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Internet Banking


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Internet Banking

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Internet Banking

  1. 1. CHAPTER-1 INTRODUCTION 1.1 ABSTRACT Banking is undergoing a rapid metamorphosis. Traditionally the business has been basically the mobilization of savings. The customer put his money in the bank more out of habit. But today he has choice and the booming mutual fund industry, insurance and pension sectors are waiting at his doorstep. The Banks have to be anywhere anytime and at the demand of the customer. Besides, the Net and e-commerce will result in a paradigm shift for Traditional Banking. Future banking will see megacorporates emerging as banks themselves. Hence, any bank that does not innovate will be force out of the reckoning. At present, banks in the country are wooing customers with automated teller machines (ATMs) in virtually every city and telebanking is becoming more the norm than the exception. It can't be denied that a beginning has also been made in Net Banking. Internet Banking (I-Banking) is also known by the name Net Banking and Cyber Banking. All these names are related to conducting banking through Internet. This project work is an attempt to explore the usefulness of the newly innovated banking tool - Internet Banking. -1-
  2. 2. 1.2 HISTORY The Internet is an outgrowth of a project from the 1970's by the US department of defense Advanced Research projects Agency (ARPA). The ARPNET as it was then called was designed to be a network service for computer communications over a wide area. In 1973 and 1974, a standard networking protocol, a communication protocol for exchanging data between computers on a network, emerged from the various research and educational effects involved in this project. This became known as TCP/IP or the IP suite of protocol. The TCP/IP Protocol enabled ARPANT computers to communicate irrespective of their computer operating system or their computer hardware and hence they were heterogeneous. UNIX was developed in the same area and TCP/IP became almost synonymous with the UNIX operating system as UNIX was spread throughout the many educational institutions around the US for low cost Multi-user systems such s UNIX and VMS soon became the most popular method of accessing the Internet. Once the protocols were in place, much of the software and services that make up the Internet appeared. The basic services for remote connectivity, file transfer and electronic mail appeared in the mid and late seventies. The USENET news system appeared in 1981. The Internet GOPHER made its debut in 1982. The World Wide Wed service appeared in 1989. In the 1990, the ARPANET had many other networks connected to it and its role as network backbone was taken over by the NSFNET funded by the National Science Foundation. The networking companies and organizations which provide the data connections to all the Internet hosts continued in their goal of providing easy global network access. The Internet as it now stands is still one third a research and educational network because of the many universities and institutes connected to it. Commercial communications have taken over the majority of Internet traffic. -2-
  3. 3. Industrial Credit and Investment Corporation of India (ICICI) Bank is a commercial banking outfit set up by the ICICI Group. The Bank was registered a banking company on January 5, 1994 and received its banking license from the Reserve Bank of India on May 17, 1994. The Bank has an authorized capital of INR 300 crores (USD 75.96 million), of which subscribed and paid up capital of INR is 165 crores (USD 41.78 million). The first ICICI Bank branch was started in Chennai in June 1994. As of March 31,1999, 64 branches were functional across the country. By next year 36 more branches/offices are expected to be added to the network. The branches are fully computerized with state-of-the-art technology and systems. All of then are fully networked through V-SAT (satellite) technology. The Bank is connected to the international SWIFT network since March 1995. ICICI Bank offers a wide spectrum of domestic and international banking services to facilitate trade, investment, cross-border business and treasury and foreign exchange services. This is an addition to a whole range of deposit services offered to individuals and corporate bodies. ICICI Bank's Infinity was the first Internet Banking service in the country, and a prelude to banking in next millennium. Currently the Bank has around 1,50,000 customers. Electronic commerce is set to revolutionize the way business is conducted in the future of the e-revolution in India. ICICI launched I-payments and a pioneering B2B Internet based solution, which seamlessly integrates its clients with their vendors and suppliers in a closed payment loop, thereby facilitating superior inventory and receivables management. ICICI also launched on online utility bill payment system for Internet Banking customers and tie-ups with several utility service providers in the major Indian meters. They are presently working on an open loop payment gateway, in collaboration with a Compaq Led Consortium, which is expected to be a significant driver to future customer acquisition. -3-
  4. 4. ICICI stands on the fifth rank on the basis of CRAMEL analysis, which was conducted by Business India panel to choose the Best Banks in India for the year 1999. CRAMEL stands for Capital adequacy, Resources deployed, Asset quality. Management, Earning quality and Liquidity. 1.3 ASSOCIATED TECHNOLOGIES Computerization in Clearinghouses: The work involved in cheque clearing operations is voluminous, repetitive and routine in nature. To speed up the process, it was fell that the clearing operations might be computerized. In the first phase, operation at the clearing houses managed by RBI at 9 major centers viz., Ahmedabad, Bangalore, Mumbai, Calcutta, Hydrabad, Kanpur, Chennai, New Delhi and Nagpur have been computerized. The system installed in the clearing houses are also utilized for balancing covering receipts and payments, transactions on account of Government departments. Further, to facilitate cheque sorting and to cut delays, high-speed reader sorter systems driven by powerful IBM 4381 system was installed at Mumbai. Delhi, Chennai and Calcutta. The 4 systems together are now processing about one million instruments per day with Mumbai clearing houses touching peak Figure of over 7 to 8 lacks on some days. Magnetic Ink Character Recognition (MICR) technology was used for cheque clearance. By the end of June 1990, they had installed 5007 Advanced Ledger Posting Machines (ALPM and 253 minicomputers at their regional and zonal offices. -4-
  5. 5. CHAPTER 2 TECHNOLOGY AND TRENDS 2.1 TECHNOLOGIES The following are some of the common technologies used in banks. These technologies have helped the banks in carrying their business and transactions more easily. Communication technology has helped the bank to provide better services for their customers. It has brought a paradigm shift in banking transaction from paper based to electronic transaction. 2.1.1 CREDIT CARDS: The bank credit card is a relatively recent method of payment that offers a alternative to the cheque or gyro. Single, “All bank Credit Cards”, with machine readable magnetic strips embedded at the reverse, containing essential customer readable magnetic strips embedded at the reverse, containing essential customer information needs to be introduced and encouraged for wider use. Such cards will act as conducts for canalizing the flow of funds into the banking sector, beside; greatly reducing the pressure on the cheque clearing system. Subsidized or free card reading equipment can be provided to merchant establishments. Citibank SBI etc banks issue credit cards to their needy customers. 2.1.2 AUTOMATED TELLER MACHINE (ATM): These machines allow the customer to withdraw cash from a bank account, borrow cash against a line of credit, make deposits, transfer money between accounts, check on an account balance and in some cases make a loan payment. Some has been installed in shopping malls, office buildings and major airports. It is estimated that ATMs can perform 90% of a bank routine operations. -5-
  6. 6. Despite their sophistication, these machines are simple to use. To activate them you insert your ATM card and then punch your Personal Identification Number (PIN) on the keyboard. On the bank of each card there is a magnetic stripe with your PIN and bank account numb r invisibly micro encoded. Now you simply push buttons, following the instructions that appear on an illuminated window. If you make a mistake, the machine will tell you and wait for you correct it. If you ask for cash, the bills drop into a tray or drawer. To make deposit, you put money or cheque in an envelope and place it in a drawer or slot to be credited to your account. After each withdrawal, the computer records your new balance and it will not honor the next transaction made with the card if you are overdrawn or have exceeded a daily limit. 2.1.3 ELECTRONIC FUND TRANSFER OF SALE (EFTPOS): In addition to using your cash card at an ATM, you will increasingly be able to use it to pay for purchases at retail outlets. Instead of writing a cheque, you will able to insert your cash card into an EFTPOS terminal connected to the store's cash register. EFTPOS terminal is a terminal at the point of sale into which an electronic debit card can be inserted to effect a payment. The terminal will connected through the ATM or credit card switching systems to your own bank's computer. After punching in your PIN, the amount of the purchase will be deducted immediately from your checking deposit and credited to the deposit of the store. Promoters hope there will be a significant market for EFTPOS among retailers that do not now accept credit cards. Supermarkets, for example, operate on very narrow margins, leaving little room for the discount charged on credit card transaction. The planned debit card network would charge merchants. -6-
  7. 7. 2.1.4 COMMON NETWORKING BANKING: A common networking for Indian bank will also help to check the growth on the cheque volume, particularly in metropolitan centers in the wake of increased business. The proposed network would be a co-operative network would be a co-operative network called "BANKNET" jointly owned by the RBI and public sector banks. The private sector and co-operative banks including Stale, Central, Urban and Land Development hanks and financial institutions such as ICICI, IDBI. NABARDM, IFC, SFC, EXIM Bank etc. may also be allowed to use the same network. 2.1.5 TELEBANKING: After the introduction of facilities like ATMs to facilitate withdraw of cash anytime, the telephoning facility, which seeks to connect account numbers to the telephone line, is becoming popular among the bank customers. Presently, the telephoning facility is operational in foreign banks like the ANZ Grind lay bank and Citibank. And it is also operational in some private banks Like HDFC, ICICI. etc., While the banks made their presence in the four Indian meters, telephoning facility is available for Customers in Mumbai, Delhi and Chennai. Main motive behind introducing the facility at this point of time was Citiphone Banking is a service delivery platform, introducing for the convenience of customers Bank does not charge anything for this service. Telebanking facility offered by Citibank uses state of the art technology, which is being used everywhere in the word. This facility works as under. The customers has to up a telephone numbers which has been allotted for this facility and the pre-recorded voice answers back with a request to key in his/her account no. The customer is also required to dial his confidential for digit Telephone/Personal Identification Number (T-PIN). This number is not known to anyone in the bank as it randomly by the system at the time of printing and is stored in an encrypted format. The security provision made for providing the service is that is impossible to access someone else account through the unique combination of the 13 Digit account number and the 4 Digits confidential P-PIN. -7-
  8. 8. 2.1.6 E-BANKING: E - Banking is a generic name for a range of technologies that allow the exchange of information related to banking transactions electronically. The component of E Banking are: 1. Electronic data interchange 2. Electronic fund transfer 3. Electronic mail 4. Smart card and 5. Internet/Intranet/Extranet 2.1.7 ELECTRONIC DATA INTERCHANGE (EDI): This is an application exchange of information using a standard format to structure the transaction of data. More precisely EDI is defined as " The transfer of structured data for processing from computer to computer using agreed formats and protocols ". The key difference between EDI and other forms of electronic mail and fax is that information transferred in EDI is meant for direct use by the recipient computer. The other form of communications are aimed at humans who read interpret and act on accordingly. The current users of EDI in banks include automatic teller machines (ATMs) where EDI is used for transferring and withdrawing funds between different bank accounts. 2.1.8 ELECTRONIC MAIL: Exchange of mail messages by way of computer system connected over communication net working these are sent and received at the user's convenience. 2.1.9 ELECTRONIC FUND TRANSFER: Electronic Fund Transfer is the management of cash flow and timely payments made to parties with the use of electronic messages. EFT system involves the electronic movement of funds and fund information between financial institutions. -8-
  9. 9. 2.2.0 SMART CARD: Smart Card is a credit sized plastic card with a computer chip embedded, capable of storage data and allowing it is to be retrieved by a separate reader device. A Smart Card looks like a credit card but contains a microprocessor and memory. It can be loaded with the desired value and when used to buy something, the amount is siphoned off to the seller's card through a reader With smart cards you could, in theory, be walking around with your entire net worth in a small plastic card-2.5 inches long, one and half inches wide and a half millimeter thick. 2.2 CURRENT TRENDS Wireless gateway A computer (server) that transmits messages between a server computer network and a cellular telephone or other wireless Website hosting access device. The service of providing ongoing support and monitoring of an Internet-addressable computer that stores WebPages and processes transactions initiated over the Internet. Wireless Application A data transmission standard to deliver wireless markup Protocol (WAP) language (WML) content -9-
  10. 10. 2.3 EXAMPLE 2.3.1 INTERNET BANKING UNDER ICICI BANK COST OF OPENING AN INFINITY ACCOUNT: Infinity is absolutely free for individual account holders. But for corporate, the rates will be decided on a case-to-case basis. ACCESS TO INFINITY: The customer can have an access to ICICI Bank website at the following address As customer gets connected to this site, a screen similar to fig. 5.1 will be displayed, which is shown in the page 56. This page displays the Home page of ICICI Bank' website. From this page, customer can register online Infinity by clicking at the 'Sign up now' or 'your account for online' option. He can logon Infinity services by clicking at the 'Login Here' option. If the customer wants to know about Infinity, he can directly enter into Infinity web page by clicking at the Infinity' option. As customer gets connected, Infinity page will be displayed as shown in the fig. 5.2, which is shown in the page 57. REGISTRATION: Customer can register Infinity directly in the bank or through online. Clicking at the 'Sign up now' option, he can open his resident account, or a student account (currently available in Bombay and Manipal only), or a kid-e- account (currently available in Bombay and Thane only), or a NRI account. - 10 -
  11. 11. STEPS TO OPEN ACCOUNT ONLINE: • Step 1: Customer has to fill the online relationship form and submit it to bank electronically. • Step II: After submission of the form, customer will receive a call from the bank's customer service representatives seeking an appointment to obtain his signature and proof if identity as per current legal requirements. • Step III: The representatives will visit customer on the agreed date to complete the formalities. Customer has to keep all requisite documents ready including a cheque favoring ICICI Bank drawn on his earlier bank. • Step IV: Customer account number will be generated(subject to completion of account opening formalities) and all the documents such as Cheques Book, ATM card and PIN for ATM, Call Center and Infinity will sent by courier to him within 8 days after his cheques is collected. 2.4 MARKET VIEW How Bank Expect to sell Products Products 2003(%) Cash Machine 15 Shops, Supermarkets 15 Branches/broken 15 Computer 6 Internet 1 Post 4 Fax 2 Call Centers 8 TV, Mobile phones, Smart Cards 0 Others 3 CHAPTER 3 ARCHITECTURAL DESIGN - 11 - 2004(%) 16 16 33 7 10 3 1 10 2 2
  12. 12. 3.1 ARCHITECTURE: Client 1 Switched Networks , IP Networks , Gateways Access points Pin code Networks, gateways, servers Infinity User name and pas swo Servers Client n Access points Pin code Networks, gateways, servers User name and pas swo FIG-3.1 STAGES OF INTERNET BANKING: There are three stages of Internet banking. They are - 12 -
  13. 13. FIG-3.2 3.2 WORKING MODLE: - 13 -
  14. 14. 3.2.1 INFORMATION SECURITY: There are two main areas of risk that are inherent in conducting banking transactions over the Net: preventing unauthorized transactions and maintaining integrity of customers' transactions. As for the First, it will generally be implied into the contract between a bank and its customer that in the absence of any negligence on behalf of the customer the bank will be liable for any transaction occurring on the account that have been perpetrated by fraud. The Indian Contract Act, 1872, prevents contractual terms being enforced against a customer that are inherently unfair or do not satisfy the test of good faith. Similar to the English Unfair Contract Terms Act, 1977, the Indian Act provides that a partly dealing with a consumer can't exclude or restrict its liability in respect of a breach of contract and can't claim to be entitled to render a contractual performance subsequently different from that which was reasonably expected or render no performance at all, except in so far as the contract terms satisfy the requirements of 'reasonableness'. 3.2.2 INTEGRITY OF CUSTOMER’S TRANSACTION: As for the second area-that is maintaining the integrity of customers' transactions the risk here is that a customers transactions history or account details are accessed by a third party. The ability of hackers to crack encryption products has been widely published and a bank is likely to be liable under one of the following three heads 3.2.3 CONTRACTUAL LIABILITY: In relation to the confidentiality of the customer's transactions, the banks have an implied contractual obligation to keep their customers' affairs secret. The bank will also be liable to its customers and other their parties who are contractually authorized to access its network, and to read information held on it, for loss of damage to those customers and other third parties that arise from inaccurate or faulty information held on the network. 3.2.4 NEGLIGENT MISSTATEMENTS: There is little case law on the point of the liability of an information service provider for information, which is inaccurate or incomplete, and there is no legislation - 14 -
  15. 15. regarding liability arising from information services. Much will depend on the contractual relationship between the bank and its customer. However, similar considerations in relation to the ability of banks to limit their liability to cover the risk of unauthorized transactions apply equally in context. It is important to note that data controllers must take into account both the harms that might result from unauthorized processing and the nature of the data to be protected. 3.2.5 JURISDICTION ISSUES: In terms of legal risk management, banks may want the law of their choice to govern their contractual relationships when conducting banking on the Internet. The Contracts (Applicable law) Act 1990 (UK Act) will almost always uphold an express choice of law clause in a contract. This means that a bank can specify which law governs the contract (Provided the terms have been adequately incorporated). However, it is crucial to remember that British banks may still have to take into account the customer protection laws in the country in which the consumer is based. One possible solution is to design the website on which the banking services are accessible so that it is seen as making an invitation to treat' as compared to an offer. This will mean that when the customer contracts the bank, the latter is free to accept or reject the offer made by the customer. Moreover, as a customer-relations exercise, banks would be wise to state clearly on their sites that they are not prepared to accept dealings with consumers in certain jurisdictions. In the debates leading up to the Cyber Bill to be presented in Parliament, the issues of the taxation of e-commerce has focused on the taking problem of jurisdiction. As far as Indian tax laws are concerned, corporate taxation is assessed at flat rates and dividends distributed are included in the taxable income of shareholders. Regarding earnings received from overseas trade, a company is taxed on the income received in India or income earned through any business connection in India. 3.2.6 SECURITY PRODUCTS AVAILABLE: - 15 -
  16. 16. ' The ability of banks to rely on encryption products is crucial to processing customer's transaction safely. There are various products available, some offering a greater level of security than others For example, the Secure Electronic Transaction (SET) protocol offers a form of guarantee against credit card fraud. The protocol consists of a cardholder interface resident on the customer's PC, an electronic till at the retail level and a payment mechanism located on the bank's server, which possesses the encrypted transaction messages. In contract to SET, Secure Sockets Layer (SSL) technology does not offer a guarantee against credit card fraud. However, the cost-benefits of this technology appear to outweigh the security risks and many banks are currently trailing this technology background, the uncertainty surrounding mandatory key escrow and the consequent perceived lack of security provides yet another challenge for banks to consider. The out come of the consultation process relating to the DTI's e-commerce bill will be crucial in this regard. SERVICES ON INTERNET BANKING: Services of Internet Banking or what does it offer for customer? Or what all a customer can do in Internet Banking are explained below. The services of Internet Banking differ slightly from one bank to another. But in general they are: 1. FUNDS TRANSFER: I-Banking makes it easy to transfer funds between any of customer accounts. even if they are in different branches or cities and even if they are in other countries i.e.. NRI accounts. 2. ACCOUNT INFORMATION: • It provides customer a summary of all his accounts (SB, RD, CC, OD, deposits, loans) by giving details of each account, snapshots of - 16 -
  17. 17. balances, available credit lines, record of payments and transfers. • It displays account balance message and also a warning when the account limit, as defined by customer has been crossed. This helps to plan and monitor investments and expenses. • It provides account statement and transaction reports based on userdefined criteria. • It allows transaction details based on cheque number, transaction amount, date and so on. • It allows one to view loan installment due. 3. NEW FIXED DEPOSIT REQUEST: Customer can even open a FD account on the net. All he need to do is give details regarding the account from which he want to transfer funds, the amount and term for which customer would like to make the FD, the branch at which he would like to open his FD and the relevant maturity instructions. 4. DEMAND DRAFT/BANKER'S CHEQUE REQUEST: Customer can have a Banker's cheque or DD issued from his account. All he has to do is select the account to be debited and give to the bank, the details of the amount, location and beneficiary. Bank will even have the DD couriered to customer at his mailing address (however DD will be issued only where the bank has a branch or has an arrangement with a correspondent bank) 5. TDS INQUIRY: Customer can access information on the Tax Deducted at Source for all his FDs held at any of bank branches for the current or previous financial year. 6. STOP PAYMENT REQUEST: Customer can request slop payment on a cheque or series of cheque on-line. All - 17 -
  18. 18. he has to do is cheque number and the reason for stopping payment. 7. CHEQUE STATUS INQUIRY: Customer can use Internet Banking to view the status of a specific. Cheque that he had issued on any of his accounts. 8. CHEQUE BOOK REQUEST: Customer can request for a new cheque book on-line. His cheque book will be couriered to the address on bankers record. 9. LEAVE AN INSTRUCTION TO BANK: Customer can leave an instruction to bank such as 'change in FD maturity' or 'change in address' instruction. 10. COMMUNICATION WITH BANK MANAGER: Customer can communicate wit bank manager regarding new schemes or about any doubt. 3.3 UTILITIES 3.3.1 INFRASTRUCTURE: The IT infrastructure Building includes a 110 port local area network (LAN) based on Cisco Catalyst 4912 and 3524 switches with a fiber-optic, gigabit Ethernet backbone and Category 3 and enhanced Category 5 cable runs throughout the building, providing switched 10Mbps or 100Mbps service to all desktops. 3.3.2 WORKSTATIONS: A general-purpose computing lab is available Seventeen 3.2 GHz Pentium 4 Dell Optiplex GX280 PCs with Windows XP, Microsoft Office 2003, and Internet Explorer . - 18 -
  19. 19. 3.3.3 WIDE AREA NETWORK (WAN) ACCESS: A Xyplex N3000 router and T-1 circuit provide WAN access for services. File and Print Services: A single Windows 2000 domain with backup domain Controllers (BDCs) in both the Medical Center and the Medical Education Building School of Medicine buildings provides for authentication, file and print Services across the enterprise. A domain trust relationship with the Windows 2000 domain of Marshall University’s main campus provides selected access to resources throughout the university, including electronic library subscriptions and Banner financial, student information and human resources databases. 3.3.4 EMAIL, GROUPWARE AND COLLABORATION SERVICES: A Microsoft Exchange Server provides electronic mail and integrated calendars for School of Medicine faculty and staff in all facilities. The enterprise-wide integration of email, phonebook and scheduling are provided. email accounts are provided on the main campus mail server and are accessed via the WWW-based campus portal. Email discussion and distribution lists are provided both through the Exchange Server and through a PMDF Mail server list manager software on the university’s email gateway. - 19 -
  20. 20. CAPTER-4 APPLCATION DOMAIN 4.1 APPLICATION AREAS 4.1.1 E - BANKING: E - Banking is a generic name for a range of technologies that allow the exchange of information related to banking transactions electronically The component of E Banking are: 6. Electronic data interchange 7. Electronic fund transfer 8. Electronic mail 9. Smart card and 10. Internet/Intranet/Extranet 4.1.2 ELECTRONIC DATA INTERCHANGE (EDI): This is an application exchange of information using a standard format to structure the transaction of data. More precisely EDI is defined as " The transfer of structured data for processing from computer to computer using agreed formats and protocols ". 4.1.3 AUTOMATIC TELLER MACHINES (ATM): These machines allow the customer to withdraw cash from a bank account, borrow cash against a line of credit, make deposits, transfer money between accounts, check on an account balance and in some cases make a loan payment. Some has been installed in shopping malls, office buildings and major airports. It is estimated that ATMs can perform 90% of a bank routine operations. 4.1.4 ELECTRONIC MAIL: Exchange of mail messages by way of computer system connected over - 20 -
  21. 21. communication net working these are sent and received at the user's convenience. ELECTRONIC FUND TRANSFER: Electronic Fund Transfer is the management of cash flow and timely payments made to parties with the use of electronic messages. EFT system involves the electronic movement of funds and fund information between financial institutions. 4.1.5 SMART CARD: Smart Card is a credit sized plastic card with a computer chip embedded, capable of storage data and allowing it is to be retrieved by a separate reader device. A Smart Card looks like a credit card but contains a microprocessor and memory. It can be loaded with the desired value and when used to buy something, the amount is siphoned off to the seller's card through a reader. 4.1.6 INTERNET/INTRANET/EXTRANET: Internet/Intranet/Extranet are those that use the web technologies of Graphical Users Interface to facilitate interaction and communication. INTERNET BANKING FOR BUISINESS PURPOSE: It's easy to use, convenient and puts you in control. As long as you can log in to the Internet you can manage your business banking with a few clicks of a mouse. Bank of New Zealand's Internet Banking for Business is designed to meet the needs of small to medium businesses, and those with accounts requiring more than one signature. With Internet Banking for Business you enjoy flexibility, security and control. Different registered users can have different authority levels, with an “administrator” who can add, delete or modify users and authority levels. You can also make direct credit payments with up to 50 payees at a time. Some of the everyday banking functions that used to require a trip to your branch or multiple cheques, can now be achieved instantly from any internet-linked computer, 24 hours a day, 7 days a week*. With Internet Banking for Business you can: - 21 -
  22. 22. • Access accounts where one or two signatures are required • Review and print account balances or specific transactions • Transfer funds between your Bank of New Zealand accounts • Make payments to New Zealand bank accounts - either for the same day or any future date • Make payments to Inland Revenue such as Income Tax and GST • Import files for processing as one debit with multiple credits, or pay a standard list of creditors • Create a reusable list of direct credits for regular payments such as payroll and bills • Request new Automatic Payments, modify or delete existing ones • Use online forms to apply for a new cheque or deposit book and statement reprints • Review and print out your personal BNZ Credit Card balances, as well as a range of other BNZ Credit Card services • Export your information to a financial management application 4.2 INDUSTRY RELEVANCE The changes occurring today in the Internet banking infrastructure are poised to have a significant impact on banking. The nature of how we use this infrastructure will change dramatically as several key developments become widespread. These developments include a dramatic increase in available bandwidth, the transition to the "always on" network, the evolution of wireless Internet connectivity, and the increase in connected devices. 4.2.1 INCREASED BANDWIDTH: The increase in available bandwidth to the customers and the provider's will also allow internet interactions to occur more spontaneously from any convenient location in a synchronous mode. The ability for a provider to respond spontaneously to a request, between seeing customer in the remote place, is a much more important and efficient - 22 -
  23. 23. manner of conducting these types of transactions like fund transfer, account information, cheques book request, become vastly more desirable once this transition occurs. 4.2.2 WIRELESS CONNECTIVITY: One of the great shifts occurring in all modes of communications is the increased reliance on wireless connectivity. Cellular phone usage has increased enormously during the past few years. Cell phones are displacing the permanent land based handset. In some markets it is now less expensive to purchase cell phone usage and long distance minutes, than traditional phone service. People who travel a great deal see this option as superior to owning a land-based phone. The advantages of having one point of contact into the voice network are compelling. And soon, satellite phones will increase the reach of wireless communications and take connectivity to an even higher level: one connection to the entire globe. 4.2.3 CONNECTED DEVICES E-Services - Evolution of the Functional Internet There will be concerns about the security of information exchange just as there were during the transition to an E-commerce economy. Those concerns have not stopped the transition. We are growing more comfortable trading stocks online, banking online and Purchasing products online. We are growing more accustomed to looking for services online and creating relationships with companies who only exist as virtual real estate. CHAPTER 5 RESEARCH AND DEVELOPMENT 5.1 SCOPE: - 23 -
  24. 24. The scope is realized from the growing use of internet banking from three perspectives: 1) Economic development and quality of life, 2) Customers, and 3) Banks FOR CUSTOMERS: • A customer can access I-Banking with case from anywhere and at anytime in the world. • It is very easy to transact through net. The screens and options of Internet Banking are so simple that a customer may not even need a manual help. • Net transactions take just a few minutes. Imagine the time and effort that a customer can save. • A customer can pay utility bills through Internet. At present this service is not there. But very soon within few months this facility will be provided by ICICI Bank and HDFC Bank. With this facility, there is no burden on a customer head to pay utility bills standing in queues. • I -Banking is very useful for NRI customers of Bank. A NRI customer can access Internet transactions with less cost and he can also save his time. FOR BANKS: • Through I-Banking, Banks can attract more customers. • Banks can also save their time. • Banks can build a clam environment in their branch by carrying out customers' transaction through net. • Though the investment in Internet Banking is high. Banks can reduce the cost of manpower. • Banks can sell products more easily through net. It was estimated that there was 9% increase in the Internet in 2004. The following table gives a clear picture that how banks expect to sell their product. 5.2 CONVERGENCE OF TECHNOLOGY Internet banking technologies, the electronic transfer of information, include a number of modalities. Telephone, radio, other voice modalities, picture phones, fax, computer real - 24 -
  25. 25. time data/images, video teleconferencing (VTC), computer store and forward (enhanced email) data/images, broadcast video, World Wide Web pages and virtual reality are examples. Internet banking information, another inclusive term, includes banking information from the customers. The convergence of technology noted with the innovations such as digital technology, fiber optics, Internet technologies and protocols, advances in computer science and capabilities, coupled with the dramatic fall of internet costs has made internet banking a more practical target. The hard lesson of sustainability will be learned or programs will again fall by the hand of natural selection. 5.3 STATISTICAL SUPPORT OCCUPATION OF RESPONDENTS: Most of the respondents were professionals and businessman. It shows that only well educated people use the internet banking facility. The following graph shows the - 25 -
  26. 26. percentage of respondents’ occupation. Classification of respondents on the basis of occupation Occupation Professionals Businessmen Others Total No. of Respondents 22 20 08 50 Percentage 44% 40% 16% 100% TABLE-5.3.1 44% 40% 45% 40% 35% 30% 25% 16% 20% 15% 10% 5% 0% Professionals Businessmen Others No. of Respondents FIG-5.3.1 PREFERENCE OF INTERNET BANKS: As the Citibank has more numbers of customers in Bangalore, the majority of respondents have Internet bank accounts in Citibank. ICICI bank follows next, then HDFC Bank and lastly Global Trust Bank. It is clearly shown in the following chart. - 26 -
  27. 27. Classification of respondents on the basis of preference of Internet banking Preference ICICI bank HDFC bank Citibank Global Trust bank Total No. of Respondents 18 14 16 02 50 Percentage 36% 28% 32% 04% 100% TABLE 5.3.2 Usage of Internet banking facility: FIG-5.3.2 4% 32% 36% 28% ICICI HDFC CITI GLOBAL TRUST 5.4 DERIVATION OF RESULTS USAGE OF INTERNET BANKING FACILITY: As the Internet banking saves both time and money, customer uses the facility more frequently. Most of respondents use it once in fortnights. The below figure shows a clear picture about the usage of I-Banking. Classification of respondents on the basis of usage of I-Banking - 27 -
  28. 28. Usage Once in a week Once in 15 days Once in a month More frequently Total No. Of Respondents 06 24 14 06 50 Percentage 12% 48% 28% 12% 100% TABLE 5.4.1 48% 50% 45% 40% 28% 35% 30% 25% 20% 15% 12% 12% 10% 5% 0% Once in a week Once in 15 days Once in a month More frequently No. of Respondents FIG-5.4.1 The list of Indian Internet banking subscribers, citywide Internet subscribers and web market estimation are shown in the following table. - 28 -
  29. 29. Indian Internet banking Subscriber Forecast TABLE 5.4.2 CHAPTER-6 CONCLUSION - 29 -
  30. 30. 6.1 CONCLUSION At the end it is very essential that overall study and findings must be concluded in a compact way. The main aim of this investigation has been to study the Internet Banking, its awareness and to collect the opinion of users and banks' staffs about it. The statistical data obtained about Internet usage showed that its usage has increased substantially over the years and many banks are migrating to the World Wide Web. Internet Banking has great significance and is gradually replacing the Traditional Banking. The benefits accrued from Internet Banking for both banks and customers have been highlighted in this report. It is very helpful to NRI customer as he can access it anywhere in the world. A customer can be more benefited if he owns both ATM card and Internet Bank account with regard to Indian context. Either he can make deposit or withdraw money directly through ATM card in cash points or make funds transfer electronically through Internet. At the heart of all this is a revolutionary assumption: banking is no longer about money. Then what is it about? Way back in the 1960s. Citibank's then Chairman Walter Wrist on had said that the basic commodity in banking is information, and not money. In our time, Microsoft's Bill Gates has made a similar observation. "Data about customer relationship and credit analysis are at the heart of the (banking) business", he says in his book 'Business @ Speed of Thought'. If banks are redefined as organizations, which crunch information, then they just cannot do without the Internet. That is what the Internet Banking revolution is ultimately all about. 6.2 FEATURES OF TECHNOLOGY • Fast transfers - usually within 3 working days. • Attractive £££ to rupee exchange rates. • Make money transfers and get exchange rate quotes over the phone. • Ability to nominate a person living in India to have access to your account. - 30 -
  31. 31. • Fee free money transfers to India between your nominated and eligible customer current account and your ICICI bank NRE savings account via bill payment. • IP mobile & wireless. • Multi domain network management. BIBLIOGRAPHY WEB SITES VISITED: - 31 -
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