The document discusses the role of electronic banking (e-banking) in Pakistan's banking sector. It defines e-banking as using technology like the internet, ATMs, phones, and mobile banking for financial transactions. Foreign banks introduced e-banking in Pakistan in the 1990s, and domestic banks soon followed with services like ATM cards and debit cards. The document examines how e-banking impacts customer satisfaction in Pakistan and discusses various e-banking services offered by banks. It analyzes the performance of banks that offer internet banking compared to those that do not.

1. Benazir Bhutto Shaheed University Karachi
Pakistan
Name Rehman khan shama
Department Bs commerce
Batch 4th
Semester 5th
Subject: marketing research
Project electronic banking
literature.
Email REHMANSHAM54@GMAIL.COM
CELL 293022253177

2. ROLE OF ELECTRONIC BANKING IMPACT ON CUSTOMER
SATISFICTION .
Electronic banking refers to the use of the Internet as a remote
delivery channel for providing services, such as opening a deposit
account, transferring funds among different accounts and
electronic bill presentment and payment. Foreign banks in
Pakistan are initiators for introducing E-banking practices in mid
1990’s. In late 90’s domestic banks also adopted the technology
and e-banking services like ATM cards and debit cards. According
to the definition provided by (Abid et al., 2006), Any use of
information and communication technology and electronic means
by a bank to conduct transactions and have interaction with the
stakeholders Electronic Banking is defined as using electronic
devices like internet, wireless connection networks, ATM, phone
and cell phone in banking services. This can be offered in two
main ways. First, an existing bank with physical offices can
establish a Website and offer these services to its customers in
addition to its traditional delivery channels. Second, is to establish
a virtual bank, where the computer server is housed in an office
that serves as the legal address of such a bank. Virtual banks offer
their customers the ability to make deposits and withdraw funds via
ATMs (Automated Teller Machines)is the new delivery channel of
banking services is very imported for customer to provided essay
facilities in there houses offices shops to deposit payment without

3. risk by online system etc. The concept of electronic banking has
been defined in many ways (e.g. Daniel, 1999). According to
Karjaluoto (2002) electronic banking is a construct that consists of
several distribution channels. Daniel (1999) The electronic
banking has converted time days to minutes of save money and
transferred to a place to another place during into minutes as
credit cards debits card atm machines and online facility . The
customer like to more facility so the satisfying. Now days lot of
facility available for to active customer as easy paisa western
mobicash that’s also parts of electronic banking . Electronic-
banking has opened new scenarios, increased service quality and
more customers. The main motive for e-banking identified by the
all bank managers was their customers their clientage, to increase
customer satisfaction .The managers confirmed e-banking as
contributing to the profits of their businesses. The electronic
banking services provided by the banks include ATM, credit cards,
funds transfer, cheque payment, funds deposit, balance enquiry,
utility bills payment, statement of account, remittance, draft, pay
order, phone banking, mobile banking, PC banking etc. such as
wasting time, long line- and from the perspective of banks the
costs of banking services with the help of E- Banking decrease- for
there is no need to extra paper, extra employee and investments
opportunity with other section and other banks. Internet technology
holds the potential to fundamentally change banks and the banking
industry. An extreme view speculates that the Internet will destroy
old models of how bank services are developed and delivered
(DeYoung, 2001a).Whether or not this extreme view proves
correct and whether banks take advantage of this new technology

4. will depend on their assessment of the profitability of such a
delivery system for their services. In addition, industry analysis
outlining the potential impact of Internet banking on cost savings,
revenue growth and risk profile of the banks have also generated
considerable interest and speculation about the impact of the
Internet on the banking industry (Berger, 2003). investigated the
impact of the introduction transactional Internet banking on
performance and risk profile of major credit unions in Australia.
Similar to the results of Sullivan (2000), describes it as an
electronic connection between the bank and the customer in order
to prepare, manage and control financial transactions. Electronic
banking according to Al-Abed (2003) is an umbrella term for the
process by which a customer may perform banking transactions
electronically without visiting a brick and-mortar institution. Lustsik
(2004) describes electronic banking as a variety of the following
platforms: Internet banking, telephone banking, TV-based banking,
mobile phone banking, and PC banking. The present study is an
attempt to present the present status of Internet banking in
Pakistan and its implications for n banking industry. A survey of the
bank websites during the period of June, 2007 reveals that only 57
percent of the commercial banks operating in as on March end
2006 offer Internet banking. Using data on the financial
performance, the present study also analyzed the performance of
an Internet group in comparison to non-Internet banking group and
impact of Internet banking on banks’ performance and risk. A
panel data of 85 banks (operating as on March end 2006) was
taken for the period of 1998-2006.
IN THE PAKISTAN

5. Earlier, (Kazmi, S.H., 2002) had also conferred that even with a
late initiative in respect of electronic banking; efforts were being
put into the account to deal with the rising competition across the
globe. MCB (Muslim Commercial Bank) arranged ‘Pakistan
Electronic Banking Conference’ in the promotion of electronic
banking which was co-funded by IBM, Teradata, ABN-AMRO and
local newspaper. Another movement was made in the mode of
installation of ATMs during 90’s to counter the emergence of
foreign oriented banks. Whilst many banks have their own ATMs
installed outside their branches, numerous banks jointly introduced
a dedicated network using a leased line over the internet to
improve their operations while reducing cost. In Pakistan, this
system is termed as ‘One Link’ that allows an ATM card holder to
access his/her account. The card holder/customer either from the
parent bank or from the partner bank are allowed to have an
access to his/her account though using this line.
The purpose of this study is to examine the influences that play a
role on the impact of electronic banking on satisfaction of bank’s
customers. The impact may be analyzed from the study of banks
along with the satisfaction/dissatisfaction of customers from
electronically offered services and whether the customers are
satisfied with the quality of services being offered in Pakistan. The
study will also help to unleash the actual awareness of the
customers towards the usage of banking performed electronically
which may lead to the tendency of using internet and other
electronic medium. This study will also cover the discussion that
whether the system is dependable enough to meet the user

6. requirement and is useful in maintaining the credibility of a system
in terms of security and privacy of its users
Role of E-Banking in the Banking Sector
Electronic banking (e-banking) is the newest delivery channel of
banking services. The definition of e banking varies amongst
researches partially because electronic banking refers to several
types of services through which a bank’s customers can request
information and carry out most retail banking services via
computer, television or mobile phone (Daniel, 1999; Mols, 1998;
Sathye, 1999). Burr, 1996, for example, describes it as an
electronic connection between the bank and customer in order to
prepare, manage and control financial transactions. Electronic
banking can also be defined as a variety of the following
platforms:(a) Internet banking (or online banking), (b) telephone
banking, (c) TV-based banking, (d) mobile phone banking, and (e)
PC banking (or offline banking). In this paper, the ATM (Automated
Teller Machine)channel is also added to the research. The
channels comprise two major groups: the traditional channels and

7. e-channels. (1) The traditional channels are defined on the basis of
the type of human assistance: teller, retailor corporate manager.
(2) E-channels are divided into 4 sub-groups on the basis of how
the channel is seen by clients, with some exceptions based on the
technological processes of transaction execution: Internet
based(online bank for corporate clients Telehansa.net, online bank
for private clients Hanza.net, offline bank for large corporate clients
Telehansa), card-related (ATM – Automated Teller’s Machine and
POS –payment terminal), Phone channels (call center, IVR, mobile
bank) and Automated channels (“virtual” bank core channels
where direct debit and incoming payments are effected). Services
are one of the primary benefits which a customer looks for while
adopting a new channel. The consumers consider the benefits and
weigh them against the costs associated. The Internet offers a lot
of benefits to consumers, like any time anywhere banking, updated
information, convenience, faster transaction, etc. E – Banking
services are replacing traditional services and creating a new scale
in transformation. In the initial stage, e- channels were introduced
in metropolitan cities and urban areas, but recently some banks
have started focusing on rural and semi urban areas. New private
sector banks are taking the lead in capturing rural and semi urban
sector. The different e- channels such as ATMs, Credit and debit
cards, Tele-banking, Mobile – banking, online –banking and Smart
Cards, are changing the face of the retail banking sector. New
private sector banks and foreign banks are attracting customers in
a big way. The potential customers and big companies are shifting
their accounts from traditional banks (not fully computerized) to E -
banks (fully computerized and provide different e – channels). If

8. traditional banks, mostly public sector banks, do not transform their
business by introducing IT, their survival will become difficult, as
now-a-days IT is not a matter of convenience but a survival factor.
Therefore, e – banking services are a potent factor for
transformation in this e – ag
Electronic Money
Electronic money is money which exists only in banking computer
systems and is not held in any physical form. In the United States,
only a small fraction of the currency in circulation exists in physical
form. The need for physical currency has declined as more and
more citizens use electronic alternatives to physical currency.
Electronic money (also known as e-currency, e-money, electronic
cash, electronic currency, digital money, digital cash, digital
currency, cyber currency) is money or scrip that is only exchanged
electronically. Typically, this involves the use of computer
networks, the internet and digital stored value systems. Electronic
(EFT), direct deposit, digital gold currency and virtual currency are
all examples of electronic money. Also, it is a collective term for
financial cryptography and technologies enabling it . In the 1990s,
banks realized that the rising popularity of the World Wide Web
gave them an added opportunity to advertise their services.
Initially, they used the Web as another brochure, without
interaction with the customer. Early sites featured pictures of the
bank's officers or buildings, and provided customers with maps of

9. branches and ATM locations, phone numbers to call for further
information and simple listings of products
Electronic-Banking Services
The view that the Internet is a revolution that will sweep away the
old order holds much sway. Arguments in favor are as follows :E-
banking transactions are much cheaper than branch or even
phone transactions. This could turn yesterday’s competitive
advantage - a large branch network, into a comparative
disadvantage ,allowing e banks to undercut bricks-and-mortar
banks. This is commonly known as the "beached dinosaur"
theory .E banks are easy to set up so lots of new entrants will
arrive. ‘Old-world’ systems, cultures and structures will not
encumber these new entrants. Instead, they will be adaptable and
responsive. E-banking gives consumers much more choice.
Consumers will be less inclined to remain loyal .E-banking will lead
to an erosion of the endowment effect’ currently enjoyed by the
major UK banks .Deposits will go elsewhere with the consequence
that these banks will have to fight to regain and retain their

10. customer base. This will increase 63 their cost of funds, possibly
making their business less viable. Lost revenue may even result in
these banks taking more risks to breach the gap.
Conclusion
The results show opportunity cost of lost of banks customers will
reduce to use of electronic banking and also indicate non-existing
of enough knowledge and trust have led to decrease in using e-
banking in the world and education can increases using of
electronic banking services among the banks’ customers in the
world. Therefore government and Bankers should attempt to
introduce e-banking very well in the world as early as possible. For
their part, banks should: Have a clear and widely disseminated
strategy that is driven from the top and takes into account the
effects of e-banking, together with an effective process for
measuring performance against it. Take into account the effect that
e-provision will have upon their business risk exposures and

11. manage these accordingly. Undertake market research, adopt
systems with adequate capacity and scalability, undertake
proportional advertising campaigns and ensure that they have
adequate staff coverage and a suitable business continuity plan.
Future studies can consider all of factors in empirical to improve
electronic banking services in Iran or other areas.
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