A PROJECT ON

“E-FINANCE IN SBI”
SUBMITTED TO THE
UNIVERSITY OF MUMBAI
FOR THE DEGREE OF
BUSINESSE MANAGEMENT STUDIES
IN PARTIAL FULFILLMENT OF
REQUIREMENT OF THE COURSE
BY
ARAVIND ANANDA
DEPARTMENT OF BMS
MUMBAI JUNIOR COLLEGE
APRIL-2021
STATEMENT BY THE CANDIDATE

I, ARAVIND ANANDA , wish to state the work embodied in this project entitled“E-
FINANCE IN SBI” is carried out under the supervision of Prof.___, , MUMBAI JUNIOR
COLLEGE
This work has not submitted for any other degree of this or any other universities.

Dr.Rinkesh Chedda
_____________________ ______________________
(EXTERNAL EXAMINER) (CO-ORDINATOR)

____________________
ARAVIND ANANDA
 DECLARATION

I MR. ARAVIND ANANDA , student of MUMBAI JUNIOR COLLEGE

OF from BMS (SEM VI) here by declare that I have completed the
project on “E-FINANCE IN SBI” in the academic year (2020-2021) and
the information is true and best of my knowledge.

_______________________________

ARAVIND ANANDA
 ACKNOWLEDGEMENT

I feel deeply indebted towards people who have guided

me in this project. IT would have not been possible to
make such an extensive report without their support and
guidance.
I would firstly like to express my gratitude towards for
having shown to much trust and optimum in guiding and
encouraging me. She has shown a lot of openness in her
approach and I would like to thank her for her support in
a way that has lead to proper and effective learning.
I would like to thank all the faculty members of the BMS
,BBI, BAF & BMM department for their guidance and
motivation.
I express my gratitude to our BMS Coordinator, Prof.
__________ sir and our Principal Madam Dr.Usha Iyer,
for all support I needed to complete the project report.
Last but not the least I am grateful to my family
members and my friends for being on my side always,
without their help and motivation it would not have been
possible complete my project.
 PROJECT OF
E-FINANCE
IN SBI

IN
 INDEX
CHAPTERS TOPICS

1. INTRODUCTION

2. RESEARCH
METHODOLOGY
3. LITERATURE
REVENUE
4. DATA ANALYSIS,
INTERPRETATION &
PRESENTATION
5. CONCLUSIONS &
SUGGESTIONS
6. BIBLIOGRAPHY
APPENDIX
 CONTENTS
CHAPTER. 1.INTRODUCTION
1
1.1 INTRODUCTION ABOUT
SBI
1.2 WHAT IS E-FINANCE
1.3 DEFINITION OF E-
FINANCE
1.4 EVOLUTION OF E-
FINANCE
1.5 KINDS OF E-FINANCE
SERVICES OF SBI
1.6 ORIGIN OF E-FINANCE
AND ELECTRONIC
COMMERCE
1.7 CHANNELS IN E-BANKING
OF SBI
1.8 SBI’s SUPPLY CHAIN IN E-
FINANCE SCHEMES
1.9 IMPACTS OF E-FINANCE
1.1O RAISE OF E-FINANCE
AND ELECTRONIC TRADING
1.11 SYSTEMS OR
ORGANIZATIONS
FACILITATING E-FINANCE
1.12 BENEFITS OF E-FINANCE

1.13 ISSUES AND

CHALLENGES
1.14 MODELS OF E-FINANCE

1.15 SCOPE OF E-FINANCE

1.16 RISKS AND

 ABSTRACT
This purpose of this paper is to provide an overview of the status of e-finance in SBI
and discuss related issues and challenges. Provides data about growth of e-finance in
the last decade. Introduces advances and innovations in e-finance in SBI and
challenges facing the financial services and IT industries. Design/methodology – The
paper employs the archival method of reviewing related literature (theoretical,
applied and empirical) and organizing and presenting the topics to provide an
overview of e-finance status. Findings – The major contributions and finding e-
finance in SBI, application of technology to e-finance, growth of the e-finance OF SBI
in the financial services industry. Research limitations/implications – The paper
provides areas of e-finance that face many different challenges and calls for further
research in a number of areas related to e-finance technology and the interface of
financial services. The main value or contribution of this paper is bringing together
most of available literature, advances, innovations, application of IT in the financial
services industry and showing how organizations could benefit from such innovations
 CHAPTER-1.INTRODUCTION
1.1INTRODUCTION
E-finance includes all the relationships relating to financial transactions on the
internet: - Finance to consumer aimed at the family or individual. - Finance to
business aimed at public and private companies. Among the online services offered
by banks and brokerage firms in recent years it is one of the most successful, many
young savers have thus approached the world of finance, sometimes even in a rash
way, but helping to build a part of that phenomenon then called New Economy . In
practice, a common citizen can turn to his bank or to a specialized company and ask
to activate the so-called "trading" service from that moment the user will be free to
operate, sitting comfortably at home on the world stock markets.
Let's not forget that until a few years ago, the common saver could only operate
through the appropriate bank offices, moving in person during the opening hours and
always having a bank official as an intermediary. In the recent past, moreover, small
savers were allowed to operate only with financial instruments of the national stock
market, with the advent of online trading it has become possible for even a small
saver to operate on foreign markets and on more advanced financial instruments such
as social lending or risky such as futures and options .
E-Finance also known as internet banking or web banking, is an electronic
payment system that enables customers of a bank or other financial institution to
conduct a range of financial transactions through the financial institution's website.
The online banking system will typically connect to or be part of the core
banking system operated by a bank and is in contrast to branch banking which was the
traditional way customers accessed banking services.
Some banks operate as a "direct bank" (or “virtual bank”), where they rely completely
on internet banking.

ABOUT SBI:-
State Bank of India welcomes you to explore the world of premier bank in India.In
this section, you can access detailed information on Overview of the Bank,
Technology Upgradation in the Bank, Board of Directors, Financial Results and
Shareholder Info.The Bank is actively involved since 1973 in non-profit activity
called Community Services Banking. All our branches and administrative offices
throughout the country sponsor and participate in large number of welfare activities
and social causes. Our business is more than banking because we touch the lives of
people anywhere in many ways.Our commitment to nation-building is complete &
comprehensive.
Internet banking software provides personal and corporate banking services
offering features such as viewing account balances, obtaining statements, checking
recent transactions, transferring money between accounts and making payments.
Living in India, we might find these ideas too farfetched but the truth is that Internet
has changed the way these services are delivered, particularly in countries where the
Internet penetration is high. The different ways in which internet is trying to
revolutionize the delivery of the financial services and products are given below:-
1. INTERNET BANKING
2. ELECTRONIC BILL PAYMENT
3. ONLINE BROKERAGE
4.ONLINE DELIVERY OF FINANCIAL PRODUCTS LIKE MORTGAGES

1. INTERNET BANKING
Two different necks of the woods have come up in the context of Internet Banking.
One is that the banks and the NBFCs are trying their hands on the entire market of
financial services. On the flip side, new Internet Sites are coming up and challenging
the banks and the NBFCs. Banks are trying new schemes and melding moves to
stronghold their customers while the dot-coms are fragmenting the market by
providing first-rate aid.
The value of banking industry in India is $ 270 Billion by the total asset value, and
the total deposits account for $ 220 Billion according to the report by IBEF. So, with
such a great potential, this industry is becoming a milepost of opportunities. The rural
penetration of Internet in India is 29% that will become 48% in 2018. So, they are in
the limelight for the banks to take hold from products like Agri-Loan.
All characters share the same objective: take possession of the customers, provide
them the knowledge about the domain with services and competitive products and
increasing the value proposition of their brands.
Earlier, when the banking was offline, the customers had a gap between the
content and the reach. So, this discontinuity has been filled up by internet banking.
Institutions can now cover the wider audience, shifting the competition from products
 to services. The most benefitted through E-Banking are the private sector banks that
have introduced the concept of Telephone Banking and Home banking.
Also, the E-Banking has worked for the customers who can now apply for
products like loans and insurance without getting into long queues. Instead of making
an attempt of visiting individual websites of various banks and getting the charges
like the Interest rates, they can use the power of technology and access Online
Financial Services Comparison platforms which will help them understand the hidden
charges and make their journey of availing services like loans and insurance smooth.
The time has shifted from the basic Net Banking like NEFT and RTGS to the very
economical E-Wallets
Internet banking is the system that provides the facility to the customer to conduct
the financial and non-financial transactions from his net banking account. The user
can transfer funds from his account to other accounts of the same bank/different bank
using a website or an online application. The customer uses a resource and a medium
to conduct financial transactions. The resource that a customer uses might be an
electronic device like a computer, a laptop, or a mobile phone. The internet is the
medium that makes the technology possible.
The facility of internet banking is provided through banks and the customer must
be an account holder with any bank to get the facility available for him/her.

 FEATURES OF INTERNEY BANKING:-

 The customer can view account statements.
 The customer can check the history of the transactions for a given period by the
concerned bank.
 Bank, statements, various types of forms, applications can be downloaded.
 The customer can transfer funds, pay any kind of bill, recharge mobiles, DTH
connections, etc.
 The customer can buy and sell on e-commerce platforms.
 The customer can invest and conduct trade.
 The customer can book transport, travel packages, and medical packages.

 ADVANTAGES OF INTERNET BANKING ARE:-

1. Internet banking is 24 hours a day and 7 days a week. One can send money any time.
2. Payment of bills or ticket booking is easy with online banking or net banking.
3. With Internet banking Fund transfer, loan application can be done within seconds.
4. One can update contact information as well as can check online statement with Net
Banking.
5. One can check balance and online transactions any time, no need to visit bank.

 DISADVANTAGES OF INTERNET BANKING ARE:-

1. Internet connection is required for Net Banking.
2. If bank's server is down or internet speed is slow then online transaction is not
possible.
3. One can misuse your account if your password or Pin Id. comes in hand of an
unauthorized person.
4. Basic knowledge of computer and Internet is must in order to use Internet Banking.
Security of Internet Banking
The financial information of a customer is important. This is the reason a customer
trusts financial institutions. The financial institutions keep it on a high priority that the
security of customers’ accounts shouldn’t face a breach. The financial institutions are
using two types of security methods to make internet banking safe and secure:
 Use of PIN/TANs –Under this system, a PIN is used to login and TANs are used to
conduct transactions. TANs are one time passwords. TAN is sent to the customer via
SMS on registered mobile number that corresponds with the login user id. It is valid
for a short time frame.
Internet banking is conducted using web browsers with SSL enabled websites, so
encryption is not an important issue. It also uses signature verification as a base.
Under this method, the transactions done by the customer are signed and encrypted
digitally. The smart cards or any other memory storable medium can be used to store
keys for signature generation and encryption.

2. ELECTRONIC BILL PAYMENT

The EBP (Electronic Bill Payment) have been proved a significant tool to attract
customers by making the transactions more efficient and accessing the chapter and
verse of their financial health more easily. Although the CMS (Cash Management
Services) and the revenue generated by processing in the physical form have been
affected by EBP but still banks take it as an integral and most vital part of services to
the customers. Banks have consolidated platforms to pay the bills or recharge online
 which gives the customers relaxation from the hassles of late payments and issuing
cheques, and also add-ons like real-time SMS alerts, etc. This has facilitated the
customer to check their account balance while paying the bills. The upper hand of
EBP in the market has facilitated the sale of Debit and Credit cards and also has given
advantage to payment gateways.
E-Finance is about web-enabled finance function which includes all areas of
financial services industry. However, if its true benefits are to be realized, e-Finance
is far more than just adding a web front-end to financial services. It is about changing
fundamentally the value proposition of the finance function by redefining its core
activities, changing the interaction mechanism between itself and its prime customers,
and moving it up the value chain by creating and assisting others in the organization
to create better value for shareholders. Technology enablers play key roles in making
the transition to e-Finance. An e-Finance transformation sees finance change its role
from transaction processing to true business partnering, with far reaching implications
on interactivity with customers, suppliers and others within the organization.
Developments in technology and deregulation are eroding the nature of what has
made banks special. On the lending side, e-Finance allows non-banks financial
institutions and capital markets to reach far more borrowers, including small and
medium-size enterprises (SMEs). On the deposit and payments system side, many
deposit substitutes (such as stored value cards) are emerging and many non-banks are
offering payment accounts. The purpose and main focus of this paper is to provide,
 An overview of e-finance, its growth, impacts and future prospects in the financial
services industry and e-commerce,
 A summary review of the nature of the financial products, services and information
that are available to institutions and individuals globally, relevant costs, benefits, and
drawbacks,
 An analysis of the advantages/disadvantages of legacy and e-finance, potential areas
of growth, consolidation, and the future path of the industry in a rapidly-changing
environment,
 A review of technological infrastructure and regulatory advances (or lags) that have
enabled (hindered ) the growth of e-finance and e-business
 A review of the impact of e-finance globally, including its impacts on international
trade and investment and on developing economies and unique and extra challenges
they face.
 Introduce examples of products and services unique to e-finance, and finally,
 Identify areas or issues related to e-finance that needs further research and
investigation.

 FEATURES OF ELECTRONIC BILL PAYMENY

 It is supported by computer technologies. It realizes storage, payment, and circulation.
 Multiple functions are integrated together, including deposit, loan, and non-cash
settlement.
 It is widely applied to areas such as production, exchange, distribution, and
consumption.
 It is simple, secure, fast and reliable.
 It is usually accomplished through an exclusive network for banks.
Types of Electronic Payment System are:
 Electronic cash
 Electronic wallets
 Smart cards
 Credit cards
 Debit cards
 Charge cards

 ADVANTAGES OF ELECTRONIC BILL PAYMENT

1. Economy:-By any standard, e-commerce is economical. Unlike the brick-and-mortar
(traditional) environment, there is no rental of physical store space, insurance or
infrastructure investment.

2. Global reach:-The internet can be accessed by anyone by anyone at any time and
from anywhere in the world. Thus, the market reach of a company goes beyond its
geographic location and time horizon to transact business with customers from all
over the world.
3. Information sharing and convenience:-Electronic marketplaces improve
information sharing between merchants and customers and promote quick deliveries.
Customers and merchants save money, experience no traffic jams, and do not have to
carry heavy shopping bags.

4. Round-the-clock operation:-E-commerce enables both business houses and

customers to engage in business contracts 24 x 7. This opportunity has increased real-
time business operation and customer connectivity to business.

5. Cost-effectiveness:-Business organizations evaluate the cost-effectiveness of every

product before making any investment on that. E-commerce helps in lowering the
various costs that contribute to the total cost, procurement cost, purchasing cost,
selling and marketing cost.

6. Better customer service:-E-commerce means better and quicker customer service.

Web-based customer service makes customers happy. Customers have direct access to
their accounts over the internet. The overnight package delivery services, tracking of
the Better customer service package online are the other examples of better customer
service.

7. Disintermediation:-Using e-commerce, the business organizations can directly

approach the customers and suppliers, cutting down the intermediaries, a number of
levels in the process as well as the cost. Thus, e-commerce facilitates businesses to
operate under a disintermediated environment by providing direct communication
between customers and business organization.
8. Interrelated business partners:-The value chain in e-commerce consisting of
suppliers, contractors, and regulatory agencies is fed by an integrated trade
partnership. Developing an electronic community improves the competitive position
of business through low pricing, reduced inventory-carrying cost and broader
availability of materials.
9. Strong information base:-E-commerce facilitates the dissemination of information
to wipe off any information related to customer behavior, inventory management,
brand preference, repeat purchase trends helps organizations in developing strategies
to survive and grow.
10. Improved customer relations:-By providing customized products and services to
customers and fulfilling several other demands, e-commerce can help in building a
strong customer relationship that helps in retaining customers for a long period. Thus,
e-commerce help in building a base of loyal customers by improving customer
relations.

 DISADVANTAGES OF ELECTRONIC BILL PAYMENT

1. Hidden costs:-Often, there are various hidden costs associated with the products. For
example online purchases are often accompanied by high shipping and re-stocking
fees. There are many e-commerce companies that overcharge the customers for
shipping and handling.
2. Network unreliability:-Network reliability problems arise in e-commerce because of
many factors such as: Long response time due to increased network traffic or
increased bandwidth Equipment failure in the network connection provider or ISP.
Accidental problems caused by nature such as floods, earthquakes that affect the
communication line.
3. Lack of security:-Security of transactions on the internet is a major concern in e-
commerce. Payment, by credit card, requires faith in the system security. Customers
are worried about giving their credit card details to vendors because of the security
issues prevalent in the e-commerce.
4. Difficulty in transition:-Implementation of e-commerce requires technological base
as well as skilled human resources. Thus, the transposition of the traditional system of
commerce to e-commerce is difficult.
5. System and data integrity:-Data protection and integrity of a system that handles the
data are serious concerns. Computer viruses cause unnecessary delays, file backups,
storage problems etc. There is a danger of hackers accessing the files and corrupting
online accounts of the organization.
6. System scalability:-The website of vendors should have the capability of being
scaled up quickly when the number of users suddenly increases. If the server’s
capability is limited, the response time of the website will be unacceptably high if a
large number of customers decide to use the sits.
7. Corporate vulnerability:-Online businesses expose their product details, catalogs,
piece lists and other information about the business on their websites. This makes it
vulnerable to access by the competition.
8. Customer relations problems:-Shipping delays, merchandise mix-ups and website
crashing are the problems often encountered in e-commerce. Customer confidence in
e-commerce’s ability to deliver during heavy shopping seasons continues to be a
concern. Customer relationship management should be a higher priority in order to
gain customer loyalty.
9. Logistical problems:-If there is a sudden increase in orders, there may be logistical
problems in physically items to customers. Long delays in receiving ordered goods
will adversely affect future sales.
10. Copping of ideas by competitors:-Duplication in much simpler in e-commerce as
compared to traditional businesses as it is easy to quickly build a website and start a
competitive business. Thus, to maintain the advantage of being the first with the idea
requires innovation and improvement.

3. ONLINE BROKERAGE
E-Brokerage is one of the fields where the online financial websites are giving a
tough competition to the traditional service providers. The local DSAs and the brokers
are facing threats by the online DSAs because of the value and the intelligent services
these E- brokers provide to the customers. Banks and the NBFCs have also played a
smart move, and they are getting into a tie-up with these e-brokers to expand their
customer base and gain more on client acquisition. Banks have recorded the E-
trading business and have sourced the e-traders so that the customer can buy or sell
the stocks online and can also pay via the net. For example, ICICI has its trading
podium icicidirect.com and HDFC have its platform called hdfcsec.com with features
to integrate the Trading, Banking and Demat accounts of the customers and provide
them a single solution to Internet trading.
Online broker gives greater control with an online broker, customers have much
greater control over trades. They can execute them much faster than they ever could
over the telephone. Thanks to the Internet, investors can manage multiple positions
simultaneously. The online broker has opened the door to the world of investments to
a wide range of people. In other words, online brokers have opened up financial
 trading to more people than anybody had expected. The online broker – brief history
Before the Internet existed, investors had to place their orders either through a
stockbroker, in person, or via the telephone. The brokerage firm would then enter the
order into their system. Their system was linked to the exchanges and trading floors.
In 1985, America Online and Compuserve hosted Trade-Plus, a retail trading
platform. William Porter, one of Trade-Plus’ founders, created E-Trade Securities Inc.
in 1991. K. Aufhauser & Company, Inc. offered online trading via its Wealth Web.
Since then, online trading has been expanding rapidly. (TD Ameritrade later acquired
Aufhauser & Company, Inc.)If you want to trade today, your online brokerage firm
provides you with an online trading platform. The platform is a sort of hub. The
platform allows investors to trade various types of securities. For example, they can
buy and sell mutual funds, options, equities/stocks, and bonds.

 FEATURES OF ONLINE BROKERAGE

1. Pioneer:-In the year 2000, Geojit pioneered the simple concept of providing
individuals with the facility to trade online. Ten years later, the state of the art Mobile
Trading platform, FLIP-ME was launched for real-time Market Watch, Quotes,
Market-by-Price, etc. This revolution gave the company the first mover advantage in
online & mobile trading.
2. Security:-Every client is provided with a User Name and Password with 128 bit
encryption along with a virtual keyboard to provide the highest level of security.
3. Multiple bank payment gateways:-Transfer money online real-time to benefit from
price movements in the market. Current payment gateways: Catholic Syrian Bank,
HDFC Bank, Axis Bank, State Bank of India, ICICI Bank, Federal Bank & Oriental
Bank Of Commerce.
4. Automated NEFT Facility through HDFC Bank:-Buying power is updated
automatically once the amount is received in the bank account.
5. UPI Transfer:-Enjoy benefit of instant credit using UPI transfer facility which is
available across all major banks.
6. Reduced Brokerage:-Brokerage fees are very competitive and fair.
7. After market Hour Orders:-If you are unable to participate in the market, place
your orders after the market has closed. It will be sent to the Exchange on the next
working day.
8. Other Investment Products:-
 Access to IPO’s
 Mutual Funds
 Bonds in a single click.
9. Equity Exposure:-
 Day Trading
 Exposure against Holdings
 7 day credit facility
 Margin Trading Facility
10 .Customer Care Website-Provided to all clients-
 Provision to apply for IPO/ Bonds online.
 Access to Ledger, Demat holding, Portfolio tracker, Contract notes etc.
 Transaction details of Cash, Derivatives, Commodity & Currency
 Facility to subscribe for SMS.
 Information related to support, resistance of each security.
 Facility for Payout request ,details of FAO rollover and Margin Requirement.
 Information regarding securities available for intraday and margin applicable for each
scrip.(Cash & FAO)
 Toll Free numbers 1800–425–5501 and 1800-103-5501 are accessible from most
mobile and land line service providers within India.
 E-mail service supported through Customer Care Centre.
 Additional support of Geojit branches.
11. Portfolio Margin System: - FAO Span Margin is calculated in real time. Hedging
positions are identified correctly in this system.
12. Customized Services:-Subscription services are available for daily research and
recommendations, daily demat holdings, market tips and daily calls via SMS and
much more.

 ADVANTAGES OF ONLINE BROKERAGE

1. Lower fees:-One of the clearest advantages of online trading is the reduction in
transaction costs and high fees associated with traditional brick-and-mortar brokerage
firms. Typically, you’ll pay between $5 and $10 to buy and sell stocks and exchange-
traded funds at online discount brokerages, according to a Bloomberg report.
2. More control and flexibility-Time is often of the essence when you trade stocks, so
the speed of using online trading portals is a benefit to many investors. With online
trading, you can execute a trade almost immediately. Traditional brick-and-mortar
brokers might require appointments, either online, over the phone or in person, just to
initiate a trade.
3. Ability to avoid brokerage bias-By taking trading into your own hands, you can
eliminate brokerage bias. Bias sometimes occurs when a broker gives financial advice
that benefits the broker — such as in the form of a commission for selling specific
mutual funds and other products.
4. Access to online tools-In the world of online trading, a lower cost does not
necessarily mean a shoddy product. Many of today’s online trading companies offer
customers an impressive suite of tools providing valuable information and helping
optimize trades.
5. Option to monitor investments in real time-Many online trading sites offer stock
quotes and trade information that make it easy for people to see how their investments
are doing in real time.

 DISDVANTAGES OF ONLINE BROKERAG

1. Easier to invest too much too fast- Because online trading is so easy — you
basically push a button — there is the risk of making poor investment choices or
overinvesting. Online investors can protect themselves by understanding the stocks
they are buying and setting up safeguards in fast-paced markets. Placing a limit order
on your account is one way to control what you buy and how much of it.
2. No personal relationships with brokers-From getting help on how to create an
investment strategy to understanding how the results of feedback mechanisms affect
the market, online traders are left to their own devices. For some, this kind of
autonomy can be unsettling. Experts often stress the importance of research,
particularly for new traders. You need to learn as much as you can about the
companies in which you invest.
3. Addictive nature- Online traders can experience a certain high when trading that is
similar to what people experience when gambling, according to a recent study on
excessive trading published in the journal Addictive Behaviors. The study noted that
some investors choose short-term trading strategies that involve investing in risky
 stocks offering the potential for large gains but also significant losses. “The structure
itself of the two activities (gambling and trading) is very close,” the study concluded.
4. Internet-dependent-The nature of online trading means that, ultimately, you’re at the
mercy of your internet connection. If the internet connection is too slow or is
interrupted, you can lose out on a potentially important or lucrative trade.
5. Buying errors due to computer missteps-With online trading, to simply assume a
trade was not completed can cost you money. Investors who believe their trade was
not completed might make the trade again and end up investing twice as much as they
intended. Assuming a trade was completed without seeing confirmation of the fact
also is a mistake. Make sure you understand how to verify trades and review
statements before you begin using an online investing system.

4. ONLINE DELIVERY OF FINANCIAL PRODUCTS LIKE MORTGAGES

Banks and other financial entities in India entered the world of information
technology and computer networking only very recently. The introduction of
liberalization measures in the banking sector and the emergence of new private sector
and foreign banks equipped with latest technology, led to increased competition in the
banking sector. With the introduction of the new technology in banking sector,
customers are fast moving away from the traditional branch banking system to the
convenience and comfort of remote electronic banking services or virtual banking.
With E-banking, the brick and mortar structure of the traditional banking gets
converted into a click and portal model thereby giving real shape and form to the
concept of virtual banking. In virtual banking, brick and mortar structure or physical
bank branch is no more required for rendering banking services.
E-banking is a generic term for delivery of banking services and products
through electronic channels such as telephone, internet, 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 Information Technology (IT) A, 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 issues1
Improved customer service has become very important for public and private
sector banks to survive and to grow in the emerging deregulated financial market.
Consequently, banks are under increasing pressure to ‘offer today what customers
would expect tomorrow’. The banks now compete with one another to offer value-
added services to customers to expand their customer bases. In this chapter, the
various types of E-banking products and services offered by the Indian banks have
been enumerated with latest statistical data available.
The banks have come up with the delivery of services like checking your account
status on fund transfer, writing the cheques and demand drafts through the internet.
They are also trying to get into the B2C and B2B E-commerce by providing the
value-added services to the customer online. Banks have also approached features like
having a tie-up with the corporate so as to enter their supply chain by facilitating the
electronic transfer of funds. The application process for a Personal Loan, Car loan and
even mortgages have shifted Online and other products like bonds, and mutual funds
are offered through their service portals. Banks have also planned their online
shopping portals like HDFC has a way-in called easy2buy.com and Federal bank has
a similar concept with Rediff.com and Fabmart. ICICI also has its e-tailing site called
magiccart.com.
The time is not far when the customer will scan and upload his documents to avail
any financial service in the comfort of his home. This will reduce the turnaround time
of any product significantly, making India stand in the array of countries with highest
growth rate through technology and financial knowledge.

 FEATURES OF ONLINE DELIVERY

 Use Bank-to-Bank Transfer
 See your account transactions and history
 Pay bills without writing checks
 Transfer money between your accounts
 Sign up for paperless statements
 Set up account alerts and reminders
 View images of processed checks
 View reports
 A convenient, engaging, and complete financial planning experience with Money
Management
 Earn cash back with Purchase Rewards

 ADVANTAGES OF ONLINE DELIVERY OF FINANCIAL PRODUCTS

 Easy and best solution for online shoppers.
 These systems are most efficient and have excellent response times.
 Very easy to use; as simple as fill a form and the rest will be taken care of by the web
and database servers.
 Online banking is completely based on online transaction processing systems.
 Credit cards are also well-handled by these systems.
 You can access anything on the web and choose to buy it because all financial
transactions methods are supported by these systems.
 The privacy of customers.
 Online services are available for consumers 24 hours daily during the whole week.
 Customers might save time and efforts of doing their finance transactions.
 It will be easy for them to view all information they need clearly and simply.
 Searching of any branch of a bank will be accessibly by online users

 DISADVANTAGES OF ONLINE DELIVERY OF FINANCIAL PRODUCTS

 At times, there occur millions and millions of requests at a time which gets difficult to
handle.
 During purchases even if the servers hang for few seconds a large number of
transactions get affected, in turn affecting the organizations’ reputation.
 Databases store all user data and account information, if these servers are hacked, it
could lead to financial and personal problems (thefts).
 In the case of hardware failures of the online transaction processing systems, visitors
of the website get in trouble and their online transactions get affected.
 Electricity problem is another issue, i.e., if there is a shortage in electric supply
additional backup facilities like generators and related hardware, is a must.
 Online transaction processing involves a lot of staff working in groups to maintain
inventory.
 These online transaction systems impose processing costs on the buyers and sellers as
well.
 These systems do not have efficient methods of transferring products to buyers by
themselves. That’s where the e-commerce websites come in.
 The fundamental of operation of online transaction systems is atomicity. Atomicity
ensures that if any step fails in the process of the transaction, the entire transaction
must fail, due to which the same steps have to be repeated again and again while
filling forms which causes dissatisfaction among buyers.

1.2. WHAT IS E-FINANCE?

E-finance-including investing, banking, mortgage lending, and insurance-will

grow at a dazzling rate in the coming years. It's a reflection of the spectacular growth
of the Internet. In just five years, the World Wide Web has gone from being terra
incognita to becoming a ubiquitous medium for transacting business, sharing
information, and communicating with people all over the world.
E-finance will empower both consumers and businesses, enabling them to reduce
transaction costs, speedily process documents online, and have instantaneous access
to information. For businesses, online finance can dramatically improve efficiency
and decrease the costs of internal business functions such as expense reporting,
contract labor management, and time-and-billing procedures. Plus, by providing
personalized information about consumers, the Internet lets companies engage in
"one-to-one marketing," allowing them to tailor the online experience to fit unique
individual needs. Moreover, Congress has just passed an electronic signature and
record-keeping bill that will make it easier for both companies and consumers to do
business online. The bill will give new technologies such as electronically transmitted
fingerprint scans and encryption keys the legal weight of ink-on-paper signatures.
 Companies can now shop for loans on the Web, lease a building, or purchase
health insurance for their employees. Procedures that used to take weeks-and that
required seemingly endless phone calls, paperwork, and manpower-can now be
handled in days or hours, electronically. In world financial markets, traders and
money managers have access to cutting-edge data about the markets 24 hours a day,
all over the world.

1.3. DEFINITION OF E-FINANCE

E-finance is defined as “The provision of financial services and markets using

electronic communication and computation”. In this paper we outline research issues
related to e-finance that we believe set the stage for further work in this field. Three
areas are focused on. These are the use of electronic payments systems, the operations
of financial services firms and the operation of financial markets. A number of
research issues are raised. For example, is the widespread use of paper-based checks
efficient? Will the financial services industry be fundamentally changed by the advent
of the:
1. A part of e-business and provides financial services through over the Internet, but in
general, any network, public or private, can be included. Learn more in:
Intermediaries in E-Commerce.
2. E-finance is a part of e-business and provides financial services through over the
Internet, but in general, any network, public or private, can be included. Learn more
in: E-Finance Services in Russia.
UNCTAD defines e-finance as “that of financial services delivered through Internet
or online. E-finance includes online brokerage, banking, insurance and other financial
services. Internet technologies have now penetrated all aspects of financial services
industry, both retail and wholesale, back-office and front office, information and
transaction”.
Rest of the paper is organized as follows: Section II discusses the review of
literature. Section III outlines the objectives of study. Section IV highlights the
research methodology. Section V highlights the models of e-finance. Section VI
explains the different kinds of e-finance services. Section VII highlights impacts of e-
finance and section VIII describes the challenges faced by Efinance in growth and
development. Section IX concludes the study.
1.4. EVOLUTION OF E-FINANCE IN SBI

The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.
Three years later the bank received its charter and was re-designed as the Bank of
Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of
British India sponsored by the Government of Bengal. The Bank of Bombay (15 April
1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These
three banks remained at the apex of modern banking in India till their amalgamation
as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence
either as a result of the compulsions of imperial finance or by the felt needs of local
European commerce and were not imposed from outside in an arbitrary manner to
modernise India's economy. Their evolution was, however, shaped by ideas culled
from similar developments in Europe and England, and was influenced by changes
occurring in the structure of both the local trading environment and those in the
relations of the Indian economy to the economy of Europe and the global economic
framework.
Electronic Finance was not born with the advent of the Internet. In fact, it dates
back to 1871 when Western Union Corporation introduced distant money transfer for
the first time. Western Union introduced the first consumer charge card in 1914 and
the first prepaid card in 1993. In 2006, the company handled 147 million consumer to
consumer money transfers and 249 million consumer to business transactions.
Although e-Finance has existed for a long time, the Internet, the Web, and
telecommunication technologies dramatically changed e-commerce and e-finance
since the mid-to late 1990s.
Institutions developed new web-based platforms to deliver financial services
quickly and efficiently. The trend began with services such as banking, insurance and
trading services and moved to other institutional activity areas including foreign
exchange and cash equity trading.
According to Miniwatts Marketing Group, as of November 2007, 1.262 billion, or
19% of the world population, have access to the Internet. North America leads the
Internet penetration Though Asia has the largest number of total internet users (462
million).
The key drivers of the evolution of e-Finance include-
Technology:Computer, Internet, and Telecommunications Technologies enabled
business to be conducted in a fast, efficient and secure way.
Globalization:Worldwide liberalization of trade and investment facilitated the
phenomenal growth of global business including the Internet based e-business and e-
finance.
Regulations: Both deregulations of the finance industry and re-regulations of e-
commerce facilitated the growth though in some areas lacking behind technology.
Entrepreneurship:Creativity allowed entrepreneurs, start-ups and seasoned
companies to break ‘old economy’ traditions and deliver business solutions through
new, exciting and often radically different structures.
Capital:Capital provided the financial means to put these technical and human wheels
in motion.
Competition:The above factors created a globally fertile and competitive
environment and pool Of talents to compete for introducing new technologies,
concepts, and models.
These five factors have affected providers, users, regulators and investors by
creating remarkable transformation in financial industry.
The U.S. e-commerce as a percentage of total retails sales increased 566% from
0.6% to 3.4% between 2000 to 2006. Forrester Research estimates the online
purchases at about 5% of total
U.S. retail sales, excluding airline tickets and by 2011, it is expected to account for
9% of sales.
In India the traditional method of banking was through branch banking. It was in
1991, that with economic reforms, the banking industry also witnessed the new wave
of banking methods. It was Saraf Committee which was constituted by RBI in 1994
that recommended the use of Electronic Fund Transfer System (EFT), introduction of
electronic clearing services and extension of Magnetic Ink Character Recognition
(MICR) beyond metropolitan cities and branches. It was ICICI bank which became
the pioneer of e-banking in India .It was the first bank to introduce online banking
services in 1996. Its initiatives were followed by Citibank, IndusInd Bank and HDFC
Bank who provided internet banking services in 1999.Various initiatives have been
taken by both the government and the Reserve Bank from time to time to smooth the
expansion of e-banking in India. The Government of India enacted the IT Act, 2000
which provided legal recognition to electronic transactions and other means of
electronic commerce. The important technological developments witnessed in the new
age payment systems in India are:
1. Arrival of card- based payments- debit card, credit card- late 1980‟s and early
1990‟s.
2. Introduction of Electronic Clearing Service (ECS) in late 1990‟s
3. Introduction of Electronic Funds Transfer/ Special EFT in the early 2000‟s
4. Real Time Gross Settlement (RTGS) was introduced in March 2004
5. Introduction of NEFT (National Electronic Funds Transfer) 2005/06
6. Introduction of CTS (Cheque Truncation System) in the year 2008

1.5 KINDS OF E-FINANCE SERVICES IN SBI

E-Banking: E-Banking one of the important kind of E-finance services offered by

FIs. E-banking is also called internet banking or online banking. The service enables
customers to perform different basic financial transactions such as enquiring bank
accounts; make bill payments; transfer funds etc. Because e-banking is relatively easy
to set up, the barriers to entry are low and there due to this there are more service
provider in the market. As a result, e-banking is not limited to just big and well
established banks. FIs have no choice but to offer such services as e-banking, like
ATMs and branches, has become a basic service that customers expect.
E-Payment: Another kind of e-finance service is the payment system that forms an
integral part of the banking and financial system. With the advancement of ICT,
affordable e-payment can be a reality. E-Payment includes electronic payment in the
physical world and the virtual (internet) world. e- Payments are delivered through
varoius channels such as debit cards, credit cards, pre-paid cards, Internet banking and
mobile banking.
E-Trade Finance: traditionally, trade finance is based on paper work that makes it
slow, more costly and error-prone. But the invention of Internet it is possible to
streamline such processes through electronic documents. Services provided in e-trade
finance are: LC (Letter of Credit) applications, Foreign Exchange and many more.
E-Credit and e-loans: Now days for smooth running and success of SMEs these kind
of e-finance services are more important. Under e-credit and e-loan facility, SMEs are
required to apply for credit or loan facility online from the bank. When bank approved
loan, than amount will be credited directly to the customer’s account and it will save
the time as well as it is more efficient way of getting loans from the banks for SMEs.
E-Rating: E-rating plays important role for both: banks and SMEs as it provide the
credit and payment track records of the parties involved in the transactions to FIs as
well as help in managing their risk. While banks have their own risk management and
credit assessment units, they also rely on specialized services, which provide credit
information and assessment data, as well as ways and means, such as credit risk
insurance, to reduce the credit and transaction risks.
E-Insurance and guarantees: Another part of the e-trade finance module in many
banks, e-insurance and guarantee services enable SMEs to apply for insurance and
guarantee online. As for insurance, banks normally partnership with large insurance
companies to jointly provide such a service. In this case, information captured from
the bank system will feed the bank’s financial partners. This involves the privacy of
customer data, thus the bank has to make clear to customers that such information will
be forwarded to a third party. Example: e-Insurance service by EDC Export
Development Canada (EDC) has an online service called EXPORT Protect.
1.6. ORIGIN OF E-FINANCE AND ELECTRONIC COMMERCE

Even during the 1960s, businesses conducted electronic transactions via primitive
computer networks. Through Electronic Data Interchange (EDI), they were able to
share business documents with other companies’ machines. During the same time
period, the military created ARPAnet, which enabled important information to be
circulated in the event of a nuclear attack. These innovations laid the groundwork for
e-commerce as it is known today. In fact, when ARPAnet switched to Transmission
Control Protocol and Internet Protocol (TCP/IP) in 1982, it utilized the same type of
technology that powers the internet of today.
In the early 1980s, research universities were still the primary owners of
computers. However, those who had access to computers could send emails and share
documents through networks like BITNET and USENET. For home PC users,
CompuServe was the major service provider of message boards, chat rooms and more.
CompuServe introduced the Electronic Mall in 1984, which allowed users to purchase
from more than 100 online retailers. The service wasn’t a big success, but it was one
of the first examples of online retail. Then in 1991, the National Science Foundation
lifted its ban on commercial internet use. This historic move made e-commerce
possible.
Security was the next big issue, and the release of Netscape 1.0 in 1994 featured a
protocol called Secure Socket Layer (SSL) that kept both the sending and receiving
side of an online transaction secure. SSL made sure that personal information could
be encrypted on the web. The first third-party credit card processing companies were
launched shortly after. This made the first ever secure online retail transaction
possible. On August 11, 1994, The New York Times reported that a man named Phil
Brandenberger from Philadelphia purchased a Sting album from his computer. This
opened up a staggering opportunity for innovative entrepreneurs to capitalize on this
emerging trend. With the advent of Amazon and eBay the following year, it’s an
understatement to say that the pace of e-commerce sped up soon after.

1.7 CHANNELS IN E-BANKING OF SBI

1. AUTOMATED TELLER MACHINE (ATM)
An automated teller machine (ATM)is an electronic telecommunications device
that enables customers of financial institutions to perform financial transactions, such
as cash withdrawals, deposits, funds transfers, or account information inquiries, at any
time and without the need for direct interaction with bank staff. ATMs are known by a
variety of names, including automatic teller machine (ATM) in the United
States(sometimes redundantly as "ATM machine ATMs have a sign above them
indicating the name of the bank or organisation that owns the ATM, and possibly
including the networks to which it can connect. ATMs that are not operated by a
financial institution are known as "white-label" ATMs.Using an ATM, customers can
access their bank deposit or credit accounts in order to make a variety of financial
transactions, most notably cash withdrawals and balance checking, as well as
transferring credit to and from mobile phones.

ATMs can also be used to withdraw cash in a foreign country. If the currency
being withdrawn from the ATM is different from that in which the bank account is
denominated, the money will be converted at the financial institution's exchange
rate.Customers are typically identified by inserting a plastic ATM card (or some other
acceptable payment card) into the ATM, with authentication being by the customer
entering a personal identification number (PIN), which must match the PIN stored in
the chip on the card (if the card is so equipped), or in the issuing financial institution's
database.

2.TELE-BANKING OR PHONE BANKING

Telephone banking is a service provided by a bank or other financial institution,
that enables customers to perform over the telephone a range of financial
transactions which do not involve cash or Financial instruments (such as cheques),
without the need to visit a bank branch or ATM.
 Telephone banking is a service provided by a bank or other financial institution,
that enables customers to perform over the telephone a range of financial
transactions which do not involve cash or Financial instruments (such as cheques),
without the need to visit a bank branch or ATM.
Phone Banking is a telephone banking service that gives information about your
accounts on a 24*7 basis from anywhere, at any time. It provides effective Resolution
of customer queries, complaints and certain requests without visiting branch Channel.
It also provides you with information about other products and services of the Bank.
Phone banking service may be availed through the IVR (Interactive Voice Response)
or manually assisted through Phone banking Executives. IVR mode is a self-service
option for customers to access their Banking account details, using their Customer ID
and Telephone Personal Identification Number (T-PIN).

3.MOBILE BANKING.
Mobile banking is a service provided by a bank or other financial institution that
allows its customers to conduct financial transactions remotely using
a mobiledevice such as a smartphone or tablet. Unlike the related internet banking it
uses software, usually called an app, provided by the financial institution for the
purpose. Mobile banking is usually available on a 24-hour basis. Some financial
institutions have restrictions on which accounts may be accessed through mobile
banking, as well as a limit on the amount that can be transacted. Mobile banking is
dependent on the availability of an internet or data connection to the mobile device.
 .
Transactions through mobile banking depend on the features of the mobile banking
app provided and typically includes obtaining account balances and lists of latest
transactions, electronic bill payments, remote check deposits, P2P payments,
and funds transfers between a customer's or another's accounts.Some apps also enable
copies of statements to be downloaded and sometimes printed at the customer's
premises. Using a mobile banking app increases ease of use, speed, flexibility and
also improves security because it integrates with the user built-in mobile device
security mechanisms.
From the bank's point of view, mobile banking reduces the cost of handling
transactions by reducing the need for customers to visit a bank branch for non-cash
withdrawal and deposit transactions. Mobile banking does not handle transactions
involving cash, and a customer needs to visit an ATM or bank branch for cash
withdrawals or deposits. Many apps now have a remote deposit option; using the
device's camera to digitally transmit cheques to their financial institution.

4) INTERNET BANKING.
Internet banking is the system that provides the facility to the customer to
conduct the financial and non-financial transactions from his net banking account.
The user can transfer funds from his account to other accounts of the same
bank/different bank using a website or an online application. The customer uses a
resource and a medium to conduct financial transactions. The resource that a customer
uses might be an electronic device like a computer, a laptop, or a mobile phone. The
internet is the medium that makes the technology possible.

Internet banking is the system that provides the facility to the customer to conduct
the financial and non-financial transactions from his net banking account. The user
can transfer funds from his account to other accounts of the same bank/different bank
using a website or an online application. The customer uses a resource and a medium
to conduct financial transactions. The resource that a customer uses might be an
electronic device like a computer, a laptop, or a mobile phone. The internet is the
medium that makes the technology possible.
The facility of internet banking is provided through banks and the customer must be
an account holder with any bank to get the facility available for him/her.

1.8 SBI’s SUPPLY CHAIN IN E-FINANCE SCHEMES

State Bank of India (SBI) offers various supply chain financing schemes to
provide liquidity to businesses, as mentioned on the official website of country's
largest lender. Currently, SBI offers two types of financing schemes- electronic
vendor financing scheme and electronic dealer financing scheme. These can be
applied online. 'Supply Chain Financing' is an online collaborative platform for the
banks, buyers and sellers for transactions and financing across the financial supply
chain. It lowers financial costs and improves business efficiency.

5 things to know about SBI's supply chain E-financing schemes:

1. 'Supply chain finance' provides short-term credit that optimizes working capital for
both the buyer and the seller.
2. SBI's electronic vendor financing scheme provides for financing receivables of
vendors (suppliers) of reputed corporates/industry majors (IMs) with whom tie-up has
been entered. The scheme is a completely web based solution with minimal branch
intervention and provides instant credit to vendors account electronically.
3. SBI's electronic vendor financing scheme enables both the Industry majors with
whom tie-up has been entered and their vendors to achieve the objective of just in
time production. The vendors enjoy timely availability of funds.
4. SBI's electronic dealer financing scheme provides for financing purchases of
dealers from corporates/Industry majors (IMs) with whom tie-up has been entered. It
is also completely web based solution. The Industry Major enjoys timely availability
of funds.
5. The dealer can make effective utilization on working capital funds via bank's
electronic dealer financing scheme. Both Industry Major and dealer can make use of
improved cash flow forecasting. It provides 100 per cent financing, low collateral and
competitive pricing, said SBI.

1.9. IMPACTS OF E-FINANCE

INTERNATIONAL TRADE
IMPACT OF DEVELOPING COUNTRIES
FINANCIAL MARKETS
E-FINANCE BANKING SERVICE
ON:- NON PERFORMING ASSETS
REVENUE ON COST
Impact of e-finance on international trade:
E-finance affect the international business in many ways such as new virtual
network intermediaries or electronic marketplaces reduce the need for the firm to have
human and financial infrastructures necessary for internationalization.
Impact of e-finance on developing countries:
E-finance and globalization offer many important opportunities. E-finance has
great potential to improve the quality and scope of financial services and expand
opportunities for trading. For many countries, e-finance will allow easier access to
global capital and financial service providers, bringing opportunities to quickly widen
access to and improve financial services. Achieving such gains will require that
emerging markets give far greater priority to improving the framework for financial
and other information, modernizing and strengthening their legal systems, and
improving technology-related infrastructure.
Impact of e-finance on financial markets:
In this section we consider the impact of electronic communication and
computation on stock markets, bond markets and foreign exchange markets. Now all
the stock exchanges, bond markets, foreign exchange markets and financial markets
have moved to electronic trading to avoid the risk of fluctuation and to reduce the cost
of transactions.
Impact of e-finance on banking services:
The other sector which is affected by e-finance services is banking sector. By
using e-finance services in banking it will provide certain gain as it reduce the
transaction cost by less use of paperwork.
Impact of e-finance on non performing assets:
E-finance helps in proper assessment of loan risk with the application of modern
techniques. It also ensure better customer relationship management, better loan
monitoring (kumar,2001)and lessening the interest rate. Therefore, implementation of
e-finance reduces the NPL of banking sectors.
Impact of e-finance on Revenue and cost:
Last but most important impact of e-finance is that it reduces the transaction cost
as well paperwork, that will automatically increases the revenue of financial service
sectors.
1.10. RAISE OF E-FINANCE AND ELECTRONIC TRADING
India was introduced to the Internet in the early 90's and the use started to increase
rapidly. India stands 5th in the list of countries by number of internet users. The Stock
markets introduced Internet trading (online-trading) in February 2002 which has
brought a tremendous change in trading. The National Stock Exchange started the
first form of online trading wherein user/investors can buy/sell stocks in a day without
much paper work. Earlier it used to take around 60 days to buy/sell stocks in stock
markets and the investor also had to go through loads of paper work. But thanks to
Internet the wait has curbed and in the last ten years, Indian capital markets have
recorded 1488% of growth in exchange turnover.
At the end of March 2010, a total number of 363 members were permitted to allow
investor’s web based access to NSE’s trading system. The members of the exchange
in turn had registered 5,143,705 clients for web based access as on March 31, 2010.
During the year 2009-10, 11.13 % of the trading value in the Capital Market segment
(692,789 - US $ 135,974 million) was routed and executed through the internet. The
table below shows the growth of internet trading from the fiscal years 2006-07 till
2009- 10. Chart-1 shows the internet trading volumes in the CM segment of NSE in
comparison with the total traded volumes at NSE.
Online stock trading in India has gained ground in the last two years. It’s
interesting to note that it was a beer making company, "WIT Beer” that for first time,
way back in 1969, had introduced the idea of online stock trading. There are several
leading companies involved in online stock trading in India. ICICIDirect, Sharekhan,
AnandRathi, Geojit securities, Indiabulls, Religare, Kotak Securities, Motilal Oswal
Securities, Reliancemoney, India Infoline.com Securities limited, and IDBI
Paisabuilder are the major players in online Indian stock trading.

1.11. SYSTEMS OR ORGANIZATIONS FACILITATING E-

FINANCE
1. Society for Worldwide Interbank Financial Telecommunication (SWIFT)-
SWIFT provides financial data communication and processing services to support
the business activities of worldwide financial institutions for securities, payments,
foreign exchange and money markets, as well as trade finance. Its dedicated
telecommunications network guarantees the rapid, cost-effective, secure and reliable
 transmission of financial data using a range of ISO-compliant standardized messages
that have been developed by SWIFT in conjunction with its users and industry
organizations. Originally designed to eliminate the need for paper-based processes in
the financial markets, SWIFT has also lowered costs, increased productivity and
helped reduce risk in the securities industry by providing several of the key elements
necessary for the automation of the settlement process, and by providing a reliable
and secure network. Owned by nearly 3,000 of its user banks, SWIFT also connects
other categories of non-bank financial institutions engaged in the securities industry.
SWIFT is present in over 208 countries, handled over 3 billion messages during 2007
and has over 8200 users worldwide.
2. Automated Clearing House (ACH):-
The ACH Network is a highly reliable and efficient nationwide batch-oriented
electronic funds transfer system governed by the NACHA Operating Rules which
provide for the Interbank clearing of electronic payments for participating depository
financial institutions. The Federal Reserve and Electronic Payments Network act as
ACH Operators, central clearing facilities through which financial institutions
transmit or receive ACH entries. ACH payments include:
 Direct Deposit of payroll, Social Security and other government benefits, and tax
refunds;
 Direct Payment of consumer bills: mortgages, loans, utility bills and insurance
premiums;
 Business-to-business payments;
 E-checks;
 E-commerce payments;
 Federal, state and local tax payments
Electronic checks are becoming more popular in recent years. According the
Neilson Report in 2006 the ACH network ranked second only to Visa in transaction
volume with $13.43 billion, up 15.3%. Visa’s 2006 growth rate was 13.2%. Two of
the most impressive areas of consumer ACH transactions relating to the payment
processing industry were in ‘Internet and ‘Telephone’ categories. Consumers are
increasingly pulling out their check book to pay for goods and services.
The growth of electronic ACH/check payments appears to be coming at the
expense of credit cards and paper checks. More than 3.44 billion transactions worth
more than $7.0 trillion were conducted during the third quarter in 2007. These figures
represent growth rates of 11.7 percent and 8.0 percent, respectively, over the same
quarter of 2006. There were 2.11 billion debits and 1.34 billion credits, for a total of
3.44 billion. The statistics include commercial inter-bank and government
transactions, but not “on-us” transactions
American businesses and governments use the ACH Network for payments to and
from trading partners, vendor payments, business-to-government tax withholdings,
intra-company cash management transfers, and to exchange remittance information
regarding payments.
About 19 billion more electronic payments were made in 2006 than in 2003. In
contrast, the number of checks paid fell by about 7 billion over the same period. Of
the 93 billion noncash payments in 2006, about 63 billion were electronic and around
30 billion were checks. The highest rate of growth from 2003 to 2006 was in ACH
payments, which grew about 19% per year, followed closely by debit card payments
at almost 18%. Meanwhile, checks declined by an average of 6.4% per year since
2003, indicating the pace at which checks payments has been decreasing since the
mid-1990s has picked up in recent years.
Multiple hurdles challenge international trading activities. With increasing cross
border volumes and shorter settlement periods, securities firms cannot afford the risk
and cost of manual processing and failed trades. To respond to these challenges, the
securities industry must prepare for major changes. Several competing solutions are
being sponsored, including the global straight through processing association’s
(GSTPA’s), Thomson Financial/Depository Trust and Clearing Corporation (DTCC)
global joint venture and other Internet-based solutions and tools.Participants in cross
border trading, including broker-dealers fund managers, custodians, exchanges and
depositories need to re-engineer technical, business process and operational
architectures to realize the ultimate goal of GSTP.
3. Online Trading Community:- As discussed earlier, online trading communities
exists to provide a structured method for trading, bartering, or selling goods or
services. These communities often have forums and chartrooms designed to facilitate
communication between the members. These can be further segregated into two parts:
1. Formal Trading Communities are business-run websites maintained for the purpose
of facilitating trades between members. Some of these charge a fee for each
successful transaction. 2. Informal Trading Communities are lesser-known sites
known that specialize in a multitude of services including community trading.
Examples include, 1UP, Craig's List, IGN.
4. E-Money:-
E-Money allows payments (including P2P payments) without involvement of a
third party during the payment transaction. There are two main types of e-money: ‘e-
cash’ including electronic purses and multi-purpose stored value smart cards; and
‘cybermoney’ (also called ‘network money’) which are prepaid software products
used for payments or transfers on cyberspace.
5. Price Comparison Service:-
On the Internet, a price comparison service (also known as shopping comparison
or price engine)allows individuals to see lists of prices for specific products. Most
price comparison services do not sell products themselves, but source prices from
retailers from whom users can buy. Price comparison sites typically do not charge
users anything to use the site. Instead, they are monetized through payments from
retailers who are listed on the site. Depending on the particular business model of the
comparison shopping site, retailers will either pay a flat fee to be included on the site
or pay a fee each time a user clicks through to the retailer web site or pay every time a
user completes a specified action - for example, when they buy something or register
with their e-mail address.
In the area of e-Mortgage, LendingTree and E-Loan are two different examples of
such new innovations which enable borrowers to do online comparison shopping for
loans. Although online aggregators widely differ from one another, they generally fall
into two basic categories. Originators, such as E-Loan and Intuit Inc.'s
Quickenloans.com, operate much the same as off-line mortgage brokers and mortgage
banks. They accept, process and underwrite loan applications. Pricing is based on a
mark-up of rates and points quoted by wholesale lenders.
By contrast, referral sites, which include LendingTree and Providian Financial
Corp.'s GetSmart.com, pass along leads to retail lenders, who then handle the
application and underwriting process. GetSmart collects fees strictly for its leads;
LendingTree assesses "a few dollars" for each referral and "several hundred dollars"
when a loan closes. So far, neither business model is remotely profitable. E-Loan lost
$40 million last year; LendingTree, $25 million. E-Loan had to secure $40 million in
new funding from a consortium of investors that included Charles Schwab & Co.
Similar services are available in the insurance industry. Sites such as SelectQuote and
Insweb are prime examples. Figure 9 depicts how the Internet has changed home
financing and mortgage industry.
6. Online Auction Business Model:-
The online auction business model is one in which participants bid for products
and services over the Internet. The functionality of buying and selling in an auction
format is made possible through auction software that regulates the various processes
involved. The strategic advantages of this business model include fewer time
constraints, no geographical constraints, pressure of intense social interaction through
large numbers of bidders and sellers, network economies, andthe ability to capture
consumers’ surplus.
Several types of online auctions are possible. In an English auction the initial price
starts low and is bid up by successive bidders. In a Dutch auction, multiple identical
items are offered in one auction, with all winning bidders paying the same price -- the
highest price at which all items will be sold (treasury bills, for example, are auctioned
this way). In a Reverse auction, a need for a good or service is specified and the
maximum price at which a firm will have that need filled is listed. Then, service
providers who can meet that need actually bid the price down, competing against one
another, to get the order. General Motors uses this approach to source most of the
parts used in the production of its vehicles.
7. M-Finance: Mobile Banking:-
Mobile banking (also known as M-Banking) is a term used for performing balance
checks, account transactions, or payments via a mobile device such as a mobile
phone. Mobile banking today (2007) is most often performed via SMS or the Mobile
Internet but can also use special programs downloaded to the mobile device.
Mobile banking in the U.S. first appeared a before 2000, but it failed to catch on
over the following few years. As an example, Wells Fargo shuttered its original
mobile banking operations in 2002. It had only 2,500 users at the time. Wells is one of
the first financial institutions to offer online banking and now is among the pioneers
of mobile banking in the United States. Wells Fargo isn't just peddling ‘m-banking’ to
its customers; it also is providing small business and commercial ‘m-banking’
services.
8. Value Proposition:-
Beyond building consumer demand and securing the mobile channel, banks also
are challenged to build the business case for mobile banking, mostly because the ROI
 is impossible to pinpoint. The smaller banks are reluctant to use this technology and
waiting for the big banks to take the plunge. The Net Banker that tracks online
banking activities forecasts that 25% of U.S. households will use mobile bank access
by the middle of the next decade. The mobile banking adoption curve for the next 10+
years is expected to be identical to that of e-banking since 1995..

1.12. BENEFITS OF E-BANKING OF SBI

The main benefit from the bank customers’ point of view is significant saving of
time by the automation of banking services processing and introduction of an easy
maintenance tools for managing customer’s money. The main advantages of e-
banking for corporate customers are as follows (BankAway! 2001; Gurău, 2002):
Reduced costs in accessing and using the banking services.
1. Increased comfort and timesaving - transactions can be made 24 hours a day, without
requiring the physical
2. Interaction with the bank. Quick and continuous access to information. Corporations
will have easier access to information as, they can
3. Check on multiple accounts at the click of a button. Better cash management- E-
banking facilities speed upcash cycle and increases efficiency of business
4. Processes as large variety of cash management instruments are available on Internet
sites of Estonianbanks. For example, it is possible to manage company’s short-term
cash via Internet banks in Estonia(investments in over-night, short- and long term
deposits, in commercial papers, in bonds and equities, inmoney market funds).
5. Reduced costs- This is in terms of the cost of availing and using the various banking
products and services
6. Convenience- All the banking transactions can be performed from the comfort of the
home or office orfrom the place a customer wants to.
7. Speed - The response of the medium is very fast; therefore customers can actually
wait till the last minute
8. beforeconcludingafundtransfer.Funds management- Customers can download their
history of different accounts and do a ―what-if‖analysis on their own PC before
affecting any transaction on the web. This will lead to better fundsmanagement.

1.13. ISSUES AND CHALLENGES OF SBI

1.SECURITS ISSUES

A) SOFTWARE VIRUS:- A computer virus is a type of computer program that,

when executed, replicates itself by modifying other computer programs and inserting
its own code. When this replication succeeds, the affected areas are then said to be
"infected" with a computer virus.
Virus writers use social engineering deceptions and exploit detailed knowledge
of security vulnerabilities to initially infect systems and to spread the virus. The vast
majority of viruses target systems running Microsoft Windows, employing a variety
of mechanisms to infect new hosts, and often using complex anti-detection/stealth
strategies to evade antivirus software. Motives for creating viruses can include
seeking profit (e.g., with ransomware), desire to send a political message, personal
amusement, to demonstrate that a vulnerability exists in software,
for sabotage and denial of service, or simply because they wish to
explore cybersecurity issues, artificial life and evolutionary algorithms.
Computer viruses currently cause billions of dollars' worth of economic damage
each year, due to causing system failure, wasting computer resources, corrupting data,
increasing maintenance costs or stealing personal information. In response, free,
open-source antivirus tools have been developed, and an industry of antivirus
software has cropped up, selling or freely distributing virus protection to users of
various operating systems. As of 2005, even though no currently existing antivirus
software was able to uncover all computer viruses (especially new ones), computer
security researchers are actively searching for new ways to enable antivirus solutions
to more effectively detect emerging viruses, before they have already become widely
distributed.
B) HACKING:- Hacking is identifying weakness in computer systems or networks to
exploit its weaknesses to gain access. Example of Hacking: Using password cracking
algorithm to gain access to a system. Computers have become mandatory to run a
successful businesses. It is not enough to have isolated computers systems; they need
to be networked to facilitate communication with external businesses. This exposes
them to the outside world and hacking. Hacking means using computers to commit
fraudulent acts such as fraud, privacy invasion, stealing corporate/personal data, etc.
Cyber crimes cost many organizations millions of dollars every year. Businesses need
to protect themselves against such attacks.

C) SERVICES DISRUPTION:- In business theory, a disruptive innovation is

an innovation that creates a new market and value network and eventually disrupts an
existing market and value network, displacing established market-leading firms,
products, and alliances.The term was defined and first analyzed by the American
scholar Clayton M. Christensen and his collaborators beginning in 1995, and has been
called the most influential business idea of the early 21st century.
 Not all innovations are disruptive, even if they are revolutionary. For example, the
first automobiles in the late 19th century were not a disruptive innovation, because
early automobiles were expensive luxury items that did not disrupt the market
for horse-drawn vehicles. The market for transportation essentially remained intact
until the debut of the lower-priced Ford ModelT in 1908. The mass-
produced automobile was a disruptive innovation, because it changed the
transportation market, whereas the first thirty years of automobiles did not.

Disruptive innovations tend to be produced by outsiders

and entrepreneurs in startups, rather than existing market-leading companies. The
business environment of market leaders does not allow them to pursue disruptive
innovations when they first arise, because they are not profitable enough at first and
because their development can take scarce resources away from sustaining
innovations (which are needed to compete against current competition).A disruptive
process can take longer to develop than by the conventional approach and the risk
associated to it is higher than the other more incremental or evolutionary forms of
innovations, but once it is deployed in the market, it achieves a much faster
penetration and higher degree of impact on the established markets.

D) PHISHING-LATEST INTERNET FRAUDS:- Phishing is the fraudulent

attempt to obtain sensitive information such as usernames, passwords and credit
card details by disguising oneself as a trustworthy entity in an electronic
communication.Typically carried out by email spoofing or instant messaging,it often
directs users to enter personal information at a fake website which matches the look
and feel of the legitimate site.

Phishing is an example of social engineering techniques being used to deceive

users. Users are often lured by communications purporting to be from trusted parties
such as social web sites, auction sites, banks, online payment processors or IT
administrators.

Attempts to deal with phishing incidents include legislation, user training, public
awareness, and technical security measures (the latter being due to phishing attacks
frequently exploiting weaknesses in current web security).

Internet fraud is a type of fraud or deception which makes use of the Internet and
could involve hiding of information or providing incorrect information for the
purpose of tricking victims out of money, property, and inheritance. Internet fraud is
not considered a single, distinctive crime but covers a range of illegal and illicit
actions that are committed in cyberspace. It is, however, differentiated
from theft since, in this case, the victim voluntarily and knowingly provides the
information, money or property to the perpetrator. It is also distinguished by the way
it involves temporally and spatially separated offenders.

According to the FBI's 2017 Internet Crime Report, the Internet Crime Complaint
Center (IC3) received about 300,000 complaints. Victims lost over $1.4 billion in
online fraud in 2017. According to a study conducted by the Center for Strategic and
International Studies (CSIS) and McAfee, cybercrime costs the global economy as
much as $600 billion, which translates into 0.8% of total global GDP.Online fraud
appears in many forms. It ranges from email spam to online scams. Internet fraud can
occur even if partly based on the use of Internet services and is mostly or completely
based on the use of the Internet.

2.POPULATION ISSUES:-

A) LACK OF AWARENESS:- Lack of awareness of digital financial literacy,

especially among the rural population is a major challenge in the country, more so in
light of the Government’s recent demonetization and plans to make India a cashless
economy. There is an urgent need to create awareness among the citizens, especially
in rural and semi-urban areas regarding basics of digital finance services.
B) LACK OF PRIVACY:- The concept of privacy in general dictates that no one
should be able to observe things about a person without that person’s knowledge. In
social networks, privacy is greatly ignored unwittingly. Many people perceive that
rejecting a request to be your friend based on one of your other friends’
recommendations might be considered rude. It is important to recognize that
friendships are dynamic. A typical scenario in Facebook could be that a friend posts
“Five Things About Me” and encourages the recipient to do the same. In response to
this suggestion from a friend, the posting by the recipient states, “I attended Valley
High,” and, “My cat’s name is Myra.” It is likely that the user has chosen these two
answers as his/her challenge response for an online bank account. This simple
scenario points to the vulnerability of exposing personal information unwittingly.
C) CULTURAL BARRIERS:- Wherever you live, you're going to be
influenced by the attitudes, customs and practices of the people around you.
Those basic elements are the definition of culture. When a person of one
culture encounters the beliefs and resulting actions of another culture, a
clash can occur, which can be a barrier to success. Such barriers can have
significant implications at work, school or in the wider community.
D) PREFERENCE TO PERSONALIZRD FINANCIAL SERVICES:- Personal
finance services is a term that covers managing your money and saving and investing.
It encompasses budgeting, banking, insurance, mortgages, investments, retirement
planning, and tax and estate planning. It often refers to the entire industry that
provides financial services to individuals and households and advises them about
financial and investment opportunities.
E) LACK OF TRUST:- The majority of adults would prefer to do their banking
online than in a physical branch, however less than a quarter currently trust the
information they receive online from banks, a new survey has found.
The study from Lithium Technologies which surveyed 2,000 adults revealed that 62
per cent would rather bank online than in a branch. But it also showed that just 23 per
cent do not trust information online from banks, with in-person banking remaining the
most trusted source of information for 58 percent of adults. When asked which they
found to be the most convenient way to conduct their banking, 59 per cent of
respondents chose digital, with 23 per cent opting for in-person and only nine per cent
chose via telephone.
3.REVENUE AND COST ISSUES:-
A) REVENUE STRUCTURE COMPLEX:- A revenue structure complex is a
framework for generating revenues. It identifies which revenue source to pursue,
what value to offer, how to price the value, and who pays for the value. It is a key
component of a company's business model.It primarily identifies what product or
service will be created in order to generate revenues and the ways in which the
product or service will be sold. Without a well defined revenue model, that is, a clear
plan of how to generate revenues, new businesses will more likely struggle due to
costs which they will not be able to sustain. By having a clear revenue model, a
business can focus on a target audience, fund development plans for a product or
service, establish marketing plans, begin a line of credit and raise capital.

B) PRICING COMPLEX:- Pricing complex is the process whereby a business sets

the price at which it will sell its products and services, and may be part of the
business's marketing plan. In setting prices, the business will take into account the
price at which it could acquire the goods, the manufacturing cost, the marketplace,
competition, market condition, brand, and quality of product.

Pricing is a fundamental aspect of financial modeling and is one of the four Ps of

the marketing mix, the other three aspects being product, promotion, and place. Price
is the only revenue generating element amongst the four Ps, the rest being cost
centers. However, the other Ps of marketing will contribute to decreasing price
elasticity and so enable price increases to drive greater revenue and profits.
 Pricing can be a manual or automatic process of applying prices to purchase and
sales orders, based on factors such as: a fixed amount, quantity break, promotion or
sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice
date, combination of multiple orders or lines, and many others. Automated
pricing systems require more setup and maintenance but may prevent pricing errors.
The needs of the consumer can be converted into demand only if the consumer has the
willingness and capacity to buy the product. Thus, pricing is the most important
concept in the field of marketing, it is used as a tactical decision in response to
changing competitive, market and organisational situations.

C) HIGH COST OF INTERNET SERVICES:- High-speed internet isn’t cheap and

there are logistical reasons why. Satellite internet requires expensive satellites to run
and transmit from space. Fiber optic internet requires special installation of fiber-optic
cables in your neighborhood. Cable and DSL are usually the cheapest because they
use existing telephone line infrastructure. The faster the high-speed internet plan, the
more likely it is to be expensive. You’ll find that fiber-optic and cable internet have
the most speed options and that these options will vary from affordable to expensive
for the highest speed tier.

4.LEGAL ISSUES
A) LACK OF PROPER RULES AND REGULATIONS:- One of the arguments
against regulations is that they can have unintended consequences. For example, in
October 2013, the Federal Reserve required big banks to add more liquid assets, so
they could quickly sell them if another financial crisis loomed. As a result, banks
increased their holdings of bonds. In 2014, the increase in demand pushed yields on
long-term Treasurys down. Lower interest rates spurred lending but reduced demand
for stocks. Bonds compete with the stock market for investors' dollars. Although their
returns are lower, they offer more security.

B)LIMITED-COVERAGE
SERVICES:The specific insuredevents for which an insurancecompany will pay a be
nefit. For example, a lifeinsurancepolicy provides coverage in
the event of death. Likewise, a healthinsurancepolicy provides money in the event of
illness. Generally speaking, an insurance policy outlines what it covers and the benefit
s it provides under different circumstances.A measure of a company's ability to pay its
fixed liabilities. It is calculated by determining by subtracting its fixed payments from
its operatingincome. High coverage indicates that the company can easily make its pa
yments and indeed is able to set funds aside to do so in the event its income declines.
Low coverage means that the company can make its payments but that it has less flexi
bility in doing so. A negative number indicates that the company cannot pay its fixed l
iabilities. The payments included in this calculation are lease payments, dividends on
preferred stock, and debtservice. It is also called fixed-charge coverage.
5.TECHONOLOGY ISSUES
A) PROBLEMS IN ADOPTING GLOBAL TECHNOLOGY IN LOCAL:- The
financial aspects of adoption will depend on the agency you choose for the process. If
you choose a private adoption agency, you may have to pay more in terms of adoption
fee and other expenses compared with any public agencies in your state/country.
Prepare to pay more if you are adopting a child who is a foreign national.Your
financial expenses can increase if you are paying for the expenses of the birth
mother’s hospital/medical bills. Your actual expenses will depend on your specific
situation.
B) FINANCIAL ISSUES:- Financial problems or financial pressure is a situation
where money worries are causing you stress. Many people are facing hard financial
times and the impact on mental health can be significant. These problems can seem
impossible to overcome, but you can get help and take steps to improve your
situation.
C) LACK OF PROPER KNOWLEDGE:- In an application development, the
number of coding or logic errors made by the programmer influence the results of the
complete application. One of the reasons for such mistakes is the lack of knowledge
of a specific banking process. Often, knowledge related to user needs such as
application flow and business processes is only known by System Analyst in the form
of tacit knowledge. This condition requires knowledge management activities,
especially for application development. However, based on prior studies, not all
organizations can successfully implement knowledge management activities. To
ensure success, an organization needs to identify the level of readiness to implement
knowledge management
D) LACK OF RESOURCES:- Lack of financial resources is a major reason that the
decrease in out of school children has leveled off in the last 3-5 years. It is generally
accepted that countries should allocate 20% of their budgets to education. Globally,
(including wealthy countries) only 15% of government expenditure was directed to
education in 2011, often with a bias towards higher education. The EFA Global
Monitoring Report (2013/14) notes that 25 countries, many with very high numbers of
OOSC, dedicate less than 3% of GNP to education rather than the recommended
6%.The problem of insufficient financial resources is further exacerbated by the need
for sustained economic growth, particularly in poor countries, and the existence of
ways and means to ensure distribution of resources including fiscal policy, tax
systems and budget reforms.
1.14.MODELS OF E-FINANCE

MODEL Products & Services

1.Business-to-Business(B2B)  Online financial services like, corporate
finance, investing, IPOs.
 International finances issues like, foreign
exchange, derivatives etc.

2.Business-toConsumer(B2C)  International such as online trading, online

banking, E-bill payment, E-Credit and E-
loanS.
 E-Insurance and guarantees.

3.Consumer-to-Consumer(C2C)  E-money transfer

4.Technical infrastructure
 Online transaction payments
 Internet
 CRM
 Software and Hardware
 IT services etc.

5.Global, institutional &  Rules and regulations

regulatory environment  Contract enforcement etc.

This table depicts the e-Finance sector models which are divided into five broad
categories such as 1. Business-to-Business (B2B), 2. Business-to-Consumer (B2C), 3.
Consumer-to-Consumer (C2C), 4. Technical infrastructure to support the e-Finance
platform,5. Global, institutional and regulatory environment that facilitate the
functioning and growth of e-commerce and e-finance. This model shows that how
does efinance work between the two important parties i.e., business and customers.
1.15. SCOPE OF E-FINANCE

Financial
market

Online Online trade

banking transaction
E-
FINANCE

Credit
Internet information
transaction &
management

1.Financial Market:-
A financial market is a market in which people trade financial securities and
derivatives at low transaction costs. Some of the securities include stocks and bonds,
and precious metals.
The term "market" is sometimes used for what are more strictly exchanges,
organizations that facilitate the trade in financial securities, e.g., a stock exchange or
commodity exchange. This may be a physical location (such as the NYSE, LSE, JSE,
BSE) or an electronic system (such as NASDAQ). Much trading of stocks takes place
on an exchange; still, corporate actions (merger, spinoff) are outside an exchange,
while any two companies or people, for whatever reason, may agree to sell stock from
the one to the other without using an exchange.
Trading of currencies and bonds is largely on a bilateral basis, although some
bonds trade on a stock exchange, and people are building electronic systems for these
as well, to stock exchanges.
2.Online trading transactions:-
Trade exchange and investments have been a part of people’s lives in all
developed countries for years now. However, it doesn’t mean that anyone can become
a trader. In fact, until recently, it was quite an arduous task to get into this business –
auctions were held exclusively in exchange buildings and one needed a license to
have access. The Internet made the entire process of trading on the stock exchange
much easier for everyone. This gave birth to a whole new trend – online trading. For
some, it became a hobby, and to others, it became a full-time profession. And even
though it has spread so widely among people, there still are many who do not know
what online trading is, why it is so popular, and how simple it is to become a trader.
3.Credit information and transaction:-
Credit Information Management System (CRIMS) is an advanced state-of-the-art
information and communication technology based system and application
infrastructure, implemented by the Credit Information Bureau of Sri Lanka as a part
of its modernization project (Phase I) in 2006 – 2010. CRIMS provides credit
information services to its members as well as to the general public. Credit Reports
are the primary product of CRIMS, and made available to member institutions to
enable them to arrive at faster and more objective credit decisions.
Key objective of this investment using its own funds was to improve the quality of
the credit information disseminated by the bureau in the form of credit reports. The
manual process which largely depended on human intervention in many operational
areas such as updates in the database and processing of credit reports eventually
exposed the CRIB to an increased volume of disputes. This growing tendency directly
created an adverse impact on the integrity of the services extended by CRIB and
challenged the very objective of its establishment and existence.
The acquisition of this advanced web technology and an internationally reputed
credit bureau application greatly benefited CRIB to achieve other technological and
operational requirements beside its core objectives that were required to operate a
modern credit bureau. With the latest information security advances, the bureau could
effectively enforce enhanced security policies and procedural guidelines at both ends
to protect the commercially sensitive financial data stored in the CRIB.
4.Internet transaction:-
An internet transaction is the sale or purchase of goods or services, whether
between businesses, households, individuals, governments and other public or private
organisations, conducted over the internet. The goods and services are ordered over
the internet, but the payment and the ultimate delivery of the good or service may be
conducted on or off-line
5.Online banking:-
 Online banking, also known as internet banking or web banking, is an electronic
payment system that enables customers of a bank or other financial institution to
conduct a range of financial transactions through the financial institution's website.
The online banking system will typically connect to or be part of the core banking
system operated by a bank and is in contrast to branch banking which was the
traditional way customers accessed banking services.
Some banks operate as a "direct bank" (or “virtual bank”), where they rely
completely on internet banking.
Internet banking software provides personal and corporate banking services
offering features such as viewing account balances, obtaining statements, checking
recent transactions, transferring money between accounts and making payments.

1.16: RISKS AND CHALLENGES

1. Regulatory Issues:-
The deregulation of the London stock market in 1986, the passage of the Riegle-
Neal Act in 1994, the deregulation of the Tokyo stock market in the 1990s, the
crumbling of the GlassSteagall Act in the late 1990s and broad financial deregulation
measures around the world have led to the increased amalgamation of the traditional
and e-finance environments. Competition in e-finance is expected to accelerate over
the coming years as deregulation continues to make its way around the world and new
entrants enter particular areas of the market, develop new niches/product expertise, or
expand into new countries. Check clearing in the U.S. is manually intensive,
involving multiple handling of the physical check. Check clearing for the 21st
Century (Cheque 21) was passed into a law in October 2003. Cheque 21 allows banks
to truncate checks and begin transferring their electronic images. Businesses benefit
from the speed of funds transfer and consumers can view their transactions online
immediately.
2. High Barriers to Entry:-
The finance industry has historically been both protected and plagued by high
barriers to entry. In particular, new entrants to the financial markets have to have
strong human resource management, a deep knowledge of risk, adequate financial
resources, responsive customer service, a robust technology infrastructure and a well-
established brand name/franchise. The first two factors – management of human
resources and risk management oversight – can be major barriers for new ventures.
The ability to serve customers quickly and securely has been the backbone of
traditional financial services for decades. The management of information and the
ability to solve customer problems in a secure and rapid fashion are major benefits of
dealing through a web-based system.
The financial sector has traditionally been very reliant on technical infrastructure to
handle many aspects of business, including trading, reporting, processing and control.
Historically, this requirement has been a barrier to entry because institutions had to
invest large amounts of money to implement technical solutions. Now, firms are able
to use the Internet’s technologies to adapt their architecture to deliver e-finance
services. The effect of low technology delivery cost is evident from the fact that many
non-financial portals or B2C exchanges such as AOL Finance, Intuit Quicken,
Bloomberg, Yahoo Finance and MSN MoneyCentral provide financial services.
These portals provide extensive financial news, research and quotes, analytical
services such as calculators and other financial analytical engines and supply links to
financial services through partnerships and alliances with financial sponsors.
Moreover the banking industry can be challenged by a category of new entrants
called converges such as airlines, consumer goods retailers, supermarket chains and
computer software and hardware companies which are already enjoying brand names,
large customer bases and established distribution channels or interfaces with
customers. Once these branded converges have established a foothold in the banking
market, the need for banks to intermediate payments in the longer-term is reduced. In
the future, e-money may be easily transferable among consumers and businesses
without the need for financial institutions to act as intermediaries.
3. Value Proposition:-
A successful e-commerce strategy in the financial services industry involves
rethinking and challenging value propositions. Some organizations started as
informediary sites and eventually transformed themselves into full-fledged corporate
storefronts (Bank of America and Barclays) or integrator/portal sites (Citibank and
American Express). Some organizations concentrate on a specific value-adding
product. For example, E-Loan and InsuWeb are active marketplaces, whereas
FinanceWise and Finweb act as financial Informediaries. The financial services
industry had to rethink its e-commerce business strategy and that involves reinventing
products and services, redefining the value proposition and perhaps creating new
business models.
4. Revenue and Cost Dimensions:-
The e-commerce revenue structure is quite complex, as the web has altered the
established concepts of pricing. In contrast to traditional models, the web allows for
free products and services, differential prices for the same product and customer
profiling. The pricing function is very complex for the e-finance business model,
given that the Internet is a relatively new medium. Therefore, it is hard to understand
the value of providing features such as news headlines, e-mail, stock quotes, trade
execution, investment advice, portfolio management, bill paying, front-to-back
processing/ fulfillment and so forth to the average customer. Further, it’s still unclear
as to which services should be ‘bundled’ or ‘unbundled’.
The revenue generation within B2B exchanges is an even more complex issue. The
practice of charging a fee for bringing sellers and buyers together may not bear fruit,
as many of these buyers and sellers may have a long history of dealing with each
other outside the exchange.
Furthermore, a sustainable revenue flow will depend on the relationships between
exchange participants, the degree to which the underlying market served by the
exchange is fragmented or concentrated and the relative balance of buying and selling
that occurs within the exchange. These pricing complexities are likely to be an
ongoing challenge for all participants as competition creates new ways of
reconstructing the value chain and doing business.
5. Technology Architecture:-
The nature of the business model dictates the selection of the most appropriate
technical platform for the e-finance model. For example, a basic information model
with a relatively static information base would require routine technical maintenance
and security to keep it operational. On the other hand, an e-finance model that uses
dynamic information such as streaming headlines, stock quotes and other real-time
information will require an intricate technical construction and maintenance schedule.
Similarly, corporate storefronts that offer interactive, transaction-enabled services and
products require an even more extensive technical architecture that is secure and
guarantees a certain level of performance. In addition, the architecture should fit well
with the legacy systems, providing a seamless link with the existing corporate
systems.
6. Security:-
Security and data privacy, the global character of the provision of e-finance
services and entry by non-regulated new intermediaries are challenges faced by the
financial regulators ad financial services industry. The online environment leaves all
the operations of a financial services firm susceptible to external and internal threats.
Security of transactions and data privacy are increasingly matters of concern for
regulators worldwide. Moreover, such threats can exist internally within the
organization. Pre-employment screening and security and on-going education become
all the more relevant in today’s technology-intensive environment in which an
employee can e-mail massive amounts of information with the click of a mouse. For
example, recent announcement by a rogue trader, acting without supervision, had rung
up $7.2 billion in losses this month at Societe Generale of France sent shockwaves
across Europe and the world.
If operations are outsourced, the financial services firm needs to ensure that the
outside vendor follows the same security guidelines in its employment practices.
Security measures that combine hardware and software tools need to be employed to
fight internal and external attacks. These measures include intrusion detection,
encryption, password protection, firewalls and virus controls. Firms need to have a
plan to update their systems regularly.
7. Adapting Global Technology to Local Requirements:-
While Internet technologies are global and standardized, their applications can and
must be adapted to local circumstances. Distinctions between proximity and
remoteness remain highly pertinent, even if the distance becomes virtual rather than
geographical. The need to localize financial solutions is even stronger in e-finance for
SMEs, which for the most part operate within a limited geographical area.
Furthermore, their characteristics, size, financial structure and sectoral mix can vary
considerably even within the same country or region.

1.17. SBI MOBILE BANKING APPS:-

There are a number of apps provided by the State Bank of India. Some of the apps
are mentioned below:
1. SBI Anywhere Personal App
 Features of SBI Anywhere Personal AppSBI Mobile Banking app for smartphone
usersCarry out voice assisted transactions for balance enquiry, mini statement,
recharge, transfer,etc.Get detailed account information and mPassbook on the goFund
transfer through various methods – IMPS, NEFT, RTGS, mCash and QR codeUPI
Transactions through VPA, Aadhaar and account number and IFSCTopup and
recharges for postpaid mobile, DTH, SBI wallets, prepaid cards, etc.Safe and secure
app as no data is stored in the smartphone
2. SBI YONO App
Features of SBI YONO AppAll banking transactions can be performed through the
appGet all your bank account details on the SBI YONO appSelect from various
options and apply for SBI Credit Card online through the appGet all SBI and
associated products at one place in the appTransfer funds using IMPS, NEFT, RTGS
and UPI through this appEasy to invest in SBICAP Securities through the appBook
vacations and trips online and get huge discounts in the app itself
3. BHIM SBI Pay App
Features of BHIM SBI Pay AppSend/receive money using UPI to and from any
bank’s account through the BHIM SBI Pay appPay for services such as mobile
recharge, food orders, bill payments and other dealsAny bank’s account can be added
to the app for carrying out the UPI transactionsThe only requirement is that your
mobile number should be linked with your bank accountThe maximum transaction
amount is capped at ₹ 1 LakhBoth merchants and users can use the same app. A
merchant can use the app as a user as wellMultiple VPAs can be created and managed
through the same app
4. SBI Buddy
Features of SBI Buddy AppThe SBI Mobile wallet app supports 13 language to
cater needs of customers from all over the countryMoney can be loaded into the
wallet from the SBI savings account directlyMoney can be transferred easily to
contacts in the phonebookFacility to recharge/pay bills directly through the appOnline
shopping and booking tickets online for flights, hotels and trainsInstant money
transfer to your bank account through the SBI Buddy appRound the clock customer
support. Queries can be mailed to customercentre@sbi.co.in
5. BHIM Aadhaar SBI App
Features of BHIM Aadhaar SBI AppThe app allows merchants/traders/businesses
to collect payments from the customers onlineNo PoS machine is required for
makings transactions at the shopThe merchant has to seed his Aadhaar with the bank
account to avail this facilityAn Android device with OTG support and STQC certified
fingerprint scanner is requiredRegister on the app, provide fingerprint and set mPIN
to start making transactionsThe customer has to enter his Aadhaar number and select
the bank account to payOn successful verification, the payment is made instantly from
the bank account of the customer
 CHAPTER.2.RESEARCH METHODOLOGY
2.1DATA SOURCES :-
The study is based on two sources of data collection primary as well as secondary
data:-
 PRIMARY DATA:-
The first stage of research is, among the data required following data has collected
using primary sources like a descriptive research has been carried out by applying a
survey method. Data for the study were collected from many publics like age’s from
18 to 50 & above the tool used for data collection was an interview schedule like
survey through google forms from which I, got various information and data through
public responces
 SECONDARY DATA:-
The second stage of the research ie exploratory by nature. This is done in two
phase is to undertake detailed secondary data search abouy E-finance in India, SME’s
accounting and financial management practice and its effect on assessing finance.
This forms the desk research work where the reviews are available secondary
literature for the study were collected. This exploratory search forms the basis for
preparing the interview schedule. Secondary data which is collected from various
books, National & international Journals, published government reports, publication
from various websites which focused on various aspects and impacts of E-finance.

2.2 OBJECTIVE OF STUDY:-

Overall result of the study shows that e-finance helps in achieving the economic
growth of a country by providing many benefits to the FIs and government. E-finance
means a provision of financial services and markets using electronic communication,
electronic tools and technology with the help of internet. The following objectives
have been set for this study:-
 To study the strategic model of E-finance.
 To study the different kinds of E-finance services adopted by India.
 To study the impact of E-finance after its implementation.
 To study the issues and challenges faced by E-finance in India.
 To review the progress of E-finance in India.
 To evaluate the difficulties faced by Indian banks to create infrastructure for E-
finance in India.
 To study the security measures undertaken by Indian banks for the safety of E-
finance.
 To understand the bank costumers perception regarding security measures.
 To study the growth and development of E-finance in India.
 To study in detail the preference of publics in selected cities.

2.3 LIMITATIONS :-
 Setting of interview is a crucial element of the data gathering process.
 The period of data collection poses a threat to the success of the data gathering
process.
 Decline in survey response is the big challenge in data collection.
 No response of participants in a sample size is a daunting challenge in data collection.
 Researcher tiredness is one of the hindrances to data collection for research.
 Gender issues is one of the most challenge in data collection.
 Language problems faced by illetrate people
 The area selected were few and as such the scope of the study is limited
 The conclusion may or may not be generalized since the study is confined to Mumbai
& Chennai only.

2.4 SAMPLE OF THE STUDY:-

Sample size of the study was 100.The public sample after leaving out not properly
filled questionnaries the real sample size was 94. All 94 respondents have been
administered with a structured questionnaire for the purpose of the study. The
selection of the respondents has been randomly made from the cities like Mumbai &
Chennai. The sample size of the survey has been drawn for various categories of
public. The size and the length of the survey questionnaire have been kept optimum.
Convenience sample method has been adopted for selection of the respondents.
CHAPTER-3 LITERATURE REVIEW
Shahrokhi (2008) examined the status of e-finance and also discuss the challenges
and related issues facing by financial services and IT industry. Overall findings of the
study show that the all areas of e-finance, application of technology to e-finance,
growth of the e-finance in the financial services industry.
Riyadh et al. (2009) try to investigate the present status of e-finance in Bangladesh
and its impact on the economy, also analyze its rationale together with policy
strategies for the successful implementation of e-finance in Bangladesh. Study found
that the position of e-finance is still in its initial stage, hence a lot to grow up near
future in this area.
Srivastava (2014) examined the status of E-finance, Scope of E-Finance, role and
importance of SMEs in development of the economy on a country, the state of E-
finance in India and the importance of E-finance for the developing countries
especially in context with India.
Kumari Nidhi (2016) examined and analyze the progress made by E-Banking in
India. Study shows that the internet banking has got attention in the Indian context.
The banks are facing many challenges and many opportunities are available with the
banks. Many financial innovations like ATMs, credit cards, RTGS, debit cards,
mobile banking etc. have completely changed the face of Indian banking.
Krishnan Dandapani (2017) investigates the status of e-finance in the last two
decades & recognize the impact of the Digital Age on e-finance in five key areas:
Payment systems, Cloud computing in financial services, Valuation metrics for multi-
sided platforms & Quantum trading, Cyber security – costs, benefits, and protection.
Allen and Gale (1997) argue that bank-based financial systems eliminate risk
through inter-temporal smoothing. Banks are able to build up reserves in good times
and run them down in bad times. Disintermediation prevents this from happening
because assets will be marked to the market and the current owners will obtain the full
increase in value. The extent to which e-finance leads to this type of disintermediation
remains an empirical issue.
Brett F. Woods (1997) “E-Money: Financial Management in the Electronic Age,”
explains the security of electronic cash transfers, deposits and payments, and
shopping online and who would be responsible in case of identity theft and losses.
 Claessens, S, et. al. (2000) argued that together with technological advances, the
emergence of e finance, offer great benefits to consumers worldwide. They also call
for a review of public policy in four areas: safety and soundness, competition policy,
consumer and investor protection, and global public policy. The changes can
accelerate financial sector development by lowering the costs, increasing the breadth
and quality, and widening access to financial services. The e-finance impact globally
would be material especially in the developing countries.
Claessens. S. et. al. (2001) analyzed the impact of e-finance on the financial
systems in different countries, and the leapfrogging opportunities for emerging
markets. The authors addressed new policy issues and the role of government
intervention in light of these developments. Special focus is given to models of
financial sector development that enable and promote e-finance in banking, capital
markets, insurance, housing finance and microfinance areas, drawing on innovative
applications from the industrialized and the developing world.
Anthony Herbst (2001) argued that “innovations and growth of e-finance have
lagged those of e-commerce in general. E-cash has stumbled along but not lived up to
its early promise or its current potential. despite growth of e-commerce and e-finance,
some of initial promises such as the growth of e-money have not materialized.” He
viewed the growth in e-finance as augmentation of legacy system and innovation in
new technologies and value propositions.
Allen, Franklin, et. al. (2002). Provided a comprehensive definition of e-finance
and outlined research issues related to e-finance. They focused on the use of
electronic payments systems, the operations of financial services firms and the
operation of financial markets. A number of research issues were raised: Is the
widespread use of paper-based checks efficient? Will the financial services industry
be fundamentally changed by the Internet? Why have there been such large
differences in changes to market microstructure across different financial markets?
Lopez (2002) argued that a strategic model should address issues such as the risk
of cannibalization, the increase of the penetration rate, the training of employees, the
education of customers with a view to go beyond the branchless system and to
increase the trust, the legal regulation of the activity and problems derived of the
globalization of the economies with faster, cheaper, easier capital transactions and an
increasing difficulty for following them..
 Andrew Fight (2002) provided an overview of some of technical systems that have
been enablers of e-commerce and e-finance and provided examples of legacy
institutions and new entrants who have adapted the new technologies. He argued that
e-commerce and e-finance are breaking the established patterns of doing business and
are defining the “new economy.”
Kolodinsky et al. (2004) discussed factors affecting the adoption of e-banking
products, their relative advantage, compatibility, complexity/simplicity, trial ability,
transparency, risk, and product involvement. They believe that the banking industry
lags in adopting new technology.
V.C. Joshi (2004) in ‘e-Finance: Log to the future,’ provides a detailed discussion
of the growth of e-finance and challenges developing economies such as India had to
meet to log on to the new economy of e-commerce and e-finance. He discussed
cybercrime, security, and regulatory issues in addition to e-banking, e-trading, and e-
finance products and their marketing.
Yuntsai C. et. al. (2004) employed the analytic hierarchy process (AHP) and
evaluated the performance of four e-payment systems: credit card, stored-value card,
smart card, and telecommunication bill. The results showed that the stored-value card
had the highest performance. Their findings also suggested that a payment alternative
can be flawed technologically but can still become the de facto e-payment scheme due
to the advantage of an established customer base. They suggested that multiple usages
be added to e-payment systems with higher economic/social merits so that they can
gain a critical customer base.
Dandapani, K. et. al. (2005) and Dandapani, K. (2004 and 2001) examined the
growth of virtual banking with a focus on the economics of their business model.
They explored both the impetus and constraints for their growth. While the online
banking by brick and mortar banks increased dramatically, only a few Pure Play
Virtual banks turned into brick and mortar banks to survive.
Manuchehr Shahrokhi (2004, 2002, and 2001) provided a comprehensive overview
of the applications of the Internet and IT technology to financial services industry. He
documented the evolution, growth of e-Business and e-Finance and their impacts on
the global economy.
Hakman, A Wan (2006) in “Electronic Financial Services: Technology and
Management, covers the issues of technology management (ICT) and its applications
to banking, insurance, stock trading, e-payment, and e-finance system in use by the
major financial services worldwide
Gewei Ye, Garland, K. (2006), in “E-finance: the CCMP model,” suggests a model
that extends the e-finance framework from the technology perspective and provides a
basis for a more comprehensive approach to financial digitization. Specifically, the e-
finance model is comprised of four components: digital wealth Creation, wealth
Collection, wealth Management, and wealth Protection (CCMP). Extensions of
Enterprise Application Integration (EAI) with CORBA (Common Object Request
Broker Architecture) and web services are presented to demonstrate the value-added
implications of a networked approach to business digitization.
Canard,S. and Gouget, A. (2007) presented an off-line divisible e-cash scheme
where a user can withdraw a divisible coin of monetary value that can be parceled and
spend anonymously and unlinkably. They presented the construction of a security tag
that protects the anonymity of honest users and to revoke anonymity only in case of
cheat for protocols based on a binary tree structure without using a trusted third party.
This is the first divisible e-cash scheme that provides both full unlinkability and
anonymity without requiring a trusted third party.
The ‘e-Finance Lab’ of Frankfurt, Germany is a pioneering industry-academic
partnership between Frankfurt and Darmstadt Universities and industry partners7 with
the main goal of developing scientific yet managerial methods for rearranging the
business processes of the financial service industry. The overall approach is to apply
industrial methods well established in other domains, such as automotive supply chain
optimization, to the financial supply chain. To pursue its goals, since 2003, e-Finance
Lab has formed study clusters that encompass different areas of financial services
industry. They are:
 CHAPTER.4. DATA ANALYSIS, INTERPRETATION &
PRESENTATION.

A).GENDER OF THE RESPONDENTS:-

GENDER FEMALE MALE

NO.OF RESPONDENTS 41 53

PERCENTAGE % 43.6% 56.4%

This pie chart shows me that out of the 94 people that completed my questionnaire,
43.6% of these are female and 56.4% were male. This is quite an equal amount so it
should not affect my overall results drastically.
B). AGE GROUP OF THE RESPONDENTS:-

AGE GROUP 18-25 26-30 31-40 41-50 50&above

NO.OF 65 3 7 8 11
RESPONDENTS

PERCENTAGE % 61.9% 3.2% 7.4% 8.5% 11.7%

As you can see the majority of the people that completed my questionnaire were aged
between 18 & 25. A total of 3.2% was aged 26 – 30, 7.4% was aged 31 – 40, 8.5%
was aged 41 – 50 and 11.7% was aged above 50.This will show through my result as
the genres that people prefer appeal more ti the younger generation rather than the
older.
C). OCCUPATION OF THE RESPONDENT:-

OCCUPATION STUDENT BUSINESS SALARIED HOUSEWIFE

PERSON

NO. OF 52 9 27 6
RESPONDENTS

PERCENTAGE 55.3% 9.6% 28.7% 6.4%

%

According to the survey the respondents were of different occupations. Most of the
respondents are from student category is about 55.3% of the survey. Respondents
from the business group are occupying 9.6%, then come salaried person with 28.7%
and from the housewife occupies 6.4% of the sample.
D).DO YOU PREFER USING INTERNET BANKING/VISIT A
BANK PERSONALLY?

RESPONSES INTERNET BANKING VISIT A BANK

NO.OF RESPONSES 71 23

PERSENTAGE % 75.5% 24.5%

According to the survey majorityof the people prefer using internet banking rather
than visiting to a bank personally about 75.5% of people use internet banking and
24.5% of persons visit bank personally.
E) DO YOU USE MOBILE BANKING?

RESPONSES YES NO

NO.OF RESPONSES 72 22

PERCENTAGE % 76.6% 23.4%

The above chart shows thst 76.6% of people have knowlwdge about mobile banking
and 23.4% of people do not use mobile banking. Thus it means the people are aware
about the mobile banking. Therefore the less number of people are not known about
mobile banking as compared to people who know about mobile banking.
F).HOW OFTEN DO YOU USE INTERNET BANKING

RESPONSES DAILY MORE ONCE A ONCE A

THAN WEEK MONTH
ONCE A
WEEK
NO.OF 18 19 30 27
RESPONSES
PERCENTAGE % 19.1% 20.2% 31.9% 28.7%

According to the survey most of the people use mobile banking once in a week they
don’t use mobile banking daily, about 19.1% of the people use mobile banikg daily,
20.2% of the people use more than once a week, 31.9% of the people use mobile
banking once in a week and 28.7% of the people use once in a month.
G).WHICH SERVICE OF INTERNET BANKING DOES RESPONSES USE
THE MOST?

Check Transfer Make online Statement

RESPONSES Balance Money payment request

NO.OF RESPONSES 31 49 45 9

PERCENTAGE % 33% 52.1% 47.9% 9.6%

The above graph shows the majority of internet banking is used for transferring
money, about 52.1% of the responses use mobile banking for transferring money,
33% of the responses use for checking the balance, 47.9% of the responses use for
makinh online payment and rest of 9.6% of the responses use for ststement request.
H).WHICH FACTOR INFLUENCES RESPONSES TO USE INTERNET
BANKING

RESPONSES Convenience Security Speed Cost Accuract of

of information
access
NO.OF 33 37 34 10 16
RESPONSES
PRECENTAGE% 35.1% 39.4% 36.2% 10.6% 17%

According to survey the above graph shows that the security factor influences the
respondent to use internet banking more, 35.1% of the people feel convenience using
internet banking, 39.4% for security factor, 36.2% of speed of access, 10.6% of cost
factor and 17% of respondent prefer accuracy of information factor influences them to
use internet banking.
I). RESPONSER’S AFRAID OF EXECUTING ONLINE
TRANSACTION?

RESPONSES YES NO

NO.OF RESPONSES 49 45

PERCENTAGE% 52.1% 47.9%

According to the survey the majority of the respondents are afraid of executing online
transaction, about 52.1% of the peoples are afraid of executing online transaction and
47.9% of the peoples are not afraid of executing online transaction
J).WHATS STOPS RESPONDENTS FROM USING INTERNET
BANKING

RESPONSES Fraud False Vague Server Slow

online information language error access to
transaction issues website
NO.OF 36 11 5 32 10
RESPONSES
PERCENTAGE% 38.3% 11.7% 5.3% 34% 10.6%

As you can see the majority of the people are afraid of fraud online transactions and
less afraid from vague language.From the above survey slow access to website stops
people from using mobile banking, 34% of the server error issues, 5.3% of vague
language, 11.7% of false information and 38.3% of fraud online transaction stops
respondents from using internet banking.
K).THE CONTRIBUTION OF INTERNET BANKING TO THE
SUCCESS OF BANKS IN RESPONDENTS OPINION

RESPONSES HIGH AVERAGE LOW

NO.OF RESPONSES 26 61 7

PERCENTAGE% 27.7% 64.9% 7.4%

According to the survey the respondents says that the contribution of internet banking
to the success of banks is average, 7.4% of the people says that the contribution of
internet banking to the success of bank is low, 64.9% says that its average and the rest
of 27.7% of people says that the contribution of internet banking to the success of
bank is high.
L). HOW SATISFIED DID RESPONDENTS WITH THEIR
BANK’S INTERNET BANKING SERVICES

RESPONSES GOOD SATISFACTORY AVERAGE

NO.OF RESPONSES 38 35 21

PERCENTAGE% 40.4% 37.2% 22.3%

As you can see that most of the respondents are very much satisfied with their bank’s
internet banking services.22.3% of people are not so satisfied, 37.2% of the people are
satisfy and 40.4% of the people are very satisfied with their bank’s internet banking
services
M).WHAT SUGGESTION DID PEOPLE MAKE FOR THE BANK
TOIMPROVE INTERNET BANKING
RESPONSES Provide Two step Solve Update Additional
more authenticati server application security for
language on issues regularly beware of
fraud/false
information
NO.OF 18 16 41 18 1
RESPONSES
PERCENTAGE 19.1% 17% 43.6% 19.1% 1.1%
%

According to the survey most of the people suggested to their banks to solve the
server issues, about 19.1% of the respondents suggested to provide more languages,
17% people for two step authentication, 43.6% of the people for update application
regularly and very few(1.1% )of them suggested additional security for beware of
frauds/false information.
CHAPTER:5.CONCLSIONS AND SUGGESTIONS.

E-finance means a provision of financial services and markets using electronic

communication, electronic tools and technology with the help of internet and intranet.
In other words, e-finance means use of ICT in financial service industry. It saves time
reduces the paper works and chances of fraudulent. From the above study we
concludes that the e-finance raises more as compared to e-commerce in India and
plays a significant role in the economic growth of a country by providing better e-
finance services. Although there are lots of challenges and risk faced by e-finance but
still it helps a lot in achieving the objectives of growth. It also improve the position of
financial inclusion in India.
The evolution and growth of e-Finance has been phenomenal during the last
decade. The adoption of internet technologies around the world and the
implementation of key regulatory measures, such as electronic signatures and cross
border contacts should spur further growth in e-commerce. Financial services industry
was among the earliest adaptors of information technology. E-Finance sector of e-
Business are interlinked. E-business in the financial services industry has been slow to
evolve because of complexity of inter-organizational relationships, regulations,
security concerns, lack of standards, and conservative principles.
E-finance builds on new business models and processes and demands new
paradigm and software to clearly position finance as a service center within
organizations. The benefits of e-finance are many and include: reducing the cost of
transaction processing, expanding the information scope of accounting and finance’s
systems, extending the information reach of the finance department and improving the
quality of financial information. However, to realize these gains, finance professionals
must embrace and leverage new technology, realign the traditional accounting mind-
set and skill set, engage in process transformation initiatives, and focus on delivering
value-added information services to the organization. Furthermore, they must have a
solid understanding and implementation of the technology platform.
The impact of the Internet on financial services is clear. However, certain trends
are emerging:
expansion of B2B e-finance, automation of customer services, consolidation in local
and regional
financial operations, growth in global services, migration towards 24/7 global trading,
blurring of business and product lines, disintermediation of traditional products and
services, creation of alternative partnerships and alliances and consolidation of
portals, storefronts, exchanges and marketplaces.
Technological developments should reduce the cost and enhance the security and
convenience of dedicated digital media. There is a clear need to ensure open markets,
minimizing the effect of switching costs, and police the pricing structures of both new
and old transaction media. Regulation and supervision of payments markets should do
much to promote the development of digital money.
E-Finance can streamline traditional business processes and deliver value-added
information services by using Internet-based technology. Leading finance,
accounting, and IT executives are transforming the finance function by deploying a
strategic application of the IT technologies to the financial services, or e-Finance.
CHAPTER.6. BIBLIOGRAPHY

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https://www.slideshare.net/Dharmikpatel7992/e-finance-24274843
 APPENDIX
SAMPLE QUESTIONNAIRE:-
Q1. Do you prefer using internet banking or visit a bank personally?
o Internet Banking
o Visit Bank Personally
Q2. Do you use mobile banking?
o Yes
o No
Q3. How often do you use internet banking?
o Daily
o More Than Once a Week
o Once a Week
o Once a Month
Q4. Which service of internet banking do you use the most?
o Check Balance
o Transfer Money
o Make Online Payment
o Statement Request
Q5. Which factor influences you to use internet banking?
o Convenience
o Security
o Speed of Access
o Cost
o Accuracy of Information
Q6. Are you afraid of executing online transaction?
o Yes
o No
Q7. What stops you from using internet banking?
o Fraud Online Transaction
o False Informaton
o Vague Language
o Server Error Issues
Q8. The contribution of internet banking to the success of banks in your opinion?
o High
o Average
o Low
Q9. How satisfied are you with your bank’s internet banking services?
o Good
o Satisfactory
o Average
Q10. What suggestion would you make for your bank to improve internet banking?
o Provide More Language Options
o Two Step Authentication
o Solve Server Issues
o Update Application Regularly