Project Report

(Submitted for the Degree of B.Com. Honours in accounting & finance under the university of Calcutta)

Title Of The Project

Online banking and its impact on customers.

Submitted by :-
Name of the candidate: ASHWANI KUMAR SINGH
Registration No.: 017-1111-0701-18
CU Roll No.: 181017-21-0393
Name of the College: THE BHAWANIPUR EDUCATION SOCIETY COLLEGE
College UID: 0101180391

Supervised by:-
Name of the Supervisor: DARSHANA TRIVEDI
Name of the college: THE BHAWANIPUR EDUCATION SOCIETY COLLEGE
Annexure-IA

Supervisor’s certificate

This is to certify that Mr. ASHWANI KUMAR SINGH a student of B.Com. Honours in Accounting & finance of
THE BHAWANIPUR EDUCATION SOCIETY COLLEGE under the University Of Calcutta has worked under my
supervision and guidelines foe his project work and prepared a project report with title ONLINE BANKING
AND ITS IMPACT ON CUSTOMERS which he is submitting, is his genuine and original work to the best of my
knowledge.

Place: Kolkata
Date: JUNE 2021

Signature :
Name: DARSHANA TRIVEDI
Designation:
Name of the College: THE BHAWANIPUR EDUCATION
SOCIETY COLLEGE

Annexure-IB
 Student's Declaration

I hereby declare that the Project Work with the title ONLINE BANKING AND ITS IMPACT ON
CUSTOMERS submitted by me for the partial fulfilment of the degree of B.Com. Honours in Accounting &
Finance under the University of Calcutta is my original work and has not been submitted earlier to any other
University /Institution for the fulfilment of the requirement for any course of study. I also declare that no
chapter of this manuscript in whole or in part has been incorporated in this report from any earlier work done
by others or by me. However, extracts of any literature which has been used for this report has been duly
acknowledged providing details of such literature in the references.

Place: Kolkata
Date:JUNE 2021

Signature:
Name: ASHWANI KUMAR SINGH
Address:205B, Regent Colony, Tollygunge,
Kolkata,700040
Registration No. 017-1111-0701-18
Introduction
The banks have become an essential component of most of the economies as banking services are described
as “engines for economic growth" or act as “conducts towards promoting economic growth”

Considering the benefits of using internet the bank have started to invest in this newly created market. At the
initial level, banks mainly focus on developing the commercial web-sites, with the purpose of promoting
their products and services using the internet.

With the rapid development of technology internet plays a significant role in changing the banking scenario.
It provides an online platform for various banking transactions through which it offers various services like
online payment, online fund transfer, online stock trading and online shopping etc. The use of internet as a
delivery channel for banking services is increasing rapidly in banking sector. Internet banking facilities
enable financial institutions and costumers to access their accounts, transactions and getting information on
financial products & services.

Now a day’s most of the commercial banks have launched various services through internet banking
including latest service like opening saving accounts and demand for these service is increasing rapidly.
History of banks in India
The history of banking refers to the development of banks and banking throughout history, with banking
defined by contemporary sources as an organisation which provides facilities acceptance of deposits, and
provision of funds. The history begins with the first prototype banks of merchant of the ancient world, which
made grains loans to farmers and traders who carried goods between cities. This began around 2000 BC in
Assyria and later , Greece and during the Roman empire, lenders based in temples made loans and added
two important innovations: they accepted deposits and changed money. Archaeology from this period in
ancient China and India also shows evidence of money lending activity.

The development of banking spread from northern Italy throughout the Holy Roman Empire, and in the 15th
and 16th century to northern Europe. This was followed by a number of important innovations that took place
in Amsterdam during the Dutch Republic in the 17th century, and in London in 18th century. During 20th
century developments in telecommunications and computing caused major changes to banks' operations and
let banks dramatically increase in size and geographic spread.

Banking in India in the modern sense originated in the last decades of 18th century. Among the first banks
were the bank of Hindustan, which was established in 1770 and liquidated in 1829-32; and the General Bank
of India, in 1786 but failed 1791.

The largest bank, and the oldest still in existence, is the State Bank Of India. It originated as the Bank Of
Calcutta in june 1806. In 1809, it was renamed as the Bay of Bengal. This was one of the three banks funded
by a presidency government, the other two were Bank of Bombay and the Bank of Madras. The three banks
were merged in 1921 to form Imperial Bank of India, which upon India’s independence, became State Bank
Of India in 1955. For many years the presidency banks had acted as quasi-central banks, as did their
successors, until The Reserve Bank of India was established in 1935, under The Reserve Banks of India Act,
1934.

In 1960, The State Banks Of India was given control of eight state-associated banks under the State Bank Of
India (Subsidiary Banks) Act, 1959. These are now called its associate banks. In 1969 the Indian government
nationalised 14 major private banks. In 1980, 6 more private banks were nationalised. These nationalised
banks are the majority of lenders in Indian economy. They dominate the banking sector because of their large
size and widespread networks.

The Indian banking sector is broadly classified into scheduled banks and non-scheduled banks. The
scheduled banks are those Which are included under the 2nd schedule of the Reserve Bank of India Act, 1934.
The scheduled banks are further classified into: nationalised banks; State Bank of India and its associates;
Regional
Rural Banks (RRBs); foreign banks; and other Indian private sector banks. The term commercial banks refers
to both scheduled and non-scheduled commercial banks which are regulated under the Banking Regulations
Act, 1949.

Generally banking in India is fairly mature in terms of supply, product range and reach-even though reach in
rural areas and the poor still remains a challenge. The government has developed initiatives to address this
through the State Bank of India expanding its branch network and through the National Bank for Agriculture
and Rural Development with facilities like microfinance.
Types of Banks
Retails banks: are probably the banks you’re most familiar with: you’re checking and savings accounts are
held at a retail bank, which focuses on customers as customers.

Commercial Banks: focus on business customers. Business need checking and savings accounts just like
individuals do, but they also need more complex services. They might need to accept payments from
customers, rely heavily of lines of credit to manage cash flow, and they might use letter of credit to do
business overseas.

Investment Banks: helps businesses works in financial markets. If a business wants to go public or sell debt,
they’ll use an investment bank.

Central Banks: manage the monetary system for a government. For example, the Federal Reserve Bank is the
US central bank responsible for managing economic activity and supervising banks.

Credit Unions: are similar to banks, but they are not-for-profit organisations owned by their customers (most
banks are owned by investors). Credit Unions offers products and services more or identical to most
commercial and retail banks.

Online Banks: operates entirely online- there are no physical branch locations to talk with a teller or personal
banker. Many brick-and-mortar banks also offer online services, such as the ability to view account and pay
bills online, but internet-only banks are different: they often offer competitive rates on savings accounts and
they are likely to offer free checking.

Saving and Loss: are less prevalent than they used to be but they are still important. This type of bank was
important in making home ownership mainstream, using deposits from customers to fund home loans.
History of online banking
The precursor for the modern home online banking services were the distance banking services over
electronic media from the early 1980s. The term ‘online' became popular in the late 80’s and referred to the
use of a terminal, keyboard and TV (or monitor) to access banking system using a phone line. ‘Home
Banking ‘ can also refer to the use of a numeric keypad to send tones down a phone line with instructions to
the bank.

Online services started in New York in 1981 when four of the cities major banks (Citibank, Chase
Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotext
system. Because of the commercial failure of the videotext these banking service never became popular
except in France where the use of videotext (Minitel) was subsidised by the telecom provider and the UK
,where the Prestel system was used. For more information about the latter see online banking in the UK.

When the clicks-and-bricks euphoria hit in the late 1990s, many banks began to view Web-based banking as
a strategy imperative. The attraction of banks to online banking are fairly obvious: diminished transaction
costs, easier integration of services, interactive marketing capabilities, and other benefits the boost customer
lists and profit margin. Additionally, web banking services allow institutions to bundle more services into
single packages, thereby luring customers and minimizing overhead.

While financial institutions took steps to implement e-banking services in the mid-1990s ,many consumers
were hesitant to conduct monetary transactions over the web. Today, many banks are internet only banks.
Unlike their predecessors , these internet only banks do not maintain brick and mortar bank branches.
Instead, they typically differentiate themselves by offering better interest rates and more extensive online
banking features.

First online Banking Services In The United States:

According to “Banking and Finance on the internet “ edited by Mary j. Cronin, online banking was first
introduced in early 1980s in New York. Four major banks- Citibank, Chase Manhattan, chemical and
manufacturer Hanover- offered home banking service. Chemical introduced its pronto services for
individuals and small businesses in 1983. It allowed individuals and small businesses clients to maintain
electronic check book registers, see account balances and transfer funds between checking and savings
account. Pronto failed to attract enough customers to break even and was abandoned in 1989. Other banks
had a similar experience.

Online Banking In The UK.:

Almost simultaneously with The United States, online banking arrived in the United kingdom. The UK’s first
home online banking services known as home link was set up by Bank Of Scotland for customers of the
Nottingham Building Society (NBS) in 1983. The system used was based on the UK's Prestel view link
system and used a computer, such as BBC Micro, or keyboard (Tan data Td1400) connected to the telephone
system and television set. The system allowed online viewing of statements, banks transfer and bill
payments. In order to make bank transfers and bill payments, a written instruction giving details of the
intended recipient had to be sent to the NBS who set the details up on the Home link system.

Banks and the World Wide Web:

In the 1990s, banks realized that the rising popularity of World Wide Web gave them an added opportunity to
advertise their services. Initially, they used the Web as another brochure, without interaction with the
customers. Early sites featured pictures of the bank’s officers or buildings, and provided customers with
maps of branches and ATM locations, phone numbers to call for further information and simple listings of
products.
What is Online Banking?
Online banking is an electronic payment system that enables customers of a financial institution to conduct
financial transactions on a website operated by the institution itself, such as a retail bank, virtual bank, credit
union or building society. Online banking is also referred as internet banking, e-banking, virtual banking and
by other terms.

To access a financial institution’s online banking facility, a customer with internet access would need to
register with the institution for the service, and set up a password and other credentials for customer
verification. The credentials for online banking is normally not the same as for telephone banking. Financial
institutions now routinely allocate customers number, whether or not customers have indicated an intention
to access their online banking facility. Customers number are normally not the same as account number,
because a number of accounts can be linked to the one customers number. The customer number can be
linked to any account that the customer controls, such as cheque, savings, loan, credit card, and other
accounts.

To access online banking, a customer visits the financial institution’s secure Website and enters the online
banking facility using the customer number and credentials previously setup.
Development of Online Banking In India

ICICI was the first bank to initiate the Online Banking Revolution in India as early as 1997 under the brand
name infinity.
ICICI kicked off online banking way back in 1996. But even as a whole, 1196 to 1198 marked the adoption
phase, while usage increased only in 1999- due to lower ISP online charges.
ICICI Bank initiated the internet banking in India and later in the year 1999 HDFC Bank and Citibank
followed the same.
In today’s scenario, with the help of internet various banking and financial services are provided by banks in
India.
Internet Banking offers different online services in India. According to a report published by RBI there are
three different levels of banking services offered through internet banking.
The first level i.e. Basic level services: It is basically about Websites which disseminate information about
different services and products offered by banks. It generally includes receiving and replying to customers’
queries through email.
The next level i.e. Simple Transactional Websites: It allows customer to submit their instruction and
application for different services, queries about their account balances, etc. But do not allow any fund-based
transactions on their Accounts.
The third level i.e. Fully Transactional Website: It allows customers to manage their accounts.
Bank Of India recently launched its card-less cash withdrawal service. This facility helps customers to send
money to anyone using internet banking or by using ATM, with the help of receiver’s mobile number.
The Business Transformation Program is being implemented by the Bank of Baroda which will provide its
customer convenience banking on a 24×7 basis in India and abroad with integrated delivery channels like,
internet, phones, mobiles, and others.
A number of Indian Banks have implemented Online Tax Accounting System (OLTAS) for collection of
taxes on behalf of Central Board of Direct Taxes, Government of India.
ICICI Bank launched 24×7 electronic branch, which is one-stop shop for all banking transactions. It offers
facilities such as cheque deposit machine and an electronic kiosk through which customers can be accessed
internet banking services. ICICI Bank has also introduced E-locker for its customers. It’s a virtual locker,
which can be accessed through ICICI internet banking which facilitates customers to store soft copy of their
important documents safely such as legal documents, agreements, policies, and various important certificates.
ICICI bank is offering various gifts to customers for start to use internet banking for the first time.
The banks are making their presence on social media like Facebook and Twitter for targeting huge customer
base as well as potential customers, there will be round-the-clock tweets and comments on the banks'
products and services. After launching accounts on Facebook and YouTube, SBI took one more step in the
social media by launching a Twitter handle.

List of Banks which provide Online Banking

1. ICICI BANK
2. STATE BANK OF INDIA
3. HDFC BANK
4. IDBI BANK
5. AXIS BANK
6. ANDHRA BANK
7. BANK OF BARODA
8. BANK OF INDIA
9. HSBC BANK

RBI and Online Banking

1. The Reserve bank of India constituted a working group on Interest Banking.
2. The group divided the interest banking product in India into 3 types based on the levels of access
granted.
3. They are:- 1. Information only system.
2. Electronic information transfer system.
 3. Fully Electronic Transactional system.

Current scenario of Online Banking

Internet banking has become an integral part of banking system in India. The concept of e-banking is of fairly
recent origin in India. Till the early 90's traditional model of banking i.e. branch based banking was
prevalent, but after that non-branch banking services were started. The Indian government enacted the IT Act
2000, with effect from the 17th October 2000. To examine different aspects of internet banking RBI set up a
committee on Internet Banking. The committee had focused on three major areas of Internet Banking.
Technology and Security issues, legal issues and regulatory and supervisory issues. RBI had accepted the
suggestions and recommendations of the Working Committee and accordingly issued guidelines to banks to
implement internet banking in India. The old manual systems which were prevalent in Indian banking for
centuries seem to replace by modern technologies. Table no. 1,2, and 3 exhibit a few facts and figures related
to internet/electronic banking to present its current scenario.
Table 1 shows evidence for ATMs, POS(point of sale) and electronic cards (credit and debit cards) deployed
and issued by the schedule commercial banks (SCBs) in India as on December 2014. It also provides
evidence of growing statistics of mobile banking users in India. According to it currently 1,76,410 ATM,
10,58,642 point of sales devices, 20.36 million credit cards and 500 million debit cards are working in India
and 35.5 million customers are using mobile banking. Table also shows growth rate of these banking
channels and it seems to be great in Indian Context.
Table 2 shows current transaction statistics performed through these banking delivery channels. As high as
6090.98 million transactions are electronically done through ATMs.
Table 3 shows NEFT and RTGS transactions performed in the current financial year 2020-21.
Initiative taken by the government of India for the online banking:
For growth and development and to promote e-banking in India the Indian government and RBI have been
taken several initiatives.
The government of India enacted the IT Act, 2000 with effect from October 17, 2000 which provided legal
recognition to electronic transactions and other means of electronic commerce.
The Reserve Bank of India monitors and reviews the legal requirements of e-banking on a continuous basis
to ensure that challenges related to e-banking may not pose any threat to financial stability of the nation.
Dr. K.C. Chakrabarty committee including members from IIM, IDRBT, IIT and Reserve Bank prepared the
IT vision Document- 2011-17, which provides an indicative road map i.e. guidelines to enhance the usage of
IT in the banking sector.
The Reserve Bank is striving to make the payment systems more secure and efficient. It has advised banks
and other stakeholders to strengthen the security aspects in internet banking by adopting certain security
measures in a timely manner. RBI believes that the growing popularity of these alternate channels of
payments (such as: Internet Banking, Mobile Banking, ATM etc.) brings an additional responsibility on
banks to ensure safe and secure transactions through these channels.
National Payments Corporation of India (NPCI) was permitted by the RBI to enhance the number of mobile
banking services and widen the IMPS (Immediate Payment Service) channels like ATMs, internet, mobile
etc. Along with this, NPCI is also working to bring more mobile network operators which can provide mobile
banking services through a common platform [26].
On the recommendation of the Damodaran committee, the guidelines were induced by RBI that provided
internet banking as totally secure and protected, zero-liability against loss for any customer induced
transaction & multi-lateral arrangements among banks to deal with internet banking frauds. To deal with
online banking fraud, customer can approach with their complaints to Banking Ombudsman.
Under this Ombudsman scheme 2006, a customer can file their complaints against any deficiencies in
banking service including internet banking, credit cards & ATM.
The Basel Committee on Banking Supervision’s (2001) has defined risk management principles for
electronic banking. They primarily focus on how to extend, adapt, and tailor the existing risk-management
framework to the electronic banking setting.

How to use online banking:

Method 1. Setup

1. It is required that you already have a bank account, if not then choose a financial institution. (For
example- State Bank Of India)
2. Setup an online login.
(ID # and Password) with your financial institution.
3. Once you have your information go to your financial institution website and enter your login
information.
Method 2. How to navigate and view your accounts

1. On the top navigation bar, click “Account” Then “account” overview.

2. This will take you to the main page where you can view all of your accounts and their balances.
3. Click on any account in order to see a detailed view of each account.
4. This will bring up the transaction bar the current statement to view past statement are the drop
down menu.

Method 3. Transferring money between accounts

1. To transfer money between accounts use the navigation bar at the top and click ‘transfer’.
2. For transferring money to another one of your accounts, choose from the drop down menu then pop up.
 3. Select the Account you wish to transfer money “From" and “To”.
4. Then enter the correct amount of money you want to transfer as well as the frequency.
5. Hit “continue” and you will be directed to new page where you will double check all the information
is correct and hit “continue" again.

Features of Online Banking:

 View balances – checking your balances doesn’t require much work you simply select Account
balances and take a look at your balance and past transactions. If you have more than one account,
you can also do transfer between your accounts.
 Pay bills – to pay your bills online, you just need to add to your account the names of companies you
wish to bills to. In the pay bills section, select add payees, search for the name of company and fill in
the account number for each company. You can also sign up for the e-bills services from e-post, a
service that sends you a bill by email instead of a printed one by regular mail.
 Transfer funds – when you select Transfer funds you’ll be asked where to transfer the money to and
from, when and the amount.
 Set up recurring bill payments or transfer – if you make a regular payment every month it might be
convenient to set up an automatic withdrawal from your account.
 Order cheques – we don’t need them much anymore due to online banking and debit purchases, but if
you still use cheques, you can order them directly from the CIBC website.

Services provided by SBI:

  Self-account fund transfer across India.
 New accounts opening
 New cheque book request
 Railway ticket booking
 Utility bill payment
 LIC and other insurance premium payments
 Credit card due payments
 Deposit your taxes
 Donations to Red Cross and such other organisations

Services provided by ICICI Bank:

 Bill payments
 Fund transfer
 Account information
 Smart money order service request
 Convert to EMI account to card transfer
 Prepaid mobile recharge
  Account transfer.

Advantages of Online Banking:

Very convenient. Online banking is totally easy thing to do. In the comfort of your home or offices, you can
do whatever monetary transactions you wish to do with your bank.

Unlimited service day and night. The services and various features of your bank are always available seven
days a week and 24 hours daily. The most interesting thing here is that, everything can happen with just a
click of your mouse.

No time constraints. Online Banking is so stress free because it never closes unlike the traditional banking
that has cut-off time.

Easy to access via PCs. Using your personal computer, you can do various transactions with your bank in
view of your business or any other personal or financial matters.

Easy way of payment. Bills payments can also be handled properly and smartly. Instead of waiting for
certain due dates, you can easily pay all your transactions using your computer and in co-ordination with
your bank.

Higher interest rate. Another great advantage of online banking is the interest rates which basically range
between 5% to 3.40% annually.

Disadvantages of online banking:

 Complex encryption software is used to protect account information. However, there are no perfect
system.
 Accounts are prone to hacking attacks, malware, and illegal activities.
 Learning – banks with complicated sites can be difficult to navigate and may require one to read
through tutorials to navigate them.
 Transaction problems – face to face meeting is better in handling complex transactions and problems.
 Understanding the usage of internet banking might be difficult for a beginner at the first go.
 Though there are some sites which offer a demonstration how to access online account, but not all
banks offer this facility. So, a person who is new, might face some difficulty.
Benefits for customers:
Online banking has become an accepted norms norm of monetary transactions for millions in India over the
past decades. The ease with which a customer can check his account, make payments online and transfer
funds between accounts has made this mode of banking hugely popular among Indians who are perpetually
short of time to visit the time physically. Online banking also provides a host of non-transactional features
which are quite handy to the customer. However along with the world of convenience this method of banking
has a few Inherent pitfalls which need to be understood in order to protect your money and avoid
complications subsequently.

Key Benefits of Internet Banking:

There are plenty of perks offered by banks to customers who adopt internet banking over the traditional visit
physically to the nearest branch office.
Convenience:-
This is single most important benefits that outweigh any shortcoming of internet banking. Making
transactions and payments right from the comfort of home or offices at the click of a button without even
having to step out is a facility none would like to forego. Keeping a track of accounts through the internet is
much faster and convenient as compared to going to the bank for the same. Even non-transactional facilities
like ordering check
book online, updating accounts, enquiring about interest rates of various financial products etc. Become
much simpler on the internet.
Better rates:-
The banks stand to gain Significantly by the use of internet banking as it implies lesser physical effort from
their end. The need to acquire larger spaces for offices and employ more staff to deal with the customers is
significantly reduced making it financially beneficial to the banks. This means that a portion of savings
accrued can be passed on to the customers in term of higher rates on deposits and lower rates on loans.
Services:-
Technology has made it extremely convenient for the bank as well as the customers to access to a host of
wonderful services by simply logging in. These services includes financial planning capabilities, functional
budgeting, and forecasting tools, loan calculator, investment analysis tools and equity trading platforms
which are available as simple applications on the bank’s website. Additionally most banks also provide the
facility of online tax forms and tax preparation.
Mobility:-
Internet banking has step further in the last few years in the form of mobile internet banking which accords
unlimited mobility to the customer who can now handle financial transactions even while on the move.
Availability:-
With the helpof internet banking, customer can access their banking facilities and services all around the clock
i.e. 24 hours and 365 days from anywhere anytime. They don’t need to wait for timing of bank branches.

Challenges in Online Banking :-

The challenges related to e-banking prevails in Indian context are discussed below:

Security Risk: The problem related to the security has become one of the major concern for banks. A large
group of customers refuses to opt for e-banking facilities due to uncertainty and security concerns. According
to the IAMAI Report (2006), 43% of internet users are not using internet banking in India because of security
concerns. So it’s a big challenge for marketers and makes consumers satisfied regarding their security
concerns, which may further increase the online banking use.
Privacy Risk: The risk of disclosing private information & fear of identity theft is one of the major factors
that inhibit the customer while opting for internet banking services. Most of the consumers believe that using
online banking services make them vulnerable to identity theft. According to the study consumers’ worry
about their privacy and feel that bank may invade their privacy by utilizing their information for marketing
and other secondary purposes without consent of consumers.
The trust factor: Trust is the biggest hurdle to online banking for the most of the customers. Conventional
banking is preferred by the customers because of lack of trust on online security. They have a perception that
online transactions is risky due to which frauds can take place. While using e-banking lot of questions arises
in the mind of customer such as:- Did transactions go through?, Did I push the transfer button once or twice?,
Trust us among the significant factors which influence the customers’ willingness to engage in a transaction
with web merchants.

Customer awareness: Awareness among the customers about the e-banking facilities and procedures is still
at lower side in Indian scenario. Banks are not able to disseminate proper information about the use, benefits
and facility of internet banking. Less awareness of new technologies and their benefits is among one of the
most ranked barrier in the development of e-banking.

Less internet penetration in Indian Context: The internet banking channels has evolved over the years. In
2011, 60 percent of the times basics transactions in banks were conducted in North America through online
channels, whereas internet banking usage in India increased from 1% in 2006 to 7% in 2011. So the
knowledge and availability of internet is still a one of the biggest challenges that prevails in Indian context.
According to the report of IAMAI 2006 around 22% of internet users do not have knowledge about
transferring online. So the penetration of internet and knowledge related to internet are major hurdles.

Technology used for Online Banking:

Digital Deposit Apps:-
Although credit cards and debit cards, direct deposit and on-line bills payments have made old-fashioned
paper checks a vanishing species, paper checks are still encountered by most people from time to time.
Internet technology and mobile apps have been developed that make deposit a check as easy as scanning the
check into a digital format or taking photographs of the front and back with a smartphone or with other
mobile devices. The resulting digital files or photographs can then be sent to the bank where the check is
processed in the same way as a deposit made at the teller window – and certainly seems like the future of
branch banking.
Bank of America, Chase Bank, and Citibank are just a few of the major financial institutions now offering
mobile check deposit through their apps.

Photo Bills Payment App:-

Following fast on the heels of digital deposit technology are photo bill payments apps that facilitate payments
to companies that only issue hard-copy bills and invoices.
This new technology in banking works by transmitting information from the bill into an individual’s bank
account using digital photograph of the bill. The payment amount, due date and company issuing the bill is
collected, allowing the bill to be paid electronically from the user’s account. Regular bill payments can also
be scheduled using these apps.
Currently only a few banks offer this service, including City Bank Texas, but like all new technologies that
make life more convenient, use of this service is sure to spread.

Smartphone credit card scanners:-

Studies have shown that consumers tend to spend more when a credit or debit card to make a purchase than
they might with cash. This fact has been a selling point for companies who market and service credit card
processing machines.
However new technologies now circumvents the traditional credit card machine by allowing credit and debit
card payments processing using a reader attached to a mobile device (one example of this is the Square App).
The scanner reads the card, and the specified amount of money is transferred directly from the cardholders
account into the payee's account.
According to the Better Business Bureau, this new banking technology allows small vendors to sell more
goods to a wider market and gives a competitive edge to small businesses that only receive occasional credit
card payments and craftsperson who sell at venues that are traditionally cash-based, such as craft shows and
flea markets.

Electronic meetings:-
Teleconferencing itself is not a new technology, but teleconferencing with a bank teller or loan officer in lieu
of a personal meeting at the local bank branch is relatively new and likely to be a big player in future
banking technology. Combined with on-line applications that are completed prior to the teleconference, this
service can be used to open a new account or apply for a loan or mortgage.

Mobile payment App:-

Debit and credit cards were the technology in banking industry that revolutionized payments for goods and
services in the twentieth century. Now, those payment methods are no longer convenient enough for many
shoppers and are being replaced by mobile payment apps that serve the same function.
Payment apps are increasingly accepted at many mainstream stores. To use a mobile payment app, the user’s
credit and debit card information is loaded into the app. Instead of searching through a wallet full of cards,
the consumer select card to use from the menu on their smartphone and then touches the phone to an in-store
reader. The payment is processed like a regular credit and debit card transaction.
Level up and Dwolla remain popular mobile payments app for small business owners, according to Fox
Business News. While access is currently limited, Google wallet is looking to be a popular mobile payment
app in years to come. The Google Wallet app also offers deals for certain stores that customers can redeem
just like coupons, as well as a loyalty program.

Security Problems In Online Banking:

The security of information may be one of the biggest concerns to the internet users. For electronic banking
users who most likely connect to the Internet via dial-up modem, is faced with a smaller risk of someone
breaking into their computers. Only organisation such as banks with dedicated internet connections face
the risk of someone from gaining unauthorized access to their computer or network. However, the
electronic banking system users still face the security risks with unauthorized access to their banking
accounts. Moreover, the electronic banking system users also concern about non-repudiability which
requires a reliable identification of both the sender and the recipient of on-line transactions. Non-secure
electronic transaction can be altered to change the apparent sender. Therefore, it is extremely important to
build in non- repudiability which means that the identity of both the sender and the receiver can be
attested to a trusted third party who holds the identity certificates.

What can customer do?

To ensure that the bank’s security measures cannot be undermined by the manipulation, it is essential, too
take steps to protect the system they use. These being include security-conscious when using the internet
and checking the banks statements regularly.
Should customers nevertheless suspect that they have come across internet fraudsters, they should ensure
that access to their online account is blocked immediately and report to their any irregularities to their bank
without delay. All relevant information should be saved so that the attempt at fraud can be treated.
It is highly important for people who use computers to maintain backup files regardless of whether or not
they bank online. A convenient way of making backups is to save a data in removable hard drive or a CD.

Survey on customers
 1. What is your reason for using online Banking service ?
43.3 % 16
To save time 27 % 10
24 hours availability 29.7 % 11
Others 0 0
Total 100% 37

To save time

123

2. How often you use your online Banking service ?

Daily 48.7 % 18
Weekly 37.8 % 14
Monthly 13.5 % 5
Never 0 0
Total 100% 37

Chart Title

DailyWeeklyMonthlyNever
 3. Do you avail all online Banking facilities ?
Yes 59.5 % 15
No 40.5 % 22
Total 100% 37

Yes

123

4. Are you aware of security threat and fraud in online Banking service ?
Yes 89.2 % 33
No 10.8 % 4
Total 100% 37

Yes

123
 5. Does you bank upgrade your online Banking service regularly ?
Yes 81.1 % 30
No 18.9 % 7
Total 100% 37

Yes

123

6. Do you still visit your bank after using online Banking service ?
Yes 48.6 % 18
No 51.4 % 19
Total 100% 37

Yes

123

7. Do you think online banking is better then traditional banking ?

Yes 78.4 % 29
No 21.6 % 8
Total 100% 37

Yes

123

8. How much satisfied are you with your online Banking service ?
Satisfied 37.9 % 14
Very satisfied 48.6 % 18
Neutral 13.5 % 5
Not satisfied 0 0
Total 100% 37

Chart Title

Satisfied Very satisfied Neutral Not satisfied

Conclusion
Online banking is changing the banking industry and is having the major effects on banking relationships.
ICICI Bank initiate the first online banking in India. Online banking has advantages as well as disadvantages
also. Advantages like customers can pay bills through online, they can check their account balances through
online banking without visiting the bank. Disadvantages like security problem, fake e-mail, hacking, and
fraud through online banking.

All banks who provide online banking they should follow security-software based system. It will help them
to protect from security issues. And customer also have to give concentration to their security password. It
should be keep changing in a six month so hacker or other fraudulent people can’t harm their account.

From the view and opinion given in the questionnaire, I thus have come to a conclusion that is:
Customers are satisfied to using online banking service because it is time saving and easy to communicate
with bank without visiting the bank. Customers can do many activities through online banking like they can
pay bills, they can transfer money to anyone etc.
But due to online theft some of customers hesitate to use online banking services, they prefer visiting banks
for all the facilities rather than doing it online. Sometimes they face some kind of issues in transferring the
money or paying bills. Poor online services of some banks is also a reason for some people not using them.

Recommendations
1. Bank should improve their security level for online banking.
2. Bank should follow new security-software based technology.
3. Banks should give more importance on customer’s trust level. So customers can invest their money in
the bank with audacity.
4. It will be beneficial for the bank, if customers are investing more in their bank because it will give
higher turnover to the bank.
5. Customers also keep in mind one thing while doing online banking that is , don’t log-in your banking
account in front of unknown persons.
6. Customers should always keep changing their password so they can protect themselves from the
fraudulent people.
7. Before opening online account in any bank customer should check full details of that bank so they
can protect themselves from fraud banks.
8. Customers should be aware of the fraud Websites.
9. For example:- SBI bank has it’s original website like www.sbionline.com
But fraud Websites like www.onlinesbi.com
10. Overall customers and bankers both play a important role in online banking. So both have to
understand their duties and responsibilities for a safe online banking service.
Limitations
1. The biggest limitation is the time.
2. Error while calculating the questionnaire.
3. Difficulty on survey while filling the form online.
4. Difficulty in find the information .
5. Lack of knowledge about banks.

Annexure
Name:
1. Age group
 Below 20
 20-35
 35-60
 Above 60
2. Occupation
 Student
 Employee
 Profession
 Businesses
3. What is your reason for using online banking services?
 Convenience
 To save time
 24 hours access to account
 Others
4. How often do you use you online banking service?
 Daily
  Weekly
 Monthly
 Never
5. Do you avail all online banking facilities?
 Yes
 No
6. Are you aware of security threats and frauds in online banking services?
 Yes
 No
7. Does your bank upgrade your online banking service regularly?
 Yes
 No
8. Do you still visit your bank after using online banking services?
 Yes
 No
9. Do you think online banking is better than traditional banking?
 Yes
 No

10. How much satisfied are you with your online banking services?
 Satisfied
 Very satisfied
 Neutral
 Not satisfied

Bibliography

Accessing data base that helped me a lot, some are listed below
Internet sites
1. www.sbionline.com
2. www.wikipedia.com
3. Http://www.electrobank.com/ebaeb.htm
4. Http://www.hp.com/ibpprogs/gsy/advantage/june96/custspot.html
5. Http://www.rsa.com/set/bankset.htm
6. Http://www.slideshare.net/ranjeet143yadav/internet-banking-7193691