How Online Banking

increases Efficiency of a
Bank
 What is Online Banking?

• Allows a user to execute financial transactions via the internet.

• Also known as “Internet Banking" or “Web Banking”.
• The automated delivery of new and traditional banking products and
services directly to customers through electronic, interactive
communication channels.
Online Banking is
SMART Banking
 Online Banking Services

Non-Transactional Transactional
Non-Transactional Services
Viewing Account Balances

Viewing Recent Transactions

Downloading Bank Statements

Viewing images of paid Cheques

Ordering Cheque books

Download Periodic Account

Statements

Downloading applications for

M-banking, E-banking etc.
Transactional Services
Funds transfers between the
customer's linked accounts

Bill payments

Third party fund transfers

Investment purchase or sale

Loan applications and

transactions

Ecommerce Payments
 Provide Convenience

• Anytime Banking, Anywhere Banking

• Consumers can perform banking transactions 24 hours-a-day, seven-days a
week.

• Basic banking transactions such as paying bills and transferring funds

between accounts can easily be performed at times convenient to
consumers.
 Cost Efficiency

Larger customer coverage Reducing the costs of operations

• Banks can deliver banking services on the internet at transaction costs far
lower than traditional ways.

• The actual costs to execute a transaction will vary depending on the delivery
channel used.

• These costs are expected to continue to decline.

 Cost Efficiency

Average Transaction Cost (in USD)

Source: Javelin Strategy and Research
 Ensure Security

• In addition to being convenient and efficient, online banking services

actually offers an additional level of security.

• Your monthly statements are sent directly to your email box and are
password-protected—you open them at your convenience and reduce the
possibility of fraud by someone taking the paper statement from your
mailbox.

• Multiple layers of infrastructure have been put into place to ensure your
personal or business information is handled with extreme sensitivity.
 Branding

• Relationship Building is a strategic priority for most banks.

• Internet banking technology and products can provide a means for banks to
develop and maintain an ongoing relationship with their customers by
offering easy access to a broad array of products and services.

• By capitalizing on brand identification and by providing a broad array of

financial services, banks hope to build customer loyalty, and enhance repeat
businesses.

• Promoting services and products internationally

 Miscellaneous

Customer Satisfaction: Increasing the customer satisfaction and providing a

personalized relationship with customers

Transaction Speed: Online bank sites generally execute and confirm

transactions quicker than manual processing speeds

Environment Friendly: Online banking is gradually replacing the paper

transactions in the banks which has reduced the paper work

 Conclusion

Online banking is changing the banking industry and is having the major

effects on banking relationships.

The net banking, thus, "now is more of a norm rather than an exception in

many developed countries" due to the fact that it is the economical way of
providing banking services.

Providing Online banking is increasingly becoming a 'need to have' than a

'nice to have' services.