The Advantages Of Electronic Banking

Published Date: 02 Nov 2017

CHAPTER 1

INTRODUCTION

OVERVIEW

India has witnessed a complete revolutions change in the way banking activity can be carried out. The traditional method of banking is being replaced by the new technology of e-banking. The banking industry has been investing a lot in this technology and now e-banking transactions are being made available through various modes of internet services. All the banking transaction that are being made available and are completed through internet application can be classified as E-banking. The various modes through which banks are providing E-banking facility are atm, internet banking, credit/debit cards, mobiles and tablet. This technology adoption in banking can benefit both the banking organization in terms of cost saving and time saving in providing services to the customers and for the customers its convenient, easy accessibility anytime and anywhere and has reduced direct interactions with the service providers avoiding the traditional for of doing banking transactions. E-banking has opened a window for various business opportunities and has helped banks to widen the scope of reach by bridging the gap so that banking as a service can be made available to customers at their door step.

MAJOR CONCEPTS

E-banking: Electronic banking which is also known as online banking, virtual banking or e-banking is an online service facility that the banks provide to their customers. The registered customers can access their bank account from their pc or laptop from anywhere using internet. They can check bank information, make financial transactions, withdrawals, transfer fund, apply for bank products and services, pay bills online, and make online shopping payment through net banking option without physically visiting the bank. E-banking makes banking transaction more easy and convenient for accessing from anywhere in the world just through a click of few buttons.

M-banking: Mobile banking is a facility provided by banks for the customer to perform banking activities on their mobile phone device. It might also be referred to as M-banking or SMS banking. Mobile banking is used for performing activities like checking balance, accounts mini transactions statements, utility payments, credit applications and other banking transactions through a mobile phone device such as a mobile phone or Personal Digital Assistant (PDA) or modern tablets that are compactible to the application can be used for accessing m-banking applications.

Mobile banking and Mobile payments are not the same. The two terms are different. Mobile Banking involves using mobile devices to perform financing activities or transactions. Mobile payments on the other hand are defined as using the mobile devices to pay for goods or services either at the point of purchase or remotely or to book online tickets or use as m-wallet.

The earliest mobile banking service which was offered was SMS, a service known as SMS banking. With the introduction of the first smart phones which supported WAP enabling the user to access the web through their smart phone. In 1999, the first European banks started to offer mobile banking to their customers to transact using m-banking facility through mobile phone devices.

Modern smart phone like Apple's iPhone and the rapid use of smart phone which have Google's Android (operating system) has led to increasing use of special client programs, called apps, which are downloaded to the mobile device. Advancements in web technologies such as HTML5, CSS3 and JavaScript have seen more banks launching mobile web based services to complement native applications. A recent study (May 2012) by Mapa Research suggests that over a third of banks have mobile device detection upon visiting the banks' main website. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the user to choose from of which visiting the main homepage is one.

The amount of banking facility availed to user on their cell phone varies depending on the banking institution they use. Some banks offer only the option of text alerts, which are messages sent to your cell phone that alert you to activity on your account such as deposits, withdrawals, and ATM or credit card use. This is the most basic type of mobile banking.

 E-banking and e-commerce are closely related systems with similar kind of activities taking place in the form of communication. But these modes need social identity, a strong law system, well-built and organized network, and support from various service providers. For making these services readily available to customers, strengthening of the network infrastructure is very important because only then banks would be able to connect to the service providers. Most banks have developed their net banking services and many banks have been successful in implementing these services also. The trending concept in banking now is the use of mobile banking and how services can be provided to the customer through their hand set devices which would be easy accessible to the customers from anywhere. Telecommunications companies world-wide are developing 3G mobile phones and various devices like tablets and gadgets through which applications of banking can be in built and used to transact with the bank so that they need not visit the banks to do their transactions.

The purpose of this research is to study and understand the challenges and effectiveness that the youth are facing in using these devices because youth population are the highest users of technology in terms of internet or mobile services. This study also provides comparisons between the views of different groups of customers and understands the king of challenges that they face while they use digital banking services and what hinders them from using it. The findings of this research would be useful bank managers in the formulating a better strategy and understand their customers in order to promote e-banking and also aid researchers in studies related to customers attitude towards technology adoption.

NEED OF THE STUDY

E-banking has become the medium nowadays to transact with the bank. Traditional method has been replaced by modern method which is more technology driven. This study is focusing on the challenges and effectiveness of e-banking facility and to identify the factors that drives the use of e-banking.