Internet Banking

Recommendations: -

• Technological development has been nothing less than explosion. Banks have been harnessing such technological innovations on one hand and adapting themselves to such changes on the other hand.

• The most significant event has been development of semi-conductor technology, which has resulted in spectacular expansion of automation.

• Processing, storage and transmission of information is very essence of banking and financial services.

• The electronic technology has bought revolutionary changes in these areas. The elimination of paper as medium for processing and storage of transactions / information has been a great event. Large volume of information can be processed, stored and retrieved very economically at terrific speed, which is not possible manually.

• The space required for managing enormous volume of information has been reduced dramatically.

• With the revolution in telecommunication technology, information can be made accessible from remote distance at lightning speed. The final output of information after manipulation and analysis can be printed by printer at high speed directly from computers.

• Thus, the computer now has the ability to retrieve data or update files instantaneously. Subsequently with the development in telecommunication, Local Area Network (LAN)/Wide Area Network (WAN) have been established.
 
Suggestions: -

 To prevent online banking from remaining an expensive additional channel that does little to retain footloose customers, banks must act quickly.

 The first and most obvious step they should take is to see to it that the basic problem fueling dissatisfaction has been addressed.

 After repairing this basic deficiency, banks must ensure that their services are competitive.

 Obviously, it should include checking, savings and brokerage services, which anchor customers to the institution.

 In addition, to meet the challenge of online brokerage and other new entrants, banks would need to add “supermarkets” selling products such as mortgage, mutual funds and insurance.
 
Role and Significance: -

Computers were originally destined for a minor role in banks, primarily intended to facilitate accounting transactions. Subsequently, once its superiority was firmly established, it grew in status as a tool for management information and a host of other inventions. Although the accounting aspect is still quite important and relevant, IT has a far greater role to play to day to day banking operations, especially in decision making process. Further, facilities like ATM, Anywhere Banking, Internet as well as Mobile Banking have been increasing their presence. It has, to be conceded that ‘Information Technology’ is not the end in itself, but is useful tool in the hands of the management to leverage business prospects in its favour and enhance efficiency.

Banks now have come under great pressure to reduce operational costs to safeguard their bottom lines. With banking tuning more and more customer-centric with every passing day, technology as an enabler has helped banks to launch a whole array of customer-centric products such as ATMs, Debit Cards, 24 hour Anywhere Banking. Customer Relations Management is now a very potential concept. Internet Banking also has a role to play in ensuring a fair return to shareholders, by facilitating in ensuring greater profits to the banking sector. The recent emerging trends in self-service channels, namely ATM,s, Call-centers, Internet and Mobile Banking would increase the use of E-banking as this offer the twin benefit i.e. convenience to the customers and reduction and cost of operation to the banks. The popularity of internet banking likely depends upon inculcating in customers about their security and personal privacy of their money and assets.
 
Conclusion: -

Technology innovation and fierce competition among existing banks have enable a wide array of banking products and services, being made available to retail and wholesale customer through an electronic distribution channel, collectively referred to as e-banking. The integration of e-banking application with legacy system implies an integrated risk management approach for all banking activities of a banking institution. Latest recommendations of Basel Committee recognize that each bank’s risk profile is different and requires a tailored risk mitigation approach appropriate for the scale of e-banking operations, the materiality of the risks present and the willingness and ability of the institution to manage their risks. This implies that a “one size fits all” approach to e-banking risk management issues may not be appropriate.

Banks have traditionally been in the forefront of harnessing technology to improve product and efficiency. Technology is altering the relationships between banks and its internal and external customers. Technology has also eroded the entry barriers faced by many industries. With one time investment, technology has brought about superior products and channel management with a special focus on customer relationship. The incremental costs incurred for expansion and diversification are also more beneficial.
The major driving force behind the rapid spread of e-banking is its acceptance as an extremely cost effective delivery channel. But on the flipside, it is associated with risks such as reputation risk, security risk, cross-border risk and strategic risk, which are unique to e-banking. Banks need to have an effective disaster recovery plan along with comprehensive risk management tool is significant not only to the bank but also to the banking system as a whole. All these issues underscore the importance of sound supervisory policies and high level of international co-operation among the bank regulators. The Basel Committee on banking Supervision has taken the lead in this area through the creation of its Electronic Banking Group – a group comprising 17 central banks and bank supervisory agencies in the late 1999. The main focus of this group has been to develop sound risk management practices.

Internet has created plenty of opportunities for players in the banking sector. While the new entrants have the advantage of latest technology, the good-will of the established banks gives them a special opportunity to lead the online world. By merely putting existing service online won’t help the banks in holding their customer close. Instead, banks must learn to capitalize their customer’s different online financial-services relationships. The article “Will Banks Control Online Banking?” focuses on how banks have to reinvent their role to remain as their customers’ preferred bank.

Coming home, India is on threshold of a major banking revolution with the invasion of net banking. With the concept of payment gateway coming in, banks are vying with one another for the lion’s share in the market. Highlighting the benefits of payment gateway over the open-loop payment mechanism, the article “Banking in the Cyber worlds” gives a brief report of the tug of war between the two major Indian e-banking players.
 
Bibliography: -

 PRIMARY SOURCES:

 O’ Brien James. A - Management Information System

 Muedic & Ross - Management Information System

 Indian Banking - S. Natarahan and R. Parameswaran

 Banking - In the New Millennium, ICFAI University

 The Business Line.


 OTHER SOURCES:

 Special Thanks to ICICI Bank – Churchgate Branch - Mr. Chintan

ICICI Bank | Personal Banking | NRI Banking | Corporate Banking | Business Banking.

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THANK YOU
 
i need this immediately for my project. i'm also searching for self banking if u have information about that plzz replyy. and plzz tell me the sources for self banking
 
hii frnds m doin 100 marks prjct on "AUTOMATIC TELLER MACHINE".IF ne 1 has ne info abt it then plz send me at it will b vry helpful 4 me
 
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