INTERNET BANKING

WHAT IS E-BANKING
DEFINATION

The provision of banking services through electronic channels and the customer can access the data without time and geographical limitation.

DEVELOPMENT OF E-BANKING
1980

- Rapid development of the internet - TCP IP system (communication system) - E- commerce

DEVELOPMENT OF E -BANKING
May 1995 :

Wells Fargo the first bank in the world to offer customer access to their account over the internet. Allows customer to see their accounts online

DEVELOPMENT OF E-BANKING
ICICI was the first bank to initiate the internet banking

revolution in India as early as 1997 under the brand name Infinity. ICICI Bank Kicked off online banking way back in 1996. But even for the internet as a whole, 1996 to 1998 marked the adoption phase, while usage increased only in 1999due to lower ISP online charges, increased PC penetration and a tech-friendly atmosphere.

COSTS OF BANKING SERVICE

Industry estimates assume :

Teller cost at Re 1 per transaction,

ATM transaction costs at Re 0.45,

Phone banking at Re 0.35, Debit cards at Re 0.20 and

Internet banking at Re 0.10 per transaction.

RBI & E-BANKING

The Reserve Bank of India constituted a working group on Internet Banking. The group divided the internet banking products in 3 types based on the levels of access granted. They are -: i. Information Only system ii. Electronic Information Transfer System iii. Fully Electronic Transactional System

 Information Only System:

General purpose information like interest rate, branch location, bank products and their features, loan and deposit calculations are provided in the banks website. There exist facilities for downloading various types of application forms. The communication is normally done through e-mail. There is no interaction between the customer and banks application system . No identification of the customer is done.

 Electronic Information Transfer System : The system provides customer- specific information in the

form of account balances, transaction detail, and statement of accounts. The information is still largely of the read only format. Identification and authentication of the customer is through password. The information is fetched from the banks application system either in batch mode or off-line. The application systems cannot directly access through the internet.

 Fully Electronic transactional System :

Transactions can be submitted by the customer for online

update. This system requires high degree of security and control. In this environment, web server and application system are linked over secure infrastructure. It comprises technology covering computerization, networking and security, inter-bank payment gateway and legal infrastructure.

DIFFERENT SERVICES PROVIDED UNDER EBANKING

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 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 Financial institution administration Management of multiple users having varying levels of authority Transaction approval process

ADVANTAGES OF E- BANKING
Benefits For banks

Benefits for small to medium Businesses

Benefits for Customers

BENEFITS FOR BANKS

Larger customer coverage

Reducing the cost of operations

Promoting their services and products internationally Increasing the customer satisfaction and providing a

personalized relationship with customers

BENEFITS FOR SMALL TO MEDIUM BUSINESS

To run its operation more effectively

Lower cost than traditional financial management

mechanisms

BENEFITS FOR CUSTOMERS

Convenience

24 hours a day, seven days a week Cost Reducing transfer fees Speed Faster circulation of assets Competitiveness Fostering competition on financial market

BENEFITS FOR CUSTOMERS

Communication

communicate easily Environmental Abolishing the uses of paper Others offering one-stop-shop solutions

DISADVANTAGES OF E-BANKING
A need for customer skill to deal with computers and

browsers. Site change it will make the customer have some confusion and delay Security risk

SECURITY RISK
Increasing number of fraudulent bank websites.

Two well known examples for those attacks are

phishing and pharming. keylogger and Trojan horses can also be used to steal login information

Phishing

PERSECUTIONS
For Bank: Should provide specific guidance to their customers

 For Customers :

Should not disclose their customer IDs (e.g.,

account numbers) or passwords to anyone else. Periodically promptly log out from the service Should promptly log out from the services Should regularly check their account balances and statements to identify unusual transactions. Do not access Corporate Cyber banking through public terminals.