02 Nov 2017
Internet banking or E-banking allows customers of financial institutions to carry financial transactions on a secure website.
To access a financial institution's online banking facility, a customer must be registered user of the institution and must have password for customer authentication. The password for online banking is normally not the same as for m-banking. A customer can access his/her account any time he wants over e-banking. E-banking has given birth to 24*7 banking, which earlier was just restricted to banking hours.
To access online banking, the customer would go to the financial institution's website, and enter an online banking facility using the user id and password. Some financial institutions have set up additional security steps for access, but there is no uniformity to the approach adopted.
Today each and every bank is providing this facility to its customers to encourage paperless banking.
Online banking has opened doors for all the customers to operate beyond the boundries.It allows people to carry out their banking transactions by using safe websites functioned by their respective banks.
The story of technology in banking started with the use of punched card machines like Accounting Machines or Ledger Posting Machines. The use of technology, at that time, was limited to keeping books of the bank. It further developed with the birth of online real time system and vast improvement in telecommunications during late1970’s and 1980’s.it resulted in a revolution in the field of banking with "convenience banking" as a buzzword. Through Convenience banking, the bank is carried to the doorstep of the customer. The 1990’s saw the birth of distributed computing technologies and Relational Data Base Management System. The banking industry was simply waiting for these technologies. Now with distribution technologies, one could configure dedicated machines called front-end machines for customer service and risk control while communication in the batch mode without hampering the response time on the front-end machine.
The Reserve Bank of India organized a working group on Internet Banking. The group divided the internet banking products in India into 3 types based on the levels of access granted. They are:Â
1) Information Only System:Â General purpose information like interest rates, branch location, bank products and their features, loan and deposit calculations are provided in the banks website. There are facilities for downloading various types of application forms. The communication is normally done via 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 probability of any unauthorized person getting into production systems of the bank over internet.Â
2) Electronic Information Transfer System:Â Â The system provides customer- specific information in a form of account balances, transaction details, and statement of accounts. The information is still essentially of the 'read only'Â format. Identification and verification of the customer is through password. The information is drawn from the bank's application system either in batch mode or off-line. The application systems cannot directly access through the internet.Â
3) Fully Electronic Transactional System: This system allows bi-directional abilities. Transactions can be submitted by the customer for online update. This system needs high degree of security and control. In this environment, web server and application systems are connected over secure infrastructure. It contains technology covering computerization, networking and security, inter-bank payment gateway and legal infrastructure.Â
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. You can also set up vertical instructions online to pay your recurring bills, automatically. Generally, the bank does not charge customers for online bill payment.
Customers can transfer any amount from one account to another of the same or any another bank. Customers could send money anywhere in India. Once you login to your account, you required to mention the payees's account number, his bank and the branch. The transfer will take place in a day or so, while in a traditional method, it takes about three working days. ICICI Bank says that online bill payment service and fund transfer facility have been their most widespread online services.
With Internet banking, customers can not only pay their credit card bills online but also acquire a loan on their cards. If you lose your credit card, you can report lost card online.
This is something that would interest everyone. Indian Railways has tied up with ICICI bank and you can now create 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, Nasik, Surat and Pune.
You can now open an FD online over funds transfer. Now investors with interlinked demat account and bank account could be easily traded 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 provide you facility to buy mutual funds directly from the online banking system.
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 act within few minutes.
With a collection of all kind of products, you can shop online and payment is also completed conveniently over your account. You can also purchase railway and air tickets through Internet banking.Â
1) Convenient: Compared to a conservative bank, internet banking can be completed in the ease of your home or office. While located in just one place facing your computer or laptop, you already have a ability to complete multiple financial transactions in a few clicks. No need to dress up and go out to travel or drive to a local bank branch. No need of paper and pen for different transactions.
2) One-stop shop: With an online bank, you can carry 95 percent of your business on the internet. Apart from accessing your account information and bank statements, you can pay your bills, transfer money from your account to another account or apply for an inspection, credit or other types of account or apply for loans or even download forms. Maximum online banks have an easy to use platform so you just have to connect on your preferred categories and you’ll be directed to the suitable page in no time with the necessary information you need.Â
3) Cost effective: Online banking permits you to enjoy big savings. Most banks normally charge less fees when you use their internet banking services. You also get to gain more interesting products and services not offered by traditional banks
4) Safe and secure:Â Banks with online presence afford top security to guard their consumers. They use the latest encryption technology to prevent fraudulent activities such as phishing and identity stealing. But while this is given, the consumers have to do their part as well by confirming that they install the latest antivirus, antispam , anti-spyware and firewall software installed in their computer.Â
5) High interest rates: If you are capable enough, you just may find a good online bank that offers higher interest rates than those provided by the standard banks. There are direct banks or those that purely do business on the internet offering high savings rates. The ability of online banks to offer higher returns and more products is credited to the fact that they have less overhead expenditures.
Internet banking services offer a number of benefits to consumers. But while it has its benefits, customers demanding to join the trend need to know its drawbacks as well. Notwithstanding the growing popularity of internet banking, it cannot be repudiated that some people still remain cautious doing transactions online especially where money is concerned. Among the aggressive marketing made by the numerous financial institutions that have gone online, some sectors of society are still uncertain about this type of banking notably on the aspect of security.
Many people still do not trust the internet. For the new users who have realized financial transactions for only a few times, they may still have this hesitation whether or not they did the right thing such as clicked the right button and so on. They can only be contented once they print the transaction receipt and the transaction appeared on the bank statement.
For a first time user, directing through a website of an internet bank may be rigid and may take some time. Opening an account could also take time as some sites ask for frequent personal details including a photo identification which can trouble the potential customer. Because of this complication, they may be discouraged to use this internet banking service. Seminars and live customer support may be provided, though, to help the client in his or her needed tasks so it's best to take time to know the virtual environment.
Many people reluctant in using internet banking because of the security threat. They cannot help but worry about this aspect what with news on fraudulent bank transactions that pop up every now and then. However, this should not be a problem as banks that deliver internet banking services rank security above anything else. Since they value their customers, they always use the most innovative security technology in protecting their websites. In addition, the Federal Deposit Insurance Corporation (FDIC) is also standing behind them.Â
Most banks upgrade their online programs on a periodic basis sometimes adding new structures and products. When this happens, the bank may ask customers to re-enter account information which could be a cause of worry.
1) Banking Technology Excellence Awards were instituted in the year 2001 with a primary objective of encouraging and recognizing the excellence in implementation of Technology for better customer service, operational efficiency and expansion of banking services to the hitherto uncovered sections of Society. The category of awards has been undergoing changes over the years, in view of the focus of technology implementation at that time and the need to recognize and encourage a particular aspect of technology implementation. In the initial period, the Awards were given for implementation of branch computerization, Implementation of email Services, INFINET usage and applications, ATM networks, internet banking, etc. Gradually, the newer categories such as Information Security, IT Governance, Financial Inclusion, Customer Relationship Management etc., were covered. Extension of technology to semi-urban and rural areas has also been in focus in several years’ awards. (Technology in banking-insight and foresight by IDRBT established by RBI).
2) A study on the Internet users, conducted by Internet and Mobile Association of India (IAMAI), found that about 23% of the online users prefer IB as the banking channel in India, second to ATM which is preferred by 53%. Out of the 6,365 Internet users sampled, 35% use online banking channels in India. This shows that a significant number of online users do not use IB, and hence there is a need to understand the reasons for not using it. In the study by IAMAI, it was found that the people are not doing financial transactions on the banks’ Internet sites in India because of reasons such as security concerns (43%), preference for face-to-face transactions (39%), lack of knowledge about transferring online (22%), lack of user friendliness (10%), or lack of the facility in the current bank (2%). (International Arab Journal of e-Technology, Vol. 2, No. 1, January 2011).
3) At present, there are three major statutes or guidelines governing e-finance operations within India, notably, The Information Technology Act, 2000; The Information Technology (Certifying Authorities) Rules 2000; and Central Bank (Reserve Bank of India (RBI)) guidelines on Internet Banking in India. The RBI guidelines have defined the operational frame work on internet banking with a focus on security issues. Though the RBI has mandated that the commonly used PKI technology standard should be followed, no compulsory timeframe has been set for the same so far. However, the guidelines detail the organizational, operational, and supervisory structures that banks will have to implement while offering internet banking. The IT Act 2000 and the IT Rules for Certifying Authorities lay down the framework for appointment of digital certifying authorities, acceptance of digital signatures, etc. , which would enable the orderly development of cyber business [Sushant Kumar 2001].However, there is a feeling that the Act has not given enough power to safeguard E-banking from frauds and complexities. With many sites getting hacked and content being changed, it is felt that the IT Act should have given more powers to deal with the complexities of the virtual world.( Economic and Political Weekly December 27, 2003)
Chapter-3
Scope of
study
I done my dissertation in Preet Vihar,Delhi from 13.12.2012 to 12.02.2013.In the project I got exposure and details about internet banking services which helped me to increase my existing domain knowledge about internet banking,But due to limited time frame I was not able to compare it with m-banking.
The proposed research study is to be centered around fulfilling the following objectives:
1) To check the awareness of Internet banking among Preet Vihar residents.
2) To identify the factors influencing awareness levels.
3) To develop the strategy to increase the awareness level.
H1-The residents of Preet Vihar are not aware of Internet banking.
Ho-The level of awareness is independent of the age of the respondent.
H1-The level of awareness is dependent on age of the respondent.
H0-The level of awareness is independent of educational background of the respondent.
H1-The level of awareness is dependent on educational background of the respondent.
H0-The level of awareness is independent of income of the respondent.
H1-The level of awareness is dependent on income of the respondent.
H0-The level of awareness is independent of gender of the respondent.
H1-The level of awareness is dependent on gender of the respondent.
Target Population-Universe or the whole mass under study will be Preet Vihar residents.
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.
D) Method of Data Collection- Primary data
E) Tools of Data Collection- Questionnaire
F) 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.
Graph-1 Age group
18-30
73
31-40
55
41-50
47
50 & above
25
In my survey 36% of the respondents were from the age group 18-30 , 27% were from age group 31-40, 24% were from 41-50 and 13% were above 50.
Chi-Square Test
Observed Frequency (O)
Expected Frequency (E)
(O-E)
(O-E)^2
(O-E)^2/E
73
50
23
529
10.58
55
50
5
25
0.5
47
50
-3
9
0.18
25
50
-25
625
12.5
∑ (O-E^2/E)=23.76
Significance Level=5% Confidence Level=95%
Degrees of Freedom=3
Tabulate Value=7.82
Since the calculated value is more than given value we reject the null hypothesis and accept the alternative hypothesis that the level of awareness is dependent on age of the respondent
Graph-2 Gender
Male
120
Female
80
In my survey 60% of the respondents were males and 40% were females.
Chi -square Test
O
E
(O-E)
(O-E)^2
(O-E)^2/E
120
100
20
400
4
80
100
-20
400
4
∑ (O-E^2/E)=8
Significance Level=5% Confidence Level=95%
Degrees of Freedom=1
Tabulate Value=3.84
Since the calculated value is more than given value we reject the null hypothesis and accept the alternative hypothesis that the level of awareness is dependent on gender of the respondent.
Graph-3 Educational Qualification
graduate
114
Post graduate
48
Non graduate
23
others
15
In my survey 57% of the respondents were graduates , 24% were post graduates ,11% were non graduates and 8% were others.
Chi-Square Test
Observed Frequency (O)
Expected Frequency (E)
(O-E)
(O-E)^2
(O-E)^2/E
114
50
64
4096
81.92
48
50
-2
4
0.08
23
50
-27
729
14.58
15
50
-35
1225
24.5
∑ (O-E^2/E)=121.08
Significance Level=5% Confidence Level=95%
Degrees of Freedom=3
Tabulate Value=7.82
Since the calculated value is more than given value we reject the null hypothesis and accept the alternative hypothesis that the level of awareness is dependent on educational background of the respondents.
Graph-4 monthly Income
Upto 20000
26
20001-50000
64
50001-80000
80
Above 80000
30
In my survey 40% of the respondents were having monthly income upto 50001-80000, 15% were from high income group that is of monthly income of above 80000 , 32% were from income group of 20001-50000 and 13% were from income group of upto 20000.
Chi-Square Test
Observed Frequency (O)
Expected Frequency (E)
(O-E)
(O-E)^2
(O-E)^2/E
26
50
-24
576
11.52
64
50
14
196
3.92
80
50
30
900
18
30
50
-20
400
8
∑ (O-E^2/E)=41.44
Significance Level=5% Confidence Level=95%
Degrees of Freedom=3
Tabulate Value=7.82
Since the calculated value is more than given value we reject the null hypothesis and accept the alternative hypothesis that the level of awareness is dependent on income of the respondents.
Graph-5
Have a bank A/c
yes
184
no
16
In my survey 92% of the respondents were having bank a/c whereas 8% of the respondents still do not have bank a/c.
Graph-6
Have a bank a/c in:
Private sector bank
61
Public sector bank
82
Both of these
41
In my survey 45% of the respondents were having bank a/c in public sector bank , 33% of the respondents were having bank a/c in private sector bank and 22% were having in both of these.
Graph-7
Type of a/c have:
Savings a/c
110
Basic saving bank a/c
6
Fixed deposits
40
Current a/c
28
In my survey 60% of the respondents were having savings a/c , 22% were having FD’s , 15% were having current a/c and 3% were having basic savings bank a/c.
Graph-8
level of awareness about NEFT
Excellent
25
Good
21
Average
64
poor
44
Very poor
30
In my survey 35% of the respondents were having average knowledge about the NEFT , 24% were having poor knowledge , 16% were having very poor knowledge , 14% were having excellent knowledge and 11 % were having good knowledge about NEFT.
Graph-9
Level of awareness about RTGS
Excellent
20
Good
23
Average
78
poor
36
Very poor
27
In my survey 42% of the respondents were having average knowledge about the RTGS , 20% were having poor knowledge , 15% were having very poor knowledge , 12% were having good knowledge and 11 % were having excellent knowledge about RTGS.
Graph-10
Level of awareness about internet banking
Excellent
43
Good
62
Average
23
poor
22
Very poor
34
In my survey 34% of the respondents were having good knowledge about the internet banking , 23% were having excellent knowledge , 18% were having very poor knowledge , 13% were having average knowledge and 12 % were having poor knowledge about internet banking.
Graph-11
Level of awareness about m banking
Excellent
51
Good
43
Average
26
poor
45
Very poor
93
In my survey 36% of the respondents were having very poor knowledge about the m-banking , 20% were having excellent knowledge , 17% were having good knowledge , 10% were having average knowledge and 17 % were having poor knowledge about m-banking.
Graph-12
Level of awareness about ATM
Excellent
87
Good
34
Average
31
poor
20
Very poor
12
In my survey 47% of the respondents were having excellent knowledge about the ATM, 18% were having good knowledge , 17% were having average knowledge , 11% were having poor knowledge and 7 % were having very poor knowledge about ATM.
Graph-13
Reason of unawareness about internet banking:
Lack of interest
11
Lack of need
9
Feel internet banking is unsafe
36
In my survey 56 respondents were having poor and very poor knowledge about internet banking.so out of these 56 respondents 64% feels that internet banking is unsafe, 20% do not have interest in internet banking and 16% do not need internet banking.
After analyzing and interpreting data I feel banks can still do a lot to improve the level of awareness of internet banking.
Banks to all their existing customers must tell about this new time saving banking mechanism.
Most of the respondents felt internet banking is unsafe so to overcome it banks must start a campaign to make customers realize internet banking is safe if precaution measures are taken.
Banks must make people realize that by using this facility a customer can do 24*7 banking which was not possible earlier.
Also the way technology has spread it’s high time that banks start pushing customers towards internet banking as it is easier for banks to trace it.
Higher income level respondents are using this facility but due to technological enhancement banks must make middle income level consumer realize this technology is for them also.
Banks can spread awareness by interacting with existing as well as potential customers who comes to their branch.
www.scribd.com
www.rbi.org.in
http://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/21595.pdf
http://www.iibms.org/pdf/Ebooks/E-Banking%20Management.pdf
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