INTRODUCTION TO ONLINE BANKING:
Online banking (or Internet banking or E-banking) allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution, which can be a retail or virtual bank, credit union or building society. To access online banking, the customer would go to the financial institution’s website, and enter the online banking facility using the customer number and password. Online banking facilities offered by various financial institutions have many features and capabilities in common, but also have some that are application specific. The common features fall broadly into several categories
A bank customer can perform some non-transactional tasks through online banking, including
– viewing account balances
viewing recent transactions
downloading bank statements, for example in PDF format
viewing images of paid cheques
ordering cheque books
download periodic account statements
Downloading applications for M-banking, E-banking etc.
Bank customers can transact banking tasks through online banking, including
– Funds transfers between the customer’s linked accounts
Paying third parties, including bill payments (see e.g., BPAY) and telegraphic/wire transfers Investment purchase or sale
Loan applications and transactions, such as repayments of enrollments Register utility billers and make bill payments
Financial institution administration
Management of multiple users having varying levels of authority
Transaction approval process
Sources of Data
An Online survey was conducted on 51 people from different places in order to find out the awareness and usage of ‘Online Banking’. Online Banking has been used widely but, the main objective of this study was to find out the awareness of Online Banking, the problems faced by the customer with regard to Online Banking and to determine the level of customer satisfaction. The data was collected using a questionnaire. The study revealed that the majority of the customers are aware about Online Banking and about 6% are not aware about Online Banking. The data sources are:
(a) Primary data: Data collected from the respondents.
(b) Secondary data: Data collected from books and the internet.
In the survey conducted with regard to Online Banking, the following responses were recorded: Firstly, the response of from the survey is found dynamic with the mixture of people from different age groups having different opinions about Online Banking.
Monthly Income of the people surveyed was found to range from Rs.10,000 to Rs.1,00,000. Students were found to be the majority.
Though Online Banking has gained importance nowadays, it is found that not all of them have availed it. This survey shows that the percentage of people who have availed the Online Banking facility is 86%(44 out of 51).
It is found that, majority of the people use Online Banking Weekly.
When asked, whether one has to avail the Online Banking Facility, majority of the people suggested that one has to avail it.
Online Banking is simple and fast. But again, the responses here varied.
From the survey conducted, Online Banking is found useful because: (i) It is convenient
(ii) There is 24*7 Access to the accounts
(iii) It Saves time
(iv) To Pay Bills
(v) To do online shopping etc.
When asked how did one come to know about Online banking, the majority told that it was suggested to them by their family, friends etc. while media i.e, Television, Internet and newspapers have also played an important role in educating people about Online banking. A lot of them use Online Banking to check account balance while others also use it to transfer funds and pay bills. According to the survey, some individuals are of the opinion that there have to be some other features introduced with regard to Online Banking than the current features. Some of them are: (i) Paypall services should be accepted by e-commerce transactions (ii) It should have a service wherein one can take appointments at Banks (iii) More Complex security features have to be introduced
(iv) Cash at counter with unique reference number like WesternUnion
(v) Reasonable Bank Charges when dealing with other Banks
(vi) Two tier protection can be used to enable better security
(vii) Link to multiple accounts in a single account
(viii) Electronic Cheques
(ix) Opening FD Accounts by filling the requirements online
(x) Needs to be simple
(xi) Hidden charges have to be specified and should be reasonable
(xii) Name of the person depositing money has to be shown
(xiii) There has to be a facility wherein one can track his lost card
(xiv) One should be able to block the card if lost and should be able to track its location and identity of the person carrying it
(xvi) Beneficiary addition procedure
APPLICATION OF MEAN:
The study reveals that on an Average, people belonging to the age group 25-39 make use of Online Banking the most as Compared to that of the other age groups.
MERITS OF ONLINE BANKING:
1) Customer Advantages:
Account balances and history, including year-to date information
Cross-account fund transfers
Check history, inquiry, images, withdrawals,reorders and stop payments Credit card and statement imaging
Online loan applications
Online loan payments
Secure interactive messaging with staff
The ultimate in convenience
Round-the-clock finance management
It can attract new customers
Increase in the value of the bank
2) Financial Institution Advantages:
Affordable flat-free pricing with no hidden charges or transaction fees Multiple choices of host connectivity, Frame relay, VPN or DSL Custom look and feel
Available in three different layout versions
Dedicated banking server and communication hardware
Robust online security systems to protect customer’s confidential information Complete set up and installation at no additional cost
User-friendly administration portal
DEMERITS OF ONLINE BANKING:
Not convenient to those unfamiliar with current technology
Technical problems can disrupt access to the website
Technical problems may require banking to be done conventionally
INTERNET BANKING RISKS:
E-banking, by implications of the built in system complexity, entails new control and safeguards challenges to the bank and also to customers. The major risks are relayed to credit, interest-rate, liquidity, foreign exchange, compliance, strategic, goodwill and transaction. These risks are inter-related and associated with e-banking operations. In addition, web-enabled or internet-based banking has a plethora of inter-connecting issues like identification and credentials of customers, safety of the servers, hacking risk etc. Changing the sequence of banking transactions, web-defacing, social engineering are some of the innovative attacking techniques currently being used as tools of cyber-crime. At present, viable safeguards against this nature of crime are limited.
There is no doubt that potential for Internet banking in India is immense considering the raising penetration level of the World Wide Web in Indian homes and offices. The Banks has very well adopted the strategy of providing Internet-Banking services. It has tried to familiarize the customer with the services like account information, fund transfer, bill payment, requests and intimation, communication with account manager and other services. The study revealed that the majority of customers are aware about Online Banking and more than 50% of them use it. But, there is a necessity to reach the customers on a wider scale and create awareness about these services. To conclude, the tendency of customers to bank through the ‘Internet Banking’ in the future days could well see virtual banking becoming a reality. Overall the fact remains that given a choice, customer would like to bank via Internet and future years could well see virtual banking become reality.