Thane, Nashik, Surat [
Images ] and Pune. The bank would just charge Rs 10 + 12.24 per cent of service tax.

ð

ð  

Opening a fixed deposit account cannot get easier than this. You can now open an FD online
through funds transfer. Online banking can also be a great friend for lazy investors.

Now investors with interlinked demat account and bank account can easily trade in the stock
market and the amount will be automatically debited from their respective bank accounts and the
shares will be credited in their demat account.

Moreover, some banks even give you the facility to purchase mutual funds directly from the
online banking system.

So you need not worry about filling those big forms for mutual funds, they will now be just a
few clicks away. Nowadays, most leading banks offer both online banking and demat account.
However if you have your demat account with independent share brokers, then you need to sign a
special form, which will link your two accounts.

 #

  


Now you no longer need to rush to the vendor to recharge your prepaid phone, every time your
talk time runs out. Just top-up your prepaid mobile cards by logging in to Internet banking. By
just selecting your operator's name, entering your mobile number and the amount for recharge,
your phone is again back in action within few minutes.


 #

 

Leading banks have tie ups with various shopping websites. With a range of all kind of
products, you can shop online and the payment is also made conveniently through your account.
You can also buy railway and air tickets through Internet banking.


ð   
 
 


Inspite of so many facilities that Internet banking offers us, we still seem to trust our traditional
method of banking and is reluctant to use online banking. But here are few cases where Internet
banking will turn out to be a better option in terms of saving your money.

'Stop payment' done through Internet banking will not cost any extra fees but when done
through the branch, the bank may charge you Rs 50 per cheque plus the service tax.

Through Internet banking, you can check your transactions at any time of the day, and as many
times as you want to.

On the other hand, in a traditional method, you get quarterly statements from the bank and if
you request for a statement at your required time, it may turn out to be an expensive affair. The
branch may charge you Rs 25 per page, which includes only 30 transactions. Moreover, the bank
branch would take eight days to deliver it at your doorstep.

If the fund transfer has to be made outstation, where the bank does not have a branch, the bank
would demand outstation charges. Whereas with the help of online banking, it will be absolutely
free for you.

As per the Internet and Mobile Association of India's report on online banking 2006, "There are
many advantages of online banking. It is convenient, it isn't bound by operational timings, there
are no geographical barriers and the services can be offered at a miniscule cost."


#+ 



Customers should never share personal information like PIN numbers, passwords etc with
anyone, including employees of the bank. It is important that documents that contain confidential
information are safeguarded. PIN or password mailers should not be stored, the PIN and/or
passwords should be changed immediately and memorised before destroying the mailers.

Customers are advised not to provide sensitive account-related information over unsecured e-
mails or over the phone. Take simple precautions like changing the ATM PIN and online login
and transaction passwords on a regular basis. Also ensure that the logged in session is properly
signed out

 ð   &




E-banking is a generic term for delivery of banking services and products through electronic
channels, such as the telephone, the internet, the cell phone, etc. The concept and scope of E-
banking is still evolving. It facilitates an effective payment and accounting system thereby
enhancing the speed of delivery of banking services considerably. While E-banking has improved
efficiency and convenience, it has also posed several challenges to the regulators and supervisors.
 Several initiatives taken by the government of India, as well as the Reserve Bank of India
(RBI), have facilitated the development of E-banking in India. The government of India enacted
the IT Act, 2000, which provides legal recognition to electronic transactions and other means of
electronic commerce. The RBI has been preparing to upgrade itself as a regulator and supervisor
of the technologically dominated financial system. It issued guidelines on risks and control in
computer and telecommunication system to all banks, advising them to evaluate the risks inherent
in the systems and put in place adequate control mechanisms to address these risks. The existing
regulatory framework over banks has also been extended to E-banking. It covers various issues
that fall within the framework of technology, security standards, and legal and regulatory issues.

$±)ð   "ð 0000

 Consumers largely select their banks based on how convenient is the location of bank to their
homes or offices.

The pressures of competitive and dynamic markets have contributed to the growth of CRM in
the Financial Services Sector. Consumers largely select their banks based on how convenient is
the location of bank to their homes or offices.

The pressures of competitive and dynamic markets have contributed to the growth of CRM in
the Financial Services Sector.

3 (#
 

Customer Relationship Management (CRM) primarily caters to all interactions with the
customers or potential customers, across multiple touch points including the Internet, bank
branch, call center, field organization and other distribution channels.

Customer Relationship Management (CRM) can help banks in following ways:

?      ± Banks need to identify customers, tailor products and services to
meet their needs and sell these products to them. CRM achieves this through Campaign
Management by analyzing data from banks internal applications or by importing data from
external applications to evaluate customer profitability and designing comprehensive customer
profiles in terms of individual lifestyle preferences, income levels and other related criteria. Based
on these profiles, banks can identify the most lucrative customers and customer segments, and
execute targeted, personalized multi-channel marketing campaigns to reach these customers and
maximize the lifetime value of those relationships.

? 

  ð
 
 

 
 ± Instead of customer information being stored in
product centric silos, (for e.g. separate databases of savings account & credit card customers),
with CRM the information is stored in a customer centric manner covering all the products of the
bank. CRM integrates various channels to deliver a host of services to customers, while aiding the
functioning of the bank.
?   #
 ± Central repository for products, pricing and competitive
information, as well as internal training material, sales presentations, proposal templates and
marketing collateral.

? î
  

 
 # ± This means whoever the bank speaks to, irrespective of
whether the communication is from sales, finance or support, the bank is aware of the interaction.
Removal of inconsistencies of data makes the client interaction processes smooth and efficient,
thus leading to enhanced customer satisfaction.

? + 
 1  
   ± CRM can provide a single view where Sales Mangers and
agents can get all the most up-to-date information in one place, including opportunity, account,
news, and expense report information. This would make sales decision fast and consistent.

? Ã   &

#    ± These enable organizations to effectively manage
leads and opportunities and track the leads through deal closure, the required follow-up and
interaction with the prospects.

? #    ± It helps managers to assign and track the activities of various
members. Thus improved transparency leads to improved efficiency.

? 
   ± It enables customer service agent to provide uniform service across
multiple channels such as phone, Internet, email, Fax.

? & 
  ð# 
  ± CRM can help in Strategy Formulation to eliminate
current operational inefficiencies. An effective CRM solution supports all channels of customer
interaction including telephone, fax, e-mail, the online portals, wireless devices, ATMs, and face-
to-face contacts with bank personnel. It also links these customer touch points to an operations
center and connects the operations center with the relevant internal and external business partners.

?  

# ± CRM can help in enhanced productivity of customers, partners and
employees.

?  
 ð - Banks need to analyze the performance of customer

relationships, uncover trends in customer behavior, and understand the true business value of their
customers. CRM with business intelligence allows banks to assess customer segments, which help
them calculate the net present value (NPV) of a customer segment over a given period to derive
customer lifetime value. Customers can be evaluated within a scoring framework. Combining the
behavior key figure and frequency to monetary acquisition analysis with a marketing revenue
quota can optimize acquisition costs and cut the number of inefficient activities. With such
knowledge, banks can efficiently allocate resources to the most profitable customers and
reengineer the unprofitable ones. Data warehousing solutions have been implemented in Citibank,
Reserve Bank of India, State Bank of India, IDBI, ICICI, MaxTouch, ACC, National Stock
Exchange and PepsiCo. And Business Intelligence players hope many more will follow suit.


+  .


 

Bank merely an organization it accepts deposits and lends money to the needy persons, but
banking is the process associated with the activities of banks. It includes issuance of cheque and
cards, monthly statements, timely announcement of new services, helping the customers to avail
online and mobile banking etc. Huge growth of customer relationship management is predicted in
the banking sector over the next few years. Banks are aiming to increase customer profitability
with any customer retention. This paper deals with the role of CRM in banking sector and the
need for it is to increase customer value by using some analytical methods in CRM applications. It
is a sound business strategy to identify the bank¶s most profitable customers and prospects, and
devotes time and attention to expanding account relationships with those customers through
individualized marketing, pricing, discretionary decision making.

In banking sector, relationship management could be defined as having and acting upon deeper
knowledge about the customer, ensure that the customer such as how to fund the customer, get to
know the customer, keep in tough with the customer, ensure that the customer gets what he wishes
from service provider and understand when they are not satisfied and might leave the service
provider and act accordingly.

CRM in banking industry entirely different from other sectors, because banking industry purely
related to financial services, which needs to create the trust among the people. Establishing
customer care support during on and off official hours, making timely information about interest
payments, maturity of time deposit, issuing credit and debit cum ATM card, creating awareness
regarding online and e-banking, adopting mobile request etc are required to keep regular
relationship with customers.

The present day CRM includes developing customer base. The bank has to pay adequate
attention to increase customer base by all means, it is possible if the performance is at satisfactory
level, the existing clients can recommend others to have banking connection with the bank he is
operating. Hence asking reference from the existing customers can develop their client base. If
the base increased, the profitability is also increase. Hence the bank has to implement lot of
innovative CRM to capture and retain the customers.

There is a shift from bank centric activities to customer centric activities are opted. The private
sector banks in India deployed much innovative strategies to attract new customers and to retain
existing customers. CRM in banking sector is still in evolutionary stage, it is the time for taking
ideas from customers to enrich its service. The use of CRM in banking has gained importance
with the aggressive strategies for customer acquisition and retention being employed by the bank
in today¶s competitive milieu. This has resulted in the adoption of various CRM initiatives by
these banks.


 ð


   
     # 

The capability to integrate two or more delivery channels through shared technology has only
recently been deployed in any significant way. Today, a handful of retail banks can boast of
globally integrated delivery channels that are built on standard technology principles. These
channels can, for example, deliver consistent balances regardless of the customer's location
because of the consistent architecture. No institution, however, can claim to have all channels
working on a common platform or claim even to share information or process across all channels.

IT managers within the bank, as well as business managers that rely on the delivery channels to
service their products, know deep down that integrating the channels is the right thing to do
because some benefits of channel integration are intuitive if not scientifically provable. The
example of inconsistent account balance information is one that integrated delivery channels can
solve and that most bankers agree is a source of frustration for the customer. Quantifying the
effects of fixing this problem proves to be tricky, however.

   

 
  

Still, many banks have implemented, or are in the process of designing, integrated delivery
channel architectures based on these soft benefits as well as on the goal of maintaining and
deepening the customer relationship in the face of competitive pressures. The implementation of
integrated delivery channels has to date focused on the service side of the relationship equation.

On the sales side, marketing and product line managers have benefited greatly from a relatively
plentiful source of analytics systems in the market. Bankers are getting better at knowing how to
calculate customer profitability, predict propensity to buy, and even recognize attrition behaviors
thanks to the segmentation and focus of solution providers in the analytics markets.

Customer knowledge databases and analytics engines have made the selling process more
predictable then ever before. But the actual use of the information from these systems has been
limited to mail campaigns and outbound telemarketing, both of which traditionally have had low
response rates. Although, these rates have improved somewhat with the improved customer
knowledge in hand.

Thus, for banks, neither the chicken nor the egg came first. Both arrived at the same time. The
opportunities to combine these powerful capabilities are built-in to the very systems that enable
them individually. But the marriage of integrated delivery channels and customer knowledge is
not a trivial arrangement. For once, perhaps, technology is not the problem.

?



 

#

 

The issues surrounding the collaboration of knowledge and delivery have to do with the
management of the data and processes involved as well as some very emotional aspects of the
customer's relationship with the bank and the extent to which individual customers perceive the
bank as a threat to their privacy. To build on the full strength of this collaboration, banks need to
completely understand the issues surrounding the use of knowledge, and then tread lightly.

Data acquisition through customer interaction is determined by the delivery channels,

themselves, or through some integrated channel management architecture. Institutions are already
collecting most of the available information today such as customer identity, accounts, channels,
transactions performed, time of day, and all the pieces of information that have some value to the
institution. Such basic information is included in the transactions that are sent to the core banking
system or to some external system such as a credit processor. For now, there seems to be no need
to collect additional information that is not currently acquired. What is required is the use of the
data in managing the relationship with the customer in a more fulfilling way.

The shift to the existing use of data comes in the form of the centralized acquisition (or
processing) of this information „ ? „
?  ? 
 „ ? . Along with the use of
transactional information by the systems that perform the basic units of work, specialized
applications collect and analyze information about the customer interaction, itself, to give insight
into customer behavior. Banks can also collect and store information about nontrivial transactions
to provide continuity among customer contacts. So if a customer has an unresolved problem, that
information is available at all appropriate channels (see Exhibit).

While many institutions are currently performing such analysis within a given channel (online
banking navigation behavior, for example), the next step includes analysis of the customer's
behavior across all delivery channels in the network. This enables gauging behavior in a broader
context, analysis of all external providers of service, and analysis of how the customer uses these
products.

The following list presents a few examples of this information management strategy:

‡ Using    # to model and predict demand at the delivery channels after
marketing campaigns or to gauge the impact of channel downtime on service or revenue,
tying downtime to a quantified loss.
‡ Using 

    to understand the individual customer's favorite channels for
specific transactions.
‡ Keeping certain   

 to maintain continuity of service. This is done
by having recent problem reports or unresolved account applications available at all
delivery channels to present the agent with what may be peripheral yet important
information about the current state of the customer relationship. This information can
also be made available to the automated channels to keep the customer aware of the
status of problems or account applications.
By itself, this management of information from the delivery channels offers many benefits to
the institution and the customer. But the real value in the effective use of customer information at
the point of interaction comes from the customer knowledge systems that are becoming pervasive
in most retail banks.

+
 


 
#




The pace of implementation of integrated delivery channel architectures will quicken and
eventually prevail at top banks. The deployment of powerful customer knowledge systems will
also increase as more and more useful information can be distilled from the myriad of resources in
the bank IT network.

As these two infrastructures evolve, the integration between them will also increase. Already,
many institutions use information gleaned from customer knowledge systems to suggest new
products to customers at the branch teller. Nonetheless, TowerGroup believes that much of the use
of information between the knowledge systems and the delivery channels has yet to be fully
realized. With most of the technology in place, banks must begin to form strategies around the use
of information in the day-to-day contact with its customers.

As the capability to build on this flow of information grows, it has the potential to outpace the
customer's acceptance of the bank's knowledge. Privacy is an emotional issue and, so, not entirely
rational. Technology and policy can only go so far in ensuring that the use of information at the
point of contact is not intrusive to the customer's comfortable level of privacy. Relationship
training is more important than before as banks begin to learn more about their customers and use
that information to bring financial value to them.

Ultimately, the management of customer information at the point of interaction is about service,
about keeping the customer happy, and, simply put, about keeping the customer. It's about
strengthening the relationship and showing the customer that the bank's knowledge can lead to
real benefit. It's about increasing the bank's benefit as well, and doing it in a way that does not
sacrifice the customer's long-term well-being. Finally, it's about trust as a result of knowing the
customer and not as an excuse for misusing information.
.! &.  "ð %
E-banking means the conduct of banking electronically. It calls for eliminating of paper based
transactions and radical change in the banking operations. E-Banking will operate through
internet, extranet and intranet. E-Banking is therefore a banking on the information
superhighways on the frontier of the internet. Parameters involved with e-banking are: customer
acceptance and satisfaction, service rendered, value added for both the organization and
consumer, privacy issues, profitability, operational risk, and competition from non-banking
institutions. Implementation of the online strategy is a given for large banking institutions, but still
being considered by smaller community banks.

E-Banking must have at least the following dimensions:-

1) Customer to Bank E-Banking.
2) Bank to Bank E-Banking
3) Electronic Central Banking
4) Intranet Procurement.

,V-( !&!&  "ð  E-banking is basically Internet based. Banking products

and services such as deposits, remittances, credit cards etc. as well as all important banking
information can be made available with easy access to customers on Internet. Customers can
make use of these services with no restricted office hours, no queues, no tellers and waiting.
Several network innovations of E-banking can be visualized such as smart cards, Electronic data
Interchange etc. of course, the banking operations have to be guarded against unauthorized access
by intruders.
,2-  "!&  "  "ð . This form of electronic banking is for transacting inter-
bank transactions such as money at call etc. This type of E-Banking is driving extranets, which is
restricted to banks only. Hence it is well secured and unauthorized access is less.

,î-Ã!& ð !Ã  "ð . Under this E-central banking all the banks within
the purview of a central bank are interconnected on extranet to facilities clearing of cheques,
management of cash reserves, open market operations, discounting of bill etc. in fact, the central
bank has to be connected with the government treasury on extranet to carry out its function as an
agent of the government. Again, the central bank of all countries can be inter-linked with the
I.M.F World Bank and other international financial institutions through extranets.

,3-ð ! !+&( !. For the transactions that are internal to a bank, between the
bank and its branches and subsidiaries, Intranet procurements of banking are required. On the
other hand, Extranet permits a bank to have full control over the users of intranet and information
to be transmitted. The Extranet-Intranet-Internet relationship that exists in the process of E-
Banking. Extensive work is required to integrate internal and external communications of banking
related information through banking internet and intranet for the development of the financial
sector.
&'Ã &.  "ð 

To implement effectively E-banking and augment the level of technology the following models
have been suggested:-

1) Complete Centralised Solution (CCS).

2) Cluster Approach.
3) High Tech Bank within Bank.

,V-&+Ã! !Ãð ' &Ã(!ð& , - 

This is an ideal branch network model on which E-banking activities can be implemented
uniformly and effectively. Under this model, the bank has to provide web-server and the requisite
software which is connected to the main server. Once the required hardware and software are set
in, the customers can access the web-server for their basic banking operations using any standard
browser at any location.

.!( :

The following are the features of complete centralized solution:-

‡ The entire system software, data for the entire bank etc are stored in a centralised server with its
hot standby server being replaced at different location and connected through high speed and
efficient network.
‡ Branches are provided online nodes to receive requests from customers and provide them
services across the counter.
‡ The nodes provided at remote branches are connected through effective satellite links with
enough redundancy to provide reliability as well as adequate bandwith.
‡ The skilled manpower is required only at the centralized location.

,2-Ã( !++&± 

Under this model, computerized branches of each city are connected with Regional Processor
located at each such city which are then connected through reliable media to a centralized High
end server. Under this approach, it is necessary that an integrated computerization is available at
all branches so that connectivity amongst various branches can be established through Regional
clusters.
.!( %

The following are the important features of the cluster approach.

‡ The entire branch network of the bank should be computerized through integrated software.
‡ All these branches should be interconnected with Regional servers through reliable network
media.

,î-±ð±!±  "$ð!±  "%

Under this model, complete computerization of all branches is avoided. Within each bank, two
different types of banks would function concurrently. High Tech banking providing E-Banking
facilities through selected branches and traditional bank offering traditional services through other
branches. This approach enables the banks to play a balanced role to offer state of the art service
to ever demanding customers of major cities and simultaneously continue to offer traditional
personalized services to the mass customers who still dominate the banking scene.

.!( %

The following are the features of High Tech Bank within bank:-
‡ Out of the entire branch network of the bank, only certain branches are selected to offer E-
banking depending upon the customers needs, business potential, infrastructure facilities available
etc.
‡ The accounts of all the customers in those branches should be automated under a centralized
system offering various electronic channels including Internet Banking.
‡ The High network customers may be encouraged to use E-Banking services through these
selected branches.
‡ It would not impose any technological burden on the customers who do not want to enjoy E-
banking services.
‡ The banks could get a gestation period to cover more branches under the umbrella of High-Tech
bank in a phased manner.
& !ð ! ð   "ð 
With the obvious benefits emerging out of E-banking mentioned above the following factors contribute
as major impediments in the smooth implementation of E-banking:
V  !!(+& !
Many banks have expressed their concern about the huge initial start-up cost for venturing into E-
banking.
The start up cost includes-
a. The connection cost to the Internet or any other mode of electronic communication. The network
should be robust, secured, efficient and scalable with inbuilt redundancy.
b. The cost of sophisticated hardware, software and other related components including Modem, Routers,
Bridges, and Network Management System etc.
c. The cost of maintenance of all equipment, websites, skill level of employees etc.
d. The cost of setting up organizational activities to implement E-Banking.
For a successful E-Banking, bankers need to develop a coherent perspective of the role of network
technologies and advancement of their EFT departments with a competitive introspection of their banking
business.

2 !ð ð  'ð !  

The introduction of E-Banking involves 24 hours support environment, quality service to end users and
other partners, which would necessitate a well, qualified robust group of skilled people to meet external
and internal commitments. Hence the bank has to spend a lot on training. What is more important is their
retention in their organization after necessary training. Moreover, the bank has to outsource certain
functions and services to maintain the level of standards and state of readiness. The training and retaining
of skilled manpower is a major cause of concern.


î Ã"&. "ðÃÃ'+ & Ã

It is a well-known fact that there is an acute scarcity of web developers, content providers and
knowledgeable professionals to route banking transactions through Internet. In a fast changing
technological scenario, the obsolescence of technology is fast and hence there is always shortage of
skilled personnel.



3  (ð!)
In paperless banking transaction, many problems of security are involved. A security threat is defined
as a circumstance decision or event with potential to cause economic hardship to data or network
resources in the form of destruction, disclosure, modification of data, denial of services, fraud, waste and
abuse. There are chances that documents such as cheques, passbook etc. can be modified without leaving
any visible trace. Distortion of information is also possible. Providing appropriate security may require
major initial investments in the form of application encryption techniques, implementation of firewalls
etc. Inspite of implementation of several securities measures, the possibility of a security breach cannot be
ruled out.


4 ÃÃð (
Legal framework for recognizing the validity of banking transactions conducted through the NET is
still being put in place. Though initial legal framework has been devised for E-banking activities, it is
uncertain as to what possible legal issues may pop up in future as banking on internet progresses. What
may happen if a customer sensitive data falls into the hands of a stranger or if his account shows a Nil
balance all in a sudden without his knowledge? The legal issues should cover unauthorized access and
authorized modification of data, wrongful communication, and punishment to be meted out to combat
computer crimes. To prevent computer crimes, the country¶s banking legislation needs to make suitable
provisions with a thorough consultation and discussion among the legal as well as technical experts.


 !ð!'Ãð !à '!± ðÃ+& Ã

The user of E-Banking needs a computer and time to log on to the site. It means that the target clientele
is restricted to those who have a home PC or can access the µNET¶ through the office or cyber cafés.
Moreover, phone connections are not always perfect and, on a home PC, the modem connection often
breaks off, requiring another seditious log-on. Navigating around websites on home computers is often
slow and frustrating. Moreover, local calls are not free generally and so the customer has to pay every
time he checks his balance.



  !ð!' ( ð  
Not all transactions can be carried out electronically. Many deposits and some withdrawals require the
use of postal services. Some banks have automated their front-end process for the customers, but still
largely depend upon manual processes at the back-end. For example, the INTERNET customers receive
their statements online, but paper statements are also sent by mail. Mail and distribution costs are still
necessary as the statements, cheques etc. are still mailed.


5 ' !(!ð& &.+ðð ± ð 

The Internet may also destroy the basic business pricing models. The Internet creates perfect market
conditions where prospective consumers have access to more information and can more readily compare
rates and financial products offerings. Now players in the field have lower costs than old banks. Hence,
they can under cut the prices and provide stiff competition to established banks.
Moreover, banks marketing programme and products are generally based on product or physical location.
The web allows customers to easily compare all the products and their prices and sign-up for the products
irrespective of location 


 Ã!& ð'Ãð
)± Ã 


(!&!'!Ãñð 

6ð !&'(!ð& 
An automated teller machine or automatic teller machine (ATM) is an computerized
telecommunications device that allows a financial institution's customers a secure method of
performing financial transactions in a public space without the need for a human bank teller or a
clerk.
ATM is a cash rending teller machine. It is a user-friendly, computer driven system, which
operates 24 hours a day, 7 days a week. A totally menu driven system, it displays easy-to-follow,
step-by-step instructions for the customer.
Using an ATM, customers can access their bank accounts in order to make cash withdrawals (or
credit card cash advances) and check their account balances. Many ATMs also allow people to
deposit cash or cheques, transfer money between their bank accounts, pay bills, or purchase goods
and services.

‡ ( 
On most modern ATMs, the customer identifies him or herself by inserting a plastic card with a
magnetic stripe or a plastic smartcard with a chip, that contains his or her account number. The
customer then verifies their identity by entering a passcode, often referred to as a PIN (Personal
Identification Number) of four or more digits. Upon successful entry of the PIN, the customer
may perform a transaction. After the transaction is complete, a transaction record is printed,
usually constisting of the action taken, date and time, location, any applicable fees, and available
balance.
If the number is entered incorrectly several times in a row (usually three attempts per card
insertion), some ATMs will attempt retain the card as a security precaution to prevent an
unauthorised user from discovering the PIN by guesswork. Captured cards are often destroyed if
the ATM owner is not the card issuing bank, as non-customer's identities cannot be reliably
confirmed.
In some cases, a transaction may be performed at the ATM that allows the customer's PIN to be
changed securely.

!###   
There are two main types of ATMs that have developed over time:
Mono-function devices, which only one type of mechanism for financial transactions is present
(such as cash dispensing or statement printing)
Multi-function devices, which incorporate multiple mechanisms to perform multiple services
(such as accepting deposits, dispensing cash, printing statements, etc.) all within a single footprint.
Mono-function and multi-function devices are manufactured both regular "interior grade" and
weather-resistant "exterior, through-the-wall grade" variants.

Some ATMs are also built as fully self-contained exterior units designed to sit alone without the
protection of a building and be completely exposed on all sides to the elements.
Reasons for selecting either mono-function or multi-function and "interior" versus "exterior"
ATMs include device cost, installation location, customer wait times, desired reliability, and
historical preference.
!##  

 

ATMs are placed not only near or inside the premises of banks, but also in locations such as
shopping centres/malls, grocery stores, gas stations and restaurants. These represent two types of
ATM installations, on and off premise. On premise ATMs are typically more advanced, mutli-
function machines that complement an actual bank branch's capabilities and thus more expensive.
Off premise machines are deployed by financial institutions and also ISO's (or Independent Sales
Organizations) where there is usually just a straight need for cash, so they typically are the
cheaper mono-function device.

±  
An ATM typically is made up of the following devices:
1. CPU (to control the user interface and transaction devices)
2. Magnetic and/or Chip card reader (to identify the customer)
3. PIN Pad (similar in layout to a Touch tone or Calculator keypad), often manufactured as part of
a secure enclosure.
4. Secure cryptoprocessor, generally within a secure enclosure.
5. Display (used by the customer for performing the transaction)
6. Function key buttons (usually close to the display) or a Touchscreen (used to select the various
aspects of the transaction)
7. Record Printer (to provide the customer with a record of their transaction)
8. Vault (to store the parts of the machinery requiring restricted access)
9. Housing (for aesthetics and to attach signage to)
Recently, due to heavier computing demands and the falling price of computer-like
architectures, ATMs have moved away from custom hardware architectures using
microcontrollers and/or application-specific integrated circuits to adopting a hardware architecture
that is very similar to a personal computer. Many ATMs are now able to use operating systems
such as Microsoft Windows and Linux.



 
With the migration to commodity PC hardware, standard commercial "off-the-shelf" operating
systems and programming environments can be used inside of ATMs. Typical platforms used in
ATM development include RMX, OS/2, and Microsoft operating systems (such as Windows 98,
Windows NT, Windows 2000, Windows XP, or Windows XP Embedded). Sun Microsystem's
Java may also be used in these environments.
Linux is also finding some receiption in the ATM marketplace
.( !ð& &.!
1. Cash dispensing
2. Generating statement of account
3. Account balance enquiry
4. Request for a cheque book
5. Deposit of cash/ cheques
6. Issue of gift cheques/ travellers cheques
7. Utility payments like telephone bills, electricity bills etc.

'
 ! &.!

1. Round the clock banking for 365 days a year, banking can be done by the customer at any time
on any day of the week.
2. Quick and efficient service
3. Response is uniform and fixed for all the customers as per the programme set, thus leaving no
scope for discourteous or subjective behaviour as may happen with human interaction at bank¶s
counters.

DISADVANTAGES OF ATM
1. Cash withdrawals are restricted to certain amounts as fixed by the bank and notified to atm cash
holders.
2. Cash dispensation is restricted to certain denomination of currency notes usually rs. 50/ 100/
500.
3. ATM can perform only particulars functions. For other functions , the customer has to visit the
branch or direct one¶s enquiries to the concerned call centre.

‡ 
#
Security, as it relates to ATMs, has several dimensions. ATMs also provide a practical
demonstration of a number of security systems and concepts operating together and how various
security concerns are dealt with.
Customer security while using ATMs

Security guards watching over ATMs that have been installed in a van.
In some areas, multiple security cameras and security guards are an ubiquitous ATM feature.
Critics of ATM operators assert that the issue of customer security appears to have been
abandoned by the banking industry; it has been suggested that efforts are now more concentrated
on deterring legislation than on solving the problem of forced withdrawals.
At least as far back as July 30, 1986, critics of the industry have called for the adoption of an
emergency PIN system for ATMs, where the user is able to send a silent alarm in response to a
threat.
  

Although ATMs were originally developed as just cash dispensers, they have evolved to
include many other bank-related functions. In some countries, especially those which benefit from
a fully integrated cross-bank ATM network, ATMs include many functions which are not directly
related to the management of one's own bank account, such as:
1. Deposit currency recognition, acceptance, and recycling
2. Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.)
3. Printing bank statements
4. Updating passbooks
5. Loading monetary value into pre-paid cards (cell phones, tolls, multi purpose stored value
cards, etc.)
6. Ticket purchases (train, concert, etc.).
7. Purchasing postal stamps.
8. Lottery ticket purchases
9. Games and promotional features
10. Donations to charity
11. ATMs can also act as an advertising channel for companies to advertise their own products or
third-party products and services

& ðà  "ð 

The last time that technology had a major impact in helping banks service their customers was
with the introduction of the Internet banking. Internet Banking helped give the customer's anytime
access to their banks. Customer's could check out their account details, get their bank statements,
perform transactions like transferring money to other accounts and pay their bills sitting in the
comfort of their homes and offices.
However the biggest limitation of Internet banking is the requirement of a PC with an Internet
connection, Mobile banking addresses this fundamental limitation of Internet Banking, as it
reduces the customer requirement to just a mobile phone.
Still, the main reason that Mobile Banking scores over Internet Banking is that it enables
µAnywhere Banking'. Customers now don't need access to a computer terminal to access their
banks, they can now do so on the go ± when they are waiting for their bus to work, when they are
traveling or when they are waiting for their orders to come through in a restaurant.
& ðà  "ð  
ð 
Banks offering mobile access are mostly supporting some or all of the following services:
1. Account Balance Enquiry
2. Account Statement Enquiries.
3. Cheques Status Enquiry.
4. Cheques Book Requests.
5. Fund Transfer between Accounts.
6. Credit/Debit Alerts.
7. Minimum Balance Alerts.
8. Bill Payment Alerts.
9. Bill Payment.
One way to classify these services depending on the originator of a service session is the
µPush/Pull' nature. µPush' is when the bank sends out information based upon an agreed set of
rules, for example your banks sends out an alert when your account balance goes below a
threshold level.
 µPull' is when the customer explicitly requests a service or information from the bank, so a
request for your last five transactions statement is a Pull based offering. .
The other way to categorize the mobile banking services, by the nature of the service, gives us
two kind of services ± Transaction based and Enquiry Based. So a request for your bank statement
is an enquiry based service and a request for your fund's transfer to some other account is a
transaction-based service.
!#

 
Technically speaking most of these services can be deployed using more than one channel.
Presently, Mobile Banking is being deployed using mobile applications developed on one of the
following four channels.
1. IVR (Interactive Voice Response)
2. SMS (Short Messaging Service)
3. WAP (Wireless Access Protocol)
4. Banking through a mobile van
5. Atm on ship or airliner

V ð
or Interactive Voice Response service operates through pre-specified numbers that banks
advertise to their customers. Customer's make a call at the IVR number and are usually greeted by
a stored electronic message followed by a menu of different options. Customers can choose
options by pressing the corresponding number in their keypads, and are then read out the
corresponding information, mostly using a text to speech program.
Mobile banking based on IVR has some major limitations that they can be used only for
Enquiry based services. Also, IVR is more expensive as compared to other channels as it involves
making a voice call which is generally more expensive than sending an SMS or making data
transfer (as in WAP or Standalone clients).
One way to enable IVR is by deploying a PBX system that can host IVR dial plans. Banks
looking to go the low cost way should consider evaluating Asterisk, which is an open source
Linux PBX system
2   (short messaging services) uses the popular text-messaging standard to enable mobile
application based banking. The way this works is that the customer requests for information by
sending an SMS containing a service command to a pre-specified number. The bank responds
with a reply SMS containing the specific information.
 For example, customers of the hdfc bank in India can get their account balance details by
sending the keyword µHDFCBAL' and receive their balance information again by SMS. Most of
the services rolled out by major banks using SMS have been limited to the Enquiry based ones.
However there have been few instances where even transaction-based services have been made
available to customer using SMS. For instance, customers of the Bank of Punjab can make fund
transfer by sending the SMS µ TRN (A/c No)(PIN No)(Amount)'.
One of the major reasons that transaction based services have not taken of on SMS is because of
concerns about security and because SMS doesn't enable the banks to deliver a custom user
interface to make it convenient for customers to access more complex services such as
transactions.
The main advantage of deploying mobile applications over SMS is that almost all mobile
phones, including the low end, cheaper one's, which are most popular in countries like India and
China are SMS enabled.
An SMS based service is hosted on a SMS gateway that further connects to the Mobile service
providers SMS Centre. There are a couple of hosted IP based SMS gateways available in the
market
  
 

±

0
The message sent by you travels from your mobile phone to the SMS Center of the Cellular
Service Provider, and from there it travels to the Bank's systems. The information is retrieved and
sent back to your mobile phone via the SMS Center, all in a matter of a few seconds.

  
Some banks also provide the facility of Mobile Banking Alerts where you can get regular updates
of transactions in your account as they happen. These include:
Credits to your account (you choose a threshold credit amount, above which you'd like to be
alerted)
Debits to your account (you choose a threshold debit amount, above which you'd like to be
alerted)
Cheques returned (Get to know every time a cheques deposited in your account is returned)
î $+(wireless access protocol) uses a concept similar to that used in Internet banking. Banks
maintain WAP sites which customer's access using a WAP compatible browser on their mobile
phones. WAP sites offer the familiar form based interface and can also implement security quite
effectively.
 Once you log onto your Bank's WAP site through your WAP/GPRS enabled mobile phone, all
you need to do is enter your Customer ID and Net Banking IPIN. Then go to the Transactions
Menu after selecting your account. Select any one of the Transactions like Balance Inquiry, Mini
Statement, Statement Request( A Statement of Accounts for the selected account for the current
period will be mailed to your address on record with the bank), Cheques Book Request (It will be
mailed to your address on record with the bank), Stop Payment, Cheques Status Inquiry(will tell
you if the cheques has been paid/unpaid/stopped/invalid), Fixed Deposit Inquiry( can get
information on account number, principal amount, rate of interest, maturity date and maturity
amount) etc
A WAP based service requires hosting a WAP gateway. Mobile Application users access the
bank's site through the WAP gateway to carry out transactions, much like Internet users access a
web portal for accessing the banks services

$+ 
 


 

The following figure demonstrates the framework for enabling mobile applications over WAP.
The actually forms that go into a mobile application are stored on a WAP server, and served on
demand. The WAP Gateway forms an access point to the Internet from the mobile network.
3  

 
 with or without computerized banking system
The mobile van moves from place to place on designated routes as designated hours and the
customers can transact the banking business, such as cash deposit, withdrawals, draft issuances,
cheques collection, cheques book issue, pass book update etc.
Main advantages of a mobile bank are-
 Lower capital investment as compared to a ³BRICK AND MORTAR´ bank.
 Larger area coverage
 It¶s a novel concept with a banker visiting the customers for banking rather than the other way
round
 It serves as a tool for marketing on special events, like exhibitions, melas, etc.
The issues connected with mobile bank are-
‡ Safety and security of cash. Equipments and records.
‡ Online communication with base office
‡ Wireless technology for data communication and online backup for transactions
4 . ! !& ðà  "ð 
Fast Net Mobile will allow you to bank on your mobile phone while you are on the move - and
to see your transactions on-screen. Fast Net Mobile is like a mini website, letting you view and
control your bank account on your mobile phone screen. Fast Net Mobile lets you check your
account balances and view mini statements (up to your last 10 transactions on each account). You
can transfer money between your accounts and you can see what's happening every step of the
way on your mobile phone screen.
±


Your mobile phone allows you to get immediate access to you accounts, just enter your Fast Net
Mobile Access Code and Password, select an account from the list and you'll have the information
you need.
Fast Net Mobile is password protected so only you can access it. You won't need to remember
all your account numbers though, as your accounts will be displayed on the screen of your mobile
phone once you sign on to use the service. So you can access your accounts quickly without fuss ±
a real plus when you are on the move.
$  + #0
ASB and Telecom have launched a world-leading mobile payment service that, in the future,
will enable consumers to pay for goods and services from their bank account using their mobile
phone.
The mPayment solution joins your mobile phone directly with your bank account, unlike micro-
payment solutions, which simply charge costs to a mobile phone account. Emerging examples of
micro-payment solutions worldwide include vending machine purchases and prepaid parking
tickets.
MPayment delivers a secure service, as it requires an alphanumeric password for authentication
of your identity. In addition, by providing payment direct from your bank account, mPayment
means your spending power is not limited to the amount of credit available on your phone
account.

#
The solution has all of the following security features:
1. ID when accessing information services
2. PIN when initiating transaction
3. Usage of dynamic SMS passwords
4. Blocking access of the service if a PIN is entered incorrectly three times
5. Setting of transaction limits
6. Electronic receipts (notification of transfers, payments, cash withdrawals)
7. Encrypted communication.
!Ã  "ð 
In the current fast and active pace of our society, most people have less or no time to go through
the hassles of going to the bank just to perform some simple transactions/inquiries. As such,
Telebanking through the telephone is the perfect solution for people on the go.
Telebanking system is an Interactive Voice Response (IVR) application, which uses a telephone
to access information from a database. It is an easy to use, cost effective and innovative solution
designed to meet user needs for electronic banking application.
It provides communication between information in IVRS system and off-site telephone
caller/customer. This solution will bridge the gap between digital data and human modality of
listening and speaking.
Telebanking ease users the hassle of going to the Bank or any Automatic Teller Machines to
perform day-to-day banking transactions
! 

%
 +
7
 #
General information about banking services/ facilities can be obtained by customers and the non-
customers alike, by dialing a special enquiry number of the bank (call center) and the desired
information can be obtained after reaching the concerned extension number/desk.
 +  7
 #
This relates to account specific information and can be accessed only by the account holder by
disclosing his/her secret PERSONAL IDENTIFICATION NUMBER (PIN) and customer ID.
. 

! 
1. Check your account balance
2. Enquire on the status of your cheques
3. Transfer funds between accounts (including third party funds transfer)
4. Open a time deposit accounts
5. Change maturity instructions for your time deposit
6. Request for a cheques book or statement
7. Pay your credit card bills by transferring funds from any of your deposit accounts (except time
deposit) to your credit card account
8. Make enquiries on your credit card statement
9. Check your credit card account balance
!  #   

 %

1 Provides round-the-clock availability of information and conduct banking

transactions over the telephone
2 Improves services levels to off-site customers with efficiency of information release
3 Offers new ways to serve off-site customers and facilitate caller-specific or personalized
information through TPIN or access number
4 Offer flexibility for change and growth through open system architecture
5 Improve efficient use of human resources
6 Project an affluent and service-oriented image

#
1. ID when accessing information services
2. PIN when initiating transactions
3. Usage of code pages when transaction is authorized
4. Usage of dynamic SMS passwords
5. Blocking access to the service if a PIN is entered incorrectly three times
6. Setting of transaction limits

 ð ! !  "ð 

INTERNET BANKING means online banking from home or anywhere. It provides µanywhere,
anytime´ banking access to one¶s account as well as to the public information updated by the bank
on its website.
It has been introduced in India by most commercial banks, which have fully computerized their
operations. Just as the bank staff accesses the account of a customer online, the customer can also
access his/her account online via Internet
& 

ð  
The following steps illustrate the operations of Internet banking:
1. The customer connects his/her computer to the Internet.
2. The customer accesses the homepage for the Internet banking services by typing the bank's
URL.
3. The customer enters his/her user ID and PIN.
4. This information will be encrypted (i.e. coded) and transferred to the bank computer through
the Internet.
5. When the bank computer receives this encrypted information, it will decrypt (i.e. decode) it. All
the information transferred between the customer computer and the bank computers are
encrypted. The sender encrypts the information while the receiver decrypts it. This process is
required in order to ensure no third party can reveal and use the information.
6. The bank computer will check if both the user ID and PIN are valid.
7. If so, the customer can proceed with the transaction, otherwise he/she is asked to re-enter the
information again.
$ ð  '
0
What to Internet Banks do? The same things traditional banks do. They hold onto our money
and lend it out to others respectively. The manage loans and help us keep track of
our finances. Chances are if you own a bank account at a traditional bank they offer some type of
Internet banking or online services. The next time you step into your branch office you should ask
them about online banking. You may find once you start you have no desire to go back to
traditional banking.
For those that have a hard time keeping track of paper statements, Internet banking is a
lifesaver. Internet banking is also advantageous for frequent travelers that need to keep a close eye
on their finances from abroad
±
ð  $

Internet banking works much like traditional banking. The primary difference is you are
accessing your account and information, making payments and reconciling statements using your
computer rather than paper or the phone to complete transactions. Instead of going down to your
local branch office when you bank online you can accomplish multiple tasks at once with the click
of a button.
Online banking is rapidly becoming more and more popular as consumers recognize the
advantages online banking has to offer. For one most banks charge fewer fees if you take
advantage of their online banking services. You can also stop receiving paper statements if you
like in many cases and conduct 95% of your business over the Web when you take advantage of
Internet banking.
. 

ð  
1. Check account balances
2. Balance a checkbook
3. Transfer money between accounts
4. Track recent account activity
5. Authorize electronic bill payments
6. Request copies of past statements and processed checks
7. Order traveler's, cashier's, and regular checks
8. Apply for auto, mortgage, home equity, student, or personal loans


   
ð  
1. Account balances and history, including year-to-date information
2. Cross-account fund transfers
3. Check history, inquiry, images, withdrawals, and stop payments
4. Credit card and statement imaging
5. Online loan payments
6. Online loan applications
7. PIN changes
8. Wireless access
9. Secure interactive messaging with staff
.  ð

  
  
1. Affordable flat-fee pricing with no hidden charges or transaction fees Multiple choices of host
connectivity, Frame Relay, VPN or DSL Customs look and feel
2. Available in three different layout versions
3. Dedicated banking server and communications hardware Robust online security systems to
protect customers' confidential information complete set-up and installation at no additional cost
4. Detailed Internet banking statistics and reporting

#
ð  
1. Confidentiality of transactions has to be ensured as the account can fall prey to Internet hackers.
Hence, the banks prescribe stringent log in procedures in this regard.
2. Integrity of transactions. This is done by following encryption standards.
3. Non-repudiation of the transactions by the customers. This is done by building a suitable
certificate authority.
4. Privacy when the account is accessed by the customers from some public places like the cyber
cafe. Once the customer logs out of his account. There are some traces of the transaction in the
form of history files. These need to be removed by certain programme, e.g. cookies or other
devices, in order to ensure privacy by the customer¶s transactions. However, this can be only by
the customer, and not by the bank, thus making the account vulnerable to fraudulent practices
5. Data exchange security is enabled by SSL protocol
6. Static user authentication (ID, passwords, PIN, etc)
7. Blocking access to the service if a pin, user ID, other passwords, etc are entered incorrectly
several times in a row
8. Option to specify that the PC used for this season is not owned by the owner
9. Setting of transaction limits

ð+!&.ð .&!ð& !± &Ã&)&   "ð 

µELECTRONIC BANKING¶ means banking done through electronic systems for customers¶
transactions (front office computerization) and/or internal accounting and book keeping (back
office computerization), instead of using the traditional manual system of banking. It may also
include the decision support system for various level of management and marketing/cross-selling
through electronic medium.
Advancement achieved in the Information Technology and Communication Technology in the
last two decades has resulted in the successful implementation of Electronic Banking in India.
Let us briefly talk about communication systems.
Communication channel can be of three types-BIT SERIAL, BYTE SERIAL AND
PARALLEL. Data compressions techniques are used for faster communication. Encryption
techniques are used for secret transmission of data. E-mail is used for transmission of data from
one place to another with speed, accuracy and security. E-mail can be used over dial-up line or a
dedicated line. Dedicated leased line connectivity can be established via satellite link or terrestrial
link. VSAT networks are used across the banking industry for many on-line applications.
Advancements in information technology have had far reaching effects on Indian banking, which
can be identified mainly in the following areas:
1.

  % This has been enhanced considerably in the following ways:
 Introducing new banking channels such as ATMs, Internet Banking and Tele-Banking.
 Enhancing costumer convenience through initiatives such as µanywhere and anytime¶ banking
and µ24*7 days banking¶, home banking.
 Making routine banking transactions speedier, safe and secure.
 Achieving banking service through inter-connectivity of branches.
 Making banker customer communications fast and neat, and providing Information service
µ24*7 days¶ basis via calls centres.
 Carrying out non-banking services for the customers
2. ð    

# Bank¶s book keeping has been made automated, fast
and accurate, which saves considerable time. Staff time thus can now be invested in marketing
and such other work after the banking hours.
3   
 
# meant for the middle and top management has improved
due to data classification and retrieval, integrated accounting system, communication and
conferencing system and inter-connectivity of branches.
4. 
 of various financial products has been made easy due to data Mining and
electronic marketing channels.

  "ð ! !ð& 

Though any type of transactions can be handled through e banking, in the initial phase most of
the basic banking transactions can be performed conveniently through Internet banking. The
following are some of the basic functions
 Account enquiry
 Fund transfer
 Payment of electricity, water, telephone bills etc
 Online payments for transactions actually performed through Internet
 Request for issuance of cheques book, draft etc
 Statement of accounts
 Access to latest schemes
 Access to rates of interest and other service charges
Transactional websites provide customers with the ability to conduct transactions through the
financial institution¶s website by initiating banking transactions or buying products and services.
Banking transactions can range from something as basic as a retail account balance inquiry to a
large business-to-business funds transfer
First, one or more technology service providers can host the e-banking application and
numerous network components as illustrated in the following diagram. In this configuration, the
institution¶s service provider hosts the institution¶s website, Internet banking server, firewall, and
intrusion detection system. While the institution does not have to manage the daily administration
of these component systems, its management and board remain responsible for the content,
performance, and security of the e-banking system.
This diagram illustrates the transaction flow for one possible configuration where the bank relies
on a technology service provider to host its Internet banking application.
1. Internet banking customer sends an e-banking transaction through their Internet Service
Provider (ISP) via a phone, wireless, or broadband connection.
2. The customer¶s ISP routes the transaction through the Internet and sends it to the e-banking
service provider's ISP, which routes it to the provider.
3. The transaction enters the provider's network through a router, which directs the e-banking
transaction through a firewall to the application running on the Internet banking server.
4. The website server and Internet banking server may have host-based intrusion detection system
(IDS) software monitoring the server and its files to provide alerts of potential unauthorized
modifications
5. Network IDS software may reside at different points within the network to analyze the message
for potential attack characteristics that suggest an intrusion attempt
6. The Internet banking application processes the transaction against account balance data through
a real time connection to the core banking system or a database of account balance data, which is
updated periodically from the core banking system
7. The Internet banking server has a firewall filtering Internet traffic from its internal network
Second, the institution can host all or a large portion of its e-banking systems internally. A typical
configuration for in-house hosted, e-banking services is illustrated below. In this case, a provider
is not between the Internet access and the financial institution¶s core processing system. Thus, the
institution has day-to-day responsibility for system administration.

This diagram illustrates the transaction flow for one possible configuration in which the bank
hosts the Internet banking application
 Internet banking customer sends an e-banking transaction through their Internet Service
Provider (ISP) via a phone, wireless, or broadband connection
 The customer¶s ISP routes the transaction through the Internet and sends it to the e-banking
service bank's ISP, which routes it the provider
 The transaction enters the bank's network through a router, which directs the Internet-banking
transaction through a firewall to the application running on the Internet banking server.
 The bank typically has several Internet application servers that could include a website server,
e-mail server, proxy server, and domain name server (DNS) in addition to the Internet banking
application server
 The router will typically send the transaction around the other application servers directly to the
Internet banking server unless it is a non-banking transaction
  The website server and Internet banking server may have host-based intrusion detection
system (IDS) software monitoring the server and its files to provide alerts of potential
unauthorized modifications
 Network IDS software may reside at different points within the network to analyze the message
for potential attack characteristics that suggest an unauthorized intrusion attempt.
 The Internet banking application processes the transaction against account balance data through
a real time connection to the core banking system or a database of account balance data, which is
updated periodically from the core banking system.
 The Internet banking server has a firewall filtering Internet traffic from the bank's internal
network.

Ã!& ð.( '! .

Electronic funds transfer or EFT refers to the computer-based systems used to perform financial
transactions electronically.
The term is used for a number of different concepts:
1. cardholder-initiated transactions, where a cardholder makes use of a payment card
2. electronic payments by businesses, including salary payments
3. electronic check (or cheque) clearing
4. electronic fund transfer at point of sale
5. card based electronic fund transfer

!  
#
A number of transaction types may be performed, including the following:
Sale: where the cardholder pays for goods or service.
Refund: where a merchant refunds an earlier payment made by a cardholder.
Withdrawal: the cardholder withdraws funds from their account, e.g. from an ATM. The term
Cash Advance may also be used, typically when the funds are advanced by a merchant rather than
at an ATM.
Deposit: where a cardholder deposits funds to their own account (typically at an ATM).
Cashback: where a cardholder withdraws funds from their own account at the same time as
making a purchase.
Inter-account transfer: transferring funds between linked accounts belonging to the same
cardholder)
Payment: transferring funds to a third party account
Inquiry: a transaction without financial impact, for instance balance inquiry, available funds
inquiry, linked accounts inquiry, or request for a statement of recent transactions on the account.
Administrative: this covers a variety of non-financial transactions including PIN change.
EFTPOS (Electronic Funds Transfer at Point of Sale) is a device by which sales transactions can
be directly debited to the customer's bank account at the point of sale, through the use of a debit
card (sometimes the same card used with Automatic Teller Machines). Merchants using EFTPOS
can also offer cashout facilities to customers, where a customer can withdraw cash along with
their purchase. EFTPOS are sometime also called POS Terminal or Payment Terminal and must
not be confused with traditional Point of sale.
The customer's card is swiped through a card reader or inserted into chip reader and the merchant
usually enters the amount of the transaction before the customer enters their account and PIN.
There is usually a short delay while the EFTPOS terminal contacts the server (over a phone line or
mobile connection) before a message of Accepted or Declined is returned. Often, at peak
shopping times , the system can become overloaded and the delay will become extended or even
time out.

  .!

  
EFT may be initiated by a cardholder when a payment card such as a credit card or debit card is
used. This may take place at an automated teller machine (ATM) or point of sale (POS), or when
the card is not present, which covers cards used for mail order, telephone order and internet
purchases.
The transaction types offered depend on the terminal. An ATM would offer different transactions
from a POS terminal, for instance.
Card-based EFT transactions are often covered by the ISO 8583 standard.
Traditionally, funds are transfer by banks from one place to another by mail transfer and
telegraphic transfer, the latter being faster. In both kinds of transfer, banks use post and
telegraphic departments services and use certain codes to ensure confidentially and safety in
transmission of the messages.
Now, in the electronic system of communication, transmission is much faster and safer. Several
banks have started the following system for funds transfer:
1. State bank of India has electronic payment system called STEPS whereby funds can effectively
be remitted electronically from one customer¶s account at one center on the same day.
2. Under core banking solutions, where the technology platform connects several branches of a
bank located at distant places, transfer of funds from one account to another account at different
places can be easily done between the inter-connected branches.
î  $ð.!% The Society of worldwide Inter-bank Financial Telecommunication is an International
Society for enabling inter-national electronic funds transfer between member banks worldwide.
State Bank of India and several other banks in India are members of this society. Member banks
are connected through a high-speed closed user group communication system. Structured and
codified messages are sent by the remitting bank to the receiving bank for crediting the
beneficiary¶s account situated with it. The inter-bank settlement of account is done via the
correspondent banks. The funds transfer system is fast, secure and efficient
!±Ã!& ð+) ! ) !
Internet shopping is a two-way electronic system. Two-way means interactive systems that allow
the user to request specific information and to conduct transactions from a computer terminal
(Strauss 1983).
Because using a computer to do shopping is not a person-to-person business, how to pay is a big
problem. There are many different types of electronic payment systems. The most common
method of paying, since Internet shopping emerged, is customers giving their credit card numbers
to the merchants. However, many customers worry that their credit card information will be
divulged over the net or misappropriated by the merchants. Therefore, software developers, banks,
and credit card companies are pushing to deliver transaction systems that are trusted, affordable,
and easy to use.
!± ! ! ''
In a SET transaction, the buyer has the equipment of an electronic wallet. In the electronic wallet,
the buyer may have many different electronic credit cards issued by different banks. When the
buyer wants to purchase something on the Internet, he can choose any of his credit cards to pay.
(Actually it means that he chooses a credit card number to pay, but on the computer screen, he can
see his different virtual credit cards.)
Buyers also have digital IDs for each SET-enabled credit card²provided by the bank that issued
the card. When a purchase is made, the transaction details, the buyer¶s card information and
digital ID, and the merchant¶s digital ID are encrypted and sent to the merchant¶s bank. A
verification check is made from the merchant¶s bank to the issuing bank. Confirmations are sent
back to all parties down the line and the goods are then delivered. Transactions via SET are
encrypted all the way from the customer to the bank, so merchants do not see the customer¶s
identity, nor do the malefactors who might lurk on the Net who pry on credit card information.
Ãð  ) !
 ±

 #%
Inter-bank cheques drawn on branches of a city/town are cleared/paid through a system of
µclearing house¶. Out-station cheques are sent for collection through a different system. Clearing
house is a common service provided by RBI in metros and by scheduled banks in other cities.
Clearing house functions in all cities /towns where there are 5 or more banks. In big cities and
metros, service branch of each bank carries out the clearinghouse operations and also the
centralized draft payment function. Conduct of clearing house operations requires huge
expenditure by way of premises, equipment and staff.
The number of cheques in clearing house transactions is very large and the volume of
transactions is huge. For speedier processing, manual systems have been replaced by Automated
Clearing System (ACS). The main elements of ACS are as follows:
ð7
%Magnetic Ink Character Recognition (MICR) cheques are used for clearing
system in India. As these are processed on high-speed machines, the cheques are printed on a
specific type of paper and meet other specifications, including two white bands on top and
bottom, which should be free from any marking or impressions. In these bands details are encoded
with special magnetic ink. The details encoded on the lower band are as follows:
1. First 6 digits - Cheques no. In a 6 digit code is pre-printed.
2. Center code in 9 digits: first 3 digits represent city code, next 3 digits represent the bank code
and the last 3 digits are for the branch code.
3. A 2 digit Transaction code indicating the type of account (e.g. savings/current)

 %
This machine is used to write details of the cheques in the lower band with magnetic ink. In power
encoder, the data on cheques is keyed at the branches and sent to the service branch along with
floppy/CD containing the information. When the cheques are passed through the power encoder,
the data on the floppy get encoded on the cheques.
Cheques Reader cum Sorter:
Cheques in the clearinghouse are run through this machine, which records the drawee bank-
wise/branch-wise presentation of cheques from the magnetic ink impression on the lower white
band. The sorter portion of the machine automatically sorts the cheques, drawee bank-
wise/branch-wise and also list out the cheques in the same order. Cheques segregated into packets
that are sent to the service branch of each bank for further processing.
Payee branches process the payments on the next day and all returns are submitted to the
clearinghouse in the next day clearing. The customers therefore get the credit on the third day.
'  #%
Under this system, the utility service provider (like telephone, electricity, gas, and insurance
company) obtains an authorization from the customer to debit his specific bank account with the
amount of the bills at regular intervals. The letter of authority is submitted by the service provider
to his banker, which raises a debit for the amount listed on the other bank maintaining the client
account.
How does ECS(Debit) work?
1. Utility Companies, banks/institutions receiving periodic/repetitive payments towards electricity
bills/telephone bills/loan installments/insurance premier initially collect mandates from their
customers / subscribers for collection of amounts due from them by direct debit to their accounts
with banks. The mandate provides details such as the name, account number, name of
bank/branch etc. duly certified by the bank concerned.
2. Based on the details furnished in the mandates, the user company prepares transaction data on
electronic media and submits the encrypted data to the local Clearing House, through its Sponsor
bank.
3. After due validation of the data, the local clearing house processes the same and arrives at the
inter-bank settlement as also generates bank-wise/branch-wise reports (hard copies)
4. NCC debits the destination banks' accounts with clearing house and simultaneously affords a
consolidated credit to the sponsor bank's account and furnishes the bank-wise and branch-wise
reports to the service branches of destination banks.
5. Service branches forward the branch-wise reports to the respective branches for debiting the
accounts of customers with the indicated amounts.
Advantages of the Debit Clearing System are as follows:
1. Customer is not required to keep a track of his bills for ensuring that he pays before the due
date. Customer also need not take effort of writing the Payments cheques.
2. The service provider need not print out the bills and send it to the customers for payment.
3. The system helps the banker in cutting down on expenses, as cheques are not used for payment
of the bills.
  ±

%
This is a total contrast to the Debit Clearing System. It is used by the company for paying the
dividends/interest of its shareholders/depositors at periodic intervals. Instead of sending out
cheques to the investors, the company directly credits the amount through the clearing system of
its bank, to the customer¶s accounts, in keeping with the letter of authority (or mandate) obtained
from the customers. How does ECS (Credit Clearing ) work ?
Step-1: The corporate body institution (called "User´) which has to make payments to a large
number of customers/investors would prepare the payment data on a magnetic media (i.e., tape or
floppy) and submit the same to its banker (Sponsor Bank).
Step -2: The Sponsor Bank would present the payment data to the local Bankers' Clearing House
(managed by Reserve Bank of India at 15 centres and by State Bank of India or Associate banks at
other centres) authorizing the Manager of the Clearing House to debit the Sponsor Bank's account
and credit the accounts (Destination Bank) of the banks where the beneficiaries of the transactions
maintain their accounts.
Step -3: On receiving this authorization, the Clearing House will process the data and work out an
inter-bank funds settlement.
Step - 4: The Clearing House will furnish to the service branches of the destination banks branch-
wise credit reports indicating the beneficiary details such as the names of the branches where the
accounts are maintained, the names of the beneficiaries, account type, account numbers and the
respective amounts.
Step - 5: The service branches will in turn pass on the advices to the concerned branches of their
bank, which will credit the beneficiaries'
Advantages of Credit Clearing system to various parties:
1. The company need not print the dividend/interest warrants and reconcile the paid and
outstanding amounts.
2. The investors need not deposit the cheques to their bankers every time and wait for the credit
clearance. Under the credit clearing system, credits to the Customer¶s accounts are made on the
fixed date.
3. The bank saves a lot of time spent in processing the large number of
Cheques/warrants deposited by the customers, as is done in the manual system.
Authentication
EFT transactions may be accompanied by methods to authenticate the card and the cardholder.
The merchant may manually verify the cardholder's signature, or the cardholder's Personal
identification number (PIN) may be sent online in an encrypted form for validation by the card
issuer. Other information may be included in the transaction, some of which is not visible to the
cardholder (for instance magnetic stripe data), and some of which may be requested from the
cardholder (for instance the cardholder's address or the CVV2 value printed on the card).
Caveat Emptor
As with any other personal information, the consumer should always be wary of potential
problems and take measures to prevent them from happening. Here are a few guidelines and
 


 # 
  
1. Fees & Charges: Be sure to find out exactly what it might cost for the service you are interested
in and if there are special charges for certain types of transactions or a limit to the amount of
transactions that can occur in a month. Also be sure to find out any charges that could be assessed
from a mistake in a transaction such as NSF charges or over limit fees.
2. Time Periods: Ask your bank about the time periods required for transactions. Some banks do
not process electronic transactions past banking hours until the next business day so be sure to
find out when your service is available and when transactions will be posted to your account. In
addition, electronic bill payment services require different time limits than a regular account
transfer. If the merchant does not accept electronic payments, the bank will have to prepare and
mail manual cheques to the merchant, which could take as much as 7 business days to receive and
be posted on your account with the merchant. In some cases it might be faster for the user to
prepare a manual cheques themselves. Electronic bill payment does not give you an excuse to
delay paying your bills on time, and most banks are not liable if you do not give them enough
notice of your payment.
3. Transaction Limits: Find out exactly what your bank offers and what a user can and cannot do
online.
4. Security: Although it is safer to transmit your credit card information over the internet than
speak it over a cordless or cellular phone, be sure that the bank uses appropriate security measures
to protect your information, especially those that offer web-based services. Also make sure to take
the appropriate measures to protect yourself.
5. What if there is a problem?? Find out what the bank's policy is on errors and mistakes. The
bank may not be liable if you make a mistake and transfer too much money, or someone breaks
into your account without authorization. The bank will send a packet of legal notices and terms
that bind the customer when they sign up for the service. Read through all of the information that
the bank provides thoroughly.
6. Floats Disappear: As electronic banking becomes more accepted, merchants will begin
accepting more payments from customers electronically rather than via cheques. When this
happens, the usual seven-day float that a check grants will be eliminated or reduced to perhaps a
few hours. Be aware of the time that a transaction may take place and plan accordingly. It is just
as easy to bounce an electronic check as paper cheques.
 (ð!) (
Most of the problems mentioned above are in the nature of teething problems and hence they
can be eliminated over a period of time. However, for venturing into E-Banking, the following
major controls must be assured:
1. Authenticity controls: to verify identity to individuals like Password, PIN
2. Accuracy controls: to ensure the correctness of the data flowing across the Network
3. Completeness controls: to make sure that no data is missing.
4. Redundancy controls: to see that data is traveled and processed only once and there is no
repetitive sending of data.
5. Privacy controls: to protect the data from inadvertent or unauthorized access
6. Audit Trail controls: to ensure keeping chronological role of events that is accrued in the
system.
7. Existence controls: to make sure that on going availability of all the System resources with the
same throughout
8. Efficient controls: to ensure that the system uses minimum resources to achieve the desired
goals.
9. Fire Wall controls: to prevent un-authorized users accessing the private Network, which are
connected to Internet
10. Encryption controls: to enable only those who possess secret key to decrypt the cyber


  
  + 
   

 

CRM performances explain the process of value creation which ends with the customer
behavior intention (to retain, repurchase, positive word of mouth), customer satisfaction and
loyalty towards the brand. Value creations become new strategies for the firms to increase their
relationship with the customer, regarding to this Khalifa (2004) was highlighted that the move of
firms strategy from transactional to relational can meet the customer needs. This strategy also
will change the way of the firms looking at their customer from the general perspective to more
personal. According to the marketing literatures, a basic ways to satisfy the customers is through
fulfilling the customer s need and expectation. This research will choose the electronic
technology usage by the bank customers as the consequence of CRM performance. Since the
theory selected in this study is the Technology Acceptance Model 2 (Venkatesh and Davis, 2000),
overall framework will design to have attitude tributes, intention and behaviors. In this study
electronic banking adoption has been choose as the behavior of customers using electronic
banking service.

Among the variables in customer requirement are machine availability, convenient service,
friendly interface, openness, security and information updated. The researchers add that the
increase in customer involvement through frequent contacts and feedback can influence customer
satisfaction and keeping the customer retain with online bank services.

Internet banking by consumers. The purpose is to quantify the factors affecting the adoption
of internet banking by Australian consumers. The sample for this survey was drawn from
individual residents and business firms in Australia. They finding shows that security concerns
and lack of awareness about Internet banking and its benefits stand out as being the obstacles to
the adoption of Internet banking in Australia. If we compare this finding with the concept of
customer satisfaction, it shows that security and benefits issues are very important factors for the
satisfaction. The customers tend to be less satisfied if the service appear less security and benefits
to them. This situation indirectly gives a negative impact on the e-service adoption. Past research
suggested that customer behavior in adopting electronic banking should consider other possible
factors derived from literature.
ëome Hard Facts about Indian Banks :
_ Throughout the country, the Internet Banking is still in the development phase.
_ In general, these Internet sites offer only the most basic services. 55% are so called 'entry level'
sites, offering little more than company information and basic marketing materials. Only 8%
offer 'advanced transactions' such as online funds transfer, transactions & cash management
services.
_ Foreign & Private banks are much advanced in terms of the number of sites & their level of
development.
_ Account security is still the key issue with the increase in hacking.
_ Increase in service time even when the system is running.
_ Absolute chaos when the system is down temporarily when no service is offered even if the
system is not needed to dispense the customer (mere acceptance of a cheque is also refused even
when the entry is possible to be done later)
_ Delay in receiving periodic statements.
_ No answer for wrong balance being carried forward either at year-end or at the time of
switchover to computers until expensive hue embarked upon.
_ Mismatch of exceptional transactions between the manual books and the computer generated
report.

& Ã( ð& %
The applications of CRM and E-Banking facilities are creating fast presence in the
private sector banks, where as customers demand for better services from banks especially in
Public sector.
a) & 
+
%
With high rate of change of technology, existing management practices and policies, marketing
strategies need to be changed. Existing businesses have to be prepared for future shock.
Awareness of the cutting edge of knowledge in each field is of supreme importance. Keeping this
challenge in mind it was an attempt to rediscover the power of upcoming technologies of digital
revolution in the field of banking sector ± the challenges and their impact on future economy.
b)  8
 
%
i) There is an immense need of adequate training and motivation to the bankers to create fruitful
and everlasting relations with their valuable customers. They should also come out with more
efforts to make their customer literate in order to incorporate the best potential available in IT
sector.
ii) No doubt CRM is here to take on the business world and essential to compete effectively in
today¶s market place. The more effectively you can use information about your customers to
meet their needs, higher the satisfaction the more profitable we will be. Operational CRM needs
analytical CRM with predictive data mining models at its core. The route to a successful business
requires that you understand your customers and their requirements, and data mining is the
essential guide. Extensive usage of Internet is going to be ?
„?standard and it¶s the challenge
for the corporate world to fulfill desire of the customers.
It can now be followed as written in the shops    + ' 9that means
Customer is God for us. Move fast or be beaten by the competition that might convince the
customers that they are better than you as proved by the private sector banks.
c) &

%
E-banking is not having top priority in India Public Sector Banks but then also it is emerging
scenario in near future. There is need of CRM to be use more effectively in order to maintain
profitable relationship with their customers.


 ð Ãð&+±)%

Oeferences:

Kotler Philip, Marketing research, Tata McGraw- Hills, New Delhi, (2000), Chapters-1 and 2

How to built customers by Herb Edelstein, President Two Crows Corporation

Economic Times, Mumbai edition Articles June-July2002.

Reserve Bank of India, Annual report 2000-2001, 2001-2002

Shukla, S.M., Sahitya Bhawan Publication, Agra, 1999, pp.46-53

Nasscom Survey, 2000-2001


$

%

http//www.economictimes.com
http//www.indiatimes.com
http//www.rbi.org
http//www.nasscom.org
http//www.rediff.com

  %

http//www.google.com
http//www.khoj.com