Internet Banking

Presented by-
Ayush Dixit
 What is Internet banking?
A system allowing individuals to perform banking
activities at home, via the internet.
The automated delivery of new and traditional banking
products and services directly to customers through
electronic, interactive communication channels.

Some online banks are traditional banks which also

offer online banking, while others are online only and
have no physical presence.
Development of E-banking
The concept of Internet banking has been simultaneously
evolving with the development of the world wide web.
Programmers working on banking data bases came up with
ideas for online banking transactions, some time during the
1980's.

The online shopping promoted the use of credit cards

through Internet.
The first online banking service in United States was
introduced, in October 1994.
 The service was developed by Stanford Federal
Credit Union, which is a financial institution.

In May 1995 : Wells Fargo ‐ the first bank in the

world to offer customer access to their accounts
over the internet(allows customer to see their
accounts online)

The online banking services are becoming more and

more prevalent due to the well developed systems
© 2004 H. Weihrich Chap. 6. Decision Making
Development of E-
banking in India
ICICI was the first bank to initiate the Internet
banking revolution in India as early as 1997
under the brand name 'Infinity‘.

ICICI Bank kicked off online banking way

back in 1996 . But even for the Internet as a
whole, 1996 to 1998 marked the adoption
phase, while usage increased only in 1999-
due to lower ISP online charges, increased
PC penetration and a tech-friendly
atmosphere
RBI & E-Banking
The Reserve Bank of India constituted 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:- i) Information Only System: ii)
Electronic Information Transfer System:
iii)
Fully Electronic Transactional System:
 Information Only System
General purpose 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.
 Uses
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.
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 .
Automated Teller Machine
(ATM)
ATM is designed to perform the most
important function of bank.
It is operated by plastic card with its
special features.
The plastic card is replacing cheque,
personal attendance of the customer,
banking hours restrictions and paper
based verification
Different services provided
under e-banking
ONLINE BILL PAYMENT
SHOPPING
TICKET BOOKING PRE
PAID MOBILE
RECHARGE
INVESTMENT SERVICES
ONLINE APPLICATIONS
Service Provided By SBI
Self-account funds transfer across India.
Third party transfers in the samebranch
New account opening
New Cheque-book request Railway tickets
booking

Utility bill payments State Bank Of India

LIC and other insurance premium payments Credit card
dues payments
Deposit your taxes
Donations to Red Cross and such other organisations
Service Provided By ICICI
BILL PAYMENT FUND TRANSFER
ACCOUNT INFORMATION
SMART MONEY ORDER SERVICE REQUEST
CONVERT TO EMI A/C TO CARD TRANSFER
PREPAID MOBILE RECHARGE ACCOUNT
TRANSFER
Advantages of E-
banking
Benefits for Banks
Benefits for Small to Medium
Businesses
Benefits for Customers
BBenefits for
Banks
Larger customer coverage Reducing
the costs of operations
Promoting their services and
products internationally
Increasing the customer satisfaction
and providing a personalized
relationship with customers
Benefits for Small to
Medium Businesses
To run its operations more
effectively
Lower cost than traditional
financial management
mechanisms
Benefits for Customers
Convenience 24 hours a day, seven days a week
Cost Reducing transfer fees
Speed Faster circulation of assets
Competitiveness - Fostering competition in financial
market
Communicate easily Abolishing the uses of paper
Disadvantages OF E-banking
A need for customer skill to deal with computers and
browsers.
Many people who are not comfortable with computers and
the Internet, often find it difficult to use internet banking
For beginners, internet banking is really time consuming
In many instances, a simple mistake, like clicking a wrong
button, may create a big problem.
Security Risk
Increasing number of fraudulent bank websites
For Eg. A suspicious bank
website:www.sbionline.com Original bank
websitewww.onlinesbi.com
Fake emails purporting to be sent from banks
Email send from Fraudulent bank Verify the personal
information Guide customer enter the fraud link
Disclosing their ATM card numbers and their passwords
Persecutions For Bank
Should provide specific guidance to their
customers
Should take the adequate measures to
ward off any problems related to the
security of internet banking

Online banking tutorials should be

provided to help familiarize people with
internet banking
Persecutions For Customers
Should not disclose their customer IDs (e.g.,
account numbers) or passwords to
anyone else.
Periodically change their passwords Should
promptly log out from the service Should
regularly check their account balances and
statements to identify
unusual transactions.