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Online Banking

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An academic presentation to introduce online banking to people.

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Online Banking

  1. 1. On-Line Banking Global Trends and Local Prospects RITUL SONANIA 2005H124416 BITS-Pilani 4 th March 2006
  2. 2. Index <ul><li>Definition of Online banking </li></ul><ul><ul><ul><ul><ul><li>The difference between PC banking and Internet Banking </li></ul></ul></ul></ul></ul><ul><li>The Importance of Online banking </li></ul><ul><ul><ul><ul><ul><li>Pro’s & Con’s </li></ul></ul></ul></ul></ul><ul><li>Past, Present & Future </li></ul><ul><ul><ul><ul><ul><li>Services Offered </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Usage Rates </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Faced Problems, and problems solved </li></ul></ul></ul></ul></ul><ul><li>Online banking in India </li></ul><ul><ul><ul><ul><ul><li>Evolution </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Current scenario </li></ul></ul></ul></ul></ul><ul><li>Conclusion </li></ul>
  3. 3. What is On-line Banking <ul><li>CONVENIENT </li></ul><ul><li>FAST </li></ul><ul><li>CHEAP </li></ul><ul><li>INEVITABLE </li></ul>
  4. 4. Why is it Important <ul><li>For Customers: </li></ul><ul><ul><ul><li>No need to mess up in queues. </li></ul></ul></ul><ul><ul><ul><li>They need bank to be always available. </li></ul></ul></ul><ul><li>For Banks: </li></ul><ul><ul><ul><li>The most important reason being ECONOMICS. </li></ul></ul></ul><ul><ul><ul><li>Each Internet transaction typically costs the bank one cent. </li></ul></ul></ul><ul><ul><ul><li>Compare that with 27 cents for each ATM transaction. </li></ul></ul></ul><ul><ul><ul><li>USD 1.07 every time user visits to a tellers window !!! </li></ul></ul></ul>
  5. 5. Cost per Transaction
  6. 6. PC vs. Internet Banking <ul><li>PC Banking (also known as Home Banking): </li></ul><ul><ul><ul><li>The use of proprietary financial software running on a computer in the home. </li></ul></ul></ul><ul><ul><ul><li>Direct dial-in into the banks servers. </li></ul></ul></ul><ul><li>Internet Banking: </li></ul><ul><ul><ul><li>Similar in functionality to PC Banking </li></ul></ul></ul><ul><ul><ul><li>Allows access through a browser eliminating the need for proprietary software </li></ul></ul></ul><ul><ul><ul><li>Can be accessed through a regular Internet connection, through the sites public web site. </li></ul></ul></ul>
  7. 7. Past, Present & Future <ul><li> Past: </li></ul><ul><ul><ul><ul><li>No automated services </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Only brochureware </li></ul></ul></ul></ul><ul><ul><li>Present: </li></ul></ul><ul><ul><ul><ul><li>Interactive Bank (Includes formatted email service, online calculator) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Intermediate Cyberbank (Lets customers consult accounts online) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Advanced Cyberbank (Fully transactional for transfers, payments, sales) </li></ul></ul></ul></ul><ul><ul><li>Future: </li></ul></ul><ul><ul><ul><ul><li>Interfaced Services </li></ul></ul></ul></ul>[ a] Services Offered
  8. 8. Past, Present & Future Past Present Future Simple Brochure Interfaced Services Advanced Cyberbank Intermediate Cyberbank Interactive Bank Advanced Brochure [ A] Services Offered
  9. 9. Services Presently Available Product / Function Standard Services ATMs Checking Credit Cards Customer Services Home Equity Loans ATM locator with addresses Balance & transaction history Download to OFX enabled software Available credit & Tn. History FAQs and Emails/contacts Rates & pay. Calculators Balance & Trans. History Investments Yields, Prospectus & Sign-up Forms
  10. 10. Services of the Future <ul><li>PUSH services - </li></ul><ul><ul><ul><li>alerts, emails, webcasting, outbound messaging </li></ul></ul></ul><ul><ul><ul><ul><li>Cellular Financial Processors </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Linking Banking with GSM </li></ul></ul></ul></ul></ul><ul><ul><li>Privacy Protection </li></ul></ul><ul><ul><ul><li>& Fraud-prevention services </li></ul></ul></ul>
  11. 11. Past, Present & Future <ul><li>[ b] On-line Banking Penetration in U.S Households </li></ul>5 MM 1997 9 MM 1998 15 MM 1999 22 MM 2000 28 MM 2001
  12. 12. Online banking Problems <ul><li>On-line bankers need & want the following 5 features : </li></ul><ul><li>A sophisticated security system </li></ul><ul><li>Low fees </li></ul><ul><li>Real-time information & detailed account info. </li></ul><ul><li>24 Hour customer service features </li></ul><ul><li>Wide array of products </li></ul>
  13. 13. Indian Scenario <ul><li>Started ATM service in mid 90’s. </li></ul><ul><li>Banking masters, ICICI & Citibank were on top in 2001. </li></ul><ul><li>By 2002, 50% major private sector banks were online (partially). </li></ul><ul><li>By 2003, SBI started Internet Banking (on lower level). </li></ul><ul><li>By 2005 all major banks are providing full Internet Banking. </li></ul><ul><li>There is no Internet-only bank in India. </li></ul><ul><li>Presently less than 2% of all Indian customers are using this. </li></ul>
  14. 14. On-Line Banking is the kind of breakthrough service, like ATMs, that will change the defition of banking but most certainly traditional banking survives in India. Conclusion

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