“FINANCIAL MANAGEMENT”PRESENTATION ON ELECTRONIC BANKINGKEERTHI HNHNKEERTHI@GMAIL.COM

What is E-banking?In a broad sense, it is the use of electronic means to transfer funds directly from one account to another, rather than by cheque or cash.The term online banking was first started in 80’sE-banking is a delivery of banking services and products through electronic channels, such as the telephone, the internet, the cell phone, etc.E-banking is an upshot of Globalization.

In a broad sense, it is the use of electronic means to transfer funds directly from one account to another, rather than by cheque or cash.

The term online banking was first started in 80’s

E-banking is a delivery of banking services and products through electronic channels, such as the telephone, the internet, the cell phone, etc.

E-banking is an upshot of Globalization.

E-banking vis-A-vis Traditional bankingSpeedAccessibilityElectronic documentationTime savingSatisfaction to the customerComplimentary to traditional bankingGeographical boundaries surpassedScince rather than art

Speed

Accessibility

Electronic documentation

Time saving

Satisfaction to the customer

Complimentary to traditional banking

Geographical boundaries surpassed

Scince rather than art

Why E-banking?From the banking point of view;Differentiation of products from the others. A combination of regulatory and competitive reasons. Stress on branchless banking. Increasing volumes of banking transactions. Providing customers with cost effective services From customer point of view; Convenience Low cost banking

Differentiation of products from the others.

A combination of regulatory and competitive reasons.

Stress on branchless banking.

Increasing volumes of banking transactions.

Providing customers with cost effective services

Convenience

Low cost banking

General Types of e-banking(RBI)

Modes of e-bankingAutomated teller machineTele bankingPlastic cardsE-chequeInternet bankingVirtual bankingSpecific technology discussed,ATMInternet bankingMobile bankingTelephone banking Debit cards

Automated teller machine

Tele banking

Plastic cards

E-cheque

Internet banking

Virtual banking

ATM

Internet banking

Mobile banking

Telephone banking

Debit cards

How ATM’s work?Bank computerHost computerATM

The Future ofATMsInstant cash depositPrint on DemandInstant cheque depositVirtual cash on your mobile phonePay income taxVoice aided MachinesMore secure transactionBraille on keyboards

Internet banking

How mobile banking work?BANK DATABASE

Plastic cards

Tele bankingCustomerBankEnquiryRequest facilityLoans Cheque StatusFixed Deposit details

Multidimensional role of RBIElectronic Clearing Service (ECS)Electronic Funds Transfer (EFT) Real Time Gross Settlement (RTGS)National Electronic Funds Transfer (NEFT)Cheque Truncation System (CTS)

Electronic Clearing Service (ECS)

Electronic Funds Transfer (EFT)

Real Time Gross Settlement (RTGS)

National Electronic Funds Transfer (NEFT)

Cheque Truncation System (CTS)

Advantages of E-banking Transparency and disclosure practicesFacilitate the offering of more servicesIncrease customer satisfaction and loyaltyCompetitive advantage for banksReduce customer attritionReduces the time, cost and effort in the interaction

Transparency and disclosure practices

Facilitate the offering of more services

Increase customer satisfaction and loyalty

Competitive advantage for banks

Reduce customer attrition

Reduces the time, cost and effort in the interaction

risks and issues involved in e-bankingRisk factorsTransaction and security riskTechnology riskStrategic riskLegal riskCross border riskIssuesLegal issuesRegulatory issuesSupervisory issues

Risk factors

Transaction and security risk

Technology risk

Strategic risk

Legal risk

Cross border risk

Issues

Legal issues

Regulatory issues

Supervisory issues

Risk management principles by Basel committeerecommendationBoard and management oversight Establishment of a comprehensive security control process Due diligence and third party dependencies Security controls Authentication of e-banking customers Non repudiation and accountability for e-banking systems Establishment of clear audit trails for e-banking transactions Confidentiality Legal reputational risk management Privacy of customer informationAppropriate disclosure for e-banking servicesCapacity and continuity

Board and management oversight

Establishment of a comprehensive security control process

Due diligence and third party dependencies

Security controls

Authentication of e-banking customers

Non repudiation and accountability for e-banking systems

Establishment of clear audit trails for e-banking transactions

Confidentiality

Legal reputational risk management

Privacy of customer information

Appropriate disclosure for e-banking services

Capacity and continuity

Developments in E-banking in the world:SwedenSouth KoreaFinland

Sweden

South Korea

Finland

Future challenges ahead for Indian banksLack of Education-on the part of staffCustomer involvementGlobal banks competitionDemand side pressure due to low cost products

Lack of Education-on the part of staff

Customer involvement

Global banks competition

Demand side pressure due to low cost products

ConclusionTechnology advances and increasing number of internet users.Increasing usage of mobile phones is going to revolutionize the banking culture in near future.E-banking has become a necessary survival weapon and is fundamentally changing the banking industry worldwide.Decades ago, E-banking was a strategic advantage, nowadays; it is a business reality, if not a necessity.

Technology advances and increasing number of internet users.

Increasing usage of mobile phones is going to revolutionize the banking culture in near future.

E-banking has become a necessary survival weapon and is fundamentally changing the banking industry worldwide.

Decades ago, E-banking was a strategic advantage, nowadays; it is a business reality, if not a necessity.