CONSUMER ATTITUDE TOWARDS INTERNET BANKING

DECLARATION
It is hereby declared that all the work presented in this project report Consumer Attitude towards Internet Banking, to be submitted in fulfilment of the requirements of the award of the degree of MBA in I and !" by "uby Manchanda, "oll #o$ %&%' ( )**+, is an authentic record of her own work carried out under the guidance of ,rofessor -.r$/ ,awan 0arga, Marketing, !,1B2, !, 1ni3ersity, 2himla$

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"uby

Manchanda

CERTIFICATE
his is to certify that project report entitled Consumer Attitude towards Internet Banking, which is submitted by "uby Manchanda, "oll #o$ %&%' ( )**+, MBA -I and !"/, !,1B2, !, 1ni3ersity, 2himla, is an authentic record of the candidate5s work carried out by her under our guidance$ his project report or any part thereof has not been submitted to any uni3ersity or institution for the award of any other degree or diploma$

.r$ ,awan 0arga ,rofessor, ,roject 0uide, Marketing, !,1B2, !, 1ni3ersity, 2himla
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ACKNOWLEDGEMENT
I take the great pleasure to recall with gratitude the people who ha3e been instrumental for the successful completion of this project work$ I would like to e6press deep sense of gratitude to my project guide, .r$ ,awan 0arga, ,rofessor, Marketing, !,1B2, !, 1ni3ersity, 2himla for his 3aluable guidance without which the project would not ha3e been accomplished$ he project has pro3ided me with an opportunity to understand the fundamentals of research and to understand the attitude of people toward internet banking, how they percei3e the emergence of this new style and how it is changing the en3ironment of banking sector$ I am also indebted to all the teachers of !,1B2, !, 1ni3ersity, 2himla who ha3e helped me directly or indirectly in accomplishing this task$ I would also like to record my deep sense of gratitude to my entire family and friends, e67colleagues, without whose blessings and encouragement the project would not ha3e seen the daylight$ I would also like to thank all my respondents heartily for gi3ing me their 3aluable time and pro3iding me with the information needed to carry out the research successfully$ Anand, "ajpal, "attan, Amandeep and Aman ,al deser3e a special mention for helping me find interested respondents$ May 0od bless them all in all their endea3ours$

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"uby

Manchanda

CONTENTS Contents
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TABLE OF FIGURES
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EXECUTIVE SUMMARY
Banking has always has been a highly information intensi3e acti3ity that relies hea3ily on information technology -I / to acquire, process, and deli3er the information to all rele3ant users$ #ot only is I critical in the processing of information, it pro3ides a way for the banks to differentiate their products and ser3ices$ Banks find that they ha3e to constantly inno3ate and update to retain their demanding and discerning customers and to pro3ide con3enient, reliable, and e6pedient ser3ices$ .ri3en by challenge to e6pand and capture a larger share of the banking market, some banks in3est in more bricks and mortar to enlarge their geographical and market co3erage$ ;thers ha3e considered a more re3olutionary approach to deli3er their banking ser3ices 3ia a new mediumG the Internet$ >ith the rapid diffusion of the Internet, banking in cyberspace is fast becoming an alternati3e channel to pro3ide banking ser3ices and products$ he Internet is now being considered as a strategic weapon and will re3olutioniHe the way banks operate, deli3er and compete against one another, especially when competiti3e ad3antages of traditional branch networks are eroding rapidly$ Indeed, the emergence of Internet banking has prompted many banks to rethink their I strategies in order to stay competiti3e$ 9ustomers today are demanding much more from banking ser3ices$ hey want new le3els of con3enience and fle6ibility on top of powerful and easy to use financial tools and products and ser3ices that traditional retail banking could not offer$ Internet banking has allowed banks and financial institutions to pro3ide these ser3ices by e6ploiting an e6tensi3e public network infrastructure$ ;nline banking was, therefore, introduced as a channel where bank5s customers could perform their financial transactions electronically 3ia their bank5s >eb sites$ An online banking user is e6pected to perform at least one of the following transactions onlineG 9hecking account balance and transaction history ,aying bills ransferring funds between accounts

"equesting credit card ad3ances ;rdering checks Managing in3estments and stocks trading
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1sing the Internet is more efficient than using other distribution mediums because banks are looking for an increased customer base$ Internet also offers the deli3ery of customiHed ser3ices to suit the needs and the likes of each user$ It reduces cost and allows for spending time effecti3ely on business$ It also pro3ides for a con3enient and effecti3e way to manage finances that is easily accessible %* hours a day, se3en days a week$ In addition, information is up to date$ .espite the many potential benefits, many teething problems need to be addressed before Internet banking can become widely adopted$ hese include problems like teaching staff and customer how to work with technology, set7up costs, legal issues, and lack of personal contact with customers$ And from customer5s stand point, there are security and pri3acy issues$ hrough this research, an attempt has been made to find out the attitude of the customers towards Internet banking$ An analysis of the perception of the customers towards Internet banking re3ealed the 3arious considerations that are prime factors in determining the adoption and acceptance of this new system of banking$ he report is initiated with the understanding of the Internet banking, followed by the literature sur3ey, and detailed analysis of the data collected and interpretation of the results of analysis$

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INTRODUCTION
A big re3olution in the financial market, rapid re3olutions in communication market, e3olution of Internet and allied technologies, and all the recent modern, sophisticated state7of7the7art technology based ser3ices ha3e led to the banks adopting modern systems$ raditional paper7based banking had started becoming inefficient, dissatisfying for customers and restricting global presence$ <or many consumers, electronic banking means %*7hour access to cash through an automated teller machine -A M/ or .irect .eposit of pay7cheques into checking or sa3ings accounts$ 8lectronic banking, also known as electronic fund transfer -8< /, uses computer and electronic technology as a substitute for cheques and other paper transactions$ 8< s is initiated through de3ices like cards or codes that let you, or those you authoriHe, access your account$ Many financial institutions use A M or debit cards and ,ersonal Identification #umbers -,I#s/ for this purpose$ 2ome use other forms of debit cards such as those that require, at the most, your signature or a scan$ 8< is defined as any transfer of funds initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape or so as to order, instruct, or authoriHe a financial institution to debit or credit an account$ It utiliHes computer and telecommunication components both to supply and to transfer money or financial assets$ he trends in electronic banking system can be di3ided into categoriesG echnology oriented trends

9ustomer5s trends in adoption of electronic banking >ork on 8< can be segmented into three broad categoriesG Banking and <inancial systems I a :arge scale or wholesale payments -bank to bank transfer/ b 2mall scale or retail payments -automated teller machines and cash dispensers/ c !ome banking -bill payment/ "etailing payments I a 9redit cards -AI2A or Master9ard/ b ,ri3ate label credit ( debit cards -E$9$ ,enney 9ard/ c 9harge cards -American 86press/
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 ;n7line electronic commerce payments a oken I based payment systems i Electronic cash (DigiCash)

ii Electronic cheques (NetCheque) iii Smart cards or debit cards b 9redit I card based payment systems i Encrypted credit cards (World Wide Web form based ecryption)

ii Third party authori ation numbers (!irst "irtual) hus, 8< offers se3eral ser3ices that consumers may find practical$ A few distribution channels for electronic banking are discussed as followsG

Automated eller Machines or %*7hour ellers -A Ms/ are electronic terminals that let a person bank almost any time$ o withdraw cash, make deposits, or transfer funds between accounts, one has to generally insert an A M card and enter the ,I#$ 2ome financial institutions and A M owners charge a fee, particularly to consumers who don5t ha3e accounts with them or on transactions at remote locations$ .irect .eposit lets one authoriHe specific deposits, such as pay7cheques and 2ocial 2ecurity cheques, to his ( her account on a regular basis$ ;ne also may pre7authoriHe direct withdrawals so that recurring bills, such as insurance premiums, mortgages, and utility bills, are paid automatically$ ,ay7by7,hone 2ystems allow a person to call a financial institution with instructions to pay certain bills or to transfer funds between accounts$ ;ne must ha3e an agreement with the institution to make such transfers$ ,ersonal 9omputer Banking allows handling many banking transactions 3ia a personal computer$ <or instance, one can use his computer to 3iew the account balance, request transfers between accounts, and pay bills electronically$ he credit cards are the electronic cards used to obtain credit at the time of purchasing articles or ser3ices$ It is widely belie3ed by the customers that the interest rates on credit cards are 3ery high and as a result their use by general public is limited$ .ebit 9ard ,urchase ransactions are carried out by making purchases with a debit card, which also may be an A M card$ his could occur at a store or business, on the Internet or online, or by phone$ he process is similar to using a credit card, with some important e6ceptions$ >hile the process is fast and easy, a debit card purchase transfer5s money 7 fairly quickly 7 from the
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bank account to the company5s account$ 2o it5s important to ha3e funds in one5s account to co3er the purchase$ his requires the keeping of accurate records of the dates and amounts of the debit card purchases and A M withdrawals in addition to any cheques one writes$ he debit card information should be accessed or used only at safe known stores, to a3oid the possible loss of funds through fraud$ he A M cum debit card ser3ice is the prime facility being a3ailed by many customers$

8lectronic 9heque 9on3ersion con3erts a paper cheque into an electronic payment in a store or when a company recei3es a cheque in the mail$ In a store, when customer gi3es his cheque to a cashier, the cheque is run through an electronic system that captures the banking information and the amount$ he customer is asked to sign a receipt and get a copy for his records$ >hen the cheque has been handed back, it should be 3oided or marked by the merchant so that it can5t be used again$ he merchant electronically sends information from the cheque -but not the cheque itself/ to the bank or other financial institution, and the funds are transferred into the merchant5s account$ >hen the customer mails7in a cheque for payment to a merchant or other company, they may electronically send information from the cheque -but not the cheque itself/ through the system, and the funds are transferred into their account$ <or a mailed cheque, a customer should still recei3e ad3ance notice from a company that e6pects to send the cheque information through the system electronically$ he merchant or other company might include the notice on monthly statements or under its terms and conditions$ he notice also should state if the merchant or company will electronically collect a fee from the account J like a bounced cheque fee J if the funds are insufficient to co3er the transaction$ he Internet Banking 2er3ice is also emerging as one of the most popular channel$ his medium pro3ides the banking ser3ices through the medium of Internet$ 2ometimes, the ser3ices are pro3ided through a web7page, sometimes by installing the software on the customers5 system and sometimes by accessing the ser3ices through mobile phones$

hus, banks ha3e traditionally been in the forefront of harnessing technology to impro3e the products, ser3ices and efficiency$ hey ha3e, o3er a long time, been using electronic and telecommunication networks for deli3ering a wide range of 3alue added products and ser3ices$ he deli3ery channels include direct dial I up connections, pri3ate networks, public networks etc and the de3ices include telephone, ,ersonal 9omputers including the Automated eller Machines, etc$ >ith the popularity of ,9s, easy access to Internet and >orld >ide >eb ->>>/, Internet is increasingly used by banks as a channel for recei3ing instructions and deli3ering their products and ser3ices to their customers$ his form of banking is generally referred to as Internet Banking, although the range of products and ser3ices offered by different banks 3ary widely both in their content and sophistication$ Broadly, the le3els of banking ser3ices offered through Internet can be categoriHed in to three typesG

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he Basic :e3el 2er3ice is the banks5 websites which disseminate information on different products and ser3ices offered to customers and members of public in general$ It may recei3e and reply to customers5 queries through e7mail$

In the ne6t le3el are 2imple ransactional >ebsites which allow customers to submit their instructions, applications for different ser3ices, queries on their account balances, etc, but do not permit any fund7based transactions on their accounts$ he third le3el of Internet banking ser3ices are offered by <ully ransactional >ebsites which allow the customers to operate on their accounts for transfer of funds, payment of different bills, subscribing to other products of the bank and to transact purchase and sale of securities, etc$

he abo3e forms of Internet banking ser3ices are offered by traditional banks, as an additional method of ser3ing the customer or by new banks, who deli3er banking ser3ices primarily through Internet or other electronic deli3ery channels as the 3alue added ser3ices$ 2ome of these banks are known as K3irtual5 banks or KInternet only5 banks and may not ha3e any physical presence in a country despite offering different banking ser3ices$ hus, Internet banking means that the banking ser3ices such as ser3ices introduction, loan application, account balance enquiry, fund transfer and so forth are pro3ided by a bank through the Internet$ Internet banking has e3ol3ed into a one step ser3ice and information unit that promises great benefits to both banks and consumers$ According to Michael =arlin, the ,resident and 9hief ;peration ;fficer of the world5s first 3irtual bank, 2ecurity <irst #etwork Bank, the idea of Internet Banking is as follows I ;ne does not ha3e to purchase any software, store any data on computer or back up any information, since all the transactions occur on the bank ser3er o3er the infrastructure of the Internet$ ;ne can conduct the banking ser3ices anywhere one likes but needs to ha3e a computer and a modem$ he banking facilities will be a3ailable %* hours a day, + days a week, and &'? days a year$ ;ne does not ha3e to reconcile bank statements or track manually the A M or paper cheques$

<rom the perspecti3e of banking products and ser3ices being offered through Internet, Internet banking is nothing more than traditional banking ser3ices deli3ered through an electronic communication backbone, 3iH, Internet$ But, in the process it has thrown open issues which ha3e ramifications beyond what a new deli3ery channel would normally en3isage and, hence, has compelled regulators world o3er
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to take note of this emerging channel$ 2ome of the distincti3e features of internet banking areG It remo3es the traditional geographical barriers as it could reach out to customers of different countries ( legal jurisdiction$ his has raised the question of jurisdiction of law ( super3isory system to which such transactions should be subjected$ It has added a new dimension to different kinds of risks traditionally associated with banking, heightening some of them and throwing new risk control challenges$ 2ecurity of banking transactions, 3alidity of electronic contract, customers5 pri3acy, etc$, which ha3e all along been concerns of both bankers and super3isors ha3e assumed different dimensions gi3en that Internet is a public domain, not subject to control by any single authority or group of users$ It poses a strategic risk of loss of business to those banks who do not respond in time, to this new technology, being the efficient and cost effecti3e deli3ery mechanism of banking ser3ices$ A new form of competition has emerged both from the e6isting players and new players of the market who are not strictly banks$ Internet Banking is a product of e7commerce in the field of banking and financial ser3ices$ In what can be described as B%9 domain for banking industry, Internet Banking offers different online ser3ices like balance enquiry, requests for cheque books, recording stop7payment instructions, balance transfer instructions, account opening and other forms of traditional banking ser3ices$ Mostly, these are traditional ser3ices offered through Internet as a new deli3ery channel$ Banks are also offering payment ser3ices on behalf of their customers who shop in different e7shops, e7malls etc$ he transfer of customers5 funds inter7branch, intra7branch, inter7bank le3el forms the core and life of Internet banking$ he customisation in Internet banking allows the changes in formats of dates, currency, colour schemes etc$ <urther, different banks ha3e different le3els of such ser3ices offered, starting from le3el7) where only information is disseminated through Internet to le3el7& where online transactions are put through$ here are factors like a3ailability of electronic and internet banking ser3ices, con3enience, prompt banking ser3ices, location, and wider network are the prime factors that would help in selection of Internet banking ser3ices$ Internet banking is still in nascent and infantile stage and is being a3ailed by relati3ely few customers$ Aarious studies and researches ha3e re3ealed that majority of customers are I sa33y and usually well I educated$ he customers5 ha3e to be encouraged to use this cost7effecti3e, user7friendly deli3ery channel$ All categories of customers desire con3enient, prompt and user7friendly modern banking ser3ices$ he more ad3anced electronic and Internet based banking ser3ices like core banking solutions, real time gross settlement system allow on7demand a3ailability of computerised banking ser3icesL user7friendliness of bank5s websiteL promptness in issue of passbooks, chequebooksL updating of passbookL quickness in issue of
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demand draftsL clearance of outstation chequesL generation of financial statementsL a3ailability of informationL transfer of funds from one account to anotherL time taken to respond customers5 queriesL transaction completion timeL a3ailability of alerts to usersL adoption of security measures$ his also helps to ascertain the satisfaction le3el of a customer$ Internet security measures are 3ery essential for secure transactions between customer and main bank ser3ices$ hese co3er both the access le3el and application le3el security and include passwords, digital signatures, socket layers, management of session times$ his is essential to boost the confidence le3el of customers and needs proacti3e support from financial as well as go3ernment ends to bridge the digital gap$ 9redibility -trustworthy source, author5s credentials, e3idence of quality control, respected authority, organiHational support/, accuracy -up to date, factual, detailed, e6act, comprehensi3e, completeness, accuracy/, reasonableness -fair, balanced, objecti3e, no conflict of interest, absence of fallacy,/, support -listed sources, contact information, a3ailable corroboration, claims supported, documentation supplied/, challenge -who says so, why should I belie3e, who are the target audience/, adapt -find robust e3idence before adapting to the information/, file -file information and gain knowledge/, e3aluate -as circumstances change/ are the check points for any internet banking system$ he goal of this checklist is to pro3ide a quality internet banking facility to customers$

TYPES OF INTERNET BANKING

According to Aladwani -%44)/ different forms of online banking are web7based banking where a customer can access his or her account-s/ when he or she uses the InternetL second form of online banking is where a bank customer uses a modem to dial7up to a bank5s ser3er to access his or her bank account-s/$ he later type of online banking is known as dial7up banking$ A special type of dial7up banking is called an 86tranet, a pri3ate network between a bank and its corporate customers$ hulani et al -%44C/, Bibin -%44&/ and .iniH -)CCD/ identify three functional le3el(kinds of internet banking that are currently employed in the market place and these areG Informational, 9ommunicati3e and ransactional$

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Figure 1 TYPES OF INTERNET BANKING

In ormationa! "#e$sites% 7 his has been identified as the first le3el of internet banking$ ypically the bank has the marketing information about the bank5s products and ser3ices on a standalone ser3er$ he risk is 3ery low as informational systems typically ha3e no path between the ser3er and the bank5s internal network$ Informational Internet banking simply means the bank pro3ides basic information about its products and ser3ices, much like a brochure$ his is meant for marketing purposes only, and there is no connection to the bankMs main computer systems$ his le3el of Internet banking can be offered by the bank or outsourced$ >hile the risk to a bank is rather low, the ser3er or >eb site may be susceptible to adjustment$ o pre3ent unauthoriHed alterations to the bankMs ser3er or web site, appropriate controls therefore must be in place$ Communi&ati'e(Sim)!e transa&tiona! "#e$sites% 7 his type of internet banking allows some interaction between the bank5s systems and the customer$ he interaction is limited to e7mail, account inquiry, loan application or static file updates -name and address/$ It does not permit any funds transfers$ 9ommunicati3e online banking allows for some communication between the patron and bank$ !owe3er, this is typically limited to fundamental
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interactions such as account inquiries, new account updates, loan or mortgage applications, contact information updates and balances$ 9ommunicati3e online banking may connect with the bankMs main computer systems$ he risk is higher with this configuration than with informational systems since these ser3ers may ha3e a path to the bankMs internal networks$ o pre3ent, monitor, and alert management of any illegal attempt to access the bankMs internal networks and computer systems, appropriate controls required to be in place$ In this en3ironment, 3irus controls also become much more critical$ Ad'an&ed Transa&tiona! "#e$sites% 7 his le3el of internet banking allows bank customers to electronically transfer funds to(from their accounts, pay bills and conduct other banking transaction online$ he most popular online banking type, transactional Internet banking offers all of the benefits of a traditional brick7and7mortar institution$ his includes full control o3er your accounts 7 deposits, withdrawals, transfers, updates and online payments$ Increased security measures now make Internet banking safe, secure and con3enient, especially in the case of mobile online banking$ his is the highest risk architecture and must ha3e the strongest controls, since a path normally e6ists between the ser3er and the bankMs or outsourcerMs internal network$

CHOOSING AN INTERNET ACCOUNT

2ecurity is an important issue for internet accounts$ Internet banking can be highly secure but you need to be aware of safety precautions to take$ Always take the time to read the small print too I it takes a few minutes, but it should help you understand the ser3ice$ ypes of internet bank accounts and ser3ices includeG 9urrent Accounts I All the con3eniences of a regular current account, including credit and debit cards, cheque books and regular statements 9urrent Accounts I with specific benefits -for instance, roadside reco3ery/ and a small monthly fee to pay All in one and off7set accounts 2tudent accounts :oan appro3al 2a3ings Accounts I <a3ourable interest rates because the o3erheads are reduced$

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 2a3ings Accounts I Including those with tiered rates depending on the sa3ings amount I2As and mini7I2As Mortgages 2hare rading 8thical In3estments Insurance 2er3ices Business Bank Accounts

BUSINESS CONSIDERATIONS IN INTERNET BANKING

Internet banking can open a ,andora5s Bo6 of opportunities for financial institutions$ As soon as one bank begins Internet banking, other banks face the following quandary, Bou are either on the >eb, or you are risking being on the >ay$ Business considerations in Internet banking can be di3ided into three important factorsG 9lient focus, cost reduction and market e6pansion$

Figure * B+SINESS CONSI,ERATIONS IN INTERNET BANKING

CLIENT FOCUS

#ncrease Customer Satisfaction

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Internet banking allows customers to access banking ser3ices %* hours a day, + days a week$ :ike A Ms, Internet banking empowers customers to choose when and where they conduct their banking$ A .ynamic net report came to the conclusion that, the more deli3ery channels a bank offers and the more functions a3ailable on an Internet site, the more con3enient it becomes for customers to conduct business and the higher the rate of customer acquisition that a bank is likely to e6perience$ #ncrease Customer $etention ;ne of the important ad3antages of Internet banking is its ability to increase customer retention$ ;nline branches ha3e been shown to dramatically reduce the loss of customers due to relocation needs$

COST REDUCTION

A study by BooH Allen N !amilton, analyHed the transaction cost reductions that 1$2$ Internet banks gain$ According to this study, the cost per bank transaction for the customer 3aries from O)$4+ for full ser3ice branch transactions, to O4$?* for telephone transactions, and O4$4) for transaction 3ia the Internet$ :owered transaction costs are primarily due to two factorsG widespread Internet access and its low cost in the 1$2$ which minimiHes transaction processing costs, and the reduction of the number of brick and mortars branches required to ser3ice an equi3alent number of customers, which dramatically lowers o3erhead costs$

MARKET EXPANSION

Internet banking will allow credit institutions to make further inroads into new fields$ Indeed by co7operating for e6ample with I,2, telecom or software, Internet banks can take ad3antages of cross7selling effects, to offer personaliHed ser3ices to their customers and potentially win new customers$ In this conte6t, the financial supermarket concept has arisen, by which Internet banks, ha3e horiHontally integrated with other financial ser3ices to pro3ide their ser3ices on its platform and sometimes e6panded horiHontally to include non7financial ser3ices such as online shopping$

ADVANTAGES OF INTERNET BANKING

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In recent time internet banking has spread rapidly all o3er the globe$ All Banks are making greater use of internet banking facilities to pro3ide better ser3ice and to e6cel in competition$ he spread of internet banking has also greatly benefited the ordinary customer in general and corporate world in particular$ he following points summariHe benefits of Internet based e7banking$

ADVANTAGES TO THE CUSTOMER

Internet banking does offer many benefits for both banks and their customers$ 2o the banks are doing what they can to encourage customers to try it$
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An internet banking account is simple to open and use, just by entering a few answers to the questions in a form while sitting comfortably in home or office$ o access the account, 3arious security measures are established such as usernames and passwords$ o complete the set up of the account, one just prints, signs and sends in the form$ Internet banking costs less$ Because there are fewer buildings to maintain, and less in3ol3ement by salaried employees, there is a much lower o3erhead with online banks$ hese sa3ings allow them to offer higher interest rates on sa3ings accounts and lower lending rates and ser3ice charges$ 83en traditional brick and mortar banks offer better deals such as free bill paying ser3ices to encourage their customers to do their banking online$ 9omparing internet banks to get the best deal is easy$ In a short time, one can 3isit se3eral online banks to compare what they offer, sa3ings and checking account deals as well as their interest rates$ ;ther things one can easily research are what credit cards are a3ailable, credit card interest rates, loan terms and the banks own rating with the <.I9$ Bouncing a cheque -accidentally/ should be a thing of the past because one can monitor the account online any time, day or night$ ;ne can track the balance daily, see what cheques ha3e cleared and when and know when automatic deposits and payments are made$ his is all possible by simply going online to the banks website and logging into one5s account$ ;ne can keep his(her account balanced using personal computer and monthly statement$ he bank account information can be downloaded into software programsL making is easy to reconcile the account with just a few mouse clicks$ he con3enience of the data capture online makes it much easier to budget and track where the money goes$ he internet bank account e3en allows one to 3iew copies of the cheques one has written each month$

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>ith the ability to 3iew the account at anytime, it is easier to catch fraudulent acti3ity in the account before much damage is done$ As soon as one logs into the account, one will quickly see whether there is anything amiss when one checks on the deposits and debits$ If anyone writes a cheque or withdraws funds from the account, one will see it right away$ his lets one to get started on correcting the problem immediately rather than ha3ing to wait to recei3e a clue that it is happening as would be the case with a traditional bank$ Internet banking offers a great deal more con3enience than one could get from a con3entional bank$ ;ne is not bound by MbankerMs hoursM and physical presence is not required$ ime is not wasted when one has work to do because one can do the banking without lea3ing the office$ #o matter where one is or what time it is, one can easily manage the money$ It reduces the pressure to stand in long queues and is 3ery time sa3ing$ 9on3enience$ 1nlike any normal physical bank, online banking sites ne3er close$ heyMre a3ailable %* hours a day, se3en days a week, &'? days a year and theyMre only just a mouse click away$ 1biquity$ If one is out of station or e3en out of the country on a tour or on an official trip, and suddenly a money problem arises, all one has to do is log on to the internet and transfer funds from one account to another and take care of personal needs and business %* (+$ ransaction speed$ ;nline banking initiates speedy transactions and they are 3ery cost effecti3e and are generally quicker than the transactions conducted at the A M5s or at the bank$ 8fficiency$ <ree to access, manage and control all the bank accounts, including Indi3idual "etirement Accounts, 9.s, e3en securities, from one secure site, the indi3iduals can efficiently manage their money$ 8ffecti3eness$ Managing the money, in3estment, bank accounts without e3en going to the bank, getting email and wireless alerts on 3arious transactions, getting the statements online, making bill payments on7line and transferring funds, all for free, has made the banking highly effecti3e$

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0eneral consumers ha3e been significantly affected in a positi3e manner by internet banking$ Many of the ordinary tasks ha3e now been fully automated resulting in greater ease and comfort$
9ustomer5s account is e6tremely accessible with an online account$ 9ustomer can withdraw can at any time through A Ms that are now widely

a3ailable throughout the country$

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 Besides withdrawing cash customers can also ha3e mini banks statements,

balance inquiry at these A Ms$

hrough Internet Banking, customer can operate his account while sitting in his office or home$ here is no need to go to the bank in person for such matter$ no need to stand in long queues outside banks for this purpose$

Internet banking has also greatly helped in payment of utility bill$ #ow there is

All ser3ices that are usually a3ailable from the local bank can be found on a

single website$

he growth of credit card usage also owes greatly to internet banking$ #ow a customer can shop worldwide without any need of carrying paper money with him$ mouse click away$

Banks are a3ailable %* hours a day, se3en days a week and they are only a

ADVANTAGES TO THE BANK

Banking industry has also recei3ed numerous benefits due to growth of internet banking infrastructure$ here are highlighted belowG

he growth of internet banking has greatly helped the banks in controlling their o3erheads and operating cost$

Many repetiti3e and tedious tasks ha3e now been fully automated resulting in greater efficiency, better time usage and enhanced control$

he rise of internet banking has made banks more competiti3e$ It has also led to e6pansion of the banking industry, opening of new a3enues for banking operations$ work, thus helping them to mo3e the paper less en3ironment$

Internet banking has greatly helped the banking industry to reduce paper

Internet banking has also helped bank in proper documentation of their

records and transactions$

he reach and deli3ery capabilities of computer networks, such as the Internet, are far better than any branch network$

Banks ha3e quickly le3eraged the capabilities of the Internet and >eb %$4 technologies and adopted the online banking model$ 83ery mainstream bank now offers a host of banking ser3ices and products to an e3er increasing base of
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customers$ hrough online banking, banks ha3e been able to reach out to millions of customers not in their geographical area of operations and offer more products and a relati3ely better, con3enient and fle6ible banking e6perience than that pre3alent in traditional, fi6ed7location branches$ he benefits can be studied in the following broad categoriesG -ore Customers . hrough online banking, better ser3ice le3els and strategic marketing initiati3es, banks are able to reach out to more customers than possible through traditional banking through physical location branches$ On!ine On!/ Produ&ts and Ser'i&es . :e3eragability and amenability of new technologies, tools and widespread broadband Internet acceptance, has made it possible for banks to offer a whole host of online only products and ser3ices to customers, such as 9.s, e7bank statements, financial calculators, and personal finance news feeds$ Broader Customer Base . Banking online has afforded customers user7 friendly features of >ebsites, robust security technologies, pri3acy protection measures, and mainstream Internet acceptance$ Banks can reach out to a broader customer base beyond the geographical confines of their locations or base operations$ Attra&ti'e Rates and In&enti'es . Better management practices, consolidated operations and streamlined sa3ings from managing and deli3ering online banking ser3ices allow banks to offer attracti3e rates and other incenti3es to customers$ Cost Sa'ings . Banks sa3e a significant amount of operational capital from not ha3ing to open brick and mortar branches in new locations and far7flung areas$ hese sa3ings are passed onto the consumer in the form of reduced or no fees for inter7bank and e3en intra7bank money transfers, no fees for online payment of utilitiesM bills, and cash7back options on frequent use of online7 applied bank credit cards$ here are sound reasons why internet banking is growing$ he economic ad3antages ha3e encouraged banks to pro3ide an increasing range of easy to use ser3ices 3ia the internet$ 9ustomers ha3e found doing business online simple and speedy and ha3e become 3ery comfortable with the arrangement$ Internet banking gi3es people more control o3er their money in a 3ery con3enient way that they find enjoyable and reassuring$

DISADVANTAGES OF INTERNET BANKING

Internet banking ser3ices pro3ide a number of benefits to consumers$ But while it has its ad3antages, customers wishing to join the trend need to know its disad3antages as well$ .espite the growing popularity of internet banking, it cannot be denied that some people still remain hesitant doing transactions online especially where money is concerned$ Amidst the aggressi3e marketing made by the numerous
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financial institutions that ha3e gone online, some sectors of society are still doubtful about this type of banking notably on the aspect of security$ Major disad3antages can be listed as followsG Identit/ Con irmation . <ederal regulations require that financial institutions confirm each customerMs identity$ his may present a logistical issue, as copying and fa6ing documents is sometimes necessary$ Se&urit/ Con&erns . >ith hacking and identity theft on the rise, Internet banking customers ha3e to place a certain amount of trust in the bank that their account information and personal information are safe$ Customer Ser'i&e . If you bank at a traditional bank, you can go to the bank and speak to someone face to face about your problem but, with an Internet bank, you will likely spend a lot of time on the phone being passed around and placed on hold$ A&&essi$i!it/ . If the Internet goes down in your area or the area of the banking office, you will be unable to access your accounts$ his includes being unable to withdraw money from A Ms or to use your debit card$ Fees . Many Internet banks donMt ha3e A Ms, which means you will ha3e to pay A M fees$ his can cost you more money than paying the regular monthly fees at a brick and mortar bank$ Te&0ni&a! )ro$!ems . 2ome people a3oid using Internet banking ser3ices because they find it difficult to understand how it works$ Also, the fact that a wrong click can cause monetary losses may be a deterrent$ Pro1/ we$sites . A few cases of forgery ha3e been reported in online banking$ here are some fraudulent or pro6y websites, which can hack information -user name and password/ entered by a person for some transaction, and later misuse it$ In such cases, people lose their money without knowing and by the time, they get the bill, huge losses may ha3e been incurred$ Im)ersona! . .oing transactions on the internet can be 3ery impersonal$ In other words, you only do business with the use of a computer$ #o indi3idual to recei3e and check your money or correct some wrong information that you might ha3e written on a certain form$ And so for people comfortable dealing with real people who pro3ide personaliHed ser3ices and using paper and money, internet banking is not ideal$ 2a&k o trust . Many people still donMt trust the internet$ <or the new users who ha3e performed financial transactions for only a few times, they may still ha3e this doubt whether or not they did the right thing such as clicked the right
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button and so on$ hey can only be comfortable once they print the transaction receipt and the transaction appeared on the bank statement$ ,i i&u!t or irst timers . <or a first time user, na3igating through a website of an internet bank may be hard and may take some time$ ;pening an account could also take time as some sites ask for numerous personal details including a photo identification which can cause incon3enience to the potential customer$ Because of this comple6ity, they may be discouraged to use this internet banking ser3ice$ Bank site &0anges . Most banks upgrade their online programs on a periodic basis sometimes adding new features and products$ >hen this happens, the bank may ask customers to re7enter account information which can be a cause of worry$

RISKS ASSOCIATED WITH INTERNET BANKING

2ince its debut nearly two decades ago, online banking has become one of the fastest7growing Internet acti3ities$ But that growing popularity has also brought increasing an6iety o3er whether something as pri3ate and personal as a bank account can be fully protected in the relati3ely unregulated and un7policed world of the Internet$ >ithout doubt, using internet banking is usually an e6cellent decision but as with any type of ser3ice, it would be important to understand any potential risks associated with internet banking$ he greatest potential when banking online has to do with identit/ t0e t$ <or your identity to be stolen, hackers use a 3ariety of different ploys such as pharming, phishing, hacking, 3iruses, fraudulent transactions, and unauthoriHed access$ >hat happens is that once you ha3e been targeted, not only your personal information would be stolen but also your financial information$ <rom there, these thie3es can do serious damage by emptying your bank accounts, making purchases on credit under your name, etc$ 1nfortunately, trying to find the responsible parties is e6tremely difficult and once identity has been stolen, it takes many years to reco3er$ herefore, when choosing internet banking, the greatest risk is theft and most important decision has to do with online security$ Although all ploys are used, )0is0ing is the most common, especially when it comes to internet banking$ ypically, you would recei3e an email that looks like an official notice coming from your bank$ he bank5s letterhead might be used, actual names of bank e6ecuti3es, etc$ >ithin the email, you would be notified of some reason that you must immediately pro3ide confidential details or connect to a pro3ided link$ <or instance, the message may state that someone was trying to access your account and to protect your assets, immediate action is required$ 1nsuspecting people will gladly pro3ide the information being requested or follow the link where they are required to complete a form that also gi3es the crooks sensiti3e information$
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At home, you ha3e 'irus )rote&tion and a se&ured 0osting ser'i&e but when public computers are used, they go through open or public routers, which means anyone could gain access to that same connection and start capturing information, often through keystroke software$ In no time, these criminals would know where you bank, your account number, logon I., ,I#, etc$ <inally, )0arming is also 3ery dangerous when it comes to internet banking$ In this case, crooks will compromise a non7secure online financial institution so when a customer logs in to manage finances, they are quickly and without knowing redirected to a bogus site that looks identical to the real bank$ ;f course, as information is entered and money transactions completed, all the information is collected$ Ke/stroke !ogging is another common method of perpetrating online banking theft$ his literally in3ol3es the user5s keystrokes being recorded, in a number of ways, and then using this information to access accounts without authorisation and make fraudulent transactions$ o do this, the fraudsters may use software, hardware, keyboard sniffers, keyboard o3erlays or e3en optical sur3eillance like 3ideo cameras$ he information, re3ealed in the abo3e specified manners, is then captured by the fraudsters and used to make unaut0orised transa&tions on an account$ Banks and ser3ice pro3iders require guarding against 3arious types of online attacks$ he purpose of an attack may 3ary$ In operating systems of particular kind, attackers may try to e6ploit known 3ulnerabilities$ .uring a short time frame, they also may try to make an unauthoriHed entry into a >eb site repeatedly thus denying ser3ice to other customers$ ypes of attacks may includeG Sni ers 7 Also familiar as network monitors, this software is used to capture keystrokes from a specific ,9$ :ogon Ids and passwords may be captured with this software$ Guessing Passwords 7 >e can test all possible combinations to enter into a network using this software$
Brute For&e 7 A technique to capture encrypted messages then using

software to break the code and gain access to messages, user I.Ms, and passwords$
Random ,ia!!ing 7

o dial e3ery number on a known bank telephone e6change, this technique is used$ he purpose is to find a modem connected to the network$ his could then be used as a point of attack$ o gain information about the system along with changing password, an attacker calls the bankMs help desk impersonating an authoriHed user$ programmer or another person illegal entrance into the system or network$

So&ia! Engineering 7

Tro3an 0orse 7 A programmer can insert code into a system that will let the

4i3a&king . Attempting to deduce information from them there by intercepting

transmissions$ Internet traffic is particularly susceptible to this threat$

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>hile these threats are real and pose a serious risk to users of internet banking, it cannot be denied that online banking has benefits that outweigh the issues$ As long as users are aware of potential problems that may compromise their accounts, and take security seriously, these threats can be a3oided and users can enjoy the con3enience of online banking without falling 3ictim to frauds$ Because of rapid changes in information technology, there is no finality either in the types of risks or their control measures$ Both e3ol3e continuously$ he thrust of regulatory action in risk control has been to identify risks in broad terms and to ensure that banks ha3e minimum systems in place to address the same and that such systems are re3iewed on a continuous basis in keeping with changes in technology$ In the following paragraphs a generic set of risks are discussedG

Figure 5 RISKS ASSOCIATE, #IT4 INTERNET BANKING O)erationa! risk . ;perational risk, also referred to as transactional risk is the most common form of risk associated with Internet banking$ It takes the form of inaccurate processing of transactions, non enforceability of contracts, compromises in data integrity, data pri3acy and confidentiality, unauthoriHed access ( intrusion to bank5s systems and transactions etc$ 2uch risks can arise out of weaknesses in design, implementation and monitoring of banks5 information system$ Besides inadequacies in technology, human factors like negligence by customers and employees, fraudulent acti3ity of employees and crackers ( hackers etc$ can become potential source of operational risk$ ;ften there is thin line of difference between operational risk and security risk and both terminologies are used interchangeably$
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 Se&urit/ risk . 2ecurity risk arises on account of unauthoriHed access to a bank5s critical information stores like accounting system, risk management system, portfolio management system, etc$ A breach of security could result in direct financial loss to the bank$ <or e6ample, hackers operating 3ia the Internet could access, retrie3e and use confidential customer information and also can implant 3irus$ his may result in loss of data, theft of or tampering with customer information, disabling of a significant portion of bank5s internal computer system thus denying ser3ice, cost of repairing these etc$ In addition to e6ternal attacks banks are e6posed to security risk from internal sources e$g$ employee fraud$ 8mployees being familiar with different systems and their weaknesses become potential security threats in a loosely controlled en3ironment$ hey can manage to acquire the authentication data in order to access the customer accounts causing losses to the bank$ S/stem ar&0ite&ture and design . 9hoice of appropriate technology is a potential risk banks face$ echnology which is outdated, not scalable or not pro3en could land the bank in in3estment loss, a 3ulnerable system and inefficient ser3ice with attendant operational and security risks and also risk of loss of business$ Re)utationa! risk . "eputational risk is the risk of getting significant negati3e public opinion, which may result in a critical loss of funding or customers$ 2uch risks arise from actions which cause major loss of the public confidence in the banksM ability to perform critical functions or impair bank7customer relationship$ It may be due to banks5 own action or due to third party action$ he main reasons for this risk may be system or product not working to the e6pectations of the customers, significant system deficiencies, significant security breach -both due to internal and e6ternal attack/, inadequate information to customers about product use and problem resolution procedures, significant problems with communication networks that impair customers5 access to their funds or account information especially if there are no alternati3e means of account access$ 2uch situation may cause customer7 discontinuing use of product or the ser3ice$ .irectly affected customers may lea3e the bank and others may follow if the problem is publiciHed$ 2ega! risk . :egal risk arises from 3iolation of, or non7conformance with laws, rules, regulations, or prescribed practices, or when the legal rights and obligations of parties to a transaction are not well established$ 0i3en the relati3ely new nature of Internet banking, rights and obligations in some cases are uncertain and applicability of laws and rules is uncertain or ambiguous, thus causing legal risk$ -one/ !aundering risk . Application of money laundering rules may also be inappropriate for some forms of electronic payments$ hus banks e6pose themsel3es to the money laundering risk$ his may result in legal sanctions for non7compliance with know your customer laws$ Cross $order risk . It includes legal and regulatory risks, as there may be uncertainty about legal requirements in some countries and jurisdiction ambiguities with respect to the responsibilities of different national authorities$ 2uch considerations may e6pose banks to legal risks associated with non7 compliance of different national laws and regulations, including consumer protection laws, record7keeping and reporting requirements, pri3acy rules and money laundering laws$
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 Outsour&ing risk . he outsourcing of banking ser3ices ( operations contains certain elements of operational risks$ he dependence on third parties for business operations also increases operational risks$ he operational risks also tend to increase when banks choose different I partners$ Strategi& risk . his risk is associated with the introduction of a new product or ser3ice$ .egree of this risk depends upon how well the institution has addressed the 3arious issues related to de3elopment of a business plan, a3ailability of sufficient resources to support this plan, credibility of the 3endor -if outsourced/ and le3el of the technology used in comparison to the a3ailable technology etc$ Network risk . #etwork security is related to the securing of infrastructure used for storage and transmission of information$ It depends on the type of the data being transmitted$ ,ersonal data is considered e6tremely critical and companies e6pect adequate security measures to protect this$ 2o proper documentation, design and implementation of the network, firewalls, password protection, anti3irus on all the network, measures to pre3ent unauthoriHed access, secure connections, adequate encryption techniques, in7built security mechanisms in operating systems and locked rooms for ser3ers etc$ are part of network security measures$ here is use of hardware and software, certain policies on control and authentication$ P0/si&a! se&urit/ . It in3ol3es securing of building, work areas, de3ices and data in the form of documents through multiple7le3el access control systems, security guards, clear disk and clear screen policies, file suppression systems, temperature sensors, smoke7detectors, dedicated and isolated work areas, 3isitor5s policy, random bag checks, closed circuit tele3ision cameras -99 A/ etc$ Personne! se&urit/ . It is the arrangement made to address the potential threat arising from the employees of offshore 3endors$ Maintaining confidentiality and non7disclosure of agreements, terms and conditions of employment, policies regarding use of mobile phones, pens, papers etc$, background screening, training of information security, defined user access rights, policies and procedures, e7mail and internet access controls, e6tensi3e log monitoring form a part of personnel security measures$ Ot0er risks . raditional banking risks such as credit risk, liquidity risk, interest rate risk and market risk are also present in Internet banking$ hese risks get intensified due to the 3ery nature of Internet banking on account of use of electronic channels as well as absence of geographical limits$ Credit risk is the risk that a counter party will not settle an obligation for full 3alue, either when due or at any time thereafter$ Banks may not be able to properly e3aluate the credit worthiness of the customer while e6tending credit through remote banking procedures, which could enhance the credit risk$ Another facility of Internet banking is electronic money$ It brings 3arious types of risks associated with it$ 2i6uidit/ Risk arises out of a bank5s inability to meet its obligations when they become due without incurring unacceptable losses,
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e3en though the bank may ultimately be able to meet its obligations$ 2imilarly banks dealing in electronic money face interest rate risk because of ad3erse mo3ements in interest rates causing decrease in the 3alue of assets relati3e to outstanding electronic money liabilities$ Banks also face market risk because of losses in on7and7off balance sheet positions arising out of mo3ements in market prices including foreign e6change rates$ Risk o un air &om)etition is also there$ he open nature of Internet may induce a few banks to use unfair practices to take ad3antage o3er ri3als$ Any leaks at network connection or operating system etc$, may allow them to interfere in a ri3al bank5s system$

PRECAUTIONS FOR INTERNET BANKING

9ustomers should ne3er share personal information like ,I# numbers, passwords etc with anyone, including employees of the bank$ ,I# or password mailers should not be stored, the ,I# and(or passwords should be changed immediately and memorised before destroying the mailers$ 9hange your password regularly$ =eep your password a combination of alphabets, special characters and numbers$ It is important that documents that contain confidential information are safeguarded$ 9ustomers are ad3ised not to pro3ide sensiti3e account7related information o3er unsecured e7mails or o3er the phone$ ake simple precautions like changing the A M ,I# and online login and transaction passwords on a regular basis$ Also ensure that the logged in session is properly signed out$ 9ustomers should ne3er access their Internet banking accounts through hyperlinks embedded in e7mails, suspicious pop7up windows, or Internet search engines$ hey should instead access their bank accounts by typing the website addresses at the address bar of the browser, or by bookmarking the genuine website and using that function to access their accounts$ :og on to banks only from a secure computer$ #e3er log on from a public computer in a hotel or cafe, and be careful when logging on to unknown networks with a laptop$ A more secure 1": will begin with PhttpsG((P and be followed by the bank name$ Make sure the bankMs padlock is displayed in a corner of the site before you log on$ Icons for security companies would be 3isible on the home page$ >hile there are many, the most popular and effecti3e is Aeri2ign$ An icon, statement, or the actual company name would be clearly 3isible$
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9ustomers should be wary of opening une6pected e7mails with attachments, and should think twice before 3isiting suspicious websites$
9ustomers should install personal firewall software and anti73irus software, and should regularly download the latest updates a3ailable$ his software will help ward off attempts by fraudsters to plant harmful 3iruses or worms in personal computers$ =eep anti73irus and

anti7spyware software up to date$ 0i3en that passwords are commonly used as the basic factor of authentication, we recommend that banks adopt a second factor, which cannot be easily stolen by fraudsters, for customer authentication$ 86amples of second7factor authentication include digital certificates, one7time passwords generated by a security de3ice and 2M27based one7time passwords$ In addition, high7risk retail Internet banking transactions should at least include unregistered third7party fund transfers and payments, and change requests concerning customersM sensiti3e information -for e6ample a correspondence address/$ 1se keypad for logging when you are not using your own ,9$ here might be a risk of capturing your key stokes$ .onMt click on website links(attachments in un7known( suspicious emails$ hese links may take you to replica of bankMs website and ask for keying in your user7id N password-s/$ If you get a warning e7mail, call your bank 77 donMt click on any pro3ided links$ If your computer is acting strangely 77 for instance, reacting slowly or getting pop7ups 77 a3oid using it for online banking until you can get it checked out$ Be leery of fly7by7night, Internet7only banks with high interest rates on sa3ings or checking accounts$ Make sure the bank is certified and is insured$ And, most importantly, use a different user name and password for each financial account$ 8ducate yourself about the 3arious ways in which information is captured$ Being aware and recogniHing a ploy puts you in control$ It is necessary to check your internet banking account at regular inter3als$ he inter3als can be e3ery two or three days or at the most one or two weeks$ If you do not check your account for a long time, you may not come to know of what is happening to it$ If you find any discrepancy, inform the bank authorities at once$ Many banks send their account holders 2M2s regarding any acti3ity taking place at their account$ 2M2 alerts are also an important tool since any transaction carried out on account is reported to the account holder through as 2M2$ ,ut password on your computer as well and also the screen sa3er password$

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SWOT ANALYSIS OF INTERNET BANKING

2trengths of Internet banking lie in the following areas :arger network area for banks ,ri3ate data communication for internal use of banks 0reater reach to customers ;n7demand ser3ice for the customers ime sa3ing access to bank ser3ices

1niform, cost7effecti3e ser3ices 2tandardiHation of working procedures 8nables to recei3e feedback ,ro3ides competiti3e edge in the banking world Brings out transparency in the system Increased customer satisfaction -%* hours, + days con3enience/ Increased customer acquisition Increased customer retention -less loss of customers due to relocation needs/ 9ost reduction -reduced transaction costs, lower transaction processing costs, reduction in number of branches, lower o3erhead costs/ !elps in market e6pansion 9ustomiHation or personaliHation of ser3ices for customers Fuicker time to market Ability to introduce new products and ser3ices quickly and successfully Ability to understand its customers5 needs Access to information easily across any location 8asy online application for all accounts, personal loans, mortgages >eaknesses in this system Missing personal human touch
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 "equirement of huge in3estments for implementation #eed of e6pert staff "apid ad3ancements in technology render e6isting systems obsolete easily !igh risk 3ulnerability A3ailability of low potential customers :ow awareness among customers ;bsolescence of technology in terms of security on Internet :ack of knowledge Implementation of newer technology is little complicated ;pportunities a3ailable in this field ,ro3iding 3alue added, user7friendly and con3enient banking system 9ore competency can be de3eloped 9oncentration and integration of 3arious ser3ice deli3ery channels 0ain of efficiency and profitability 2tandardising ser3ices <aster flow and access of information .e3elop data warehouses and customer support ser3ices ,ro3isions for feedback Multi channel Internet banking to increase cost efficiency in transaction costs :ower entry barriers :eapfrogging low ,9 penetration .e3elopment of mobile internet banking solutions .isintermediation and commoditisation 83ol3ing customer efficient frontier Integrating emerging technologies 0reater customer loyalty
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hree

strategy I talent, technology, traffic

Fuality customer ser3ice with personal attention hreats and challenges to the system Maintaining business edge o3er competitors in the conte6t of sameness in I infrastructure Multiple 3endor support Maintaining alternati3e in case of failure of system 2horter life of technology :ack of technical e6pertise ;utsourcing, organisational, reputational, super3isory, location, operational, information security, systematic systemic and legal risks .igital di3ide .ecreased 3olume of some products because of commoditisation .i3erse, conflicting national regulations Maintaining secured I infrastructure for business operations ,romotion and ad3ertisement

INTERNET BANKING IN INDIA

Internet banking, which has gained wide acceptance internationally, both as a medium of deli3ery of banking ser3ices and as a strategic tool for business de3elopment, is fast catching up in India with more and more banks entering the fray$ India can be said to be on the threshold of a major banking re3olution with net banking ha3ing already been un3eiled$ ;ut of the *' banks sur3eyed by "BI, )) banks are pro3iding Internet banking ser3ices at different le3els, %% banks proposed to offer Internet banking in near future while the remaining )& banks ha3e no immediate plans to offer such facility$ he number of Internet users is growing e3ery year e6ponentially$ he growth potential is, therefore, immense$ <urther incenti3es pro3ided by banks would dissuade customers from 3isiting physical branches$ he facility of accessing their accounts from anywhere in the world by using a home computer with Internet connection, is particularly fascinating to #on7"esident Indians and high net worth Indi3iduals ha3ing multiple bank accounts$ 9osts of banking ser3ice through the Internet form a fraction of costs through con3entional methods$ he cost7conscious banks in the country ha3e therefore acti3ely considered use of the Internet as a channel for pro3iding ser3ices$ <ully computeriHed banks, with
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better management of their customer base are in a stronger position to cross7sell their products through this channel$
PRODUCTS AND SERVICES OFFERED

Banks in India are at different stages of the web7enabled banking cycle$ >ith the adoption of information technology, the banks put up a web7site that pro3ides a general information on the banks, its location, ser3ices a3ailable e$g$ loan and deposits products, application forms for downloading and e7mail option for enquiries and feedback, request for opening of accounts, requisition for cheque books, stop payment of cheques, 3iewing and printing statement of accounts, mo3ement of funds between accounts within the same bank, querying on status of requests, instructions for opening of :etters of 9redit and Bank 0uarantees etc$, facility of re3iew, receipt and payment of bills on7line, transactional facilities, online real time shopping etc$ 2ome banks ha3e tied up with computer training companies, computer manufacturers, Internet ser3ice pro3iders and portals for e6panding their #et banking ser3ices, and widening their customer base$ 2etting up of Internet kiosks and permeation through the cable tele3ision route to widen customer base are other priority areas in the agendas of the more aggressi3e players$ Banks pro3iding Internet banking ser3ices ha3e been entering into agreements with their customers setting out the terms and conditions of the ser3ices$ he terms and conditions include information on the access through user7id and secret password, minimum balance and charges, authority to the bank for carrying out transactions performed through the ser3ice, liability of the user and the bank, disclosure of personal information for statistical analysis and credit scoring also, non7transferability of the facility, notices and termination etc$ :eading banks ha3e announced the launch of mobile banking ser3ices$ 1nder Mobile Banking ser3ices, customers can scan their accounts to seek balance and payments status or instruct banks to issue cheques, pay bills or deli3er statements of accounts$ 0radually, the cellular phones will become the premier Internet access de3ice$ Mobile banking will further minimise the need to 3isit a bank branch$

THE FUTURE SCENARIO OF INTERNET BANKING IN INDIA

Indian banks offering online ser3ices still ha3e a long way to go$ <or online banking to reach a critical mass, there has to be sufficient number of users and the sufficient infrastructure in place$ Aarious security options like line encryption, branch connection encryption, firewalls, digital certificates, automatic signoffs, random pop7 ups and disaster reco3ery sites are in place or are being looked at$ here is as yet no 9ertification Authority in India offering ,ublic =ey Infrastructure which is absolutely necessary for online banking$ he customer can only be assured of a
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secured conduit for its online acti3ities if an authority certifying digital signatures is in place$ he communication bandwidth a3ailable today in India is also not enough to meet the needs of high priority ser3ices like online banking and trading$ Banks offering online facilities need to ha3e an effecti3e disaster reco3ery plan along with comprehensi3e risk management measures$ Banks offering online facilities also need to calculate their downtime losses, because e3en a few minutes of downtime in a week could mean substantial losses$ 2ome banks e3en today do not ha3e uninterrupted power supply unit or systems to take care of prolonged power breakdown$ ,roper encryption of data and effecti3e use of passwords are also matters that lea3e a lot to be desired$ 2ystems and processes ha3e to be put in place to ensure that errors do not take place$ he contract details are often one7sided, with the bank ha3ing the absolute discretion to amend or supplement any of the terms at any time$ <or these reasons domestic customers for whom other access points such as A Ms, telebanking, personal contact, etc$ are a3ailable, are often hesitant to use the Internet banking ser3ices offered by Indian banks$ he Internet is in the public domain whereby geographical boundaries are eliminated$ 9yber crimes are therefore difficult to be identified and controlled$ In order to promote Internet banking ser3ices, it is necessary that the proper legal infrastructure is in place$ #otwithstanding the abo3e drawbacks, certain de3elopments taking place at present, and e6pected to take place in the near future, would create an en3ironment conduci3e for online banking to flourish$ <or e6ample, Internet usage is e6pected to grow with cheaper bandwidth cost$ he .epartment of elecommunications -.o / is mo3ing fast to make a3ailable additional bandwidth, with the result that Internet access will become much faster in the future$ his is e6pected to gi3e a fillip to Internet banking in India$ 9ollecting and sharing credit information on borrowers of lending institutions online would gi3e a fillip to electronic banking$ Banks are mo3ing in for technological up gradation on a large scale$ Internet banking is e6pected to get a boost from such de3elopments$ "eser3e Bank of India has taken the initiati3e for facilitating real time funds transfer through the "eal ime 0ross 2ettlement -" 02/ 2ystem$ 1nder the " 02 system, transmission, processing and settlements of the instructions will be done on a continuous basis$ 0ross settlement in a real time mode eliminates credit and liquidity risks$ Any member of the system will be able to access it through only one specified gateway in order to ensure rigorous access control measures at the user le3el$ he system will ha3e 3arious le3els of security, 3iH$, Access security, )%D bit cryptography, firewall, certification etc$ <urther, 0eneric Architecture, both domestic and cross border, aimed at pro3iding inter7connecti3ity across banks has been accepted for implementation by "BI$ Banks ha3e been ad3ised to de3elop domestic generic model in their computeriHation plans to ensure seamless integration$ he abo3e mentioned efforts would enable online banking to become more secure and efficient$

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>ith the process of dematerialisation of shares ha3ing gained considerable ground in recent years, banks ha3e assumed the role of depository participants$ In addition to customers5 deposit accounts, they also maintain demat accounts of their clients$ ;nline trading in equities is being allowed by 28BI$ his is another area which banks are keen to get into$ ransfer of funds can be made through credit(debit( smart cards and cheques, with the central payment switch enabling the transactions$ Banks are showing interest in this new concept, which will facilitate inter7bank funds transfers and other e7 commerce transactions, thus highlighting the role of banks in e7commerce as intermediaries between buyers and sellers in the whole payment process$ >A, ->ireless Application ,rotocol/ telephony is the merger of mobile telephony with the Internet$ It offers two7way connecti3ity, unlike Mobile Banking where the customer communicates to a mailbo6 answering machine$ 1sers may surf their accounts, download items and transact a wider range of options through the cell phone screen$ >A, may pro3ide the infrastructure for ,%, -person to person/ or ,%M -person to merchant/ payments$ It would be ideal for transactions that do not need any cash backup, such as online in3estments$ 1se of this cutting edge technology could well determine which bank obtains the largest market share in electronic banking$ =eeping in 3iew all the abo3e de3elopments, Internet banking is likely to grow at a rapid pace and most banks will enter into this area soon$ "apid strides are already being made in banking technology in India and Internet banking is a manifestation of this$ 83ery day sees new tie7ups, inno3ations and strategies being announced by banks$ A sea change in banking ser3ices is on the cards$ It would, howe3er, be essential to ha3e in place a proper regulatory, super3isory and legal framework, particularly as regards security of transactions o3er the #et, for regulators and customers alike to be comfortable with this form of banking$

CUSTOMER ATTITUDE TOWARDS INTERNET BANKING

"esearch on consumer attitude and adoption of internet banking showed there are se3eral factors predetermining the consumer5s attitude towards online banking such as person5s demography, moti3ation and beha3iour towards different banking technologies and indi3idual acceptance of new technology$ It has been found that consumer5s attitudes toward online banking are influenced by the prior e6perience of computer and new technology$ he adoption of electronic banking forces consumers to consider concerns about password integrity, pri3acy, data encryption, hacking, and the protection of personal information$ 8lectronic banking requires perhaps the most consumer in3ol3ement, as it requires the consumer to maintain and regularly interact with additional technology -a computer and an Internet connection/$ 9onsumers who use e7banking use it on an ongoing basis and need to acquire a certain comfort le3el with the technology to keep using it$

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2e3eral studies ha3e in3estigated why indi3iduals choose a specific bank$ Important consumer selection factors include con3enience, ser3ice facilities, reputation and interest rates$ 9ustomers ha3e less time to spend on acti3ities such as 3isiting a bank and therefore want a higher degree of con3enience and accessibility$ he ser3ice7quality attributes that the Internet banks must offer to induce consumers to switch to online transactions and keep using them are percei3ed usefulness, ease of use, reliability, responsi3eness, security, and continuous impro3ement$ he indi3idual e6pectations regarding accuracy, security, network speed, user7 friendliness, and user in3ol3ement and con3enience were the most important quality attributes in the percei3ed usefulness of Internet7based e7retail banking$ he crucial factors that affect an indi3idual5s decision to use or not to use online ser3ices the indi3idual5s age, the difficulties of using the Internet, the fear of changes in the banking sector due to technological de3elopment and the lack of information concerning products and ser3ices pro3ided to customers through electronic deli3ery channels$ <actors such as the speed of transactions or the cost of using the Internet ha3e little impact on an indi3idual5s final decision$ he si6 composite dimensions of electronic ser3ice quality, including the pro3ision of con3enient(accurate electronic banking operationsL the accessibility and reliability of ser3ice pro3isionL good queue managementL ser3ice personaliHationL the pro3ision of friendly and responsi3e customer ser3iceL and the pro3ision of targeted customer ser3ice are important in re3ealing customer attitude towards Internet banking$ ,ercei3ed usefulness, security and pri3acy -i$e$ percei3ed credibility/, percei3ed ease of use and computer self7efficacy are the main perusing factors to accept online banking system$ ,ercei3ed usefulness is the e6tent to which a person belie3es that using a particular system will enhance his or her performance, while percei3ed ease of use is the e6tent to which a person belie3es that using a particular system will be free of effort$ Adoption is the acceptance and continued use of a product, ser3ice or idea$ he consumers go through a process of knowledge, persuasion, decision and confirmation before they are ready to adopt a product or ser3ice$ he adoption or rejection of an inno3ation begins when the consumer becomes aware of the product$ <or adoption of Internet banking, it is necessary that the banks offering this ser3ice make the consumers aware about the a3ailability of such a product and e6plain how it adds 3alue relati3e to other products of its own or that of the competitors$ 9onsumers must become aware of the new brand or technology$ he amount of information consumers ha3e about online banking has been identified as a major factor impacting the adoption$ he use of online banking ser3ices is fairly new e6perience to many people and low awareness of online banking is a major factor in causing people not to adopt online banking$
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Figure 7 FACTORS CONTRIB+TING TO#AR,S A,OPTION OF INTERNET BANKING

,ercei3ed "isk reflects an indi3idual5s subjecti3e belief about the possible negati3e consequences of some type of planned action or beha3iour, due to inherent uncertainty$ he ,ercei3ed "isk associated with online transactions may reduce perceptions of beha3ioural and en3ironmental control, and this lack of control is likely to negati3ely influence internet banking intentions$ ;wing to the open Internet technology infrastructure and lack of sufficient laws concerning internet banking acti3ities, the trust and trust related7concepts -that is, percei3ed risk, credibility, image and reputation/ ha3e been integrated with the adoption models to e6plain the adoption beha3iour$ >eb quality attributes for measuring perception towards Internet banking, falls into four broad categoriesG information quality, transaction speed, user7friendliness, and security$ <our web quality attributes were introduced to impro3e the understanding of consumer attitudes and adoption intentions$

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Figure 8 ATTIT+,E TO#AR,S INTERNET BANKING

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LITERATURE SURVEY
Ra0mat0 Sa eena9 A$du!!a0 and 4ema ,ate "*:1:% belie3e that the e3olution of e7 banking started from the use of A Ms -automatic teller machines/ and telephone banking -tele7banking/, direct bill payment, electronic fund transfers etc$ hey conducted a study to determine the consumer5s perspecti3e on adopting Internet banking$ heir study re3ealed that percei3ed usefulness, percei3ed ease of useL consumer awareness and percei3ed risk are the important determinants of online banking adoption$ hey also concluded that majority of customers are accepting online banking because of many fa3ourable factors$ !owe3er, since the sample siHe is limited, the results cannot be generaliHed and might 3ary according to location and demography of the people$ ;ose)0 et a!< "1===% in3estigated the influence of internet on the deli3ery of banking ser3ices$ hey found si6 underlying dimensions of e7banking ser3ice quality such as con3enience and accuracy, feedback and complaint management, efficiency, queue management, accessibility and customiHation$ ;un and Cai "*::1% identified )+ ser3ice quality dimensions of internet banking ser3ice quality$ hese are reliability, responsi3eness, competence, courtesy, credibility, access, communication, understanding the customer, collaboration, continuous impro3ement, content, accuracy, ease of use, timeliness, aesthetics, security and di3ers features$ hey also suggested that some dimensions such as responsi3eness, reliability and access are critical for both traditional and internet banks$ ;a/award0ena "*::7% transforms the original 28"AF1A: scale to the internet conte6t and de3elops a battery of %) items to assess ser3ice quality in e7banking$ By means of an 86ploratory <actor Analysis -8<A/ and a 9onfirmatory <actor Analysis -9<A/, these %) items are condensed to fi3e quality dimensionsG access, website interface, trust, attention and credibility$ <rom the pro3ider perspecti3e, there are target quality and deli3ered quality$ he focus of process or supply7led quality definition is rather internal than e6ternal, and it is defined as conformance to requirements$ It lays emphasis on the importance of the management and the supply7side quality, and there is an important role of the process in determining the quality of outcome "G0o$adian9 1==7%< Achie3ing the quality of conformance between the planned -target/ quality le3el and the real quality deli3ered to customers depends on the ser3ice quality management system in an organiHation$ -em$ers o ,e)artment o In ormation Te&0no!og/9 -em$ers o ,e)artment o Banking Su)er'ision9 -em$ers o 2ega! ,e)artment9 -em$ers o ,e)artment o Banking O)erations and ,e'e!o)ment o Reser'e Bank o India consider Internet Banking as another way of deli3ering traditional banking ser3ices through an
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electronic communication backbone$ features attributed to internet banking$

hey ha3e also pro3ided certain distincti3e

It remo3es the traditional geographical barriers as it could reach out to customers of different countries ( legal jurisdiction$ his has raised the question of jurisdiction of law ( super3isory system to which such transactions should be subjected$ It has added a new dimension to different kinds of risks traditionally associated with banking, heightening some of them and throwing new risk control challenges$ 2ecurity of banking transactions, 3alidity of electronic contract, customers5 pri3acy, etc$, which ha3e all along been concerns of both bankers and super3isors ha3e assumed different dimensions gi3en that Internet is a public domain, not subject to control by any single authority or group of users$ It poses a strategic risk of loss of business to those banks who do not respond in time, to this new technology, being the efficient and cost effecti3e deli3ery mechanism of banking ser3ices$ A new form of competition has emerged both from the e6isting players and new players of the market who are not strictly banks$ he report also co3ers legal and regulatory issues, security and technology issues and super3isory and operational issues$ :egal issues are related to jurisdiction of laws, 3alidity of electronic contracts etc$ 2ecurity issues include questions of adopting the technology standards for access control, encryption ( decryption, firewalls, digital signatures, public key infrastructures etc$ he super3isory and operational issues include risk control measures, ad3ance warning system, information technology audit and re7engineering of operational procedures etc$ he report states that the cost of deli3ery of banking ser3ices through this medium is se3eral times less than that incurred through traditional methods and that is why more and more banks are adopting the medium of Internet to deli3er their ser3ices$ he report also mentions the risk of sur3i3al the banks face if they do not adopt this medium$ he report also discusses the scenario of Internet banking in India$ ;ustin Ro$inson and #inston -oore carried out a study to see the attitudes and preferences in relation to the Internet Banking in the 9aribbean$ heir study re3ealed that only a relati3ely modest population of 9aribbean still preferred to use the Internet banking and that too mainly for checking balances and making bill payments$ heir study re3ealed that there is still a lot of insecurity regarding this medium in the minds of people$ heir study also brought forth the finding that debit ( A M card users are %4Q more likely to adopt the Internet Banking$ he study of customer attitude towards Internet Banking was also carried out by Ya. Yue0 S0i0 in the 9hung!ua 1ni3ersity, aiwan$ his study is based on the heory of ,lanned Beha3iour$ he research has mainly focussed on the adoption of Internet banking in relation to the indi3idual beliefs, indi3idual attitudes, subjecti3e norms, and
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percei3ed beha3ioural controls$ he theory of planned beha3iour states that the beha3ioural intention is a function of attitude and subjecti3e norms$ Bandura "1=>>% applied this concept to Internet Banking where this refers to the knowledge of being able to perform banking through the medium of Internet, knowledge about resource constraints like time, money etc$ A3?en "1==1% disco3ered that these factors reflect the percei3ed ease and difficulty with which the beha3iour is affected$ he e6tended theory of ,B has brought forward four broad categories of attributes that help to understand the customer attitude and adoption intentions about Internet banking, shopping and ser3icesG information quality, transaction speed, user7friendliness and security$ heir study concluded that information quality -complete, correct, and rapidly updated/, transaction speed, security concerns positi3ely influence the customer attitude towards Internet banking$ 1ser7friendliness -clear and easy to7 follow instructions, !8:, menus, simple operating procedures/ does not influence the attitude towards Internet banking positi3ely$ It was also concluded that attitudinal belief has significant impact on the attitude, normati3e belief has a significant impact on the subjecti3e norms, control belief on percei3ed beha3ioural control, subjecti3e norms and percei3ed beha3ioural control on beha3ioural intentions and finally the beha3ioural intentions ha3e a significant impact on the actual usage$ ,anie! "1===% and Kar3a!uoto "*::5% ha3e identified the following deli3ery platforms for electronic bankingG T/)e o Ser'i&e ,9 banking -pri3ate dial up/ Internet banking Managed network A based elephone banking Mobile phone banking -2M2, >A,, &rd generation/ ,es&ri)tion ,roprietary software, distributed by the bank, is installed by the customer on their ,9$ Access to bank 3ia a modem linked directly to the bank$ Access their bank 3ia Internet$ he bank makes use of an online ser3ice pro3ided by another party$ he use of satellite or cable to deli3er account information to the A screens of customers -Also Internet based/ 9ustomers access their bank 3ia telephone -;wn personal I. and password required/ Access with te6t messages -2M2/, Internet connection ->A,/, or high speed &rd generation mobile connection -also Internet based/

According to Rogers and S0oemaker "1=>1%, consumers go through a process of knowledge, persuasion, decision and confirmation before they are ready to adopt a product or ser3ice$ According to Sara Naimi Barag0ani "*::>%, the technological inno3ations pass through the following stagesG
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 =nowledge ,ersuasion .ecision Implementation 9onfirmation rust as defined by -a/er "1==8% is the willingness of a party to be 3ulnerable to the actions of another party based on the e6pectation that the other will perform a particular action important to the trustor, irrespecti3e of the ability to monitor or control that other party$ According to Sara Naimi "*::>%, making a banking transaction on the Internet is a form of trusting beha3iour, since a consumer makes him(her 3ulnerable to the actions to the Internet$ 2he further added that the customer willingly becomes dependent on the Internet and e6pect the Internet to perform whate3er the consumer wants it too$ !er study re3ealed that both technological and trust7based issues are important to influence a customer5s beha3ioural intention to use Internet banking and that to attract the customers to use Internet banking, the Internet banking sites ha3e to be designed according to both the aspects$ 2he also e6plained that the new users base their attitude more on percei3ed ease of use and usefulness, pri3acy protection, accuracy to declaration and unauthoriHed access etc$ Tan and Teo identified social indicators, understanding, communality, and personal e6perience as important factors that help to de3elop trust in Internet banking$ 2he has also discussed the early adoption stage strategies of internet banking, usually the push strategy where the internet banking ser3ice pro3iders use all forms of media ad3ertising to pro3ide knowledge about these ser3ices to wider audiences$ he information should include reference to time sa3ing, con3enience, low costs, and information a3ailability etc$ he customer should not be made to undergo drastic changes in beha3iour and the information and instructions should be made a3ailable to him in the languages he is comfortable with$ he basic steps in3ol3ed in push strategy are outlined as followsG Build customer5s recognition of internet banking Attract customers to the web site Attract customers by ease of access Build customer5s confidence ;ffer incenti3es he other strategy a3ailable is pull strategy where the diffusion is increased amongst the internet users and effecti3e co7operation between 3arious channels has to be arri3ed at$ 2upport from industry regulators and the go3ernment should be increased
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to make the growth more effecti3e$ 2o the pull strategies can be easily summed up asG increasing ser3ice 3alue by collaboration with internet ser3ice pro3iders, free internet access, e6panding banking ser3ices and increasing linkagesL being proacti3e, educating people about internet banking, supporting the go3ernment, working with industrial regulators$

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OBJECTIVE
>ith cyber7cafes and kiosks springing up in different cities access to the #et is going to be easy$ Internet banking -also referred as e7banking/ is the latest in this series of technological wonders in the recent past in3ol3ing use of Internet for deli3ery of banking products N ser3ices$ 83en the Morgan 2tanley .ean >itter Internet research emphasised that >eb is more important for retail financial ser3ices than for many other industries$ Internet banking is changing the banking industry and is ha3ing the major effects on banking relationships$ Banking is now no longer confined to the branches were one has to approach the branch in person, to withdraw cash or deposit a cheque or request a statement of accounts$ In true Internet banking, any inquiry or transaction is processed online without any reference to the branch -anywhere banking/ at any time$ ,ro3iding Internet banking is increasingly becoming a Pneed to ha3eP than a Pnice to ha3eP ser3ice$ he net banking, thus, now is more of a norm rather than an e6ception in many de3eloped countries due to the fact that it is the cheapest way of pro3iding banking ser3ices$ !ence, the objecti3e that was sought to be accomplished through this research was toG .etermine attitude of people towards Internet banking >hich customers are using Internet banking and which are not using >hy the customers are not using Internet banking >hat other e7banking facilities are more popularR

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RESEARCH METHODOLOGY
Any systematic research begins with the problem formulation or defining of the problem of research$ he term problem means any question or issue to be e6amined$ !ere the issue to be e6amined has been defined as determining the 9onsumer Attitude towards Internet Banking$ he ne6t step in3ol3ed is the literature re3iew$ :iterature re3iew is defined as the documentation of the comprehensi3e re3iew of the published and unpublished work from secondary sources of data in the areas specific interest to the researcher$ he ne6t step entails designing of a descripti3e and e6ploratory research in order to understand the problem and carry out the research in a lucid manner$ .escripti3e research is also called 2tatistical "esearch$ he main goal of this type of research is to describe the data and characteristics about what is being studied$ he idea behind this type of research is to study frequencies, a3erages, and other statistical calculations$ Although this research is highly accurate, it does not gather the causes behind a situation < 86ploratory research is used to obtain information concerning the current status of the phenomena to describe Pwhat e6istsP with respect to 3ariables or conditions in a situation$ !ere it was attempted to find out the main factors affecting the attitude customers towards Internet banking$

DATA COLLECTION METHOD

he primary research was carried out through questionnaire method$ he questionnaire was structured in such a manner to a3oid ambiguous responses and to aid analysis of the collected data$ he questionnaire was then circulated among the chosen population in two mannersG Mail 7 enabled questionnaire I his questionnaire was circulated 3ia mail among the respondents who filled in the answers and then mailed it back to us$ >eb 7 enabled questionnaire I his questionnaire was administered to the respondents by hosting the questionnaire at a website httpG((www$e2ur3eys,ro$com(2ur3ey$asp6RidS%adad)C'7DecD7*?cc7bcD?7 &d+D+e)*fade $ he chosen population was taken randomly from across the net users and allowed the sample population to be fairly e3en$ he questionnaire administered to respondents is a3ailable for reference at A##8@1"8$
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he secondary data collection was carried out by studying online database, journals and sur3eys$ he data collected is then organiHed, compiled, analyHed and interpreted$

SAMPLING
he sampling technique followed is con3enience sampling$ he sample siHe chosen is )44$ he sample area is not limited to any particular geographical location$ he sample unit is Internet users of 3arious areas$

SAMPLING DESIGN

he targeted population was chosen in an unstructured manner on con3enience basis on as is, when is a3ailable manner$ he con3enience method allows using members on relati3e ease$ his method is difficult to be treated by statistical techniques but is most commonly employed in practical purposes$ 9o7workers, friends, internet users, members of 3arious forums all form a part of the population in this technique$

SAMPLING FRAME

In the person assisted con3enience random sampling, e3ery person has an equal chance of being selected$ he responses were collected from the people who were willing to participate in the sur3ey$ o some e6tent, judgement sampling was applied when the mails or links were sent out$

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DATA COLLECTION AND ANALYSIS

he primary research was conducted from + th May, %4)) to )'th May, %4))$ he sur3ey targeted a total of )44 indi3iduals but in all )%D people participated in the sur3ey$ he data was obtained through the use of structured questionnaires and con3enience sampling$ In relation to background information on gender, age etc$, the first block deals with awareness regarding internet banking$ he second block co3ers the attitude for the non7Internet banking customers$ he third block co3ers the attitude of the customers who use Internet banking$ he fourth and final block is for all the customers to get the feedback on internet banking ser3ices and mobile banking ser3ices$ he first section pro3ides the background details of the population and sets the en3ironment for the rest of the sur3ey$ he analysis of the responses of the first section re3ealed the following characteristics of the population I A total of )%D participants responded to the sur3ey$ ;ut of these D& were males and *? females$ 2o the gender wise distribution can be studied as

Figure @ GEN,ER #ISE ,ISTRIB+TION OF SA-P2E POP+2ATION

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Most of the respondents were in the age group %4 I &4 years but an o3erall distribution can be shown as followsG

Figure > AGE #ISE ,ISTRIB+TION

his diagram indicates that ma6imum respondents are young people in the age group %4 I &4 years followed by less than %4 years$ his is because the con3enience sampling was carried out and the most easily a3ailable sample was student and young working population$ If we see the educational qualifications of this population, the highest category is that of graduates forming a ?+Q chunk followed by post graduates at a decent &'Q$

Figure A E,+CATION #ISE ,ISTRIB+TION

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his shows that population is educated enough to understand the intricacies in3ol3ed with Internet banking and can be an acti3e participant in this field$ Also the population is intelligent enough to understand the questions being posed to them and respond correctly$ 2o, judgemental analysis will be used rarely only$ he ne6t analysis of the sample population will be done on the basis of the occupation or their area of work$ his lets us decide which target population finds it more con3enient to use Internet banking$

Figure = OCC+PATIONA2 ,ISTRIB+TION OF POP+2ATION

As is ob3ious from the abo3e diagram, most of the population consists of working professionals who form a mighty ??Q of the sample$ his is because the sur3ey was carried out by online circulation and this population has easy access to Internet at workplace as well as homes$ he homemakers were not able to participate in this sur3ey due to lack of reach$ !owe3er, students ha3e shown a fairly decent participation in the sur3ey and that is mostly because all institutes ha3e internet facilities and 3arious students are linked to one another either through their online student associations or through social media$ 2o, the abo3e analysis re3eals that mainly male graduate working professionals in the age group %4 I &4 years participated in the sur3ey$ !a3ing discussed the demographical distribution, the banking requirements and a3ailability can be discussed$

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#early ?C I '4 Q of people 3isit the bank branch only once in a few months and the main reason for 3isiting the bank is to make deposits and discuss loans and in3estments I some things that are not so easily done o3er any other medium$ >ith the coming of A Ms and Internet banking most of the transactions take place outside the four walls of a bank branch$ !owe3er, )CQ people still 3isit the bank once a month and this is closely followed by a ) I ? times 3isit made by )?Q people$ "arely does a person feel the need of making a 3isit T )4 times a month to his bank branch now7a7days$

Figure 1: BISIT TO BANK BRANC4 he sur3eyed population was also asked about the main reason that necessitated this 3isit to the branch$ And for nearly *+Q people, the need was accentuated by the requirement of making deposits$ !owe3er, %'Q people fa3oured reasons other than making deposits or withdrawals, inquiring balances or discussing in3estment options$ hese reasons primarily figuredG o update the passbook o open fi6ed deposits o make general inquiries

:oan related discussions o redress the discrepancies hings that ha3e to be done manually like closing an account, requesting branch change, opening a new account, requesting for a locker etc$ o get foreign e6change
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o discuss queries, complaints and problems

If the net banking is not working due to some reasons A M related queries o reset passwords or to generate passwords o take care of ad7hoc things like submitting documents o cash cheques and to request chequebooks

<or matters concerning ,< and ,,<

Figure 11 REASONS TO BISIT BANKS )*Q people still 3isit bank branches to withdraw cash, CQ to get firsthand ad3ice$ Merely *Q people 3isit for mundane purpose like inquiring balances$ he following figure discusses the e7Banking facilities pro3ided by banksG

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Figure 1* e.BANKING FACI2ITIES ABAI2AB2E he A M and Internet banking ser3ices follow each other at heels standing at %+Q and %'Q respecti3ely$ ogether, for ?&Q of the sur3eyed population these e7Banking ser3ices are a3ailable$ he relati3ely new entrants in the field of e7banking like elephone banking, Mobile banking and 2M2 banking are also being widely distributed to the customers$ But it is obser3ed that the mobile banking ser3ices ha3e greater penetration than telephone banking and nearly )DQ people can a3ail these ser3ices$ 2imilarly, )?Q people can a3ail 2M2 banking whereas only )*Q people can a3ail the telephone banking$ his shows that the banks are trying their le3el best to make the 3arious e7banking facilities popular and these figures are bound to rise drastically in near future$

Figure 15 CO-PARISON OF ABAI2AB2E AN, ABAI2E, FACI2ITIES

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It can be seen that all those people for whom the A M facility is a3ailable a3ail it$ But that is not the case with Internet banking$ And also, though, telephone banking, mobile banking and 2M2 banking are a3ailable to a wider section, only a handful of these people a3ail these ser3ices$ 9learly, A M is still a leader when it comes to e7 banking but Internet banking is trying to bridge the gap rapidly$ If we see the facilities a3ailed chart indi3idually, we will find that there is a constant decrease in the users of the e7banking ser3ices with the crest being obser3ed for A M ser3ices and the trough for telephone banking ser3ices$ he cur3e starts rising slightly again for mobile and 2M2 banking$ he facilities a3ailed are plotted against the percentage of the users of the respecti3e ser3ice$ >hile *?Q people use A M ser3ices, only &&Q of the sur3eyed population uses Internet banking$ 2M2 banking is used by DQ of people, followed by mobile banking that attracts +Q people and last of all comes elephone banking with '$C'Q users$ his can help the bank to identify the area where it needs to push its business$ here is still a lot of potential untapped in Internet banking and mobile banking and the banks can benefit from this, if they seiHe the opportunity timely$ he indi3idual usage chart is shown as followsG

Figure 17 e.BANKING FACI2ITIES ABAI2E, BY IN,IBI,+A2S he section % of the questionnaire was meant for only those customers of the bank who did not use Internet banking$ his section helps us to find out the reasons why people do not prefer to use Internet banking and whether they ha3e any intention of using Internet banking facility in future$ #early 'DQ of the users, who are currently not using Internet banking, are planning to use this facility in near future$ Another )*Q are inclined towards Internet banking usage and nearly DQ of the population is not likely to use this facility$ *Q of the population is still undecided whether it should take up Internet banking or not$ hus, we can safely infer that the idea of Internet banking is fast catching up and people are 3ery likely to use it for future banking transactions$ In big cities, Internet banking has already made great forays into the li3es of the people$
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Figure 18 A,OPTION OF INTERNET BANKING IN NEAR F+T+RE

he main factor that pre3ented the people from using Internet banking was the concern about security$ ?)Q of the population stated this intention unequi3ocally$ 2o clearly, if this aspect of Internet banking is addressed, the usage will increase greatly$ Banks can strengthen the security pro3ided for online transactions, adopt new technologies, and educate their customers thereby building their confidence in these ser3ices$ ,eople are always resistant to change and this reflects in adoption of Internet banking also$ &&Q of the respondents feel comfortable with the traditional banking and hence, do not find any moti3ation in adopting Internet banking$ 9hange will come slowly and steadily$ he Internet banking will ha3e to be eulogiHed and people made aware of the benefits that can be deri3ed from these ser3ices$ ;nce people realiHe that all their banking ser3ices are a3ailable at just the click of the mouse, they might change their mindset but this attitudinal change cannot be done o3ernight$ <ew sporadic incidences of under age, ne3er heard of internet banking, ser3ice charges on 3isiting bank branch, not being much in3ol3ed with banking ser3ices and less support for online ser3ices were also mentioned by sur3eys but these were indi3idually spread out reasons$ 2o, it can be safely determined that it is mainly the security concern that pre3ents the bank customers from adopting Internet banking$ he diagrammatic representation of this is as followsG

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Figure 1@ FACTORS PREBENTING +SE OF INTERNET BANKING his completes the analysis of the section % which re3eals that the users are willing to take up internet banking in future, if the banks impro3e upon the security ser3ices pro3ided for the Internet banking and addresses the concerns of people in this regards$ he ne6t section of the questionnaire was meant for those customers of the bank who used Internet banking$ his section deals with aspect what facilities people prefer to a3ail online, frequency of usage, possible factors and preferred ser3ices that fa3our the use of Internet banking, relied banks, satisfaction deri3ed by the customers, issues faced while using these ser3ices, and factors contributing towards the encouragement and popularity of Internet banking$ he prime reason for taking up Internet banking is attributed to the con3enience deri3ed by the user i$e$ the %* hours ser3ice &'? days a year, anywhere connecti3ity and hassle free transactions$ he benefits deri3ed in terms of con3enience are the major reason as to why nearly +'Q people opened an Internet account$ he second position here is bagged by quick ser3ice deli3ered to the customer as the wait period is eliminated and one does not ha3e to stand in long queues and wait for his turn$ ??Q people quoted this as the major reason to open an Internet banking account$ 8asy to maintain banking transaction acti3ity prompted ?&Q people to use Internet banking$ All the database handling is done online and all the information is catalogued systematically$ hough curiosity about this emerging field also led &CQ people to start using Internet banking but this reason is of least importance as compared to other factors$ &?Q people felt strongly about the geographical constraints as being a major factor for adopting Internet banking ser3ices and for &&Q people online shopping was the dri3ing factor$ he other factors that led to the adoption of the Internet banking can be listed as follows I

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 Sa e and se&ure I A compelling moti3e for &%$?Q people and has an o3erall moderate priority Integrated 'a!ue added ser'i&es I A3ailability of 3arious ser3ices along with banking facility is also a strong moti3ator as felt by &)Q people$ Better rate and !ower ser'i&e &0arges I his has strong potential for high banking acti3ity areas$ %DQ population stated this as an important consideration while adopting Internet banking$ Bariet/ o eatures and ser'i&es o ered I his is fa3oured by %'$?Q people as being of prime importance when opening an Internet banking account$

he priority wise distribution of the reasons is shown in the stacked columnar chart where the reasons ha3e been plotted against the percentage of response recei3ed in each section of priority$ his will help us to see clearly what importance is imparted to what reason by the customers$

Figure 1> REASON TO A,OPT INTERNET BANKING 83en though the Internet banking has been decently adopted, still the frequency of usage is restricted to only ) I ? times a month$ <rom amongst the sur3eyed population, &+Q people use this facility for ) I ? times a month$ %*Q people use this facility ? I )4 times a month and since the use is e3er increasing, it comes as no
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surprise that %)Q people prefer to use it for more than )? times a month$ )DQ people prefer accessing their internet bank accounts )4 I )? times in a month$

Figure 1A +SAGE FREC+ENCY he ne6t question analyHed the most popular facilities that are used online$ And in response to this, it was obser3ed that account inquiry was clearly the most fa3oured facility among the respondents$ his was closely followed by online bill payments and transfer of funds between accounts$ >hile the former was fa3oured by %&$%Q, the latter two were fa3oured by %%$?+Q and %%$%'Q respecti3ely, the difference being marginal only$ )CQ people use internet banking for retrie3ing bank statements$ ;nly handful of people use this facility for processing payrolls, loan payments, applying for consumer loans and credit cards, booking mo3ie and flight tickets, online shopping, retrie3ing credit card statements, opening deposits etc$ he total number of respondents for these uses put together account for )&Q of the total sur3eyed population$

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Figure 1= FABO+RE, ON2INE BANKING FACI2ITIES he respondents were asked to rate 3arious aspects of Internet bank ser3ices pro3ided by the bank$ his will pro3ide an idea about how to impro3e the internet banking facilities, what the customers look for and 3arious other clues as to how the bank should go about designing its Internet banking programme$

Figure *: ASPECTS OF INTERNET BANKING SERBICES <rom the abo3e diagram, it is clear that when users think of Internet banking, con3enience rules their minds, hearts, thoughts and actions$ A staggering ?'Q people think that con3enience is the first aspect that should be addressed by the banks$ Account security is also important considering that Internet can make banking 3ulnerable to many risks and as a result a solid ?)Q people feel that it is a crucial for the Internet banking facility$ *DQ people also feel that the bank ser3ices go a long way in deciding which Internet ser3ices are to be preferred$ Accessibility and user friendliness rank ne6t with a **Q population feeling that this aspect determines the success of Internet banking$ he banks cannot o3erlook the efforts to make Internet or rather e7banking popular, pro3iding encouragement to use these facilities as nearly &*Q people are influenced by these initiati3es alone$ And lastly, customer bases his decision on the customer care facilities$

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It was also noted that all these aspects are of equal and 3ery high importance as far as the consumers are concerned and this makes the designing and pro3ision of Internet banking ser3ices slightly tricky and complicated$ Based on the research sur3ey, it was obser3ed that 2tate banks were most fa3oured with respect to Internet banking followed by I9I9I and !.<9$ 9itibank stood fourth in terms of attracting customers$ 9ustomers also use the Internet banking ser3ices pro3ided by ,#B, A6is and Bes banks$ he reason of preferring a particular bank is beyond the scope of this research$

Figure *1 PREFFERE, BANKS he sur3ey also tried to figure out the source of encouragement that led the respondents to use Internet banking$ Mainly the media and friends suggested the option to respondents$ In some cases, the family was influencing factor$

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Figure ** SO+RCE OF INF2+ENCE #early all the users were satisfied by the Internet ser3ices pro3ided to them and rarely a non7satisfied respondent was encountered$ he satisfaction le3el runs really high amounting to a staggering C'Q with only *Q of the users being dissatisfied$ <urther research has shown that this dissatisfaction may be caused due to issues in Internet connecti3ity etc$

Figure *5 SATISFACTION OF +SERS #IT4 INTERNET BANKING And also while considering the Internet banking, the place of access is also of prime importance because this goes a long way in determining the physical, operational and security risks to the customer5s account$ But it was obser3ed that users were conscientious enough to use these ser3ices in the protected en3ironment of their homes and work places$ 2ome users a3ailed the internet facilities e3en at their mobiles thereby becoming mobile banking customers$ "arely did people use public cyber cafU for operating their Internet banking accounts$

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Figure *7 PREFERRE, P2ACE OF ACCESS FOR INTERNET BANKING he satisfaction deri3ed from the Internet banking has already been discussed in preceding pages$ In continuation with the same, respondents were asked if they had faced any issues while using Internet banking$ Most of the users ha3e been able to perform hassle free transactions but some users did encounter certain problems while operating their Internet bank accounts$ 2ome of the issues that were faced can be discussed asG 2ometimes due to ser3er maintenance or slow network, the internet banking facility is not a3ailable$ 2low speed may affect the quality of transaction$ Money transfer issues like sometimes the amount gets debited from the account, but is not credited to the merchant account$ 2uch issues are also faced in ticket bookings and reser3ations$ ;nly limited features are a3ailable and for other purposes, a bank 3isit is necessitated$ he transactions in countries not registered with the bank are a little problematic to carry out$

But these are few and far spread incidences and it can still be inferred that people are by and large satisfied by their Internet banking facilities$

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Figure *8 ISS+ES ENCO+NTERE, IN INTERNET BANKING he respondents were then asked to identify the factors contributing the most to the popularity of the Internet banking on a ? point scale$ 9on3enience is of utmost importance in this regards getting the highest priority -'%Q/ from amongst all the factors$ he ne6t factor promoting Internet banking is user friendliness of the banking site with **Q respondents gi3ing it the highest ranking$ <or &DQ users, transaction speed goes a long way to make the Internet banking popular and another &*Q set of respondents feel that it is the security features taken up by the bank to make transactions secure that contribute towards the popularity of Internet banking$ he information quality -timely access to correct, complete, updated information/ comes at last place with &&$'Q users in its fa3our$ Again, as it was obser3ed earlier also, the users consider all these factors to be equally important$ his makes it a little difficult to understand the psychology behind the Internet banking$

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Figure *@ FACTORS AFFECTING POP+2ARTIY OF INTERNET BANKING he last section deals with a general outlook on Mobile banking$ 2ince Mobile banking is closely related with the Internet banking, it was thought appropriate to gather the 3iews of people regarding this new mode of banking$ >ith rare e6ceptions, nearly all the respondents use mobile phones$ Also, for +%Q of the respondents, we browsing and Internet surfing support is a3ailable on their mobile phones itself$ hese general pointers indicate that, if channeliHed properly, there is a lot of potential for mobile banking$ he following charts show the statistics for the a3ailability of mobile phones and web browsing support on mobile phones a3ailable with the respondents respecti3ely$

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Figure *> ABAI2ABI2ITY OF -OBI2E P4ONES AN, #EB BRO#SING FACI2ITIES ON -OBI2E P4ONES #IT4 +SERS .espite the widespread a3ailability of mobile phones and web browsing facilities, it was obser3ed that 3ery few people preferred to use mobile banking ser3ices$ ;f all the respondents, a mere %CQ of the respondents carried out banking through mobile phones$ "est all either preferred traditional or some other mode of banking$

Figure *A PERCENTAGE OF RESPON,ENTS ABAI2ING -OBI2E BANKING SERBICES And again the frequency of usage of these ser3ices stands at ) I ? times a month$ here are some users who prefer to use it )4 I )? times and rarely does a respondent use this facility for more than )? times a month$

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Figure *= FREC+ENCY OF +SAGE OF -OBI2E BANKING .espite all the inhibitions in the minds of the respondents regarding the mobile or e7 banking in general, a fairly considerable number -+)Q/ of people belie3e that they would prefer mobile banking o3er traditional banking$

Figure 5: PREFERENCE TO#AR,S -OBI2E BANKING <inally, the respondents were asked to choose reasons that make them opt mobile banking and ease of access was the prime reason for choosing this facility$ It was fa3oured by &%Q of people$ he time sa3ing aspect also gained fa3our among %*Q of the respondents$ 2ince, the users are familiar with the functioning of the mobile phones, so ease of use is in good books of %)Q respondents$ he safety and risk free use and ser3ice quality are at the tail ends of the list with )%Q and ))Q 3otes$

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Figure 51 REASONS TO OPT FOR -OBI2E BANKING In the end, the users were asked to pro3ide some suggestions that will help us to promote the use of Internet Banking$ he following suggestions were recei3ed from the usersG o gi3e proper information about it to the customers By telling the benefits to the friends ( good word of mouth By concentrating on making it more secure and con3incing people about its security Ad3ertisements on popular A channels, bank branches, A Ms, popular Internet sites and social media hrough encouragement dri3es initiated by bank In person demos for people that still 3isit the bank in order to show how easy it is and how to operate it on phone ( demo kiosks in the branch .irect marketing to the customers not a3ailing themsel3es of the ser3ice ( door to door marketing >hile opening the bank account, the ser3ice pro3ider must gi3e full and accurate information regarding the ser3ice and pro3ided with the credentials required for Internet Banking ,romotion by bank staff 1ser friendly sites ( impro3ing 01I to make it more friendly and quick 9on3enience and comfort of the user By gi3ing the information in A M receipts and passbooks 8ducating the customers Internet safety seminars, e7learning Incenti3es for using Internet Banking ser3ices Internet Banking awareness canopies at 3arious prime locations ,ro3iding local language support for the con3enience of the customer 2er3ice impro3ement in field of Internet Banking

'C

2ome of these suggestions might already be in practice and some of these can be incorporated in order to promote the Internet Banking$ hese will help increase the awareness regarding the Internet banking and will help promote this new channel of banking$ Internet banking has re3olutioniHed the li3es of people as well as method of banking$ ,eople ha3e de3eloped a positi3e attitude towards Internet Banking and belie3e that it has taken away the pressure from li3es$ It has reduced the need to stand in long queues and is quite time sa3ing$ his is the prime reason why people these days prefer to use Internet banking$ !owe3er, positi3e and negati3e go hand in hand$ here are people who belie3e that Internet banking can be a3ailed only by Internet addicts and that mobile banking is better proposition than Internet banking considering the wider reach of mobiles than Internet$ And in order to promote mobile and 2M2 banking, the ser3ice charges should be lowered$ hose who fa3our mobile banking feel that pro3ision of faster net access on mobiles will promote this facility further$ Bet another group belie3es that Internet is an integral part of our economy now and banking integration with Internet should be definitely encouraged$ And if some efforts are made to make it more users friendly and secure, people will definitely prefer this medium$ hey strongly ad3ocate the idea that Internet banking is the need of hour$ !owe3er, security with regards to Internet banking is of major concern$ Also, there should be pro3ision to customiHe the Internet banking facilities according to the indi3idual requirements of the users$ his will allow them to use the facility without any hesitation$ Also 3arious ad3anced banking features should also be handled in future$ he users also feel that the complaint resolution is not efficient in case of net banking and this aspect should be impro3ed by the banks$ imely resolution of transaction related problems will further promote Internet banking$

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RESULTS AND CONCLUSIONS

he use Internet in banking represents the le3eraging of an incredibly efficient medium to pro3ide a 3ery cost and time efficient distribution channel$ his is not to discount the large, nascent opportunity for growth in this industry$ As commerce continues to increase, and increasing amounts of people embrace wireless financial ser3ice products, there is fertile ground that can be reaped for great profits, by banks that maintain a presence on the Internet$ In the preceding sections, we analyHed the attempts to understand the customer attitude towards Internet Banking$ he results from the sur3ey suggest that nearly &&Q of indi3iduals indicated that they utiliHe Internet banking ser3ices$ he highest utiliHation rates were amongst the young working professionals$ In terms of frequency of use, most people -&+Q/ indicated that they tend to access online banking ser3ices ) I ? times e3ery month$ he result of this study also shows that account inquiry and on7line bill payment are two most fa3oured Internet banking acti3ities$ he study also re3eals that con3enience and security are two most crucial aspects to determine how efficient any Internet banking acti3ity is, though, other aspects like o3erall bank ser3ices, accessibility, user friendliness, encouragement to use e7banking and customer care cannot be ruled out$ he satisfaction le3el among the users from these ser3ices runs 3ery high$ Most users were conscientious enough to use these ser3ices in the protected en3ironments of their homes and work places so as to mitigate some of the risks obser3ed in Internet banking$ 9ustomer con3enience, user friendliness and transaction speed are some factors that go a long way in determining the popularity of a gi3en Internet banking ser3ice$ he sur3ey analysis has re3ealed that people ha3e positi3e but cautious attitude towards Internet banking$ hey ha3e started accepting it and are mainly satisfied but as they say a burnt child dreads the fire$ ,eople are wary in making the use of this new medium$ It is the young population in %4s I &?s that ha3e accepted this medium with least resistance but others are fast catching up$ It was also aimed to find out the main reason why customers are not using Internet banking$ he major reason is the concern about security, the 3arious risks associated with the Internet which do not let the ties of trust be knit between the bank and customer$ It was obser3ed that A Ms are the most popular e7banking facilities, followed by Internet banking$ he ne6t preference is gi3en to mobile banking$ 2M2 banking is also picking up but telephone based banking is the least preferred of all$ As far as user attitude towards Mobile banking is concerned, it can be said that ease of access and time sa3ing facility will help it to grow by leaps and bounds$ But this field is still in budding stages and is still too early to draw any conclusions$ But people, by and large ha3e a positi3e attitude towards this new medium and that might just turn the table in its fa3our$

+)

he relati3ely small siHe of population and concentration of the sur3ey to a particular en3ironment does not guarantee standard results$ 2imilar studies can be conducted elsewhere and the results compared$ But despite these limitations, it can be stated fairly confidently that the field of Internet banking is no longer considered a taboo and is creeping into the society silently and slowly$ It is re3olutioniHing the way we percei3e the banking around us$ ,eople ha3e welcomed Internet banking with open arms and are ad3enturing into the fields of 2M2 and mobile banking also$ he study has found answers to most of the objecti3es and has opened some areas where more research can definitely be taken up$ >e can see that the times are changing and with the passage of time, people ha3e started accepting Internet banking for all the potential that it holds$ !owe3er, there are still some perceptual blockings that ha3e to be addressed carefully by the banks by gi3ing proper training about Internet banking, by making it more secure, safe and risk free, by promoting this medium of banking and pro3iding con3enient, user friendly ser3ices$

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LIMITATIONS
he study was conducted to see how the customers5 percei3e the Internet banking$ here is still room for further in3estigation into the adoption of this mode of banking$ here are certain limitations with the research carried out$ he participants comprised a small sample, only )44 and assumed to be homogeneous and enough to carry out the research$ Most of the respondents are either students or working professionals$ 2o, the results cannot be generaliHed in the wake of this limitation$ he underlying assumption is that the sur3ey conducted in limited area represents the general psyche of the users$ he analysis also takes some judgemental nature$ he concept of internet banking is still in budding stages$ he e6pertise of the questionnaire design is limited$ More research would be useful in understanding the role of trust, security measures in the adoption of Internet banking and also in enhancing the use of internet banking$ More researches can be carried out in terms of distinction of public and pri3ate sector banks, indi3idual customers and corporate customers etc in terms of the factors influencing their adoption decisions, the criterion for selecting online banking ser3ices, the products and ser3ices percei3ed to be useful$ he research has been carried out with time and budgetary constraints$

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BIBLIOGRAPHY
)$ Internet BankingG .isrupti3e or 2ustaining echnology, ,rofessor :ynda Aplegate, ,aul !aHell, Viad "aphael, +th May, %44)

%$ Attitudes and ,references in "elation to Internet Banking in the 9aribbean, Eustin "obinson and >inston Moore

&$ 9ustomer ,erspecti3es on 87business AalueG 9ase 2tudy on Internet Banking, Eournal of Internet Banking and 9ommerce, April %4)4, Aol$ )?, #o$ ), "ahmath 2afeena, Abdullah, !ema .ate

*$ "eport on Internet Banking, "eser3e Bank of India

?$ <actors Influencing the Adoption of Internet Banking, 2ara #aimi Baraghani, 2uper3ised by .r$ 2eyed !essameddin Vegordi and .r$ Mohammed =halifa, Eanuary, %44+

'$

he study of customer attitude towards Internet Banking based on the heory of ,lanned Beha3iour, Ba7Bueh 2hih, %44+

+$ 9ustomer perception towards Internet Banking w$r$f$ to pri3ate and foreign banks in India -use of M.2/, 2iddharth Agarwal, %44C

D$ ,rogress, rends, and Management in e7Banking I A 9ase 2tudy of Banks in !imachal ,radesh, Aikas 2harma, %44D

C$ httpG((www$banknetindia$com(banking(ibkgintro$htm )4$ httpG((www$ftc$go3(bcp(edu(pubs(consumer(credit(cre)*$shtm ))$ httpG((correctbanking$com( )%$ httpG((webinternetbanking$com(disad3antagesinternetbanking$html +*

)&$ httpG((www$buHHle$com(articles(disad3antages7of7internet7banking$html )*$ httpG((www$ehow$com(factsW*+*&?44Wdisad3antages7internet7banking$html )?$ httpG((articles$moneycentral$msn$com(In3esting(2tockIn3esting rading(how7 dangerous7is7online7banking$asp6Xpage opAchor )'$ httpG((cor3uswire$com(banking(potential7risks7associated7with7internet7banking( )+$ httpG((www$itnewsafrica$com(%44C())(internet7banking7know7the7risks( )D$ httpG((e7bankingser3ise$blogspot$com(%44D(4C(security7precautions$html )C$ httpG((www$info$go3$hk(hkma(eng(3iewpt(%44*4+)?e$htm %4$ httpsG((netbanking$netpnb$com(bayimgs(pnbibs(helpfile(safeguard$htm %)$ httpG((www$articlesbase$com(online7business7articles(precautions7about7net7banking7 D%4'4D$htmlXi6HH)=%!!kHt) %%$ httpG((finance++D$com(;nline7Banking(%44D4)%%(&%C$html %&$ httpG((www$banking7guide$org$uk(internet7banking$html %*$ httpG((www$ehow$com(listW'C*CD''Wtypes7internet7banking$html

+?

ANNEXURE
Cuestionnaire D Customer Attitude towards Internet Banking ACA,E-IC PRO;ECT E 4P+BS9 4P +ni'ersit/9 S0im!a his sur3ey is a part of the academic project$ he information pro3ided here will be treated completely confidential and not be misused$ )$ #ame WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW %$ 0ender &$ Age

Male :ess than %4 years &4 7 *4 years T ?4 years

<emale %4 7 &4 years *4 7 ?4 years

*$ 8ducation

2 econdary 0raduation

2 enior 2 econdary ,ost 0raduation or more !omemaker Business ;ther

?$ ;ccupation

2 tudent >orking ,rofessional 2 er3ice

If other, please specify, WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW '$ !ow often do you 3isit the bank branch in a monthR

;nce a month ? 7 )4 times a month ;nce in a few months

) 7 ? times a month T )4 times a month

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+$

he main reason to 3isit the bank branch is Y$ -please choose a single most important reason/

o make deposits o get ad3ice for in3estment options ;ther

o withdraw cash o inquire balance

If other, please specify, WWWWWWWWWWWWWWWWWWWWWWWWWWWWWW D$ >hat are the e7banking facilities pro3ided by your bankR -Mark all that apply/

A M elephone banking 2 M2banking

Internet banking Mobile banking

C$ >hich of the e7banking ser3ices pro3ided by your bank are used by youR -Mark all that apply/

A M elephone banking 2 M2banking

For t0e users w0o do not use Internet $anking

Internet banking Mobile banking

)4$ .o you plan to use the internet banking in near futureR

Aery 1nlikely #either likely nor unlikely Aery likely

2 omewhat 1nlikely 2 omewhat likely

))$ >hat are the main reasons that you ha3e not preferred Internet bankingR -Mark all that apply/

1nder age 9oncerned about security

#e3er heard of Internet banking :ittle knowledge about internet

++

9omfortable with traditional banking

;thers

If others, please specify, WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW For t0e users w0o use Internet $anking )%$ >hat is the most important reason you opened an Internet accountR -,rioritiHe according to the order of importance ) being least important and ? being most important/ a$ 9on3enience -%*hrs$ ser3ice, anywhere connecti3ity/ b$ 9uriosity about Internet banking c$ 2afe and secure d$ 8asy to maintain banking transaction acti3ity e$ ;nline shopping f$ Better rate and :ower ser3ice charges WWWWW WWWWW WWWWW WWWWW WWWWW WWWWW WWWWW WWWWW WWWWW WWWWW

g$ 0eographical constraints h$ Fuick ser3ice i$ j$ Aariety of features and ser3ices offered Integrated 3alue added ser3ices

)&$ !ow many times a month do you use Internet banking facilityR

) 7 ? times a month )4 7 )? times a month

? 7 )4 times a month ;3er )? times

)*$ >hat are the 3arious banking facilities that you use onlineR

;n7line Bill payment ransfer funds between accounts Applying for consumer loans and credit cards :oan payments and loan applications

Account Inquiry "etrie3ing bank statements ,rocess payrolls ;ther

If other, please specify, WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW

+D

)?$ "ate the following aspects of internet ser3ices pro3ided by your bank on the scale from ) to ? -) being the lowest and ? being the highest degree/ Bank ser3ice WWWWW 9on3enience WWWWW Accessibility WWWWW WWWWW Account security 1ser friendliness 9ustomer care WWWWW WWWWW WWWWW

8ncouragement to use e7banking

)'$ >ould you like to disclose the name of the bank with which you ha3e Internet accountR WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWW )+$ >ho suggested the option of Internet banking to youR

<riends

Media

<amily

)D$ Are you satisfied by your Internet banking ser3icesR

B es

#o

)C$ >here do you access the Internet banking facilityR

At home ,ublic place

At office ( workplace hrough mobile phone

If any other, please specify,7 WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW %4$ .id you encounter any issues while using Internet bankingR

B es

#o

If yes, please specify, WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW For a!! t0e &ustomers %)$ "ank the following according to the percei3ed contribution in making Internet banking popularR -) being the lowest and ? being the highest 3alue/ a$ b$ +C he information quality -pro3iding correct, complete and updated information timely/ WWWWW he transaction speed WWWWW

c$ 1ser friendliness d$ 2ecurity e$ 9on3enience

WWWWW WWWWW WWWWW

%%$ .o you ha3e a mobile phoneR

Bes

#o

%&$ .oes your mobile phone ha3e web browsing or internet facilityR

B es
%*$ .o you a3ail mobile banking ser3icesR

#o

Bes

#o

%?$ If the answer to abo3e question is yes, how often do you use such ser3ices in a monthR

) 7 ? times )4 7 )? times

? 7 )4 times T )? times

%'$ >ould you prefer mobile banking ser3ices o3er traditional banking methodR

Bes

#o

%+$ >hat are the reasons to opt for mobile bankingR If you do not use mobile banking, please answer on the basis of your e6pectations$ -Mark all that apply/ !ighly time sa3ing 8ase of access 2afe and risk free 2er3ice quality 8ase of use

%D$ !ow do you think the awareness about the internet banking can be increasedR WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW D4

WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWW %C$ Any other commentsR WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWWW WWWWWWWWWWWWWWWW

hanking you for sparing some time for this sur3ey$ !a3e a great day ahead

D)