Академический Документы
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in
Banking Sector
Prepared by
Surat – 395007
Internet banking refers to systems that enable bank customers to get access to accounts
and general information on bank products and services through the use of the bank’s
web-site, without the intervention or inconvenience of sending letters, faxes, original
signatures and telephone confirmations.
Banking on the Internet is not the same as online banking over dedicated telephone lines,
since the Internet provides universal connection from any location world-wide, and is
universally accessible from any Internet-linked computer.
Since its development, the Internet has been used for research and educational purposes
and in fact, the developers actively discouraged anyone from using it for commercial
purposes. However, as companies began to use the Internet, especially the World Wide
Web, it has become a new environment for doing business. Banks are among those
commercial entities that have established themselves on the Internet.
As customer demand grows for more innovative services and products, banks are using
state-of-heart technology to improve their delivery channels. Convenient banking is
extremely important to today’s customer and people are looking for ways to meet their
banking needs without actually visiting a branch.
The amount of trade conducted electronically has grown extraordinarily since the spread
of the Internet.
Online retailers are sometimes known as e-retailers and online retail is sometimes known
as e-tail. Almost all big retailers have electronic commerce presence on the World Wide
Web.
E-commerce is usually associated with buying and selling over the Internet, or
conducting any transaction involving the transfer of ownership or rights to use goods or
services through a computer-mediated network.
There are at least three major forces fuelling e-commerce: economic forces, marketing
and customer interaction forces, and technology, particularly multimedia convergence.
The Internet is likewise used as a medium for enhanced customer service and
support. It is a lot easier for companies to provide their target consumers with
more detailed product and service information using the Internet.
○ Bank statements
BILL PRESENTATION
The bill presentation process involves the biller generating a periodic report from
its billing system, the notification of the bill to the customer for goods or services
previously rendered.
BILL PAYAMENT
Arrows
Show the flow of information with respect to money.
1.1 Funds transfer between a customer's own checking and savings accounts, or to
2. Conclusion
Of all these types, retail and investment banking are most affected by online
technological innovations and are the ones that stand to profit most from electronic
commerce.
Many banks feel that in order to be profitable they need to reduce operating expenses and
maintain strict cost control. This philosophy is evident in the many mergers and
acquisitions occurring in the banking industry. The challenge behind bank restructuring
lies in adequately operational-zing the notion of cost control.
Technology is the predominant solution for controlling costs. Banks are increasingly
turning toward technology to help reduce operating costs and still provide adequate
customer service. Innovation and technology are becoming the key differentiators in the
financial services business. Advance in networking, processing, and decision analytics
have allowed institutions to lower service costs.
Technology has also accelerated the pace of product innovation. For example,
sophisticated arbitrage instruments like derivatives are changing the nature of investment
banking.
Although large businesses have automated these tasks, many small businesses and most
households still do them manually. This is not surprising; large businesses have been
undergoing computerization for more than thirty years, whereas PCs have been entering
households in significant numbers only in the last few years.
These online capabilities increase the facility and speed of retail banking.
Technology also creates problems in the product development life-cycle. In the past,
banks had the luxury of long roll-out periods because successful investment in retail
banking required a large monetary commitment for product development. This financial
requirement pre-vented new participants from entering the market and was a key
determinant of success.
The impetus for drastic change in the banking industry does not come from forces within
banking; it is from competitive pressure outside the industry.
In recent years, there has been a major change in the way banks strive for increased
profitability. In the past, the banking industry was chiefly concerned with asset quality
and capitalization; if the bank was performing well along these two dimensions, then the
bank would likely be profitable. Today,
E-Commerce
Consumer requirements have changed substantially in the last decade. Customers want to
access account-related information, download account data for use with personal finance
software products, transfer funds between accounts, and pay bills electronically. Along
with these services, banks must be able to supply/guarantee the privacy and
confidentiality that customer’s demand, which is not a trivial matter to implement on the
part of the banks.
Customers and financial institutions both seek closer and more multifaceted relation-
ships with one another. Customers want to be able to bank at their convenience, including
over the weekend or late at night. Bankers want more stable and long term relationships
with their customers. From the bank’s perspective, developing and maintaining this
relationship is difficult.
Electronic banking provides a method of communication that will enable the bank
customer to be reached, served, and sold products and services in their homes and offices
whenever it is convenient for them-twenty-four hours a day, seven days a week.
Many banks have started Web sites on the Internet, and many plan to offer banking
services over the Internet. Some banks are already offering certain banking services over
the telephone. Smart cards and other forms of electronic cash could be the key to