Internet banking allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution, which can be a retail or virtual bank, credit union or building society .It may include of any transactions related to online usage. To access a financial institution’s online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password for customer verification. The password for online banking is normally not the same as for telephone banking. Financial institutions now routinely allocate customer numbers whether or not customers intend to access their online banking facility. Customer numbers are normally not the same as account numbers, because a number of accounts can be linked to the one customer number. The customer will link to the customer number any of those accounts which the customer controls, which may be cheque , savings, loan, credit card and other accounts.
To access online banking, the customer would go to the financial institution’s website, and enter the online banking facility using the customer number and password. Some financial institutions have set up additional security steps for access, but there is no consistency to the approach adopted.
Internet banking (or E-banking) means any user with a personal computer and a browser can get connected to his bank -s website to perform any of the virtual banking functions. In internet banking system the bank has a centralized database that is web-enabled. All the services that the bank has permitted on the internet are displayed in menu. Any service can be selected and further interaction is dictated by the nature of service. The traditional branch model of bank is now giving place to an alternative delivery channels with ATM network. Once the branch offices of bank are interconnected through terrestrial or satellite links, there would be no physical identity for any branch. It would a borderless entity permitting anytime, anywhere and anyhow banking.
The network which connects the various locations and gives connectivity to the central office within the organization is called intranet. These networks are limited to organizations for which they are set up. SWIFT is a live example of intranet application.
FUNCTIONS OF INTERNET BANKING
1. Pay a bill.
2. Schedule payments in advance.
3. Transfer funds.
4. Manage all your accounts in one place.
5. View images of your checks online.
6. Apply for a loan or credit card.
7. Purchase and manage CD accounts.
8. Order traveler’s checks.
9 Order a cheque book.
10 View up-to-the-minute account statements and balance.
11 Track your payment history.
12 Change contact details.
Internet banking allows customers to perform a wide range of banking transactions electronically via the bank’s Web site. When first introduced, Internet banking was used mainly as an information presentation medium in which banks marketed their products and services on their Web sites.With the development of asynchronous technologies and secured electronic transaction technologies, however, more banks have come forward to use Internet banking both as a transactional as well as an informational medium.
Internet banking can perform following banking transactions:
Inquiring about account balance
The popular services covered under E-banking are :-
1. Automated Teller Machines
2. Credit Cards
3. Debit Cards
4. Smart Cards
5. Electronic Funds Transfer
6. Cheque Payment System
7. Mobile Banking
Internet banking in india
The Reserve Bank of India constituted a working group on E- Banking. The group divided the internet banking products in India into following 3 levels of access :
Information Only System: General Information like interest rates, branch location, bank products and their features, loan and deposit calculations are provided in the banks website. There exist facilities for downloading various types of application forms. The communication is normally done through e-mail. There is no interaction between the customer and bank’s application system. No identification of the customer is done. In this system, there is no possibility of any unauthorized person getting into production systems of the bank through internet.
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Electronic Information Transfer System: The system provides customer- specific information in the form of account balances, transaction details, and statement of accounts. The information is still largely of the ‘read only’ format. Identification and authentication of the customer is through password. The information is fetched from the bank’s application system either in batch mode or off-line. The application systems cannot directly access through the internet.
Fully Electronic Transactional System: This system allows bi-directional capabilities. Transactions can be submitted by the customer for online update. This system requires high degree of security and control. In this environment, web server and application systems are linked over secure infrastructure. It comprises technology covering computerization, networking and security, inter-bank payment gateway and legal infrastructure.
Benefits of E-Banking
The operating cost per unit services is lower for the banks.
It offers convenience to customers as they are not required to go to the bank’s premises.
There is very low incidence of errors.
The customer can obtain funds at any time from ATM machines.
The credit cards and debit cards enables the Customers to obtain discounts from retail outlets.
The customer can easily transfer the funds from one place to another place electronically
The following services can be availed through E-Banking:
Bill payment service
You can facilitate payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills as each bank has tie-ups with various utility companies, service providers and insurance companies, across the country. To pay your bills, all you need to do is complete a simple one-time registration for each biller. The bank does not charge customers for online bill payment.
You can transfer any amount from one account to another of the same or any another bank. Customers can send money anywhere in India. Once you login to your account, you need to mention the payees’s account number, his bank and the branch. The transfer will take place in a day or so, whereas in a traditional method, it takes about three working days.
Credit card customers
With Internet banking, customers can not only pay their credit card bills online but also get a loan on their cards. If you lose your credit card, you can report lost card online.
This is something that would interest all the aam janta. Indian Railways has tied up with ICICI bank and you can now make your railway pass for local trains online. The pass will be delivered to you at your doorstep. But the facility is limited to Mumbai, Thane, Nashik, Surat and Pune.
Investing through Internet banking
You can now open an FD online through funds transfer.Now investors with interlinked demat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their demat account. Moreover, some banks even give you the facility to purchase mutual funds directly from the online banking system.
Recharging your prepaid phone
Now just top-up your prepaid mobile cards by logging in to Internet banking. By just selecting your operator’s name, entering your mobile number and the amount for recharge, your phone is again back in action within few minutes.
With a range of all kind of products, you can shop online and the payment is also made conveniently through your account. You can also buy railway and air tickets through Internet banking.
The security precautions used in internet banking are:
Buy good antivirus, It is very important to protect against viruses. Such antivirus is Quick heal, Kasper sky, Net Protector etc.
Scan Your Computer Daily with antivirus to ensure your system is safe.
Enable Firewall for better protection.
Avoid access net banking from cyber cafe or any other PCs having virus.
With in periodical intervals, change your net banking password.
There is Last log-in Date in your net banking account. Check it daily.
Use Latest version of Browser like Mozilla Firefox 3.1 and above,IE 7.0 and above,Opera 9.5 and above,Safari 3.5 and above, Google chrome,etc.
Use Newer Operating System.
Do Not Disclose your Password to anyone.
Before log-in into your account check the website URL having https:// . it means it is secured site.
Do not click on any link showing Update Your Password .
Ensure that the logged in session is properly signed out.
Review of Literature
Introduction and development of e-banking especially began in 1990s (Pikkarainen et al.2004, p.224) A research made in U.S in year 1999 stated that there have been huge increases in the use of e-banking in America. Examining the development of online banking in the world, one can say that the European countries are still the leader of the use of newest banking technologies and online banking (Pyun et al, 2002,p.73). According to a study, less than 15 percent of banks with transactional websites will realize profits directly attributable to those sites (Courchanne et al,2002, p.354).
According to Zeithaml et al. (2008), consumer perception plays a vital role particularly in pre-purchase decision making of services with high credence attributes as their pre-purchase evaluation is difficult. Althoughinternet banking provides recognized benefits for customers over the traditional banking system, however, thecustomer’s adoption of internet banking depends upon the pre-purchase perception of its proposed benefits insteadof the potential benefits it can actually provide, due to its high credence nature (Eriksson et al, 2005). Underlying customer perceptions, satisfaction and other behavioral constructs have, therefore, become research-worthy subjects for the researchers and practitioners in this field of study, however, customer perception has been given an escalating importance in the empirical studies due to its significant role in service evaluation (International Business & Economics Research Journal – April 2011)
The vast majority of the banks that avoided Internet banking in the beginning did so because they simply did not see the benefits of using it. Polatoglu & Kin (2001) state that the average internet banking transaction costs the institution only one twentieth of teller transaction. On the importance of trainability, Rogers (1983) and Agarwal and Prasad (1998) stated that potential adopters of new technology, who are allowed to experiment with it, would feel comfortable with it and thus be more likely to adopt it. According to Tan and Teo (2000) if customers are given the chance to try the innovation, it will minimize certain fears, especially when customers found that mistakes could be rectified and thus providing a predictable situation. A more rapid diffusion occurs when consumers can have low-cost or low-risk trial of the service. Internet banking services are free.(www.arraydev.com)
An American study conducted last year by Booz-Allen projects that by the year 2000, 16 million US households will be using Internet banking. While these numbers do not appear to be significant as compared to the total population, each Internet user is projected to be 50-250% more profitable than the average banking customer. It is expected that these Internet customers will be some of the banking system’s most profitable customers representing close to 30% of all retail banking profits. The study projects that by 1999, 1,500 banks will have Internet Web sites and at least 500 of these banks will be offering full-fledged Internet banking services.In 2001 Micro banker send detailed questionnaire to the leading vendors of internet banking software27 companies responded with information on thirty programs the aggregate outcome of the outcome was that almost all the companies have developed functions for internet banking and have inbuilt feature to aid with one to one marketing on the web.The vast majority of the banks that avoided Internet banking in the beginning did so because they simply did not see the benefits of using it. Polatoglu & Kin (2001) state that the average internet banking transaction costs the institution only one twentieth of teller transaction.( www.pewinternet.org/Reports/2006/OnlineBanking-2006.aspx)
On the importance of trainability, Rogers (1983) and Agarwal and Prasad (1998) stated that potential adopters of new technology, who are allowed to experiment with it, would feel comfortable with it and thus be more likely to adopt it. According to Tan and Teo (2000) if customers are given the chance to try the innovation, it will minimize certain fears, especially when customers found that mistakes could be rectified and thus providing a predictable situation. A more rapid diffusion occurs when consumers can have low-cost or low-risk trial of the service. Internet banking services are free. The cost and risk to trial are relatively low especially when Internet access is available from work.The concept of electronic banking has been defined in many ways (e.g. Daniel, 1999). According to Karjaluoto (2002) electronic banking is a construct that consists of several distribution channels. Daniel (1999) defines electronic banking as the delivery of banks’ information and services by banks to customers via different delivery platforms that can be used with different terminal devices such as a personal computer and a mobile phone with browser or desktop software, telephone or digital television. Electronic banking also commonly known as internet banking or e-banking. Internet Banking, defined as ”the delivery of banking services through the open-access computer network (the internet) directly to customers’ home or private address”. (Lau, 1997) has experienced phenomenal growth in recent years. In 2006, Pew Internet and American Life Project reported that nearly half of internet users in the United States – 63 million adults – bank online (Fox and Beier, 2006). In many ways, e-banking is not unlike traditional payment, inquiry, and information processing system, differing only in that it utilizes a different delivery channel. Any decision to adopt e-banking is normally influenced by a number of factors. Liao et al. (2008) stress that the success in Internet banking will be achieved with tailored financial products and services that fulfill customer’ wants, preferences and quality expectations. Mattila (2001) concedes that customer satisfaction is a key to success in Internet banking and banks will use different media to customize products and services to fit customers’ specific needs in the future(.(Journal of internet banking and commerce)
Since personal and financial information can be intercepted and used for fraudulent purposes, online investing involves greater security concerns than conventional trading; users need a sense of security when conducting financial transactions, and it is still one of the major barriers to e-commerce growth (Lee and Turban, 2002). Perceived security was defined as a threat that creates a circumstance, condition, or event with the potential to cause economic hardship to data or network resources in the form of destruction, disclosures, and modification of data, denial of service, and/or fraud, waste and abuse (Kalakota and Whinston, 1997). Security, which involves the use of technical advancements like cryptography, digital signature and certificates aimed at protecting users from risk of fraud, hacking or “phishing”, has a positive influence on the intention to purchase online (Lian and Lin, 2008).
A majority of studies highlight the fact that “security” is the biggest single concern for customers when faced with the decision to use internet banking. Security has always been an issue, but its scope has changed from mere doubts about the privacy of personal information to worries of financial loss (Sayar and Wolfe, 2007). White and Nteli (2004) find that “security” is the most important attribute for UK internet banking customers. It is followed by “responsiveness of service delivery (speed and timeliness)”, “ease of use”, “credibility of the bank”, and “product variety”. Akinci et al. (2004) find that the selection of an internet banking service provider is effected by security, reliability and privacy. Security, which involves protecting users from the risk of fraud and financial loss, has been another important issue in safe use of the internet when conducting financial transactions in Saudi Arabia (Sohail and Shaikh, 2007).
The banking sector was reluctant to use e-commerce applications as they felt that transactions conducted electronically were open to hackers and viruses, which are beyond their control. As well as convinced that online services are a mixture of customer insecurities, technology investment costs and a lack of market-readiness have all conspired to make e-banking ‘unattractive’ (Abdulwahed and Yaqoub, 2006). Perceived risk was one of the major factors affecting consumer adoption, as well as customer satisfaction, of online banking services (Polatoglu and Ekin, 2001). Perceived risk usually arises from uncertainty. Howcroft et. al., (2002) the principal characteristics that inhibit online banking adoption are security and privacy. An interview held on web security and showed four screen shots of a browser connecting to a website and asked participants to state if the connection was secure or not secure and to affirm the motivating factor for their appraisal. It was discovered that about 72 participants cannot tell if a connection is secure (Friedman et. al., 2002).
OBJECTIVE OF STUDY
The proposed research study is to be centered around fulfilling the following objectives.
To study the level of awareness of internet banking among the customers of Indirapuram Area
To find out the ways to improve Awareness
To find the customer satisfaction relating to e-banking services
Scope of the study
The study attempts to identify the level of awareness among the people of Indirapuram Area , regarding Online banking services provided by Banks. The study also indentifies the attitudes and preferences of consumers. The survey for this purpose was confined to the Indirapuram Area, Ghaziabad
H0: null hypothesis: Let us consider that residents of Indirapuram Area are fully aware of internet banking services provided by banks.
H1: alternate hypothesis: Let us consider that residents of Indirapuram Area are not fully aware of internet banking services provided by banks.
Research Design:- Exploratory Research
We first used Exploratory Research. Exploratory research is a type of research conducted for a problem that has not been clearly defined. Exploratory research helps determine the best research design, data collection method and selection of subjects. It should draw definitive conclusions only with extreme caution. Given its fundamental nature, exploratory research often concludes that a perceived problem does not actually exist.
The working of the research was started with the questionnaire. In this we have used screening criterion to identify target group of our research. Screening of certain questions has been done.
The study went through the perception of the target group about the manual banking also. Opinion about manual banking by the target group helped to measure impact of manual banking transactions. Then, our study was divided into two streams: the customer, who uses Internet banking and who doesn’t use it. These parameters helped to correlate the information between both kinds of customers. This also helped to evaluate the current satisfaction level of the customers who were using Internet banking.
Then we used Descriptive Research. Descriptive research is used to obtain information concerning the current status of the phenomena to describe “what exists” with respect to variables or conditions in a situation. The methods involved range from the survey which describes the status quo, the correlation study which investigates the relationship between variables, to developmental studies which seek to determine changes over time. To accurately portrait the characteristics of person of situation or group we used Descriptive Research Design
Sample Size and Design:-
Target Population- Universe or the whole mass under study will be residents of Indirapuram area.
Sample Frame- will be educational qualifications, working and non-working males and females, professionals , students and business class.
Sampling Unit- Individuals.
Sampling method -Non Probability method under which convenient Sampling method.
Sample size – will be around 200.
Method of Data Collection- Primary data
Tools of Data Collection- Questionnaire
Period: The primary data is proposed to be collected through various means of communications, i.e. In person, by telephone, e-mail , between 10.01.2013 to 25.01.2013 the period and mode of collecting data shall be reviewed suitably at the appropriate times so as to make it meaningful and closest possible to the objectives set for the research study.
1) You have a bank account?
2) You aware of the internet banking facility? If answer to q-2 is No ,move to q 9)
3) Level Of Awarenes of online banking services provided by Banks?
4) Source of awareness :
5) Your awareness of latest banking trends:
6) Since how many years you are availing internet banking facility?
Less than 1 year
1 to 3 years
3 to 5 years
More than 5 years
7) Type of service mostly you avail?
Online bill payments
Transfer funds online
8) Please rank the following factors based on your experience
24 hour access to account
Wish to access account without visiting branch
Safe and secure
Low service charge
Easy to maintain transactions
9) Rate your experience in getting internet banking facility from the branch?
10)Reasons you are unaware of Internet Banking ?
You are not tech savy
Lack of Interest
Prefer to have personal human relation
Lack of Sources
“This survey is being conducted as a part compliance of my degree in MBA (Insurance & Banking) from Amity University and is a pre-requisit for award of Degree. The project is for academic purposes and confidentiality will be maintained.
In Indirapuram area majority of respondents i.e 88% are aware of internet banking services provided by banks while 12% respondents are not aware of internet banking services
Electronic Media is the source of awareness for majority of respondents of Indirapuram Area.
The services which are mostly used by customers are printing bank statements and transferring funds online
Majority of people are not aware of Internet banking because of Lack of sources or they are not tech savy
Banks should attract consumer attention to internet banking services through better marketing
Bank should make efforts to increase customers awareness about internet banking facilities by conducting training programmes.
Banks should conduct various training programmes for employees so that they will get aware with the terms of internet banking and could create awareness amongst the customers.
Banks should increase the awareness about various features, advantages and benefits of internet banking, especially its convenience.
Bank should make the customers aware about internet banking at the time of building relationship.
Banks should extend the technology which is used in internet banking in order to remove the difficulties.
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