etc. The third level of Internet banking services are offered by Fully Transactional Websites which allow the customers to operate on their accounts for transfer of funds. payment of different bills.INTRODUCTION Banks have traditionally been in the forefront of harnessing technology to improve their operations including the Automated Teller Machines. The delivery channels include direct dial – up connections. subscribing to other products of the bank and to transact purchase and sale of securities. as an additional method of serving the customer or by new banks. The provision of banking services on a secure website operated by their retail or virtual bank. etc. over a long time. This form of banking is generally referred to as Internet Banking. With the popularity of PCs. etc. but do not permit any fund-based transactions on their accounts. the levels of banking services offered through INTERNET can be categorized in to three types: The Basic Level Service is the banks’ websites which disseminate1 information on different products and services offered to customers and members of public in general. Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to their products. services and efficiency. queries on their account balances. been using electronic and telecommunication networks for delivering a wide range of value added products and services. In the next level are Simple Transactional Websites which allow customers to submit their instructions. Some of these banks are known as ‘virtual’ banks or ‘Internet only’ banks and may not have any physical presence in a country despite the offering IMPORTANCE OF INTERNET BANKING . It may receive and reply to customers’ queries through e-mail. etc. private networks. Broadly. applications for different services. Personal Computers including the Automated Teller Machines. They have. credit union or building society is referred to as internet banking Here the customers can access the data without time and geographical limitations. who deliver banking services primarily through Internet or other electronic delivery channels as the value added services. The above forms of Internet banking services are offered by traditional banks. public networks etc and the devices include telephone. easy access to Internet and World Wide Web (WWW).

The evolution of electronic banking started from the use of automatic teller machines (ATM) and has passed through telephone banking. . The enormous thing is that you can relocate funds from account to account. By maintaining an eye on it. and perhaps the greatest benefit is that you know how to pay your charges online! You can have your charges sent electronically so that you are not just saving paper. The fundamental shift towards the involvement of the customer in the financial service provision with the help of technology especially internet has helped in reduce costs of financial institutions as well as helped client to use the service at anytime and from virtually anywhere with access to an internet connection. But it has been forecasted that among all the categories. We are regularly multitasking.Our civilization operates on a busy. electronic fund transfer and the revolutionary online banking . With internet banking. direct bill payment. As an alternative of buying a stamp to send in your check. and there does not seem like there is ever enough time. busy. The rise in the e-commerce and the use of internet in its facilitation along with the enhanced online security of transactions and sensitive information has been the core reasons for the penetration of online banking in everyday life . online banking is the future of electronic financial transactions. Banks naturally have very tough hours for working adults to fit into their schedule. The use of electronic banking has removed the banking personnel that facilitate the transactions and has placed additional responsibilities on the customers to transact with the service. you can see if there are any suspicious charges almost directly so you can defend your finances and personal information. you be able to just transfer money directly into your account. The future of electronic banking according to some is the acceptance of WAP enabled banking and interactive-TV banking . you can do your banking several day of the week at several hour of the day. Although the use of E-banking is provided for the benefit of the customers but these changes require increased work or involvement on the part of customers. You be able to keep an extremely watchful eye on the debits and credits that hit your account instantly. but you are also saving on postage. check in on your balances. According to theorists customer evaluation of the electronic services is influenced by attributions of success and failure in inter personal service situations. Internet banking also offers you slightly more protection . busy mentality.

The world is changing at a staggering rate and technology is considered to be the key driver for these changes around us. .CONTEXT History of internet banking Internet banking can be defined as a facility provided by banking and financial institutions. During 1980’s there were certain developments such as:   Rapid development of internet TCP/IP system E-commerce In May 1995 Wells Fargo-the first bank in the world to offer customer access to their accounts over the internet. An analysis of technology and its uses show that it has permeated in almost every aspect of our life. There are many activities are handled electronically due the acceptance of information technology at home as well as at workplace. The transformation from the traditional banking towards internet banking has been a ‘leap' change. Internet can be seen as a truly global phenomenon that has made time and distance irrelevant to many transactions. that enable the user to execute bank related transactions through Internet. ICICI bank was the first to initiate the internet banking revolution in india during 1997 under the brand name ”Infinity”.

cobrowsing. chat) Viewing recent transactions Downloading bank statements. etc. including bill payments and telegraphic/wire transfers Funds transfers between a customer's own transactional account and savings accounts Investment purchase or sale Loan applications and transactions.FEATURES OF INTERNET BANKING Transactional (e. cheque links. apply for a loan. wire transfer.. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions. Different services provided under internet banking are:Online bill payment Shopping Ticket booking Prepaid mobile recharge Market watch Personal home page Investment services Online applications Personal update . performing a financial transaction such as an account to account transfer. for example in PDF format Viewing images of paid cheques Financial Institution Administration Management of multiple users having varying levels of authority Transaction approval process UNIQUE FEATURE personal financial management support. paying a bill.g. such as repayments of enrollments Non-transactional (e.g. such as importing data into personal accounting software. new account..) Payments to third parties. online statements.

However. pay bills.Communicative online banking allows for some communication between the patron and bank. transactional Internet banking offers all of the benefits of a traditional brick-and-mortar institution. Transactional Internet Banking-The most popular online banking type. This is meant for marketing purposes only. nor does it allow for communication between the financial institution and customers. new account updates. Communicative Online Banking.Types of Internet Banking The advent of the World Wide Web in the mid-1990s brought information to our fingertips. allowing their patrons to send. hear weather reports. this is typically limited to fundamental interactions such as account inquiries. This includes full control over your accounts---deposits. In recent years. receive and monitor money in their accounts. withdrawals. much like a brochure. . secure and convenient. play interactive games and keep abreast of breaking news. Increased security measures now make Internet banking safe. transfers. There are types of internet banking such as:Informational Internet Banking.This fundamental level of banking does not allow patrons to view or maintain accounts. we can shop. updates and online payments. contact information updates and balances. especially in the case of mobile online banking. Using the Internet. both Internet-based and traditional brick-and-mortar banks have set up shop online. Informational Internet banking simply means the bank provides basic information about its products and services. and there is no connection to the bank's main computer systems. loan or mortgage applications. Communicative online banking may connect with the bank's main computer systems.

Process of internet banking Opening the bank’s website Selecting the option which provides Internet Banking    Enter the user-Id and Password/PIN Perform the requisite transactions Logout .

Current Mobile Banking Applications: SMS Banking WAP Banking STK (Sim Toolkit) Banking  o o o IVR  Interactive Voice Response (IVR) is a software application that accepts a combination of voice telephone input and touch-tone keypad selection and provides appropriate responses in the form of voice  IVR has come into our life at the beginnings of 90’s. . MOBILE BANKING  It refers to the banking activity that are carried out on mobile phone.TECHNOLOGIES RELATED TO INTERNET BANKING The technologies are:    Telephone banking Mobile banking IVR ATM EFT AFT   TELEPHONE BANKING  When banking and financial services are delivered to the customer of a bank through the It uses AVR(automated voice response) In this technology a customer uses the tone-phone to send digitized data messages to the medium of telephone is called as telephone. the system contains software to recognize the tone/word.   system in order to activate a particular service.

credit card cash advances. that contains a unique card number and some security information such as an expiration date or CVVC (CVV). and less expensive than paper check payments and collections. the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip.  Using an ATM. customers can access their bank accounts in order to make cash withdrawals.  EFT is safe. and check their account balances as well as purchase prepaid cellphone credit. One of the most widely-used EFT programs is Direct Deposit. .   First step in Telephone Banking Peak transaction volume in salary payment days for balance inquiry Integrated with ATM system ATM(AUTOMATED TELLER MACHINE)  On most modern ATMs. in which payroll is deposited straight into an employee's bank account. efficient. secure. AUTOMATED FUND TRANSFER  The automatic funds transfer is a financial transaction that ensures funds are sent and received on schedule without the need for human intervention. ELECTRONIC FUND TRANSFER  Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money changing hands. Authentication is provided by the customer entering a personal identification number (PIN).

the TAN is only valid for a short period of time. Signature based online banking where all transactions are signed and encrypted digitally. used for the login and TANs representing one-time passwords to authenticate transactions. Digital certificates are used against phishing and pharming. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium. many banks have adapted this "SMS TAN" service as it is considered as very secure. TANs can be distributed in different ways. the use of class-3 card readers is a measure to avoid manipulation of transactions by the software in signature based online banking variants. 2. COUNTER MEASURES There exist several countermeasures which try to avoid attacks. a. The most secure way of using TANs is to generate them by need using a security token. Usually online banking with PIN/TAN is done via a web browser using SSL secured connections. b. stored in the security token (this is called two-factor authentication or 2FA). The PIN/TAN system where the PIN represents a password. depending on the concrete implementation. Especially in Germany and Austria. 1. To protect their systems against Trojan horses. the most popular one is to send a list of TANs to the online banking user by postal letter. so that there is no additional encryption needed. is to send the TAN of the current bank transaction to the user's (GSM) mobile phone via SMS. These token generated TANs depend on the time and a unique secret. The SMS text usually quotes the transaction amount and details. users should use virus scanners and be careful with downloaded software or e-mail attachments . Another way to provide TANs to an online banking user.SECURITY MEASURES There exist two different security methods for online banking.

Banks access the customer database and then get connected to the web server for the transactions. Firewalls are used for the protection.ARCHITECTURE In the internet architecture there is a WEB SERVER. To the web server the BANK SERVER is connected. The web server is connected to the internet. .

 encryption) would ensure that privacy of data flowing between the browser and the Infinity system is protected. PC Magazine Online also offers a primer: How Encryption Works. encryption and digital certification ensures that your account information is protected from unauthorised access:  Firewalls and filtering routers ensure that only the legitimate Internet users are allowed to Encryption techniques used by the bank (including the sophisticated public key access the system. Some basic information on the transmission of confidential data is presented in Security and Encryption on the Web. A multi-layered security architecture comprising firewalls. filtering routers. . member institutions rated security as the most important issue of online banking.  Digital certification procedures provide the assurance that the data you receive is from the Infinity system.MAIN CONCERNS IN INTERNET BANKING In a survey conducted by the Online Banking Association. There is a dual requirement to protect customers' privacy and protect against fraud. Banking Securely: Online Banking via the World Wide Web provides an overview of Internet commerce and how one company handles secure banking for its financial institution clients and their customers.

BENEFITS FOR CUSTOMERS Convenience-24 hrs a day and 7 days a week Cost. Communication.communicate easily Environmental-abolishing the uses of paper . BENEFITS FOR SMALL TO MEDIUM BUSINESS to run its operations more effectively lower cost than traditional financial management mechanisms.BENEFITS FOR BANKS Large customer coverage Lower cast of operation International promotion of products and services Increasing customer satisfaction and providing personalized relationship with customers. 3.reducing transfer fees Speed.faster circulation of assets Competitiveness-fostering competition in financial market. 2.ADVANTAGES OF INTERNET BANKING 1.

. For the new users who have performed financial transactions for only a few times. Tutorials and live customer support may be provided. the bank may ask customers to re-enter account information which can be a cause of worry. Impersonal. Bank site changes. they may still have this doubt whether or not they did the right thing such as clicked the right button and so on. navigating through a website of an internet bank may be hard and may take some time. When this happens. they always use the most advanced security technology in protecting their websites. Despite the growing popularity of internet banking.DISADVANTAGES OF INTERNET BANKING Internet banking services provide a number of benefits to consumers. you only do business with the use of a computer. this should not be a problem as banks that provide internet banking services prioritize security above anything else. though. In other words. Since they value their customers. Some of the disadvantages are :1. 5. However. They can't help but worry about this aspect what with news on fraudulent bank transactions that pop up every now and then. Lack of trust. 4.Most banks upgrade their online programs on a periodic basis sometimes adding new features and products.. internet banking is not ideal.Many people shy away from internet banking because of the security threat. 3.Doing transactions on the internet can be very impersonal. to help the client in his or her needed tasks so it's best to take the time to know the virtual environment. No individual to receive and check your money or correct some wrong information that you might have written on a certain form. Because of this complexity. it cannot be denied that some people still remain hesitant doing transactions online especially where money is concerned.For a first time user. And so for people comfortable dealing with real people who provide personalized services and using paper and money.Many people still don't trust the internet. They can only be comfortable once they print the transaction receipt and the transaction appeared on the bank statement. Opening an account could also take time as some sites ask for numerous personal details including a photo identification which can inconvenience the potential customer. they may be discouraged to use this internet banking service. Security fraud.. 2. Difficult for first timers.

a simple ignorance or oversight can make a huge dent in your hard-earned savings. Sometimes. you will be unable to access your accounts. The number and password are then used to carry out transactions on their behalf without their knowledge. Never enter your user ID or password or such sensitive information without ascertaining that you are on the right website. it has to be fake. birthdays. Securing your account Here are some simple tips to prevent you from falling into the trap of cyber criminals. Check sites Url Always check the URL of your bank's web site. Phishing A person's personal details are obtained by fraudsters posing as bankers. Just memorise it. 3. Never click on the link in the email. They are asked to provide all personal information about themselves and their account to the bank on the pretext of database upgradation. Never reveal password to anyone. Try to have an alpha- . The personal information should not be kept in a public computer or in emails. This includes being unable to withdraw money from ATMs or to use your debit card. Do not even write it on a piece of paper on diary. 2. 4. who float a site similar to that of the person's bank. Hacking Here.6. 5. Full-proof password Change your online banking password at regular intervals. kid's or spouse's name and telephone numbers. Never reply to queries from bank online about account or personal details. like first names. Avoid online banking on unsecured wifi systems and operate only from PCs at home.If the Internet goes down in your area or the area of the banking office. Accessibility. The fraudster needs to be an adept cyber criminal who can steal information stored or transacted in any computer. If you see anything other than the bank's genuine URL. Fraudsters can lure you to enter your user ID and password at a fake website that resembles your bank. Remember. Also. Always type the Web address of your bank into the browser address space. TIPS TO AVOID INTERNET BANKING FRAUDS The various ways to avoid interbanking frauds are:1. personal data is stolen through hacking. avoid easy-to-guess passwords. a spyware is installed in computer to gain access to all files. It should be alphanemeric and change it frequently.

numeric password. Public PCs Also. If you notice irregularities (like you are logging in after two days. Close the browser to ensure that your secure session is terminated. check the panel whenever you log in. avoid locations that offer online connections through wireless networks (Wi-Fi). This little amount of `finger exercise' will go a long way in safety. The fraud here takes advantage of unsecured cyber cafes. As it can easily be cracked by cyber criminals. Public access can be injurious Don't leave the PC unattended after keying in information while transacting on the website. A police office says. where privacy and security are minimal. Always log out when you exit the online banking portal. Never select the option on browser that stores or retains user name and password. Keep your system up to date Regularly check for security updates for your computer operating system. Most security updates are aimed at reducing risks to your computer. 8. 9. "Sometimes. always type it in. especially if you connect to the Internet through a cable or a DSL modem. If your bank has it. Always check 'last logged' Most banks have a 'last logged in' panel on their websites. report the matter immediately to your bank and change your password right away. And. using Net banking services at cyber cafes leaves one vulnerable to data thieves. Install a personal firewall to prevent hackers from gaining unauthorised access to your computer. Make sure that your operating system and browser have the latest security patches installed." CONCLUSION . 6. Avoid accessing your bank online at cyber cafes or on a share or public computer. Also. If you have several bank accounts. one that combines alphabets and numbers. the cafe owners are hand-in-glove with the thugs. these may be data-related or otherwise. never paste your password. but the panel says you logged in that morning!). Never exit simply by closing the browser. always install these only from trusted websites. never use the same online banking password for all. Also. Another modus operandi adopted by cheats these days is stealing data from public computers or shared PCs. 7.

REFERENCES . free bill payment and rebates on ATM surcharges It facilitates faster.More and more banks are coming to realize that internet is a part of banks' alternative delivery channel strategies activities concentrated in the business-to-consumer segment. focused on retaining clients In Internet banking. easier and more reliable service to clients It helps in the development of Corporate image  Exceptional rates on Savings. Since its evolution in 90th decade. security is a primary concern. CDs. has opened up new window of opportunity to the banks and existing financial institutions. The strategy for banks is to provide value-added services to products to customers utilizing the Internet extensively. Web based banking service or E-Banking. including personal loans and mortgages 24 hour account access Quality customer service with personal attention The potential of “E-banking is huge. the number of users     will explode”. it is having unprecedented growth. and IRAs Credit cards with low rates Easy online applications for all accounts. the latest generation of banking transactions. With the increase in connectivity. Security concerns have been addressed from every angle within the architecture of the Internet banking application Internet banking is now being widely accepted because of the following reasons:It accelerates the process of creating new markets It Reduces operational costs and workforce  Checking with no monthly fee.

    www.google.ibkgintro.K.K.C. P.authorstream.com Banking in the new millennium By-S.Gurusamy  Banking Theory By.com www.Shekhar Lekshmy Shekhar   Banking By.Dr.com www.com www.Gordon and Natrajan  Banking Theory and Practice By. Srivastava .slideshare.

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