Revolution in industrial sector and the other revolution in electronics.


Since the previous two decades the system of banking is rapidly varying. The move on the way to sophisticated culture which became an internet based is one of the major changes we are experiencing in our daily lives. The users of internet wide-reaching are usual to make 2 billion by the year 2011 which was 1 billion in the year 2006 according to Computer Industry Almec. The cause behind the extreme raise is the mobile phones practice and internet access and discovery of less costly computers. One of the majority considerable changes that we are experiencing in our everyday life in this century- the progress in the direction of the superior society which is an internet based. Most of the work which we do at residence, job, school and in the management have transformed extremely due to the use of internet. Some of the changes due to technology are just in the beginning stages whereas some of the changes are previously active and scattering all over the world. One of the most significant changes is in how we perform banking, mainly in now we manage dealings and payments. This origin source for the major alter to banking is E-commerce and its crash. This account examines the growing collision and information about E-commerce among the banking worldwide which has altered customer's living approach. It also focuses on the EC collision on the small and large scale banking and the challenges faced.

Introduction and Background:


Two major revolutions have been experienced by human beings over the last few centuries: they are revolution in industrial sector and the other revolution in Electronics. The first revolution is the one which changed human lives from agriculturally dependent to industrial dependent and the second type revolution has changed from mechanically dependent to electronically dependent. Now we are seeing the initial stages of new revolution in 21 century, nothing but network revolution which connects diverse parts of the world allowing the seamless flow of information. We can say that the engine for this network revolution is Internet and E-commerce is the fuel. Electronic banking which is also known as 'E-banking' in perspectives of banking is the method in which banking take place over networks, mostly the internet.

The style of doing almost all the activities of banking has completely changed over the last two decades all over the world. A significant shift has been made towards globalisation bringing about deregulation in banking sector with the huge advancements in computer technology. This significant change in banking has affected our attitude and has made industries more competitive.

The technology in terms of computers and communications has reached to such great heights that they have twisted the planet into a global village and the connection medium for the global village is the 'World Wide Web'(www). The geographically dispersed computer networks interface with each other through World Wide Web is known as Internet. The quickness of the internet process has brought a great change to our society affecting almost all the phases of our life. It is the E-commerce via Internet has gradually changed the trading pattern along with our insights in banking sector. From the time when the initiation of the internet came into picture, E-commerce has turn out to be the largely accepted function in the banking to face the growing competition in the present world of business technology.

The E-commerce has been largely focussed on the applications of business to customer. A lot of attention has being gained among businesses which are small and medium scale due to the growth of business to consumer (B2C) and most of the firms are trying on how to keep hold of new customers and are left in a position to compete with big firms. With the quick growth of e-commerce, it brought the unique challenges to the banking sectors including the vast opportunities. However, the E-commerce emergence and its growth brought the major revolution to the established banking sector. It has changed the existing structure of banks, the relationship between consumers to banks, and then it has had a profound impact on the development of the banking. The main intend of implementing E-commerce is to attract the concentration of large number of customers and to maintain the customers who already exist. E-commerce is one of the innovative elements today that bank is providing, it is a recent delivery channels for consumers to use the services of E-commerce 24 hours a day, 7 days a week.

The way in which business take place over the networks is described by internet Business, mainly through the Internet. All business transactions place on internet as Buying and selling goods, services. The applications like buying airline tickets, stocks, online marketing on the internet are rising quickly greater than the non internet trades. E-commerce is not just business but also interacting customers through internet. The impact of internet on trade and commerce affected a lot like businesses, professions and of course, people. The creation of Web-based commerce is not only the impact of E-commerce but it is the structure of a new business order.

Problem Statement:

Banking is one of the important service sectors of the economy. Banking sector has many transactions with in the local area, country and globally with increase of internet. In the traditional banking every transaction took place manually even transfers of money from one bank to another manually where as in E-commerce everything will be done through wire with in a fraction of minute. It gives a picture that how much a Banking sector affected with the invention of technology. The way of doing banking has completely changed with the introduction of E-commerce applications to its functions. Before E-commerce it was bit hard to bring out banking from one country to the other country as there was a lack of technology in many fields like communications, electronic transactions which plays a significant role to carry out quick banking functions. The impact of E-commerce on banking has been more from last two to three decades.

We got many changes in our daily life with E-commerce. The impact of E-commerce on banking sectors is tremendous on banking.During1970's many banking sectors in the business market arena and lots of competition between them for their survival in the global market. To keep the existing customers and bring the new customers into the business the companies are introduced new services and to meet the customers' expectations and to provide easy and comfortable services to the customer. The consumers also got attracted towards this new technology as it was ease for them to carry out their work with less stress and strain. The technology application is nothing but ‘E-commerce' which has brought a significant uprising to the business pattern. For example, most of the commercial banks today have grown up due to invent of E-commerce as EC has made easy for both the employees of the bank and also the consumers to carry out the bank transactions or services.

1.3 Objectives of the Research:

  • Understand how the banking sector and it's accessing in the current situation on the banking industries, so as to determine the level at which EC has been its impact on banking sector in India.
  • The impact of E-commerce applications on banking sector.
  • To look how the E-commerce would have an impact in future.
  • Identifying and analysing the main factors for such huge impact.
  • Find out the opportunities in different sectors.
  • Challenges faced by banking industries to implement E-commerce.

1.4 Structure of the Thesis:

This thesis is organised as follows:

Literature review

This chapter aims to re-evaluate about the research issue. This chapter sets out the important concepts and the applicable data in the selected research topic that existed already. Therefore, the literature chapter is divided into following parts:

  1. E-commerce introduction and definitions:
  2. Reviewing the relevant literature in order to give introduction and definitions to E-commerce by different authors in different perspectives.

  3. Classification of E-Commerce by the nature of transactions:
  4. The analysis of this chapter focuses on the nature of transactions categorised under E-commerce.

  5. Typical EC business models:
  6. This section tends to recognise different business models which are possible depending upon the criteria of E-commerce.

  7. E-commerce and its impact on banking
  8. This section defines E-commerce and explains views of authors on the impact of E-commerce on business and banking.

  9. Benefits and Limitations of E-commerce:
  10. This section enables us to know about the advantages and disadvantages of using E-commerce.

Chapter 3: Research Methodology

This chapter explains about the pattern followed in carrying out research and how this fits in with theory.

Chapter 4: Impact of E-commerce on Banking

This chapter explain about the impact of E-commerce on banking.

Chapter 5: Conclusions and Recommendations

|This chapter summarizes and draws the conclusion from the findings throughout the research.

Literature Review

The most important parts of any research are Literature Review as it is the one which make potential to a member to have knowledge about the E-commerce impact on banking sector conditions. The main activity at the start of any study is to have important available materials. Literature review enables to find out about the other people's methodology, come within reach of, nearby and so on with regards to one's wanted field. It also allows the researcher to spotlight on the area under discussion material, broaden the objectives and with exact proposals. The main content of this chapter would be the review on the collected works of selected papers and articles relating to the subject matter.


  • Banking
  • Impact of EC on banking
  • Other key words which are applicable to the topic

In order to gather the related information from the huge content of collected information it took added time as it is main to take out the key information related to the topic. The definitions and the approach to give details on the subject vary according to the diverse authors. So, this chapter explains about different views and definitions related to the 'Impact of E-commerce on Banking' in general as well as in particular.

What is E-commerce?

The necessary financial activity which involves trading or the buying and selling of goods is known as 'Commerce'. In broader perspectives, commerce can be notable in two types of commerce: physical commerce and E-commerce. The physical commerce is the one in which business take place through the contact between humans usually the physical outlet such as Garment shop. For example, if you want to buy a dress you will go to the physical store and buy the physical dress from a salesperson whereas in E-commerce system, dealings take place by electronic means. In the case of E-commerce you will have a online store from where you can buy a dress from a server computer. These two cases represent the extremes: the traditional commerce system on one side and the pure e-commerce on the other side. There are many variants and in many cases, e-commerce and physical commerce can complement each other [Kalakota and Whinston, 1997]. For example, a dress is ordered through electronic means and sent to you via physical means [Turban, 2000]. According to Schneider and Perry [2000], e-commerce is more suitable for standard goods, low-value goods, digital goods and simple services whereas traditional commerce is more suitable for nonstandard goods, perishable goods, expensive goods and extremely low-value goods.

The universal meaning of Electronic Commerce is the development of trade and services over the central processing unit networks with the help of the internet. E-Commerce is not only the one which includes buying and selling products online, it also includes customer service, business collaborations and conducting transactions electronically within an organisation.

E-commerce might, conversely, be purely defined as the making, promotion, sale, and sharing of goods via cable networks. The majority of the conversation on e-commerce is limited to the internet, the medium with which electronic commerce is primarily associated [WTO (1998)].

Conducting business by machine across the complete project is known as E-commerce which covers any form of business or transactions of administration or exchange of information and communications technology [Jennifer Rowley, 2002]. E-commerce is often taking a narrow perspective limited to specific initiatives, such as sales via the internet, electronic procurement or electronic payment [Morath, 2000).

The procedure of trade in which the merchandise and services are sold over the web. In its simplest form, E-commerce enables your goods of business to be hosted on a web server so that clients can visit your site, see what you have to sell and then place orders and when consumers place orders the sites ask you to pay using the debit or credit card and then the process continuous safely and securely, perform automatic credit card authorization without human intervention [Matthew Reynolds, 2000].

The paperless alternative of information connected to business that uses variety of technologies to finish the task- from Email to electronic bulletin boards to electronic funds move and electronic data exchange. Electronic Commerce seeks to computerize everyday jobs related to trade, as well as the production, processing, coordination, distribution and reconciliation of business transactions through the Internet and other electronic media. The language related to E-commerce can be confusing whether you call it as Internet commerce or Electronic commerce or Ecom or EC; it's all the same technology. All the linked terms of Electronic commerce means buying and selling of goods and services of a business electronically. EC is the one which enables business to exchange goods and services immediately while overcoming the barriers of time and distance irrespective of the day or night, it allows customers to go online and buy almost anything they want. EC allows business market to reach increased market share [Anne Nelson, 2002].

The technique to do trade has noticeably changed due to the internet influence on finding new streams of revenues, acquiring new customers or managing a new business's supply chain. The main stream which is enabling business organisations to sell products and services to consumers on a global basis is referred to E-commerce [Janice Reynolds, 2004]

Electronic Commerce has been given many definitions and terms. "A simple view has been adopted that reflects its possible level of impact on business, namely as the basis of fundamental change to business practice initiated by the substitution of existing arrangements by computer-aided processes" [Steve Elliot, 2002].

'Doing business electronically' is loosely defined as electronic commerce or better electronic business which includes trading of physical goods and of intangibles such as information via electronic means. E-commerce also includes all the right steps in trading such as marketing online, ordering, payment and delivery support which also encompasses the electronic provision of services such as after sales support or online legal advice as well as electronic support for collaboration between companies such as collaborative design [Paul Timmers, 2000].

E-commerce is the explosive emergence of the internet, distribution of goods and services worldwide and also for managerial and professional jobs. EC has a profound impact on economics, markets and industry structure and the flow of products and services, consumer segmentation, consumer behaviour, jobs and labor markets but there may be higher impact on societies and politics and above all above all on the way we see the world and ourselves in it [Drucker, 2002].

The government of UK used a broad definition when explaining the scope of E-commerce to industry: " E-commerce is the exchange if information across electronic networks at any stage in the supply chain, whether within an organisation, between businesses, between businesses and consumers, or between the public and private sector, whether paid or unpaid (Cabinet Office, 2000)". Electronic Commerce definition is not solely restricted to the actual buying and selling of products but also includes pre-sale and post-sale activities across the supply chain. The Internet and web usage to transact business is called as E-commerce; more focus will be on digitally enabled commercial transactions between and among the organisations and individuals [Kenneth, 2008].

The definitions vary with respect to the media under consideration. Some focus on the Internet, some include all sorts of direct electronic distribution channels (e.g., TV-shopping), and others include all forms electronic market places (e.g., electronic trading systems on stock exchanges).

Classification of EC by the nature of the transactions:

EC is generally classified by the nature of dealings or the relationship among participants. The following types of EC are commonly distinguished.

Business-to-Business (B2B):This is the model in which all the participants are businesses or organisations. For example, we can take Cisco, the leading supplier in the Internet hardware, where both buyer and suppliers are business organisations.

Business-to Consumer (B2C):This is the E-commerce model in which the businesses or organisations sell products or services to individual shoppers. B2C model is also known as e-tailing. For example, Tesco: a virtual shop in which the typical shopper is consumer or customer.

Business-to-Business-to- Consumer (B2B2C):In this type of E-Commerce model, a business provides a product or service to a client business which maintains its own customers. One example is the company which pays, AOL for providing Internet access rather than having each employee pays an access fee directly to AOL. Another example is selling products or services from Wholesale to Retail then to Customer like Airline tickets are sold to travel agencies from one business and these travel agencies sell the tickets to customers.

Consumer-to-Business (C2B):This is the category in which individuals use Internet as a source to sell their products to organisations and individuals who look for seller to bid on products and services they need. E-Bay is one of example for this kind of model.

Mobile Commerce:This is a model in which transactions and activities conducted in a wireless environment. For example, people can use internet enabled mobile phones to make any transactions or buy. Many M-commerce applications include Mobile devices.

Business-to-Employees:This is the model in which an organisation sells its products and services to its individual employees. A major category of employees is mobile employees such as field representatives.

Consumer-to-Consumer:This is the category in which the products are sold from one consumer to the other consumer. Examples of this category include selling of property, cars and so on in online classified ads.

E-Learning:This is a model which allows the online delivery of information for the purpose of training or education. [Turban, 2007]

Typical EC Business Models:

A business model is a method of business execution in which an administration can make income to continue itself. Depending upon the criteria's like the company, the industry and others different types of EC business models are possible.

There are many types of business models categorised under E-commerce.

Online Direct Marketing:This is a business model in which products or services are sold online by manufacturers to customers without the involvement of any

Mediators, stores or from retailers to customers creation well-organized allocation of products.

Electronic Tendering Systems:This kind of big business image involves buyers from large organisations who buy great amount of goods with huge worth all the way through order system which is called as 'Reverse auction'. Such kind of bidding can be done online which helps in saving lot of time and money. There are some pioneered corporations like General Electric Corp., which is bringing popularity to this kind of business models.

Online Auctions:There are some organisations like E-bay which maintain the world's largest online auctions site through which hundreds and thousands of consumers make successive bids for various goods and services. Beside E-bay there are other major organisations like Amazon, Yahoo who also conduct online auctions.

Electronic Marketplaces and exchanges:There are some electronic market places which are existed from decades i.e. stock and goods exchange but the fashion for this kind of trade replica is mostly rising from last one decade. If the trading organisations uphold to administer and well organise this e-market places then it can offer most important profit to both buyers and sellers.

Communal networks, communities and blogging:loads of of the companies which are just beginning social communities are reaching benefitted for remunerated advertisements. [Turban, 2007]


CRM (Customer Relationship Management) is an in sequence business expression for software, methodologies and generally Internet capabilities that smooth the progress of a project to direct consumer dealings in efficient way. Customer Relationship Management mostly urbanized its significance in confidential sector. It can be said as the mixture of knowledge and trade techniques to watch or track the retail practice of their consumers. CRM is generally apprehensive with how an administration can stay hold of their lucrative clients, create a centre of attention the new clients, continue constant expenses, and add to the main beliefs of communication to as a result make best use of the returns. CRM is not just supervision associations with the clients but also to converse with the clients in effect as in mainly of the business nowadays, the achievement of the corporation depends on the usefulness of its supervision dealings and its chief purpose is to build up long phrase associations with one's personal valued clients.

The accepting all in relation to the client requirements and pulling this information to raise and get better sales and services in that order is Customer relationship Management (CRM). CRM is the one which shapes the limitations linking sales and service and carry as one the performance of the business just about the client. The most important objective is to raise the client contribute and relation through shopper approval.

Supervision of Customer relations has turned out to be one of the planned importance's and also the main focus of any business. This centre of attention is the undeviating effect of the Electronic World. The great position to acquire to be on familiar terms with and effort on the consumer on a one to one starting point is the World Wide Web. It offers frequent opportunities to get better the services and make available a range of choices for following client and draw consumer approval and offer constancy programs. The implementation of CRM goes away from the mechanization functions. It brought with reference to a fundamental change in the organizations traditions and operations.

CRM assists a project to create likely it's each and every one departments to connect and aim their most excellent client. It helps the establishment to get better sales by most excellent potential in sequence. It also allows the shop of individualized associations with the clients with the aspire of getting better shopper approval and maximizing returns and helps in as long as maximum height of deal.

Collision of E-commerce on business sectors:

E-commerce permits being customer or companies to carry out online trade and business of commodities, services and operations on a website which protected by their banks. E-commerce opens up inventive traditions of falling costs. At the same time hardening struggle will guarantee with the intention of these benefits are approved on to the customer. The internet offers add up to potential for greater than ever the worth making for customers by means of increased transparency and improved services. Consumer's strength considers that they can get changed and improved facility during the internet. This can be seen at the moment in a number of incomplete examples. Clients benefit from a quantity of repayment from E-commerce. E-commerce is obviously the move on knowledge to speediness positive the business industry; many businesses have adopted the E-commerce as a sharing path. The E-commerce has been contributed as part of a multi-channel strategy, rather than as a stand-alone strategy. The preliminary functionality of E-commerce facilitates businesses to make development through delivering enhanced customer value. [Jayawardhena, Chanaka (2000)]

Electronic business coming out as a separate area in trade is the majority large business-related development of the point in time as said by many researchers and executives and with the rapid acceptance of networking knowledge by companies, the remarkable changes have been witnessing in the mode that the trade is done. All facets of company have been redefined in a ground-breaking manner by E-commerce. It is hard to the improved performance of organizations in a globe where companies have to transaction with suppliers, consumers, partners and their own dispersed units across the world but E-commerce twisted a new trade development which no longer mandatory planned visualization of technocrats. With 'millions of dollars' exchanged between parties every day it has shaped a new world order and is previously in concert a vital role in influential the business approach and in creating importance and in varying culture as we know today. To contribute in today's market location it is necessary for the companies to enlarge business-related actions further than nationwide limits and considerable role is played by electronic communications in this development but the only trade insurgency thing is not the skill itself but the uprising is determined by interface of information technology and buyer order. Adapting to new technologies is not only the obsession clients want but demanding more and more global competition. Electronic commerce created new business reality and calls for appropriate research and scholarship. [Celia Romm, 1998]

E-commerce is certainly shifting the techniques the business is being done. E-commerce changes occur in four different directions. Firstly it provides an alternate solution, for example if the customer want to purchase any product from online cyber shop and the particular thing is not available in cyber shop, the customer can still purchase from physical shops. This means that, cyber shops are alternatives to physical shops. Second is EC provide better solution as to illustrate this we can take the example of online auctions which cannot be realised by the traditional classified advertisement and the online auctions is therefore a better way to solve the same problem. In the third scenario, E-commerce is bringing in a recent shape of previously-existing service.[Henry Chan, 2001]

Advances in E-commerce technology at an accelerated rate are resulting in new business environment and these advances create a technical knowledge that feeds on itself, resulting in more and more technology. As a result of rapid growth in technology in a large variety of more complex systems the business environment has the impacts such as: a more turbulent environment, with more business problems and opportunities, stronger competition, the need for organisations to make decisions more frequently, either by expediting the decision process or by having more decision makers; a larger scope for decisions because it is necessary to consider more factor and more information for making decisions[Huber, 2004].

The E-commerce is fundamentally changing the companies' way of doing business and to improve their operating processes, the businesses are adopting more and more E-commerce. With E-commerce adoption companies are seeing the efficiency improvements in the areas of supply chain management, procurement, marketing, customer service and order handling and processing. E-commerce is revolutionary creating new models for business and undercutting the old. Business organisations have experiences four main types of change pressures due to the impact of E-commerce; they are individuation, virtualization, globalization and intellectualization. E-commerce in business is about the rediscovery of the wealth creating potential diversity and niche environments and is concerned with rediscovering the individuality of customers and their needs, and the creation of frictionless modes of commercial interaction with them [Paul May, 2000].

In the last few years E-commerce has brought about significant changes in the companies way of doing business with each other and in the way they interact with the customers. This revolution has been accelerated by the wide acceptance of the internet and the related technologies, and developments have often has gone through a similar process. E-commerce is enabling to do business both internally and externally by electronic means, e.g. over the internet, intranet or extranet. [Jorge Gasos and Klaus-Dieter Thoben, 1998]

The business world is undergoing radical change due to the impact of E-commerce and trends in the marketplace competition on one hand, and the advent of the web on the other have created a brand new landscape within which business is conducted. Trade throughout E-commerce is create a bold innovative globe where enterprise carry out themselves by means of lively and elastic trade models and processes, convert themselves endlessly to get together the challenges and opportunities of souk places. [Michael P. Papazoglou and Pieter M.A.Ribbers 2006]

Impact of E-commerce on banking sector:

The impact of E-commerce on banking has shaped considerable settlement for the person or business as well as the bank in by means of e-banking. An individual doing individual banking on the internet can do financial credit transfers, construct queries on financial credit report, pay bills, transmit money from one account to the other, get hold of statements, in some cases scrutiny descriptions of checks etc., Beside this one can make dealings 24 hours a day from any place with internet right to use in the region of the world (Henry Chan and Raymond Lee, 2001). The E-commerce in banking sector is transforming the industry in terms of the nature of products and services offered by banks and the way they are packaged, delivered and consumed ( Sathye, 1999). An evident approach for accelerating the banking industry is E-commerce and today most of the banks have adopted E-commerce in the banking applications as a distribution path and the functions of E-commerce allows banks to attain improvement in their services. (Jayawardhena and Chanaka, 2000).

Over the last three decades the banking world has undergone main changes due to the discovery of E-commerce applications in banking operations. Globalization in the fields of money advances in turn know-how and the monetary innovations have transformed the dealing style of banking in the last two decades. The E-commerce impact on banking sector has allowed the sector to increase their commerce and go into into new markets with sophisticated technologies connecting the communication of together person and institutional clients (De Young, Hunter and Udell, 2004). Most of the banks today have experienced a great impact from E-commerce applications as by implementing the technology of e-commerce in their services will improve efficiency in conducting banking, improve the service of quality and attract new customers (Nath et al, 2001 and Kannabiran and Narayan, 2005).

The technology of E-commerce has enabled the traditional banking sector to and through the internet and allowed people to do electronic transactions, managing account and created an alternative channel of distribution (Bradley and Stewart, 2003). The banking provided by E-commerce is regarded as the most significant way to reduce cost in banking operations and enhance the services for the customers. The payments provided electronically through online banking is the most important part of E-commerce and with the services like convenience, security and easy operations this function is used by all most all the banks all over the world(Calin, 2002; Kari, Tero, Heikki and Seppo, 2006; Laforet and Li, 2005).

Traditionally, the banking division has been reliant on the once-over of person or institutional consumer but following the appearance of E-commerce in the fields of banking sector it became the key reasonable for the potential of financial services. The E-commerce impact on banking sector has flourished this sector with web-empowered quality by maintenance cling to of the active ones and attracting more and more consumers with the superior technologies provided in the banking services. [Bora Aktan and Edip Teker, 2009]

Profit, Barriers and margins of EC:

E-Commerce provides lots of profit by means of its innovations in individual account. The opportunities provided by E-commerce are broadly extend all over the world to make available substantial increase and charge discount. The administration documented the possible ability of E-commerce and has developed numerous strategies to encourage and make easy its espousal. All the categories in the worldwide organisations, persons and nation get advantage since the services provided by E-commerce. Some of the conveniences are global nature of equipment, the important opportunities provided to make the hundreds of millions of those, its interactive nature, originality and the quick expansion of its infrastructures specially Web, result in many benefits.

Pricedrop of trade processes:By introducing trade processes all the way through electronic earnings it has condensed the rate of physical work and paper production fee.

Decline of Sales series:preventable paper job and sales pitches have been separated by E-commerce.

Tradeexpendituredecline:record, manual labour and purchasing expenses have been condensed due to the practice of E-commerce in business and it has also eliminated the high cost of "middlemen".

Consumercharge:E-commerce applications help the organisation to make parallel resources to distribute accurately the right goods and services, in the right way, at the right time.

Let us see how every group of the comprehensive world gets benefited from E-commerce.

Benefits to Organisations:

  • Worldwidecontact:It helps the organisations to attain the comprehensive world in locating the consumers or suppliers speedily at reasonably priced cost.
  • Lessening in charge:It helps in lowering the price for dealing out in order and also makes relieve for cargo space and allocation of the composed records.
  • Tradefor all timerelease:With the services provided by E-commerce it is easy to manage many of the businesses 24 hours a day, 7 days a week, 365 days in a year.
  • Well-organized Procurement:The purpose of E-commerce saves time and lowers the cost by E-procurement.
  • Customization:It allows production achievable according to the aspiration of the client with immediate right of entry at practical cost.
  • Lesserstatementfee:The trade during E-commerce has condensed the message cost to all the trade organisations all over the globe as the message through Internet is much cheaper than personal appearance and also release from end to end online is 90 percent cheaper.

Benefits to clients:

  • Ubiquity:It helps the customers can shop any time they wish and any time they want.
  • Extra and modifiedgoods and Services:It provides the client with great pool of merchandise and services to choose and buy and at the similar time the client can modify as numerous goods and services they want.
  • Instantaneousdeliverance:There are some digitised goods obtainable online which can be downloaded immediately as soon as the payment is finished.
  • Contribution in public sale:clients can take part in online auction any time from any place and bid for the products they want. Using these online auction facility clients can follow and acquire exceptional items.
  • Allowannouncement:clients can use the ability of enabling wire which provides them to work at residence and also engage in social communities online.

Benefits to the world:

  • More community services:With the abundant amenities provided from E-commerce it is obtainable for additional persons and help those from rustic areas to distribute the profit.
  • Betterpattern of existing:It has transformed the standard of living of customers and improved the lifestyle.
  • Seal the Digital divide:It allows the individuals from just beginning countries and the persons from country areas to select and wish the goods and services what they in fact like.

Barriers and boundaries of E-commerce:

The main control for creation the E-commerce and Internet are the sectors from individual administration quite than the organisations from government and the Internet companies resolve maintain to force the growth in E-commerce. However, at all levels of organisations around resolve is substantial range for collaboration to get rid of the barriers and assist in the enlargement of E-commerce. The barriers to EC are trouble in operation, Concerns about security, be small of potential clients and technology skills, charge and argument to new technology. Boundaries for E-Commerce can be classified into two categories as Technological limitation and Non Technological limitations.

Technological Limitations

Nontechnological Limitations

There is inadequate bandwidth for telecommunications particularly in the ground of M-commerce.

The expansion equipment for software is still developing.

It might be problematic for a few individuals to right of entry and utilize the amenities of the internet provided E-commerce.

In instruct to apply the amenities of E-commerce there is a requirement of some special web servers to put in to the system servers which add to the charge of E-commerce.

It is also not a simple duty to incorporate the applications of Internet and the E-commerce connected software.

There are a few concerns be fond of isolation and safety which dampen clients from buying or selling products online.

Still there are individuals who don't faith in paperless dealings.

There is as well as anxiety concerning greater than before online scam.

Mainly the buyers resembling to experience and handle the goods prior to business which is not likely through online buying.

Readily accessible are now and then policy from the national and international government.

Most of the EC operations have inadequate clients for buying and selling.

Table: 2.8.1

Research Methodology

The methodology which is worn in the present investigate will be discussed in this episode. It is on the whole depended on the investigate trouble and the fixed explore questions. The episode outlines the line of attack to be used in this study, the changed approaches worn and as well definitions for these approaches for the appropriate accepting of the readers.It starts by way of an idea to be appropriate explore method in this learn followed by short description of some of the ordinary make enquiries approaches which are used in the research to bring together applicable information. The suitable research methodology will subsequently be practical for this dissertation. This chapter also includes conversation in relation to the research plan and intend compilation and scrutiny of data.

Research Approach:

There are two types of approaches with the intention of we know how to formulate for Research: they are Quantitative and Qualitative. The way during which certain statistics is able to be discussed and analyzed is during quantitative or qualitative methods [Patel and Davidson 1994]. Both approaches contain their individual advantages and disadvantages and neither of them can be made-up to be enhanced than the former. Depending ahead the reason to delve into and the accompanied questions for the research, a best research approach can be selected.

Quantitative approach

Qualitative approach

1. This move towards imply the look for facts that will assess, illustrate and give details to the phenomena of our reality.

2. This approach is often organised and well structured.

3. The data is quantitative obtained from samples and observations. It is usually associated with natural science mode of research.

1. This approach implies the search for knowledge that is supposed to investigate, interpret and understanding the phenomena by the means of an inside perspective.

2. This approach is not well structured.

3. Data is qualitative obtained from deep understanding of the research. This approach is often related to case studies where the main objective is to collect thorough information.

As the most important function or purpose of this study is to acquire further of a universal view of the impact of E-commerce on banking sectors and predominantly to what coverage the banking and the associated clients have affected by E-commerce. As the research requires the statistics together all the way through remarks and also existent world case studies would be worn in the additional chapters, this designate that both quantitative and qualitative manner of approach would be used in this research.

Paradigms in the research methods: A set of viewpoint and assumptions about the world and how the research has to be conducted is not anything but Research concept. It proposes a structural effort which consists of methods, theories and the way of major data. It provides the rule of how study must be conducted and well uses methods and techniques to be implemented when doing research.

There are two types of research paradigms, they are

  1. Positivist paradigm
  2. Interpretive paradigm

Positivist paradigm

Interpretive paradigm

1. Systematic and purpose approaches are used in this research.

2. It on the whole depends on quantitative methods.

3. It looks to give explanation to the world by establishing informal associations connecting variables, which are urbanized into a theory.

4. It assumes that there is a truth self-governing of the researcher.

1. Personal approaches are used in this approach.

2. It is basically depended on qualitative methods.

3. It assumes that studies of individual performance have need of deeply changed approaches to persons working in the natural sciences.

4. It assumes that there is no certainty independent of the researcher.

Table 3.1.1

In this research we will be using positivist paradigm to find out qualitative information on E-commerce and Interpretive paradigm to find out the qualitative information on the impact of E-commerce on CRM.

Research Type:

We can bring out a study with numerous traditions. The majority type of study can be classified according to how much the researcher knows in relation to the trouble earlier than initial the analysis [Yin (1994)]. However, there are three classifications of research available when dealing with a research problem: exploratory, descriptive, or explanatory [Zikmund (1994)].

According to Zikmund (1994) exploratory research is done to clarify the nature of vague problem. In other words, this type of research is meaningful in a situation where researcher does not have enough understanding to proceed with the research project. It is in general done to give the problem a more solid shape and identify which information that is being needed for future research.

Descriptive research describes market characteristics or functions. When a particular phenomenon of a nature is under study, it is understandable, that research is needed to describe it, to explain its properties and inner relationships. This type of research is often used when problems are fairly well structured and there is no intention to investigate cause/effect relations [Yin (1994)].

Explanatory (causal) research identifies cause and effect relationships between variables. It is valuable for understanding questions of efficiency and when the focus is on cause and effect relationships, explaining what causes produced what effects. This kind of research is also appropriate when it does not exhibit a clear apprehension about what model should be used and what qualities and relations that is important. [Yin (1994)].

Therefore, our investigate reason is to discover out marketplace description or functions and to beneath learning the life and investigate questions explain that the research identifies reason and consequence affairs among variables, so the research come within reach of in this study is expressive and also descriptive.

Investigate approach or techniques:

A investigate approach will be a universal plan of how the researcher will go on the subject of answering the investigate questions has set [Saunders (2003)]. According to Yin (1994) there are five main study strategies, in the group sciences: trial, surveys, archival investigation, histories, and case studies. I will provide a concise description regarding these strategies.

Malhorta (2002) views research as soon as the researcher manipulates one or additional self-governing variables and process their result on one or more reliant variables, while jealous for the result of irrelevant or inappropriate variables.

According to Zikmund (1994) review is a method in which in order is composed from an example of individuals during a survey.

Archival in order holds to the goals be to explain the occurrence or incidence of an occurrence. To utilize of archival in order is not easy as this subject be upcoming study part.

The past way deals by means of history, as well as is worn after refusal applicable self are living to statement [Yin (1994)].

Reason of case study is to get information in order from single or little situations so as to be related to the research's trouble situation [Yin (1994)].

Each of these strategies is a changed method of collecting and analyzing experimental confirmation. Generally, case studies are measured proper for the investigative stage, while surveys and histories robust the expressive stage, and experiments are the merely technique of performance descriptive or connecting inquiries. Every approach has its individual compensation and disadvantages depending on three conditions [Yin (1994)].

Research questions are measured for first and most important conditions for differentiating among diverse strategies. "what", "who", and "where" questions and their derivatives-" how many" and "how much"- are possible to help review and archival records, while "how" and "why" questions guide us to case studies, histories and experiments as the chosen research strategies. However, the reason of this study is to reply this query: what is the impact of E-commerce on client relationship. Due to this piece of evidence, I will use study as the research strategy. Survey is a method connecting the study of a sample of subjects drawn from a population. It allows the collection of great amount of data from a sizeable population in an extremely economical way and it is simple to understand. In my research I am also carrying out a survey to locate out whether there is any impact on the lifestyles of the people by E-commerce. Additionally, since the major plan of this study is to gather the respond from different customers linked to different businesses. Researcher has decided survey approach which is most extent of quantitative nature.

The researcher is going to do research even with the help of the case studies. Case study and survey strategies are suitable for this research. Case study will be supportive to expand a rich understanding the context of research and it's a valuable way of exploring active state. In this research, the researcher is using so many case studies which support the foot of dissertation.

Data collection and type of data:

In general, there are two kinds of information used in researches: primary data and secondary data. Primary data is known as information that is gathered for specific research, especially in reply to a particular crisis, for the first time. Whereas secondary data is the facts that already exists, like literature studies, which has been collected before and assembled for some studies other than one at hand. It might be useful for the reason of specific survey.Researcher study will be basically depending on primary data which provides with trustworthy and approved data. Experiments, surveys and observational studies are some common research techniques to gather primary data. The most common method of collecting primary information is through surveys. The maximum use of questionnaire is made by the survey strategic. Questionnaires are sent to the respondent who answers them without any explanations or pressure from the researcher. Questionnaires cannot be no long or too exhaustive because this strength leads to unanswered questions. Questionnaire is used as data collected works instruments. Most of the information was also collected from journals of Business source premier and Emerald, these two information sources offer high-quality research in the topic and helped the researcher to be better managed.

Data Interpretation:

The basic aim of reviewing data is to treat the proof fairly, to create convincing logical conclusions and to rule out the alternative interpretations. Statistics interpretation is the most significant in proving or disproving the theory. It is important to choose the correct numerical tool to create useful interpretation of the information. For example if there is a lot of information available about the impact of E-commerce on banking sector, here information is interpreted and the researcher ignored the needless information and used the data which is associated to the topic.

Reliability, Validity and Generalisability:

Reliability: It is being able to get the same outputs if the researcher were to be repeat by any researcher.

Validity: The degree to which research results exactly interpret what is really happening in the situation;

Generalisability: The amount to which you can form conclusions related to one thing based on data about another (Example: The outcomes related to particular sample related to a wider populace?)

The data which the researcher has collected for this analysis will be reliable as most of the information is collected using case studies, academic journals which would be obviously original and reliable. The researcher believes that the information collected will yield the same results if the research were to be repeated by any researcher. In this study, the data collected will be valid. The data collects in this study may be equally not applicable to other research settings.

The information which collected till now for this study will be reliable, valid and generalisable.

Analysis of E-commerce impact on banking

Banking Sector:

Banking industries are facing unprecedented challenges and also being offered great opportunities due to the rapid development of internet and digital technology. In terms of banking sector, E-commerce emerged in the name of E-banking and its emergence has brought the significant changes to the banking sector and made them modernised from traditional pattern. It made a profound impact on the banking industry's development and changed the existing structure of banks, the customer relationships with banks. In order to make significant changes to banking industry like reducing operating cost, to achieve paperless globalization, to make use of internet and computer technology in banking and making the effective service to the customers as well as speeding up the cash flow of the bank and make effective changes to the bank's internal; management issues and the efficiency standardization. Internet banking is available today in corporate world due to E-commerce technology and internet banking has become the trend of every country's commercial banks.


"The primary activity of a bank or financial institution is to operate as a payment agent to borrow and lend money for the customers or it can also be defined as an incorporated institution for operating many functions like dealing with money, loans, providing facilities of transmitting funds by drafts or bills of exchange". [Peter Dicken, 2007)]

Banks stand as backbone of every market economy. One of the significant changes in banking sector is Internet Banking which is a fast, reliable and easy way of operating your account online via internet, the service of internet banking is 24 hours a day, 7 days in a week. It provides with so many facilities like you can view your bank statement, current balances, option to transfer the money, paying bills, manage direct debits and standing order. Beside this internet banking also provides with facilities like order foreign currency, traveller cheques and so on.

One more application of E-commerce in banking sector is Mobile Banking which is similar to Internet Banking but it is your mobile phone via internet which provides us the facility of always keeping in touch with your finance wherever you are in the world even when you are on the move.

Types of Banks:

Commercial Banks:This banks act as intermediary between lender and borrower who takes in deposits and makes commercial loans, they also administers financial transactions for clients. (E.g. making payments, clearing cheques)

Investment Banks:This bank buys and sells securities (i.e., stocks, bonds) on behalf of corporate or individual investors and also arranges flotation of new security issues.

Insurance Company:this Company's work in association with other insurers/ reinsurers who covers a whole range of risks on payment of premium.

Credit Card:This institution operates networks of credit card facilities in international dimensions in association with banks and other financial institutions.

Accountancy Firm:It certifies the accuracy of financial accounts, particularly via the corporate audit. [Peter Dicken, 2007]

Factors of Influence:

  • Economic Environment:
  • Political Environment:
  • Relationship with other countries:

Stages of banking growth:

The Stage of banking growth

Banks and places

Credit and places

Stage 1; clean economic mediators

Banks provide out funds, No Bank multiplier, Saving precedes asset

allocation limited communities assets based, for future financial centres

mediator only

Stage 2: Bank deposits used as cash suitable to apply daily cash as resources of imbursement

condensed outlet on the bank reserves, Multiplier practice potential, asset preserve at present lead saving

marketplace reliant on degree of self-assurance believed in banker

tribute making determined on confined area as whole credit controlled next to redeposit percentage

Stage 3: Inter-bank lending

praise making still forced by reserves, Hazard of raw materials failure make up for growth inter-bank lending, Multiplier progression facility more rapidly, Multiplier outsized as banks preserve hold lesser reserves

Banking method develops at nationwide point

Re-dependent control comfortable to some extent, as a result be able to let somebody use wider afield

Stage 4; Lender-of-last-resort resource

Central bank perceives want to encourage self-reliance in banking system, Lender-of-last resort resource provided if inter-bank lending insufficient

Central bank abroad state-run structure, other than partial control to hold back credit

Banks at no cost to react to recognition order as reserves restraint not necessary and they can be able to decide quantity and allocation of credit in nationwide financial system

Stage 5: Liability administration

Competition from non-bank financial intermediaries drives struggle for market share, Banks actively supply credit and seek deposits

Banks struggle at public level among non-bank monetary institutions

Credit formation resolute by resist more than marketplace contribute to the opportunities in tentative markets

Total credit unrestrained

stage 6: Securitization

investment sufficiency ratios introduced to restrain recognition

Banks include an rising sum of terrible loans since of additional than lending in stage 5

Deregulation opens up worldwide competition, ultimately causing absorption in financial centres

move to liquidity beside stress entity put on services to a certain extent than credit decisions determined in financial centres; sum credit resolute by accessibility of capital, i.e., by central wealth markets

Table 4.3.1: The sequence of development of the banking system

[Source: based on Dow, 1999]

Fig shows the series of expansion of the banking system. The initial two stages of credit condition to borrowers depend to a great amount upon the character of in nature span of information and faith grows during such developments since inter-bank lending (that is, lending outside the local area) in stage 3 in addition to finally, of a middle invest with the intention of eventually acts the same as the lender of last option to the banking system as a entire (stage 4). Following developments, particularly in securitization, make a completely changed range moreover complication of financial action.

Saturation of banks:

The services provided by financial institutions include grow to be extra and remote minus conservative through 1970's with the rivalry strength used for clients has improved extremely.

Market Saturation: The economic services which were customary in the market were success diffusion by the delayed 1970's plus the amount of persons who chose banking system has become comparatively low and the existing bank account holders were also reaching diversified as of conventional banking system.

Disintermediation: The customers going ahead are choosing non bank institutions such as mutual funds, savings belief and securities not including leaving all the way through mediator channels of have an account. As the procedure sustained it became the demanding feature for banking institutions in addition to this period has finished banks to imagine on the subject of re-intermediation by introducing new services to customer and recover their rapport in the course of internet and applications of E-commerce.

Deregulation of financial markets: The economic services were strictly in time by state governments and noticed so as to close by is growing deregulation in the earlier period few years and mostly intended at two aspects:

  • The gap of fresh markets in nature.
  • The stipulation of recent financial goods.

Internationalization of banking industry: The services provided by banking trade are no longer classified towards the family filling according to the stress, they contain befall ever more universal. The three important demands are

  • The vast expansion in global trade
  • The universal boost of corporation assistance
  • The massively enlarged institutionalisation of funds.

These services mentioned over are consistent and cooperatively fashioned a novel aggressive situation.[Peter Dicken, 2007]

Development in Banking Industry:

E-commerce has a considerable shock on banking sector, they contain totally transformed the banking organization and customers were being involved. A number of the main developments to banking sector during E-commerce are straight deposit, Debit or ATM cards, Internet Banking and test Imaging.

Direct Deposit: The companies and governments exercise this exclusive digital knowledge of bank to move payments interested in a variety of financial records via electronic means. This service of E-commerce is allowing all the confidential or communal companies to give their workers during nonstop deposits keen on their individual financial statement.

Debit/ATM cards: This skill allows the clients the easiest means to structure which openly remove currency as of their individual report after they hit this card at store's currency mechanism.

Check Imaging: Through the advancements in knowledge at hand are lots of improvements in bank services, individual of which is to ensure imaging which allows banks to keep photocopies of checks on PC as an alternative of document files.

Internet banking: This skill in banking sector allows clients to get in touch with their financial statement online, transmit on or after from one account to the other account and can make the payments, statement of an account and so on.

There might be lots of changes taking position in the banking division as have an account diversified their services to happen to added competitive. [Henry Chan, Raymond Lee and Tharam Dillon, 2001]

Mapping the possessions of E-commerce in banking services:

Various banks contain the internet as sharing trail to their clients as it provides obviously a loom to speed up the banking industry and internet involvement in banking region posses to be multi-channel approach somewhat detached approach. The major purpose of internet banking allows banks to expand development during delivering honoured consumer significance. It does not matter what come near has been engaged primarily except mainly institutions would concur that long term, electronic banking service aid ought to be ample, if the client contact strategy.

Internet through E-commerce is having a major crash on the banking sector now as it enables person clients or companies to function financial dealings on a website provided with safety firewalls operated by their banks.

Subsequent be the banking services used by clients during internet service:

  1. Transactional: It allows persons to complete economic dealings such like transferring cash from one account to another, pay bills, exchange of currency and so on.
  2. Non-transactional: Scrutiny statements and assembly investigation online which are in the course of internet email once-over among bank and the clients.[Henry Chan, Raymond Lee and Tharam Dillon, 2001]

Originality within the business formation: Numerous effects of E-commerce are not easy to divide as of the incomplete common trends in the trade. Lacking E-commerce it is surely not likely to offer service to huge customers other than it is not up to the smear of how greatly this outcome of E-commerce. E-commerce is the effect of broad developments in the banking trade like diffusion of markets, enlarged struggle and harmonisation, internationalisation. The force became other at what time the claim is raised owing to the applications like classification and verification provided by E-commerce and the faith in third parties enlarged while EC provided by means of the ability of verifying buyer and seller identities. The Electronic trade Business crash scheme views E-commerce when modernization in the organization of deal which enables delivery away from home of dealings in a variety of sell spaces in a variety of habits than previous to. Novelty is generally diverse in three types:

  • Product originality: The original goods and services growth is occupied in this procedure.
  • Procedure improvement: This deals through the plan and create of new goods and services.
  • Relational improvement: It deals by the original methods or modalities used for connections of buyer-seller in the market place.

[Source: TNO report, 2001]

The novelty practical deal organization is collected of three separate elements:

  • Contract training: It involves insertion in order regarding goods and services in the market and recovery in order on the goods and services as of market participants.
  • Business achievement: It consists of two processes; initially resolution followed by supply chains. Ordering, transmit of spending and billing comes beneath resolution while relocate of spending as of sellers to buyers within together logistics and with closing clients comes below 'supply chain'.
  • Manufacture hold:The utilization as well as confine of facts linked to contact the measure to advertise situate and offer maintain for growth, making and advertising of goods and services. [ TNO report, 2001]

Footprint of e-commerce effects in banking

[Source; TNO report, 2001]

Currently let us see how banking division is precious with the mapping of E-commerce (brief the figure). In the banking services, innermost field of deal in the worth sequence is the support staff purpose where by introducing new technologies competence gains are prepared, among the consequence of which around force be a decline in expenditure of as long as goods and services and moreover without charge up capability for recent services. Thus practice originality is regarded as the centre improvement practice in the banking services anywhere E-commerce applications grip the critical element.

In the banking sector, to various level of companies are yet vigorous in artefact advance which comes in two forms; individual is adapting goods for new purposes and the instant solitary is inventing exclusively new goods. For creating the practical setting a lot of active banks just adjust usual service. Nearby this original goods are urbanized by banks which are probable by the exercise of E-commerce. Though, the goods which are delivered to the customers are connected to the modernization in the procedure. The goods which are introduced keen on the marketplace in adding to the method the clients are approached to the item for consumption type (i.e. transaction preparation) be as well experimental by quantity of alteration.

Relational advance in the banking sector have to be viewed next to the previously elevated frequency of client security device in. In this business the improvement scheme is less concerned to acquire new clients rather than to retain existing customers and extract more value from the relationships.

In banking sector most of the innovation take place within the context of relationships which are already existed and the innovation regarding the requirements of new clients are directed as process or product innovation. In command to keep the sharing and management expenses, the new technologies and services are used to support the client's rapport. The region anywhere the slightest request of improvement is occupied consign is exposed as construction support (therefore the shade in the figure). This does not specify that banks are not generally technically higher in making support region as the generated in order of business which is captured before used is a key feature of banks in the economical market.


E-commerce applications in banking services are known as E-banking. The initial wire banking is Security. The net banking which provides as a rule of the banking services on the net. Through the E-banking we know how to do our banking on fingers instead of foot. Let us look at the two different models:

  1. Wholesome computer-generated banks.
  2. Conventional banks which provide e-banking to balance their sell banking.

The SFNB is a wholesome computer-generated bank where the homepage of Bank of America represents the second model.

Homepage of SFNB [source: Henry Chan, Raymond Lee and Tharam Dillon, 2001]

However all the banks might not succeed to offer the full variety of services through internet they offer a various series of services such as

  • Private Banking
  • Industrial Banking for together petite businesses and big corporations
  • Monetary services
  • Credit request services
  • Global trade counting resolution instruments, overseas switch business, etc.

E-banking offers settlement to persons and companies as on form as the bank. A person or company might utilize the resource of E-banking by action of individual banking, paying bills, transfers as of one financial credit to the other, be able to ask queries on bank account balances, know how to outlook the account anytime any consign with the internet contact around the globe.

By these services, figures of banks are further more offers individual financial services as well as edifice individual loan request on the internet. These services provided by E-commerce applications characterized a huge raise in expediency and instance discount for the clients discount trips to the bank division, queuing, e

The reward to the banking institutions themselves contain:

  1. Depository is able to decrease the number of branches which saves them lot of funds for the associated properties.
  2. Decline in recruitment as of the fall in document processing as well towards the bank cashier contact.
  3. bringing as regards boost in the point the bank hangs on to the cash prior to making the necessary transfers, important to rise in concentration received by the banks.

These advantages are so considerable to various banks propose clients a number of incentives to change to the internet banking such as without charge checks, condensed fee, improved deposit fees, etc. [Henrychan, 2001]

Electronic Banking: Creating the perfectanswer

A diversity of approaches has been made by financial institutions while implementing E banking services depending on limited market struggle and existing funds. A few economic institutions have adopted to remain and observe position, which enables last institutions to build the funds primarily and apply the necessary capital to check the market. In this crate, the financial organizations might map to go into the market previously victorious, verified isolated banking solutions appear.

The financial services continued existence guide

While, the previous economic institutions have adopted phased-in-approach in which they usually carry the item for consumption to market as soon as feasible in order to meet up the present order and to look after its client support beside forceful competitors. Primarily, the financial organizations could offer a fundamental distant banking service parcel given that receipt fee services and access to inspection on investments in order via phone or computer. And next they might settle on to improve and increase functionality of electronic banking and entrée methods as market demand dictates.

A number of financial institutions have engaged in the shotgun approach to distant banking by given that a broad variety of home banking services offered to execute a range of applications. The approach used by financial organization at this point is to offer the consumer with sufficient choices so that they have no cause to go to the competition.

Current financial institutions have implemented a wide-ranging of high means to distant banking scheme in which the organization provides equally retail and industrial consumers distant contact to information and services on inspection, savings, lending, credit, and savings goods. An access for client is provided via a broad variety of right entry strategy and a range of channels, as well as the Internet. The original technologies have brought a quick growth to the electronic banking in if its services and the single that provides service entering the market on a normal basis. As far as these original technologies include been implemented by financial institutions the work of integrating them into a comprehensive, stretched time electronic banking key becomes further demanding. [Celia T.Romm and Fay Sudweeks, 1998]

Internet Banking:

There is a remarkable raise in the acceptance of E-commerce in the last few years. The banking trade has witnessed increase of rate in technical improvement through the previous four decades and this increase in adoption is due to huge defensive measure against increasingly classy and highly demanding consumers, increasing competition and the necessity to control and reduce rising costs (Barra, 1990). The traditional industries of banking are predicted to be revolutionised and transformed by Internet banking (Mols, 1999; Daniel 1999; Carrington et al., 1997). The activities of banking industry are automated and digitised easily and thus from the perspectives of operations, lend themselves to the internet (Elliot and Loebbecke, 2000; Daniel 1998; Cervantes, 1997; Morgan Stanley Dean Witter, 2000). The main areas where the banks are getting advantages for using internet banking in this potential competitiveness are cost reduction and customer satisfaction. In relation to cost reduction the transaction via electronic means are a fraction of those which can be done through the branch or even telephone. (Yakhelef 2001) reports that the payment through traditional systems of banks costs $1.08. whereas the payment through internet banking costs 13 cents or less. One more opportunity which is offered to banks from internet is increased customer satisfaction as it allows to have enhanced interaction, data mining and customisation. The banking industry is provided with an electronic and remote distribution channel via Internet banking and it signify a market place via electronic means where the consumer can make transactions on a virtual level (Reiser, 1997; Daniel, 1999).

In the banking services there is a profound impact of technology, as the new technologies allows the users to access the services whenever and wherever they wish without the inter personal relationships. The services provided by internet banking play a significant role for the clients of banking sector and one reason for adoption of internet banking is the positive attitude towards financial products and services. [Enrique Ortega, 2006]. Internet banking is acting as a new distribution channel to new business models; today most of the banks have adopted a multi-channel strategy where the main resource used is internet through which customers can conduct their banking. The new strategy can be applied to different business models but the strategy will be more effective if combined with new strategic thinking. The use of the internet and the technologies related to it is shaking the banking industry's foundation. [Feng Li, 2003].

Today, one of the most intensive users of information and communication technology is the banking industry. The significant application for such extensive use is the internet banking which provides the banks with great opportunities to increase their transactions expand the base for their customers and decrease the costs for their operational services. Beside this there are some more benefits provided with the use of internet banking such as personalisation, convenience, freedom and brings advantages in perspectives of cost.[Ozdemir et al., 2006].

In the literature of E-banking one of the most heavily examined topics is the internet banking usage, perception, adoption and the main factors which motivate consumers to use internet banking are convenience, speed, 24/7 availability and price incentives (Centeno, 2004). Chang (2003), Sullivan and Wang (2005) define internet banking as the process innovation where the banking operations like transactions, payments are handled by the customers of his own without visiting bank tellers. The Internet banking is defined as the electronic channel through which banking products and services are delivered in terms of retail and small value. [BIS-EBG (2003) cited by MU Yibin (2003)]

Consumers mostly adopt internet banking due to the facilities that it provides in offering the products and services [Durkin et al.; 2008]

In the present scenario, technology is travelling at the speed of light in the banking sector with one of the many application stands as internet banking. The revolutionary implications of the internet banking have:

  • Vastly increased financial services productivity.
  • Altered the patterns of relationships both within financial firms and also between financial firms and their clients.
  • Significantly improved the resource of income of asset wealth (for example, the capacity to move fun electronically and therefore instantaneously has saved billions of dollars in interest payments)
  • Enabled monetary institutions to boost their finance actions as well as to react at once to fluctuations in switch over charge in global money markets. [ Peter Dicken, 2008]

The figure above shows the internet banking website which shows amount of applications which be able to be approved away in one particular website. The internet banking currently is provided by two types of banks. Lots of credit unions and Brick and Mortar banks are contribution services via internet anywhere the clients can use the bank website and contain right to use before they too contain the choice to call the bank and carry out the labour in one. The next type of bank to conducts internet banking is virtual bank where the only way of doing business is via internet and does not provide with the resource of visiting the position. By means of the banks which fit in to second group we do not encompass the alternative to visit the local branch of bank and create a deposit. These types of banks perform internet banking for awfully less charge and a few of the services provided might be free of charge. For example if a individual is residing external his nation and would be fond of to create a few dealings from or to the previous anyone then he know how to use the websites of practical banking (example of virtual banking which the researcher himself uses is ''). This is one of the important innovations of internet banking in the modern existence.

Today, the banking sectors are providing with so countless applications similar to we know how to create range of dealings, sum of bills in a straight line as of report. The internet banking is currently given that a feature of transferring finances as of funds report to current account or vice versa, one can fill away the glory applications which are provided in the website of banks and ensure if they are responsible of success loans. Extra security concerns are provided by banks currently to bring out internet banking similar to known that a number of services similar to movable observant which way with the intention of if a person transfers cash to the other account, immediately a call will be received by account holder and one the account owner permits the right to use then simply the transmit is completed. Such an original security technologies are provided by internet banking nowadays by means of the assist of E-commerce. Nowadays, mainly the individuals consider that the protected and easiest method of banking is all the way through internet banking.


Electronic commerce or e-commerce encompasses all commerce conducted by earnings of PC networks. Advances in telecommunications and processor technologies in current duration included through computer networks a vital part of the fiscal infrastructure. Moreover companies are facilitating business above web. E-commerce provides several profits to the customers in the shape of accessibility of goods at lesser charge, wider option and saves time. Individuals be able to purchase commodities by a click of mouse push button without moving elsewhere of their home or workplace. Likewise online services such as banking, ticketing including airlines, bus, railways, bill payments, hotel booking etc. have been of wonderful assistance for the clients. Generally experts think that in general e-commerce will rise exponentially in future years. Business to business dealings will symbolize the major income other than online transaction will moreover have an extreme development. Online businesses similar to financial services, travel, entertainment, and groceries are all expected to develop (

As per the result of Internet and Mobile companies in India the total worth of E-Commerce performance in India has Crossed Rs.570 Crore during 2004-05. Internet and Mobile companies in India a non-profit organisation founded in January 2004 by important Indian Internet portals, projects that e-commerce revenues in the nation will achieve Rs 2,300 Crore in the 2007 economic year, rising at 95 percent more than the year 2006. This pertains to the Business-to-Consumer (B2C) section. Please referTable 01.

Table 01: E-commerce market size of India







Business to Consumer transaction in Rs. (Crore)






Percent Growth






Source: (

4.9 The Potential of Internet Banking:

It is essential to include a potential background for the individual who provides technology, banks and their clients in terms of banking operations, the goods and services and its deliverance and opposition. It is rather hard to expect the future of internet banking however it is understandable that it is developing in reality. The financial services show internet banking as the potential as per the unbeaten stories while others are further harmful and propose that internet banking is no more than 'traditional banking services in electronic form'. Various authors consider that adverse switching and destruction of user long time associations will wash out some of its profits. Apart from this the borrowing and lending services will be escort to disintermediation due to the part played by extensive of internet banking. The latest technologies beginning can boost the acceptance pace of this modernization by both banks and customers during mobile telephony and video conference.

E-Commerce Survey

According to Goldman Sach's revise of Internet users, the amount of users in India is likely to raise as of 0.5 million in 1998 to 9 million in 2003, which translates to a compounded yearly developmentrate ("CAGR") of 76% - the top in Asia.

Reasons, why huge banks are normally inventive when it comes to the use of E-commerce.

Ø Big marketplaces are looked by large conventional companies; as a result the sponsor for finance is more.

Ø Recognized name and faith stands as a benefit for banks.

Ø Bank operation volumes are huge, which can build reductions in price during computerization use.

Ø The figure of banks expects the incentive of innovative technologies in its applications.

At the similar period, the service provided by banks should include those basics of the electronic banking contributions to which reliable consumers have turn into familiar. The E-commerce is allowing the banking institutions to offer the following services.

4.9.2: Figure showing the increase of online banking services from 2001 to 2006

To maintain a largediversity of entrée devices and delivery channels, counting the Internet: The advancements in electronic banking skill have separated the lines among access devices and the services they sustain. The services which were offered as of the dealings of a banker or ATM are as well presented at self check kiosks and the transactions that were available traditionally through telephone banking are currently supported in computer. Accessing bank information by computers in the course of appears and experience is currently replaced by ATM's which are net enabled that contain browser technology. Beside this the banking institutions should also be organized to support a broad variety of services above numerous access devices and delivery channels.

24/7facilityaccessibility: The E-commerce is enabling the banking services offered to their consumers 24 / 7 facilities so as to consumers be able to access their financial records any time from any place over the coverage of internet.The financial institutions face a big challenge in providing this facility as it requires continuous investigation and progression of software's provided for safety and protection.

Validaccess to existing and exactconsumerbank account and financial information: One of the significant services provided by bank is enabling the consumer to offer the feature of accessing the financial credit information agreed the varied options. This allows clients to sight their account and makes payments at any time without going and queuing at bank branches.

High level of business and statisticshonour: As Electronic banking dealings can be initiated as of a range of plans and process on any of various processing systems, it is main deal needs with the information supplied in reply be treated through a high degree of truth. In order to preserve the high integrity every deal would be tracked because it is routed during the system to certify to every appeal is handled throughout declaration.

Infrastructure that leverages activeasset in legacy systems: Millions of dollars be invested in providing such legacy systems by banks and it would be not possible and not practical to restore these systems with newer and additional flexible functioning systems. The electronic banking systems have replaced the conventional working systems through the use of such leverage infrastructure.

Flexibility to add new services and delivery technologies as clients demand: In today's market flexibility is achieved through open systems which carry a range of interface standards and in the lack of this flexibility would be cost prohibitive used for adding fresh access plans and access to new services and information. [Celia T.Romm and Fay Sudweeks, 1998]

Evolution of electronic financial services (e-banking/e-commerce):

Reserve Bank of India has been care in its speed by the developments and introduced theElectronic Clearing Service (ECS) followed by the Electronic Fund Transfer System,later on extended as the National Electronic Fund Transfer (NEFT) and the Real Time Gross Settlement (RTGS). All these systems offered a safe and well-organized proposal for transmit of money among bank accounts without the need for paper-based payment instruments. The increasing acceptability of ECS, RTGS and NEFT by banks and consumers of banking services of these schemes is evidenced by the following facts:


○ The volume of ECS (Credit) dealings handled improved from 69,019 thousand in 2006-07 to 88,394 thousand in 2008-09. The size of ECS (Debit) dealings improved from 75,202 thousand to 1, 60,055 thousand throughout this age.


○ The amount of CBS enabled bank branches contribution NEFT service has improved from 42,900to 54,200 in 2008-09 and to 60,839 as on September 30, 2009.

○ The amount of business in EFT/NEFT improved from 4,776 thousand in 2006-07 to 32,161 thousand in 2008-09. The total cost of business improved from Rs.77, 446 crore to Rs.2, 51,956 crore throughout this phase.


○ The number of bank branches presenting RTGS package has improved from 43,512 to 55,000 in 2008-09 and to 60,144as on September 30, 2009.

○ on a daily basis standard capacity of business is 90,000 for about Rs.1, 200 billion of which 82,000 transactions for about Rs.980 billion pertained to consumer transactions as at end of August 2009.

I would like to talk about at this point that in India, RTGS service isnow offered merely for business of Rs. 1.00 lakh and over. With extra bank branches coming below CBS,the quantity and worth of business developed below RTGS and NEFT is accepted to prove additional raise in the future years.


Internet based e-commerce has in addition, vast advantages, posed lots of pressure as of its mortal what is generally called faceless and borderless.

Several examples of moral issues to contain emerged as effect of electronic business. All of the next examples are equally moral issues and issues that are exclusively connected to electronic trade.

Moral issues:

Following are the moral issues connected to e-commerce.

1) Confidentiality

Confidentiality has been and continues on the way to be an important topic of concern in support of together existing and potential electronic commerce clients. Which consider to web connections and e- commerce the following scope are generally relevant:

  1. Confidentiality consists of not being interfered by, having the supremacy to eliminate; character Confidentiality is a moral right.
  2. Confidentiality is "a wanted clause with value to control of information by previous individuals regarding him/herself on the study/perceiving of him/herself by former individuals"

2) Concern for security

In addition to security concerns, previous moral issues are occupied with electronic business. The Internet offers exceptional easiness of access to a huge group of goods and services. The fast growing field of "click and mortar" along with the mainly free cyberspace contain but encouraged concerns regarding equally privacy and data protection.

3) Other moral issues

Manufacturer challenging with mediators Online

"Disintermediation," means eliminating the mediator such as retailers, wholesalers, exterior sales reps by locating a Website to trade straight to consumers.

Disintermediations contain (1) composition being downloaded honestly from producers (2) authors distributing their job from their personal Web sites or through author co-operatives.

Dinosaurs - "Dinosaurs" is a word that refers to executives and university professors who decline to identify that technology has altered our life. Once an administrator speaks in words of the Internet being the "gesture of the outlook," it is a confident mark of "dinosaur.

Perceptions of threat in e-service encounters

Reported that as companies take part to digitize physical-based service processes repackaging them as online e-services, it becomes ever more essential to know how customers observe the digitized e-service option. E-service replacements might appear unusual, non-natural and non-authentic in contrast to conventional service giving out methods. customers can think so as to fresh internet-based meting out methods expose them to fresh possible risks the dangers of online scam , uniqueness robbery and phishing swindles way schemes to steal secret information by spoofed web sites, have turn into usual, and are liable to source fear and alarm in clients.

E-commerce combination

Next to numerous rewards presented by the learning a no. of challenges has been posed to the new learning system.

Zabihollah Rezaee, Kenneth R. Lambert and W. Ken Harmon (2006) reported to E-commerce combination assures reporting of all crucial aspects of e-commerce, but it also has some obstacles. First, accumulation e-commerce resources to active trade courses can overload ability and students are equally irritating to manage with added topic theme in courses previously soaked with necessary information. Second, several commerce faculty members might not desire to insert e-commerce topics to their courses mainly because of their own want for relief with technology-related subjects. Third and at last, this approach requires an immense agreement of synchronization between teaching staff and disciplines in commerce schools to make certain appropriate exposure of e-commerce teaching.

It act 2000 and authorizedmethod

Close to loads of rewards open by the IT a no. of challenges have been posed to the legal method. The information transferred by electronic means which culminates into a deal raises lots of official issues which cannot be answered in the active supplies of the contract work. The IT act does not appear as a absolute code for the electronic contracts.

Farooq Ahmed (2001) reported to a number of the talented issues raised and shortened in next approach.

  1. Pattern of e-contracts
    1. Contracts by e-data exchange
    2. Computer-generated contracts
  2. Strength of e-transactions.
  3. Dichotomy of offer and invitation to treat.
  4. Communication of tender and receiving
  5. Fault in e-commerce
    1. Common mistake
    2. Independent mistake
  6. Jurisdiction: computer-generated space dealings have no nationwide and worldwide limitations and are not similar to 3- dimensional globe in which universal bylaw ethics occupied.
  7. Individuality of parties

The issues of authority, appropriate act and enforcement of the judgments are not restricted to merely nationwide limits. The troubles raised are worldwide in nature and require worldwide declaration.

Individual skills mandatory for E-Commerce:

It's not just about E-commerce;

It's about redefining trade models, reinventing business processes, altering business cultures, and raising dealings with clients and suppliers to unparalleled levels of confidence.

Internet-enabled Electronic Commerce:

  • Web site progress
  • Web Server technologies
  • Safety measures
  • Combination by active applications and processes

Developing Electronic trade solutions productively across the association means structure dependable, scalable systems for

  1. Security,
  2. E- commerce payments
  3. Supply- chain management
  4. Sales force, data warehousing, customer relations
  5. Integrating all of this existing back-end operation.


Through the growth of computer knowledge, the World Wide Web has turn into the association means in support of the networked humankind. Computers as of locations to be geographically spread and can converse with each other all the way through the Internet. By the means of new knowledge there are positives and negatives connected with its use and acceptance. Finally, an e-marketplace can provide as information means that provides buyers and sellers with information on goods and other participants in the market.

E-commerce creates fresh opportunities for trade; it also creates new opportunities for learning and academics. It appears that there is great potential for providing e-business education.

As discussed previous in relation to the changed media of e-commerce such as TV, PC or Mobile these new media will exist a chief concern for marketers more than the few duration that mainly to merge them contained by an integrated bricks and clicks promotion mix.

On the other hand, quickly varying technology is frequently bringing new goods and services to the market accompanied by latest strategies to sell them. Therefore, it may also bring to a close to new principled issues connected to business will appear.New principled issues must be recognized and direct steps and actions must be engaged.

To begin with, fresh Internet users would be unwilling to carry out a few kinds of trade online, citing protection reasons as their main anxiety. In order to enhance customer acceptance of e-services, the sources of customer uncertainty, anxiety and risk need to be recognized, understand and alleviated.E-commerce provides marvellous opportunities in diverse areas but it requires cautious claim for customer security issues. Expansion of e-commerce would also depend to a huge scope on successful IT safety systems for which required technological and authorized requirements need to be set in place and strengthened continually.

While lots of companies, organizations, and communities in India are start to take benefit of the potential of e-commerce, crucial challenges stay to be conquered before e-commerce would become a benefit for general people.