E-banking.docx

Essay about E-Banking Introduction Electronic banking in simple terms means, it does not involve any physical exchange of money, but it’s all done electronically, from one account to another, using the Internet. Internet banking is just like normal banking, with one big exception. You don’t have to go to the bank for transactions. Instead, you can access your account any time and from any time and from any part of the world, and do so when you have the time, and not when the bank is open. For busy executives, students, and homemakers, e-banking is virtual blessing. No more talking precious time off from work to get a demand draft made or a check book issued. Banks offer Internet banking in tow main ways. An existing bank with physical offices can establish a Web site and offer Internet banking to its customers in addition to its traditional delivery channels. A second alternative is to establish a “virtual,” “branchless,” or “Internet-only” bank. The computer server that lies at the heart of a virtual bank may be housed in an office that serves as the legal address of such a bank, or at some other location. Virtual banks may offer their customers the ability to make deposits and withdraw fund via automated teller machines (ATMs) or other remote delivery channels owned by other institutions. Online system allows customers to plug into a host of banking services from a personal computer by connecting with the bank’s computers over telephone wires the convenience can be compelling. Not only is travel time reduced, but ATM machines, telephone banking or banking by mail are often unnecessary. And, technology continues to make online banking once attempted only by computer enthusiasts, easier for the average consumer. Banks use a variety of names for online banking services, such as PCbanking, home banking electronic banking or Internet banking. Can one imagine life without paper cash? Money has always been part of human emotions. And although it is difficult to imagine that all those years of savings at the bank is now just a whole bunch of bits and bytes, it is becoming a reality and the sooner people adjust to it, the better it is.

The usage of e banking by the enterprises came into existence in mid 90’s.e banking came into existence in greater numbers because of low operating costs. First it is in the form of ATM’s and phone transactions. Recently it transformed to internet a new channel between customers and banks which benefits both. The main aim of ebanking services is to provide the customers a much faster services with low cost. From the last twenty years, banking sector has chosen a new method of banking based on the progress of information technology. In addition to these customers, transaction and communication abilities are fastened based on information technology. The progress of electronic banking started with use of automatic teller machines and afterwards it developed to online banking. In the future it will be done in mobile phones(wap-enabled). Anyway online banking continues to be the best for financial transactions. Importance of E-Banking: E banking provides many advantages for banks and customer’s. e-banking has made life much easier and banking much faster for both customers and banks. Main advantages are as follows:       

It saves time spent in banks It provides ways for international banking. It provides banking throughout the year 24/7 days from any place have internet access. It provides well-organized cash management for internet optimization It provides convenience in terms of capital, labour, time all the resources needed to make a transaction. Taking advantage of integrated banking services, banks may compete in new markets, can get new customers and grow their market share. It provides some security and privacy to customers, by using state-of-the-art encryption and security technologies.

What is e-banking? Electronic funds transfer means computer systems are used to perform financial transactions electronically. The EFT is used for electronic payments and customer initiated transactions where the cardholder pays using credit or debit card. The transaction types are, Withdrawal, deposit, interaccount transfer, inquiry, administrative transactions that covers non-financial transactions including PIN change. Electronic Fund Transfer transactions needs authorization and a means to match the card and card holder. EFT transactions require the cardholder’s PIN to send online in encrypted form for validation by the issuer of the card. Other information may include the card holders address or the CVV2 security value printed on the card.

Electronic funds transfer transactions are activated during e-banking procedures. The different methods of e-banking are:     

“Online banking Short message service banking Telephone banking Mobile banking Interactive -TV banking”

Of all the above procedures online banking plays an important role and maximum used by the account holders. Now, discussing the above one by one. Online banking: Online banking also called as internet banking, allows the customers to use all the banking services from a computer which has internet access. The customer can perform financial transactions on a secure website operated by the bank. Online banking offers features such as bank statements, loan applications, funds transfer, e-bill payments and account aggregation allows customers to monitor all their accounts in one place. Telephone Banking: Telephone banking is a service provided by the banks which provides customers to perform transactions on phone. All the telephone banking systems uses automated answering system with keypad response or voice recognition capability. To prove their identity customers must provide a numeric or verbal password or answering the questions asked by the call center representative. In telephone banking customer can’t withdraws and deposits cash but can do all the other transactions. Mostly there will be a customer care representative to which the customers speak, although this feature is not guaranteed. The customer care representatives are trained to do what are available at the branch like checkbook orders, address change, debit card replacements. SMS Banking: SMS banking is a service permitting banks to do selected banking services from the users mobile by the SMS messaging. SMS banking services have push and pull messages. Push messages are sent by the banks for alerting customer about new offers, marketing messages, alerts to events happening in customers account such as large amount of withdrawals from ATM or credit card etc. Pull messages are those that are sent by the customer to bank for having some information or to perform a transaction in their account. Examples include account balance enquiry, requesting for current exchange rates and for new offers that are launched.

The customer has a choice to select the list of services he need to be informed. This can be done by integrating to internet banking or speaking to the customer care representative of the bank call center. Interactive -TV banking: Interactive TV is a service that allows users to interact with TV content as they view it.It is also called as iTV or idTV.If the customer subscribes to a cable television service some banking facilities like balance enquiry, funds transfer between accounts ,bills payment are made available all the way through TV.Most of the major banks in UK have experimented banking services through cable and satellite TV companies. Some of the Statistics are:         

Half of the costumers registering for online banking are giving up before signing up. 10% people who used internet banking services gave up due to poor usability or security concerns. In 2001 ,1/3 rd of the top European banks offered some form of interactive TV banking. In 2004 it is approximated that there were ten million users of interactive-TV based banking services in Europe. In 2007, the estimated number of Europeans using internet banking is 130 million 88% of e-banking users visit their banking websites as a at least once a week It is estimated that 35% of online banking households will be using mobile banking by 2010. By 2011 it is predicted that 80% of the bank customers in UK will use the internet to connect to their bank. Problems encountered by disabled people and the ageing population using e-banking.

Physically Impaired: The people with physical impairments who are using telephone banking finds hard to hold and activate the buttons. People with physical disability cannot have proper control on hands and arms therefore it is difficult to use mouse effectively so using the banking website becomes a problem. Hearing impaired: People with hearing impairments require visual representation of the auditory information that is in the banking website. With increasing use of multimedia e.g video streaming the banking people should take care that these will be understood by the people having hearing problems.

One of the straight forward way to make the banking site accessible to the hearing impaired people is to make the language simple particularly for BSL users for whom English is second language.so it si necessary to use a simple language and the inclusion of a glossary of banking terms. The people who are hearing impaired, cannot use telephone banking. And the users of hearing aids will experience electromagnetic interference, from mobile phones. The radio signals from mobile telephones can arise humming and buzzing inside hearing aid. Blind and Partially sighted People having vision problems have a problem to insert the card into the ATM machine and typing their PIN. And people with vision problems can use online banking based on how the site is designed for the people with vision disabilities i.e. blind people use browsers should with speech or Braille output which are text-based systems and should be browsed independent of graphics. The browser should have the option to vary the text size so that they can increase the font. The main problem for them is the graphics in the websites are not meaningful when they are accessing with a text browser And people with vision problems find hard to use telephone banking because of the decreasing in the size of mobile phones. Due to the compact size of mobiles people with low sight find hard to use the small keypads and smaller screens. And some people are unable to distinguish color combinations used in mobile keypads and screens. And mailed notifications regarding e-banking are inaccessible to blind and people with low vision if they are not providing in alternate formats. Cognitively impaired The Banking websites with too many steps and unhelpful messages are difficult to browse for cognitively impaired people. The websites designed with complex page layouts, tables and navigation structures confuse these people and are become difficult to browse. And in telephone banking, mobile phones of latest technology are coming with so many features and complex operating systems. People with Cognitive disabilities find difficult to operate these kind of mobile phones People having dyslexia finds difficult to remember the PIN in the correct order and may enter incorrectly. So these people are prone to writing them down which lessens the security and can be misused.

Age-related Impairments People as they age will experience so many changes in memory, eye sight, hearing and dexterity and they might not consider to have disabilities. These people will be benefited by the accessibility provisions that make websites accessible. People having age related eye sight may access the website by changing the text size. These people also find difficult to use the mouse. Older people finds difficult to use mobiles having complex operating systems and too many options.

Conclusion E-banking has its own advantages and disadvantages. The main advantage of implementing E-Banking is an increase in customer satisfaction. This is because customers do not have to go the branches in order to access their accounts, make withdrawals and deposits. They can also check it anytime of the day, a feature that physical branches do not offer thus creating a good relationship with the bank and the customer. E-Banking is also advantageous not only for customer but also for the bank because it reduces costs in setting up a branch and the resources to process transactions. All these benefits are the reasons why many banks are already investing in E-Banking. The main disadvantage of E-Banking is the security problems that surround it. Its a fact that making transactions online poses a much bigger risk compared to making transactions in a physical branch. This is due to the hacking problems and identity theft. Addition to these risks, technical difficulties could also arise. Sometimes the banks website goes down, and if this happens it will be a hassle for the customer because he/she has to go to a branch or make phone calls-which are usually busy due to other customers also making a call. Another case that has happened was an unpredicted rise in customer that the servers of the bank were not able to cope with. A customer may also run into a bad service. Sometimes you might wait a while for your checks to clear and you certainly can’t do anything about it if it is online. Even though all this disadvantages the banks the banks have to make its E-Banking more fast and effective so that they cab able to survey in the stiff competition in the market. It is fact that E-Banking has increase a better relationship with the customer, because customer can have transacted with the bank with the bank with visiting it on sitting in the home.