E-BANKING CHALLENGES AND OPPORTUNITIES

VARGHEES PRABHU.S, KSR COLLEGE OF ENGINEERING, TIRUCHENGODE.

‡ The number of visits of a customer to the bank can be minimized largely by operating the account through internet ‡ E-banking is used to access the customer·s bank account and to undertake the banking transactions. speedy and boundary less due to the impact of erevolution.INTRODUCTION: ‡ Now-a-days the banking is more information-based. ‡ The number of individuals using the internet is increasing considerably and it can be seen with the following table .

225.800.677 1.5 % 3.200.000 5.Internet Penetration in India Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Users 1.094.094.677 1.677 1.094.3 % 0.129.812 1.6 % 4.000.677 1.677 1.870.870.000.500.000 7.870.667.112.094.7 % 1.6 % 3.500.000 2.1 % 3.000 39.internetworldstats.094.600.094.812 1.1 % 0.5 % 0.000 40.225.112.677 1.000 16.7 % Source: www.000 Population 1.870.870.870.000.870.528 % penetration 0.000 22.677 1.6 % 2.094.000 42.com .500.000 50.400.

Internet usage in Asia .

the customer has to visit the branch of the bank in person to perform the basic banking operations such as enquiry. funds transfer. cash withdrawal. ‡ E-banking is called any time. the customer can perform the banking transactions by sitting at their homes round the clock globally through electronic media . any where banking because. etc.TRADITIONAL BANKING AND INTERNET BANKING ‡ In traditional banking.

Introduction of computer based banking industry ‡ 1980 . Rangrajan .Introduction of computer-linked communication based banking ‡ In 1970s.TECHNOLOGY IN INDIAN BANKING ‡ 1960 . C. SBI installed a ledger-posting machine along with a mainframe computer at selected branches ‡ A committee on computerization and mechanization was appointed by RBI in 1983 under chairmanship of Dr.Mechanized banking introduced ‡ 1970 .

TECHNOLOGY IN INDIAN BANKING ‡ Technology was the rational for bank introducing ATM and POS (Point of sales) in 1970s. telephone banking in 1980s and internet banking in 1990s .

INTERNET BANKING IN INDIA ‡ Information Only System ‡ Electronic Information Transfer System ‡ Fully Electronic Transactional System .

SERVICES CAN BE OBTAINED WITH THE HELP OF E-BANKING ‡ ‡ ‡ ‡ ‡ ‡ ‡ Bill Payment Service Fund Transfer Credit Card Customers Railway pass Investment through Internet Banking Recharging the Prepaid Phone account Shopping .

‡ E-banking helps for the payment of utility bill. . balance inquiry at the ATMs ‡ Customers can operate their accounts while sitting in their offices or homes. There is no need to go to the bank in person for such matter. ‡ Besides withdrawing cash customers can also have mini banks statements.BENEFITS OF E-BANKING BENEFITS TO CONSUMERS: ‡ Customer·s account is extremely accessible to an online account. ‡ Customer can withdraw the cash at any time through ATMs that are now widely available throughout the country.

01 Source: Furst.45 ATM 0. cost per transaction through internet banking is the least among all the other modes Cost Per Transaction In The US: Money Transfer (units in US $) Type Cost Per Transacti on Branch Cheque Phone 1. ‡ The Growth of Credit Card usage also owes greatly to E-banking. Booz.15 Internet 0.95 0. Lang & Nolle (1998).27 PC 0.07 0.‡ All services that are usually available from the local bank can be found on a single website. ‡ Services can be offered at a very low cost. ‡ Banking is available throughout the day without holidays. Allen & Hamilton (Apr.1997) . As the chart shows results of a survey.

‡ The reach and delivery capabilities of computer networks like the internet are far better than any branch network. ‡ Electronic banking reduce paper work.TO BANKING INDUSTRY ‡ controlling banks operating cost ‡ Increase efficiency. thus helping them to move the paperless environment. better time usage and enhanced control. opening of new avenues for banking operations. ‡ E-banking has made banks more competitive. . It has also led to the expansion of the banking industry. ‡ proper documentation of their records and transactions.

increased efficiency. reduced delivery time.TO GENERAL ECONOMY ‡ E-banking gives tangible benefits in the form of reduction of cost. reduced wastage ‡ E-banking electronically controlled and thoroughly monitored environment discourage many illegal and illegitimate practices ‡ E-banking has also helped in documentation of the economic activities of the masses .

‡ If the bank's server is down. ‡ Our internet connection must be working properly so that customers can have access . we can't use it. ‡ Hackers may intercept data and defraud customers.DISADVANTAGES OF E-BANKING ‡ Compelled to have Computers with Internet Access. ‡ Phone bills can increase. ‡ Many banks don't show us how to use online banking.

CONSTRAINTS IN INTERNET BANKING ‡ ‡ ‡ ‡ ‡ ‡ Start-up cost Training and Maintenance Lack of skilled personnel Security Legal Issues Restricted Clientele and Technical Problems .

SECURITY MEASURES ‡ ‡ ‡ ‡ ‡ Authenticity controls Accuracy control Completeness control Redundancy controls Privacy controls ‡ Audit Trail Controls ‡ Existence controls ‡ Efficient ‡ Fire wall controls ‡ Encryption controls .

falling PC prices. ‡ The declining Internet rates. ‡ In true E-banking. would definitely encourage the boom in E Banking in India.. ‡ E-Banking Providing a 'need to have' than a 'nice to have' services.CONCLUSION ‡ E-Banking is becoming immensely popular globally and India is no exception to it. any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. accessing the NET through cable TV etc. . broad bandwidth access through cable and digital subscriber lines.

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