INTERNET BANKING

INTERNET BANKING
 What Is Internet Banking?...................................................2

 Why Internet Banking Is Cheap and why do banks

encourage it?.......................................................................2

 Advantages of Internet Banking..........................................3

o Advantages to the banks…................................................3

o Advantages to the customers…........................................3

 Advantages and Disadvantages of Online Banking Services

.............................................................................................4

 Is it safe to bank on Internet?..............................................6

 Tips for Internet Banking.....................................................6

 Internet Banking Is Booming...............................................6

INTERNET BANKING

What Is Internet Banking?

Internet or Online Banking is the facility available to the customers to conduct financial
transactions on a secure website provided by their bank or the building society.

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 on the Web

Why Internet Banking Is Cheap and why do

banks encourage it?
 Fewer buildings to maintain.
 Less involvement by salaried employees.
 Expenditure on Pay slips; Forms and even Bank stationary has gone down.
 Banks do not have to open their branches 24 hours a day to provide service.
 These savings allow them to offer higher interest rates on savings accounts and lower lending
rates and service charges.

Advantages of Internet Banking

There are two types of advantages of internet banking

 To the banks

 To the customers

Advantages to the banks….

 Banking around the clock is no longer the remote possibility. But the banks do not have to
open their branches 24 hours a day to provide this service.
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 Another advantage of the internet banking is cost–effectiveness as thousands of customers

can be dealt at once without the need of having too many clerks and cashiers

 The Administrative work gets reduced drastically with Internet Banking.

 Expenditure on Pay slips, Forms and even Bank stationary has gone down, which helps to rise
in the profit margins of the banks to the great extent.

Advantages to the customers…

 As per the customers are concerned their account is available round the clock regardless of
their location
 They can reschedule their future payments from their bank account while sitting thousands of
miles away.
 They can electronically transfer money from their bank accounts or receive money in their
bank accounts within seconds.
 You can apply for a loan without visiting the local bank branch and get one easily.
 You can buy or sell stocks and other securities by using your bank accounts.

 Even new accounts can be opened; old accounts can be closed without doing tedious
paperwork. Especially with the increasing acceptability of digital signatures around the world.

 Another advantage of Internet banking is the ability to easily compare services offered by
different banks.

Advantages and Disadvantages of Online

Banking Services
With the advent of the Internet and Internet-related services, technological conveniences and
advances have somehow made their way into our daily lives and have now become a major
part of us. So, it comes as no surprise to us that the banking industry has also developed into a
major presence over the Internet as well. But just how safe is online banking? Will your
money really be secure?
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With the popularity of the Internet increasing steadily, most of the industries are finding new
and interesting ways to make use of this new and equally interesting medium so as to keep up
with the constantly changing preferences of clients all over. Nowadays, you can do almost
anything over the Internet – from shopping for groceries to making a free call to a friend in
New Zealand through your computer! Yes, the Internet has seemingly endless possibilities and
the banking industry in turn has decided that it won’t be left behind the rest of the pack.

While most of us have heard about online banking services, more than a majority of us have
probably not even tried it out yet. It could possibly be because we are more comfortable
working with real people; paper and money instead of its virtual counterpart, as performing
transactions over the Internet can be very impersonal. Whatever may be the reason; there are
a number of advantages and disadvantages to online banking services. This article will outline
the good side as well as the bad side to online banking so that you can either feel that online
banking is a safe way to manage your finances, or you could possibly be justified in your fears.

The Advantages of Online banking

first let’s start off with the advantages of online banking. First and foremost, online banking is
very, very, very convenient. It will allow you to pay your bills and make transactions anytime
during the day and the week. The bank will never close because you can access it through your
laptop or computer. So, no matter in which country you are anywhere in the world, you can
go online and handle your finances.
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Secondly, online banking is very fast, effective and efficient. Over the Internet, you can make
transactions that are typically executed and performed at a much faster pace than at ATM’s.
Online banking services also give you the option of handling several different bank accounts
from one site itself.

Most online banking sites are compatible with programs like Microsoft Money and Quicken,
which makes management of assets more effective.

The Disadvantages of Online banking

just like with anything else, there are disadvantages to online banking services too! The
biggest problem is that most people lack trust. How many times have you performed
transactions online and wondered whether you did the right thing? Of course, you can
overcome any uneasiness by printing the transaction receipt. This receipt will conform
whether or not your transaction has gone through successfully.

Online banking can be difficult to learn for a beginner and a site could take time to start up.
Some sites ask for photo identification, which can be very inconvenient.

However, most online banking sites provide tutorials for online banking. Some sites provide
live online customer support to provide solutions for any problems. The number of cases of
banking frauds is considerably low so you don’t have to worry about the safety of your
money.

Clearly, the whole concept of online banking has its fair share of advantages as well as
disadvantages. For some people, online banking simplifies life, while for the others it is
intimidating and complex. Taking into consideration these perceptions, most banks have now
started offering online banking services and a viable option to their clients.

Some people prefer talking personally to a person in case of a problem. They prefer the
‘personal touch’ aspect of customer service. If you are this kind of a person, then you’ll
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probably never feel comfortable with Internet banking. On the other hand, if unlimited access
to your bank accounts and convenience is highest on your list of banking priorities, then
nothing can beat online banking. What with the security of the FDIC standing like a fortress
behind them, it is very clear that online banking is here to stay.

Is it SAFE to bank on Internet?

Internet banking is not always safe because of intrusion of hackers.

Your accounts can be hacked by the phishes and information can be misused by them. Even your
balance can be transferred into unknown account(s).

Tips for Internet Banking

 Make sure you never give personal information out over the Internet unless you are
connected to a secure site.
 Store your access information in a secure place
 Routinely check your computer for spy ware and viruses, protecting your identity.
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 Remember that some procedures are still affected by the business hours of the bank. Even if
you transfer a balance at 8:00 PM, it may not show up on your account until the next business
day.

 Plan your transactions accordingly if you are working on a tight budget.

Internet Banking Is Booming

Once a niche market, internet banking has grown into a widely-used tool for the average consumer.

Among 3,988 adults surveyed in the U.S. by Gartner Group, 47% said they now use Internet banking.
In the U.K, 30% said the same.

Results tended to vary according to income. Gartner found that over half of all consumers earning
more than $30,000 in the U.S. and? 15,000 in the U.K. use Internet banking. Among lower-income
households, 25% in America and 17% in the U.K. use internet banking.

“Over the past several years, online banking has been seen as a way of appealing to more affluent and
younger clients,” said David Escher, Gartner research director. “However, what is becoming clear is
that the overall level of consumer Internet use and the increasingly narrow segment of nonusers–
particularly in the U.S.–are shifting the dynamics of who is using online banking and what they seek
from it.”

Among people who don’t utilize Internet banking, no one single reason was cited above all others,
noted Gartner. Around 61% of U.S. households and 58% of those in the U.K. said they simply prefer to
use other methods. However, 41% of U.S. consumers and 38% in the U.K. blamed security as the most
important reason for not banking over the Internet.

Gartner conducted its survey in December 2008 and January 2009 and questioned people 18 years and
older.
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According to another report from research firm Forrester, the effect of bill consolidation sites, such as
Yodeled and Carillion, was noted. With these sites, consumers can manage and pay all their bills
directly online and independent of banks. According to Forrester, such sites are starting to woo more
people from the banks’ own bill payment sites, and will own a greater share of the market by 2012.
Thus, banks will need to do a better job spreading the word about their own online services.

“Business executives at banks need to work to establish earlier and stronger bill payment
relationships with young affluent and other young adults,” said Forrester senior analyst Edward
Kountze. “To strengthen their position and better support these customers, banks need to add more
payment options, deploy online and mobile alerts with greater visibility, and continue to hammer
home the message that online bill payment is free.“

SUBMITTED TO:

Mr. Sanjeev Verma

By…………

BRIJESH SINGH

MBA (CM) 2ND SEM

ROLL NO. 13