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Itinbankingindustry 130715230035 Phpapp02
Itinbankingindustry 130715230035 Phpapp02
Project on
IT in banking industry
Project by
PARESH J SUDRA
ROLL NO -48
Project guide
UNIVERSITY OF MUMBAI
ACADEMIC YEAR
2007-2008
ACKNOWLEDGEMENT
( STUDENT OF
STUDENT)
(paresh j. sudra)
CERTIFICATE
SIGNATURE OF
PROJECT GUIDE
TABLE OF CONTENT
1. INTRODUCTION
c) RESEARCH METHODOLOGY
13. BIBLIOGRAPHY
1. INTRODUCTION
small and privately held banks. In 1964, the first major banking
Committee. Private and MNC banks entered banks entered into the
banks. The Private and MNC banks brought new technologies and
cards and online banking, etc. Private banks and MNC banks had to
provide something extra and it was their service, which attracted a
the PSU (Sarkari) culture and the service of Private and MNC banks
Public Sector Banks, Public sectors banks were bound to follow the
path of Private Banks. The PSU banks felt the heat and realized their
demand more care and extra facilities. They want more mobility of
and untimely hour services. Even the PSU culture could not adjust to
environment.
where one can deposit cheque, receive payments and deposit cash
etc. This has been made possible only due to the use of technology.
Earlier one had to move from one counter to the other counter for
different sort of works. Thus this type of service not only helps in
better customer service but also minimizes the customer service time
ATMs not only with their networks but also with their partner banks.
Network with whom they have got mutual understanding for sharing
ATMs. With the least cost of Internet banking, banks are paying
Internet banking in India is over two million. But this figure needs to
accounts with more than one bank). India has one million active
Internet Users populations. Thus, this is just around 0.1% of the total
the people in India use internet from cyber café). Thus, indicating
that the concept of Internet banking is surely catching on. India is far
behind in the use of Internet banking than the other Asian countries
banking over the Internet but India is fast catching up. In India, the
Internet penetration the day is not too far when greater part of our
Banking. And later Citibank, HDFC Bank and other banks followed
the suit. PSU banks have lagged far behind in adoption of the
the arena of ATM banking quite late, was able to expand at a rapid
pace and cover almost all the cities of India. Now ATM banking has
banking. These services have helped the PSU banks to maintain their
customer driven.
quick.
of the banks.
driven banking while the client base of Private and MNC banks are
interface more with the technology than man. Aged people are not
competition due to the entry of more players in the arena, the banks
are diversifying into new areas where they can use their financial
is to minimize the visit of the customer to the bank and let him use
the technology or let technology handle him-this is the new survival
banking sector.
banking sector.
• Questionnaire method.
• Surveys in banks.
• Weekly journals.
• Articles in newspapers.
SAMPLE FRAME:
ICICI Bank.
2.E-BANKING: IN NASCENT STAGE IN INDIA
new features like Internet banking, ATMs, Phone banking etc. With
the help of new technology, banks are now able to offer products
banking. But the banks in India still have to go a long way before
reengineering/ restructuring.
and alliances.
Universal banking where one stop shop provides all related
Banking and IT
banking structures has changed and will change the definition and
the market.
expression-
digitally” or “endorsed”.
person signing the document has read and understood the contents.
with, the hash value will no longer correspond to this data unit
the plain text refers to the original digital file, whereas the
which is used to sign and guarantee that the data unit has not
been altered.
CHEQUES
signature.
the Indian Evidence Act, 1872 to remove any obstacle to the legal
Act.
relevant may be taken as evidence before the court. Again what part
is relevant depends on the discretion of the court. The court must
Government.”
constructed accordingly”.
as-
manner.
government”.
The words in Section 6(1)(C) “ the receipt or payment of
authorship of a text and the fact that the signatory had been
Technology Act, 2000 that reads, “The central government may, for
shall be affixed;
to digital signature.”
In India, evidentiary value of the digital signature has been in
section (2) to Section 85B of the Indian Evidence Act has been
reads as, “ When the court has to form an opinion as to the digital
major obstacle in the growth of debt cards; smart card has many
innovative features, which may spurt the use of cards in India. Smart
card is safer to use in electronic form than the present form of cards
intensive.”
- A senior banker
Today, many banks are offering cards. Though the foreign banks
SBI, ICICI and HDFC Bank may soon change the rules of the game.
around 3.8 million credit card users compared to 3.0 million in 1990.
Visa credit card grew by 46.4% in India while the growth in Asia
has been growing and they are offering so many add-on incentives
Smart cards are the wave of the future for consumer use,
chip that has been stored inside the card. It has the capacity to store
suggesting that the chip transfers data via a built-in antenna without
smart cards are used worldwide and it is the most flexible payment
option available in the world. Smart cards have been used in Europe
for over 10 years and now they are the accepted mode of payment.
use of smart cards has been growing rapidly. In the US, major
and some are adding smart gift cards and promotional application to
build loyalty for the growth of their business. American Express and
cards to their customers. By the end of 2005, there will be over 100
million smart cards to their customers. By the end of 2005, there will
be standalone PoS smart card terminals or smart card readers that are
credit and debit cards over the Internet. Unlike the hand-written
card reader to their PCs. Smart cards have the capacity to replace the
banks’ spreads have come under pressure, which per se, affects their
products like Net banking, mobile banking and other forms of 24X7
services, it goes without saying, have also enlarged the clientele base
Operational Efficiency
efficiency.
Customer Management
High Net Worth clients’ branch, imbued with state of the art
Product Research
getting shorter day by day and more than delivery, product servicing
value chain of services and command ‘top of the mind recall’ from
and review, which have not adequate attention in many of the banks.
Distribution Reach
major strategy adopted by many banks wherein the role of the earlier
rural areas, and bring many of those into the “Performing” category
process.
of IT expertise.
In addition to the above, banking sector is also confronted
need of the hour is to consolidate the gains so far and address the
weak links.
context, business strategies may differ from bank to bank, yet a core
in board consonance with the business objectives, and the same can
map.
context.
endemic across the financial system and result in vital data erosion.
Retrieval of the same may also cost dearly to the banks and their
associates. Security aspects like implementing a robust security
security has not been able to check the fraudulent practices. Thus,
banking in place.
6. TECHNOLOGY AND FRAUDS
ATM industry and money other organizations are fighting with them
are not less important. Criminals are raiding millions every year.
crime are:
their card number, PIN and other information, which are used
Alliance (GASA)’, which was formed in June 2003, has issued the
frauds.
The World’s Top 20 tips for ATM Use to Enhance the ATM
Tip 1: Where possible, use ATMs with which you are most familiar.
comfortable.
Tip 2: Scan the whole ATM area before you approach it. Avoid
Tip 3: Avoid opening your purse, bag or wallet while in the queue
for the ATM. Have your card ready in your hand before you
any attachments to the card slot or keypad, do not use it. Check for
screens. If you suspect that the ATM has been interfered with,
the message is posted over the card reader. Banks and other ATM
owners will not put up messages directing you to specific ATMs,
nor would they direct you to use an ATM, which has been altered.
USING AN ATM
with the transaction. You should not allow anyone to distract you
Tip 8: Stand close to the other ATM and shield the keypad with your
when keying in your PIN (you may wish to use the knuckle of your
Tip 9: Follow the instructions on the display screen, e.g., do not key
Tip 10: If you feel the ATM is not working normally, press the
cancel key and withdraw your card and then proceed to another
Tip 11: Never force your card into the card slots.
Tip 12: Keep your printed transaction record so that you can
Tip 13: IF your card gets jammed, retained or lost, or if you are
Tip 15: memorize your PIN (if you must write it down, do so in a
Tip 17: Do not use obvious and guessable numbers for your date of
birth.
Tip 18: Change your PIN periodically, and, if you think it may have
Tip 19: Set your daily ATM withdrawal limit at your branch at
related frauds and crimes, few in the industry know about these
security.
fraud.
skimming cases.
Fraudsters are using innovative ways like Web and Mail spoofing,
attacking the bank’s server etc. to break the security walls and
information.
opportunities”
This quote exactly reflects the present environment
through impersonation.
Mail Spoofing
In the mail spoofing or e-mail forgery, the fraudster sends
will not be able to verify your identity and access to your account
will be denied. Please click on the link below to get to the ICICI
Web Spoofing
easily by the fraudster, who uses the stolen sensitive information like
password and username etc., to carry out the transaction on the bank
as a real customer.
does not have any means to prove that it was not he who did those
• http://secure.bankname.com/carloanfind/carloans.asp
• http://secure.bankname.com?
@569857125/carloanfind/carloans.asp
because the first URL will drive him to the original site while the
It is essential on the part of the banks, the regulators and the service
Credit card fraud has become regular on Internet. All the agencies
suffers the most. This article examines the nature of credit card
fraud, types of credit card frauds, and the effects. This article also
grown exponentially during the past few years and is still growing.
credit card fraud, which has become common, has retarded the e-
fraud; recent surveys indicate that one out of three online customers
companies, banks and merchants are battling this problem; still this
crime is on ascendancy.
Common Types of Card Frauds
Application Fraud:
for a credit card and after receiving it, uses it as if he is the true
holder. The person in whose name the card is issued might come to
Counterfeit Cards:
which can capture all the details in the card. Using this information
hand-held devices are now available for the purpose. Further, the
or Telephone.
that his credit card is lost and request for a new card on the new
place. When the criminal has access to a stolen or lost card, he also
gains access to all the personal information. Apart from using this
ones.
Other Forms:
activity, the gang’s obtain credit cards using any of the means
himself who might claim that he never placed the order or he never
received the goods. It could also involve one of his family members
as much available credit card and then ‘bust out’ with large
purchases of items that could easily resold like jewelry or draw large
cash advances etc. Here the fraudster will draw bad checks on one
account to pay when this cannot be done any longer, the customer
does a vanishing act. This kind of fraud is the most difficult to catch,
transaction but later denies or claims that his card was stolen or used
merchant and customer is absent and this causes most of the credit
card frauds. In online transactions, after filling in the online order
customer hands over the credit card, which the merchant swipes
card, the merchant or the customer are reimbursed by the credit card
transaction reduces the overheads, but at the same time, increase the
simultaneously and there is no way the merchants can know about it.
8. INFORMATION TECHNOLOGY RISK IN BANKING:
IT risk in banks there are various methodologies available. All of them at large
follow the same primary steps like threat analyst etc. for technology risk
security program.
involved.
capabilities.
activities.
risk management.
business.
process.
criticality of an IT asset/resource.
environmental standpoint.
primary steps:
• Threat and Vulnerability Identification
• Probability/Likelihood Determination
• Impact Analysis
• Risk Determination
• Control Recommendations
• Results Documentation
they, too, follow these steps. However, the risk assessment tools
to technology.
methods and tools developed by vendors can be used for TRA also.
update the TRA throughout the year due to the costs involved; the
outsourced methodology/tool may not understand the bank’s specific
issues, etc.
Standards)
• SysTrust
Evaluation (OCTAVE)
governance experts.
as follows:
ISO Standards
The ISO along with the International Electro-technical
COBIT
to be too theoretical.
Sys Trust
The American Institute of Certified Public Accountants
system is reliable.
and authorized.
• Maintainability: The system can be updated when required
and confidentiality.
OCTAVE
Developed by the Software Engineering Institute (SEI) at
ORMs because the SEI is home to the CERT alerts and other
ORM.
to mitigate risks.
NIST
comprehensive program.
ANALYSIS: -
GRAPH: -
100%
99%
98%
97%
96%
95%
94%
Bank of ICICI HDFC
Maharashtra
EXPLANATION: -
It is cleared from questionnaire method that every one agrees
to the statement “I.T. in banks is much more advance than traditional
banking”. Approximately ninety eight percent of bank employees
agree to the above statement.
ANALYSIS: -
Bank of Maharashtra ICICI HDFC
1:2 30% 0% 0%
2:1 60% 100% 100%
Equal 0% 0% 0%
GRAPH: -
100%
80%
0%
HDFC ICICI Bank of
Maharashtra
EXPLANATION: -
ANALYSIS: -
GRAPH: -
100%
80%
60%
To some extent
40% No
20% Yes
0%
Bank of ICICI HDFC
Maharashtra
EXPLANATION: -
ANALYSIS: -
Online banking 2% 0% 0%
Manual banking 97% 98% 100%
Both 1% 2% 0%
GRAPH: -
1%
0%
2%
100%
80%
60%
100%
97%
98%
40%
20%
2%
0%
0%
0%
Bank of ICICI HDFC
Maharashtra
EXPLANATION: -
percent says online banking and one percent says both online as well
ANALYSIS: -
GRAPH: -
100%
5%
5%
7%
80%
50%
55%
63%
60%
40%
45%
40%
20%
30%
0%
Bank of ICICI HDFC
Maharashtra
EXPLANATION: -
work of the employees, fifty six percent says decreases the work and
banking transaction.
Yes No Equal
ANALYSIS: -
GRAPH: -
0%
0%
1%
2%
100%
5%
80%
60%
100%
98%
94%
40%
20%
0%
Bank of ICICI HDFC
Maharashtra
Yes No Equal
EXPLANATION: -
Indian Scenario
2002 2003
16 20
Citibank
14 18
Stan Chart
9 13
SBI-GE
According to an analyst, it is estimated that the Indian smart
card industry is growing around 45% annually, would reach the size
being used in the country can touch 400 million from around 50
governments may halt many such projects. States like Kerala have
Identity Card project is launched, the demand for smart cards will
skyrocket,” opines Sanjay Dharwadkar, Head of Systems Marketing,
frauds.
people.
BIBLIOGRAPHY
Nov.2005.
RESEARCH REPORTS
PAYMENT SYSTEM
• INTERNET BANKING
COMPTROLLERS HANDBOOK
INTERNET
• www.banknetindia.com
• www.microsoft.com