(E-Banking in Pakistan) Eps

Internet Banking &
[E-BANKING IN PAKISTAN] EPS
Acknowledgement
August 9, 2009
Well we, when writing this acknowledgement would like to acknowledge first
to Allah.
My second acknowledgement would go to our parents for their hospitality

and patience.
We would like to acknowledge Mr. Saghir Muhammad for giving us an

opportunity to do this research and for polishing us manifold. Our utmost
regards go to her for guiding us and bearing with us through the semester.
Making this report has immensely helped us in understanding the vitality

and importance of internet banking
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Internet Banking &
Letter of Authorization
August 9, 2009
To: Talha Suhail
Syed Taha Hameeduddin
From: Mr. Saghir Muhammad
Course Instructor
For Summer Semester 2009, you are assigned to prepare a report on the
Internet Banking & EPS.
Yours sincerely,
Mr. Saghir Muhammad
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Internet Banking &
Letter of Transmittal
August 9, 2009
Mr. Saghir Muhammad
Course Instructor
Institute of Business Management
Dear Mr. Saghir Muhammad,
We have attached a copy of the report on the Internet Banking & EPS. This
report is a summary of our findings from the research we conducted during
the summer semester of 2009. We were assigned this report by you in the
month of June. We are pleased to report that we have completed the project
on schedule.
If you have any questions and/or comments regarding the interpretation of

this report please feel free to contact me at the email address. I thank you
for giving us the opportunity to work on such an informative and interesting
research project.
Sincerely,
__________________ ______________________
Talha Suhail S. Taha Hameeduddin
talhasuhail@gmail.com syed.taha@live.com
0321-3893608 0321-2080126
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Internet Banking &
Executive Summary
This report is based on the research conducted regarding the internet

banking in Pakistan.
Following the overview of the Internet Banking in Pakistan, we have included

the literature review that helped us fill the gaps of our research. Next we
have defined our purpose, problem statement, research objectives, and
scope.
We have used questionnaires and focus group to collect our data. The
questionnaire was formulated in such a way that it caters to all our
hypotheses.
The later part of the report includes the findings we observed from our
results and limitations that we faced during our work. We have further given
suggestions for the Internet banking in Pakistan in general.
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Internet Banking &
TABLE OF CONTENTS
PG
S.NO CONTENTS
NO.
1 Introduction 6
2 Overview of E-Banking in Pakistan 8
3 Literature Review 11
4 Research Problem 15
5 Research Objectives 16
6 Hypothesis 17
7 Research Methodology 18
8 Hypothesis 1 19
9 Online Products and Service by UBL 20
10 Comparison of Banks 24
11 Findings and Conclusion 25
12 Hypothesis 2 26
13 Analysis 29
14 Findings 40
15 Suggestions & Conclusion 42
16 Annexure 44
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Introduction
One of the major forces behind the changes happening to business today is
technology, which is creating new products, services market opportunities and
developing more information and system oriented business and management
processes.
As an information medium, the Internet offers different information services

that have been developed over the time. The services are e.g. electronic
mail, file transfer protocol, and the worldwide web (www). The internet has
no central owner, but the connected networks are owned and administrated
by different universities, companies, authorities and other organizations.
Electronic commerce refers to the use of electronic means and technologies

to conduct commerce in various settings, such as business-to-business (B2B)
and business-to-consumer (B2C). The enabling technologies, of course, are
also used for non-commercial activities such as entertainment,
communication, filing and paying taxes, managing personal finance,
research and education, which may still include the services of online
companies. E-commerce is the application of information technology to
facilitate business exchanges among different parties.
Banking is one of the most information intensive sectors and is an ideal

domain for the successful development of E-Commerce. Internet banking
refers to the use of the Internet as a remote delivery channel for banking
services .For banks, technology has emerged as a strategic resource for
achieving higher efficiency, control of operations, productivity and
profitability. For customers, it is the understanding of their anywhere,
anytime, anyway banking dream. This has prompted the banks to embrace
technology to meet the increasing customer expectation and face the tough
competition. Internet banking would help banks present a potentially low
cost alternative to brick and mortar branch banking. Internet banking
services are crucial for long-term survival of banks in the world of electronic
commerce. The market for Internet banking is forecasted to grow sharply in
the next few years, affecting the competitive advantage enjoyed by
traditional branch banks. Indeed, it also was estimated that financial
institutions that failed to respond to the need for Internet banking services
would likely lose more than 10% of their customer’s base by the year 2000.
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Internet Banking &
Internet banking involves consumers using the Internet to access their bank
account and to undertake banking transactions. At the basic level, Internet
banking can mean the setting up of a web page by a bank to give information
about its product and services. At an advance level, it involves provision of
facilities such as accessing accounts, funds transfer, and buying financial
products or services online. This is called “transactional'' online banking.
There are two ways to offer Internet banking. First, an existing bank with
physical offices can establish a web site and offer Internet banking in addition
to its traditional delivery channels. Second, a bank may be established as a
branchless, Internet only or virtual bank. Broadly the levels of banking
services offered through Internet can be categorized in three types: (i) The
Basic Level Services use the banks websites which disseminate information
on different products and services offered to customers and members of
public in general. It may receive and reply to customers queries through e-
mail (ii) In the next level are Simple Transactional Websites which allow
customers to submit their instructions, applications for different services,
queries on their account balances, etc, but do not permit any fund-based
transactions on their accounts (iii) The third level of Internet banking
services are offered by Fully Transactional Websites 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. Most of the banks providing Internet
banking products and services offer, to a large extent, an identical and
standard package of banking services and transactional capabilities.
A website plays very significant and key role in Internet banking. Websites
should be able to convey all the information for both current customers and
potential new customers via the Internet. If the content of the site fails to
pass sufficient information on account capabilities, then the site is not
fulfilling its objectives. The bank’s website provides a better way for
communication.
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Internet Banking &
Overview of Internet Banking in Pakistan

Globally banking is no longer confined
to the four walls of a branch. Many
countries are far ahead of the facilities
being available in Pakistan. The
initiative in e-Banking in the country
was taken a bit late, but now focused
efforts are being made to catch up with
rest of the world.
The level of low banking, a few years

back, was confined to the four walls of
branch. With the entry of private banks,
having limited number of branches, investment in technology was chosen, as
alternative, to overcome this deficiency. The advent and common use of
Internet, leading to e-commerce, forced the banks globally to incorporate e-
banking. Pakistani banks are still far behind their global counter parts. One
such example is complete lack of merchant accounts in Pakistan.
However, lately a task force was established to study and implement

formation of Electronic Clearing House (ECH). Simultaneously, the local
banks also went for on-line banking, though still not a norm. Another step
forward was installation of ATMs by the banks. While some banks have their
own ATMs, some other banks started using a dedicated network. In this
system an ATM card holder of a particular bank could use teller machines
installed by all the sponsors of this network. The system is working to a
satisfactory level.
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Internet Banking &
Though efforts are being made to increase the number of on-line branches, it
is still a capital intensive proposal. It is getting popular in urban areas, but
has not become common in rural areas, mainly due to low literacy level in
the country. However, some analysts believe that with the passage of time,
confidence in the system and increasing use, traffic to branches in urban
areas will go down considerably.
A factor which is the key issue in e-banking is low penetration level of

computers in Pakistan. The other factors, not allowing the people who have
computers and Internet facility, was lack of services being offered by the
banks, legal framework and concerns about the security. A landmark step in
this direction is the promulgation of the Electronic Transactions Ordinance
2002. This Ordinance provides legal recognition to digital signatures and
documentation reducing the risks associated with the use of electronic
medium of business.
One factor prohibiting use of the newly offered services is, its high cost. The
banking sector terms this nominal, keeping in view the level of convenience.
Saying this, they still believe that cost can go down further with the
increased use of these facilities. It is also believed that while the use of these
facilities is low due to apprehensions about security, clients take refuge
behind high cost.
A factor slowing down the process in this area is capital intensive nature of
these operations. The investment in technology by the commercial banks is
affecting the payout to shareholders as well as the depositors. The banking
sector experts term this only a brief phase.
The global market for electronic transactions is growing at a phenomenal

rate. Pakistan should not sit back and ignore this global phenomenon. To
actively participate in the global economy, Pakistan must develop its e-
commerce infrastructure. This comprise of three ingredients: legal
framework, security of transactions and e-readiness of the banks.
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Internet Banking &
Challenges of the E-Banking Revolution
Electronic banking is the wave of the future. It provides enormous benefits to

consumers in terms of the ease and cost of transactions. But it also poses
new challenges for country authorities in regulating and supervising the
financial system and in designing and implementing macroeconomic policy.
Electronic banking has been around for some time in the form of automatic
teller machines and telephone transactions. More recently, it has been
transformed by the Internet, a new delivery channel for banking services
that benefits both customers and banks. Access is fast, convenient, and
available around the clock, whatever the customer's location (see illustration
above). Plus, banks can provide services more efficiently and at substantially
lower costs. For example, a typical customer transaction costing about $1 in
a traditional "brick and mortar" bank branch or $0.60 through a phone call
costs only about $0.02 online.
Electronic banking also makes it easier for customers to compare banks'

services and products, can increase competition among banks, and allows
banks to penetrate new markets and thus expand their geographical reach.
Some even see electronic banking as an opportunity for countries with
underdeveloped financial systems to leapfrog developmental stages.
Customers in such countries can access services more easily from banks
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Internet Banking &
abroad and through wireless communication systems, which are developing

more rapidly than traditional "wired" communication networks.
The flip side of this technological boom is that electronic banking is not only
susceptible to, but may exacerbate, some of the same risks—particularly
governance, legal, operational, and reputational—inherent in traditional
banking. In addition, it poses new challenges. In response, many national
regulators have already modified their regulations to achieve their main
objectives: ensuring the safety and soundness of the domestic banking
system, promoting market discipline, and protecting customer rights and the
public trust in the banking system. Policymakers are also becoming
increasingly aware of the greater potential impact of macroeconomic policy
on capital movements.
Literature Review
INDIA
India is still in the early stages of E-
banking growth and development.
Competition and changes in technology
and lifestyle in the last five years have
changed the face of banking. The
changes that have taken place impose
on banks tough standards of competition and compliance. The issue here is
– 'Where does India stand in the scheme of Ebanking.' E-banking is likely to
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Internet Banking &
bring a host of opportunities as well as unprecedented risks to the

fundamental nature of banking in India.
The impact of E- Banking in India is not yet apparent. Many global research
companies believe that E-banking adoption in India in the near future would
be slow compared to other major Asian countries. Indian E-banking is still
nascent, although it is fast becoming a strategic necessity for most
commercial banks, as competition increases from private banks and non
banking financial institutions.
Despite the global economic challenges facing the IT software and services
sector, the outlook for the Indian industry remains optimistic.
The Reserve Bank of India has also set up a "Working Group on E-banking to
examine different aspects of E-banking. The group focused on three major
areas of E-banking i.e. (1) Technology and Security issues (2) Legal issues
and (3) Regulatory and Supervisory issues. RBI has accepted the guidelines
of the group and they provide a good insight into the security requirements
of E-banking.
BRITAIN
All most all the leading banking

institutions in the United Kingdom
provide the facility of internet
banking. All of the banks and
financial institutions endow with
services that are available through
internet facility and the security is
their main assurance.
Through online banking you can get loan and mortgage facility by just filling
online applications, you can check your account balance any time and the
bank statements can be viewed online also.
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Internet Banking &
You can verify the transactions and many banks supply information of
transactions for the last few months. Paying of bills is also very easy these
days with online banking.
Bank of Scotland as well as Halifax is the two of United Kingdom’s very well
known banks. They have been long known for the trustworthy services. They
have many branches and their internet services are also good.
The Northern Bank is a renowned bank and in their website you will find all
the relevant information. Through the website of Co-operative Bank you can
get the necessary details of their working methods.
Through the internet banking you can get the services of insurance, private
loans, investment plans and all of these can be done through simple online
application.
Some of the other banks which provide useful assistance through their
internet banking are those of HSBC; NatWest; One Account, The; Standard
Life Bank; Barclays; Nationwide; First Direct; The Co-operative Bank’s
internet bank – smile; Abbey and many other but you can get the assurance
for good customer service.
Internet banking has gained huge popularity among the people of United
Kingdom. Many of the banks in United Kingdom are being explored for the
functions of buyer empowerment and also for the attributes of the internet
banking.
Online banking has long been an important area of interest so many studies
are done to make new developments to meet the various expectations.[1]
[1] http://pcinternetbanking.com/internet-banking-in-the-united-kingdom/
UNITED STATES
Internet banking has gained its

popularity over the years and has
enhanced internet based capabilities
and online marketing as well as e-
banking. It saves a lot of time and you
get full information of every transaction
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Internet Banking &
you have made. Internet banking in the United States has quite a good
impact on the people there.
According to a study report around 53 million and possibly more than that if
not less Americans are using the benefits of banking online, the ratio being
one out of four for adults.
But there are many bank users who don’t trust financial institutions for
banking online for the sake of protecting their account. They are only
focusing on the negatives rather than the positives. Though online banking
reduces on road robberies but personality thievery, various scams and other
online robberies has led many people not to trust the institution.
Recent studies say that for this reason 40% of the users that may be almost
same to nearly 70 million or more adults having bank accounts do not have
faith in online transactions.
Recently several governmental forces and a number of industries have

joined hands to fight against the online frauds to provide the users a decent
understanding and faith on this service.
In spite of the negatives involved, worries and security faults it has not
succeeded totally in turning away people for the benefits associated with it
are more worthy. The users without any theft concern are making high
balance transactions showing great loyalty and trust on their institution.
They are also sharing their experience on the benefits of online banking to
their family and friends and referring them to do the same. This has led to
the growth of internet access and is estimated to grow itself as people start
becoming more internet savvy and technologically literate.[2]
[2] http://pcinternetbanking.com/internet-banking-in-australia/
AUSTRALIA
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Internet Banking in Australia has been a

huge source for increase in national
income and prospect. Many investments
are made so that the scenario grows in a
much more positive way. The report of
Wallis Inquiry presented the facts that
internet banking is an important field
which faces major competition.
There is no denying the fact that favorable conditions prevail in Australia for
further growth and development in the internet banking sector. The good
communication systems that are all the more improving have helped out the
internet banking process. And the reality that majority people know how to
operate a computer is another boost to the internet banking facility.
‘ABA Industry Standard’ has mentioned some provisions for internet banking
in Australia. The scope of services that the banks must provide if they are
supplying internet banking facility are those of:
• Service of registration of the client online
• The funds can be transferred between the accounts
• The consumers can enquire about their balances of the accounts
• Payment of bill to the creditors
• Funds can be transferred involving the third parties
• Applications for loan can be submitted online
• The calculations for different financial aspects can be done online
• Updates and reviews for the respective investments will be submitted
Initially only two out of fifty-two banks in Australia had started the internet
banking facility. But gradually the number has increased subsequently. Some
of the most successful banks of Australia are those of Commonwealth Bank;
Advance Bank; Metway; ANZ; National Australia Bank; Bendigo Bank Limited;
Citibank Australia; Deutsche Bank; Macquarie Bank Limited and many more.
Internet banking has made all the banking functionality easy and effective.
The fact that needs consideration is that the customers must not sacrifice
with the privacy of their transaction information.[3]
[3] http://pcinternetbanking.com/internet-banking-in-the-united-states
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Internet Banking &
Research Problem
The Internet Banking in Pakistan has not been able to make its mark since its
inception. It has undergone many challenges and threats and the main
reason for that is the lack of education and research and development in this
particular field. The government has not yet taken any significant steps
rather than just passing an ordinance in order to provide the banks a greater
platform to grow their horizons in
the field of internet banking to
meet the global benchmark.
However, UBl has emerged as the
only bank in Pakistan with wide
range of product and services for
its consumers of all levels along
with few other banks. Even the way
banks in Pakistan market their
other products and services
through advertisements; there has
not been a great deal of focus for
marketing the e-products and
services. Other than that not even a related work force of information and
technology and the machinery to is available nor even looked in by banks to
focus in this area.
The other major hurdle that banks come across is the lack of awareness
among general public and the consumers or customers of the bank. This is
because lack of education and information available to them. However it’s
the responsibility of the banks to educate their customers and shift them
toward the modern banking system and to make them understand its
advantages and importance which banks in Pakistan fail to do so.
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Internet Banking &
Research Objectives
The main objectives of this study are:
Objectives of a project tell us why project has been taken under study. It
helps us to know more about the topic that is being undertaken and helps us
to explore future prospects of the topic. Basically it tells what all have been
studied while making the project.
The various research objectives of the study are:
1. To study the internet banking facilities offered by

the banks to its customers
2. To study as to how much internet banking has

penetrated in the minds of the customers
3. To gain insights about functioning of internet

banking.
4. To explore the future prospects of internet
banking.
5. To study the benefits that are provided to the
individual under internet banking
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Hypothesis
Hypothesis 1;
• Is UBL the benchmark in e-banking in Pakistan?
Hypothesis 2;
• Has internet banking penetrated in the minds of the customers?
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Research Methodology
DATA COLLECTION METHODS

The selection of the data collection methods is one of the key aspects of a
research design. Data can be described as primary or secondary based upon
its source.
Secondary research data are data that have been collected for some
other related research study previously conducted. Not much research
studies have been done related to this topic but some relevant secondary
data has been observed. Through internet research, some important points
have been acquired from some articles about Internet banking around the
world specifically India, Britain, United States and Australia. Other secondary
data has been collected from reputable research journals and some relevant
internet search engines such as Yahoo and Google. We have conducted a
series of semi-structured interviews to determine the business student’s
attitudes towards e-banking.
Primary research data is collected expressly to help solve the problem at

hand. As this research study is exploratory study so data has been collected
through the use of various survey methods such as personal interviews and
questionnaires. The practices involved, asking informal questions from
university students about their perception towards e-banking.
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Hypothesis 1;
• Is UBL the benchmark in e-banking in Pakistan?
Methodology of Data collection
Exploratory Research
Here, research is designed to allow an investigator to just look around
with respect to some
phenomenon, with the aim being to develop suggestive ideas. The purpose is
to gather as much
information as possible concerning a specific problem. Exploratory research is
often used when a
problem is not well known, or the available knowledge is not absolute. The
technique that is best
suited for information gathering when performing an exploratory research is
interviews.
Therefore, data was gathered from 19 different banks with the help of all the
classmates who searched the data through internet and through personal
interviews form personnel in different banks assigned to them.
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Online Services & Products by UBL
My Accounts
Simple and intuitive 24/7 access to your

accounts. You can keep an eye on cash flows,
transactions and check real-time account
balances.
Manage Multiple Accounts

Using net banking, the customers can manage
more than one account. All accounts are linked,
which enables them to perform fund transfers
and set auto transfers between these accounts.
24/7 Account Access

UBL net banking lets you bank when and where
you want to, so you can manage your finances
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on your schedule -24 hours a day, 7 days a

week. It is the safe, fast and FREE way to view
your account in the comfort of your home
UBL net banking Goes Mobile!

UBL net banking has now become your 24/7
companion.
Pakistan’s favorite Internet banking destination –

UBL net banking is now accessible to our valued
customers through any GPRS (Internet) enabled
mobile phone.
With its unparalleled features of instant funds

transfers, bill payments, and purchase of
prepaid vouchers, UBL net banking on mobile
Internet is bringing these amazing features
closer to you. You no longer have to reach out to
the nearest computer.
That’s right you can now access your UBL bank

account 24 hours a day 7 days a week -
anywhere, anytime, any mobile phone …
All you need to do is enable the GRPS (Internet)

on your mobile phone and logon to the UBL net
banking webpage like you do on your computer.
Real-Time Account Balance & Summary

net banking offers easy, 24-hour access to the
account information. The customers can see an
overview of the listed accounts in a summarize
form with the available account balance. Using
net banking, the customer can also keep an eye
on their cash flows, transactions and check their
balances before paying their bills or scheduling
a transfer.
Download Statement
Real -time account statements can be viewed,
printed and e-mailed. Customers can specify the
date range for viewing the account statement
and also graphically analyze account statement.
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Moreover statements can be downloaded in

various types of formats.
Access your Credit Card and Cashline Account

Being a UBL account holder, customers can pay
their monthly credit card bills online, provided
your Credit Card Account is linked. Net banking
also facilitates Cashline customers to view their
account and carry out transactions on the
internet.
Pay Anyone
Transfer funds from net banking account to

anyone instantly .Pay Anyone lets you authorize
specific deposits in any UBL account or deliver a
cheque to anyone, anywhere in Pakistan .The
process is fast, easy and secure.
Fund Transfer with Portfolio

net banking allows customers to manage more
than one account online .Customers can easily
view and perform fund transfers within their
linked accounts.
Door Step Check Delivery

UBL net banking offers customers an efficient
and most convenient delivery of funds to their
beneficiaries anywhere in Pakistan, through
Tezraftaar cheque delivery in Pakistan.
Customers can simply add their beneficiaries
and instruct fund transfers from their internet
banking account.
Third Party Fund Transfer

Customer can transfer funds from net banking
account to any UBL third party account instantly.
To transfer funds to a third party account, the
customer is required to add the account to his
portfolio. Once added, the customer can instruct
transfers to third party account.
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Pay Bills & prepaid

• Prepaid Vouchers
• Utility Bills
• Mobile Bills
• UBL Bills
• UBL Funds
• Investments
• Online Shopping
Alerts
Customers can set alerts to track movements in the listed
accounts. The customer can assign a target for alerts.
Alerts can be of the following types.
Balance Alert
Statement Alert
Transaction Alert
Cheque Tracking Alert
Low/High Balance Alert
Customers can perform all the above transactions and

more, from the comfort and convenience of your home or
office internet-connected computer, at any time of the
day or night
Mobile Internet Access
UBL net Banking on Mobile Internet
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Internet Banking &
UBL net banking – Pakistan’s favorite Internet banking

destination, was introduced four years ago with a set of
first-of-its-kind features.
As the Internet usage in Pakistan grew over the years,

UBL net banking became one of the fastest growing
Internet banking services. Now that mobile phones have
become a necessity even for the common man in the
country, UBL wants to give its customers more power and
convenience making their UBL account more accessible
than ever before.
Introducing United Bank’s Internet banking on mobile

through the Wireless Application Protocol (WAP) is yet
another effort by the bank to bring innovation &
convenience to its customers. To maintain the standards
of excellence and provide maximum quality, we are
currently offering the following features of UBL net
banking on Mobile Internet:
 UBL Bank Account Statement

 UBL Credit Card Balance Inquiry
 Pay Anyone
 Pay Utility/mobile Bills
 Buy Prepaid vouchers[4]
[4] https://www.ubl.com.pk/ebank/features/
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Findings
The data collected shows that the hypothesis considered proved to be
correct because UBL right now the only bank with most e-services and
products for its customers. Though it has many rivals like Dubai Islamic
Bank, MCB and Standard Chartered Bank which are providing almost the
same services but UBL has excelled by providing NRP services which Dubai
Islamic bank is not. So it makes UBL leader in internet banking in Pakistan
and therefore we can say that today UBL is the benchmark through which we
can compare other banks from.
Conclusion
UBL is the leader in internet banking in Pakistan today. There are many local
and other international banks with great reputations and with bigger
clientele but are not providing much e-services and products. The main
reason is that consumer’s trust lies more in conventional banking because of
slow web interface, lack of knowledge, fraud and other risks associated.
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Hypothesis 2;
• Has internet banking penetrated in the minds of the
customers?
Sample design
Doing research via sampling was important because of impossibility of

finding all of a population, as well as other restrictive parameters like cost,
time etc. Our sampling decision should be in-coordination with the research
and data objectives. The method opted for taking samples was `Non-
probability sampling’. It was a `Purposive Non-probability sampling/
Judgment Sampling’ was used. The key assumption underlined this type of
sampling is that, with sound judgment or expertise, and an appropriate
strategy, one can carefully and consciously choose the elements to be
included in the sample, so that samples can be developed that are suitable
for one’s needs.
Sample Size: - 30
Questionnaire: -
A questionnaire consists of a set of questions prepared to respondents for
their answers. Because of its flexibility, the questionnaire is by far the
common instrument used to collect primary data. Closed Ended as well as
Open Ended questionnaire were used in my market research.
Drafting of a Questionnaire: -
The formulation of the questionnaire, i.e., the structure and the disguise to
be used in the questionnaire depends upon the kind of information that is
desired. Questionnaire was prepared over a period of 5 days by intensive
brainstorming. A copy of the questionnaire has been attached as an
annexure to the project.
Since my objective was to derive out the maximum information out of the
passengers without making the whole exercise boring and troublesome, I
decided to keep majority of the questionnaire close-ended.
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In order to generate and sustain the interest of the respondents, the initial
questions pertained to the gathering of simple information like the
knowledge of internet banking, the choice of their bank and the main areas
of their transactions. Since, I had to balance the twin objectives of gathering
maximum information and at the same time retaining the interest of the
customers, I was compelled to squeeze in a lot of questions and club them
up in a single question.
LIMITATIONS
The following are the limitations with this report
1. MORE FAITH ON THE CONVENTIONAL BANKING SYSTEM.
People have more faith on the conventional banking system rather than the
internet banking
2. BUSY SCHEDULE.
People were mostly unwilling to talk because of their heavy schedule or they
get annoyed with the phone calls or even if they are asked about this face to
face.
3. RISKY PROFILE.
Some people think that transferring money is having a lot of risk and rather a
waste of time so they don’t want to transfer their money in from their
respective accounts
4. FRAUD
The very common difficulty in online trading is Fraud which can be faced by
any customer. Fraud can take place in many ways like stolen of Password,
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online fund transfer to some other account, hacking etc. So some strict
guidelines or actions should be taken by RBI in order to stop this kind of
fraud which prevails online.
5. SLOW WEB INTERFACE
Sometimes, customers have to face the problem of slow interface which is

not satisfactory from the customer’s point of view. Sometimes the network
fails in middle of their transaction making them worried as to whether their
transactions got completed of not.
6. LACK OF KNOWLEDGE
Customers who do transfers online face the problem of proper knowledge

regarding the use of their accounts and all the services which the banks
provide them with their accounts.
30
Internet Banking &
ANALYSIS
1. Are you aware of net banking services offered by the

banks?
(a) Yes
(b) No
Analysis of the above diagram
It is good for the banks as most of the respondents were aware of

the internet banking and all the services provided under internet
banking
31
Internet Banking &
2. In which company bank do you have your account?
(a) UBL
(b) Standard Chartered Bank
(c) HBL
(d) MCB
(e) Others
32
Internet Banking &
It was witnessed that today MCB has the largest customer base and
after MCB, HBL has the highest customer base .Multi-national banks
are also making their presence noticeable in the Pakistani scenario
3. Do you feel safe in disclosing your details on net?
(a) Yes
(b) No
This question witnessed a fifty fifty answer from most of the

respondents, few of the respondents felt safe in disclosing their
details but still there were a lot people who felt unsafe in disclosing
33
Internet Banking &
and feared their personal information may used by some other

person
4. Are you satisfy with your bank services?
(a) Yes
(b) No
It is very interesting to see that most of the respondents are happy

from the services their respective bank is providing ,the rest of the
respondents felt there is a scope of improvement still they were
also happy
34
Internet Banking &
5. What are your main transactions you would prefer to do by

internet?
(a) Money transfers
(b) Checking of your current balance
(c) Create Fixed Deposits Online
(d) Request a Demand Draft
(e) Pay Bills
(f) Order a Cheque Book

(g) Request Stop Payment on a Cheque
35
Internet Banking &
It is interesting to see that a respondent would like to do all the

transactions which one does personally on a visit to the bank. Thus,
internet banking has a promising future ahead
6. Are you aware of the benefits of net banking which are

available?
(a) Yes
(b) No
36
Internet Banking &
It is pretty amazing to see that most of the respondents are aware

of the benefits of internet banking
7. Are you aware of the methods which can be undertaken to

make any kind of fraud?
(a) Yes
37
Internet Banking &
(b) No
It’s pretty tragic but most of the respondents are unaware of the
techniques which can be taken up for any type of fraud.
8. Are you aware of all the methods which can be taken up to

secure your transaction?
(a) Yes
(b) No
38
Internet Banking &
Even with the increasingly knowledge of internet banking most of

the respondents are unaware the softwares and methods taken up
by the bank to secure each and every transaction.
9. Does your bank educate you about the internet banking

services being offered?
(a) Yes
(b) No
39
Internet Banking &
Most of the respondents felt that they are not properly educated of
internet banking and its benefits to them.
10. Would you prefer using net banking instead of visiting your
bank every now and then?
(a) Yes
(b) No
40
Internet Banking &
It was witnessed that most of the respondents preferred using

internet banking over there conventional banking system. Thus,
internet banking has a bright future ahead
11. What benefits do you see in internet banking?
(a) Convenience
41
Internet Banking &
(b) Speed
(c) Transparency
(d) Time
Most of the respondents felt that the transparency provided by

internet banking is the highest motivating factor for an individual to
use internet banking; rest speed convenience and time are also the
other motivating factors
FINDINGS
42
Internet Banking &
An old Chinese saying goes: If you don't know where you are
going - you will never get there.
 Many people suddenly choosing their personal computers as

the new way to view and manage their money. Why? Quite
simple - because it is a valuable option to have.(refer question no.
1)
 Every day more and more people are turning to the

Technology for their personal banking. It is a safe, convenient way
to shop for financial services, maintain bank accounts and conduct
business 24 hours a day.(refer question no. 3)
 Now, if you are already thinking about Technology as a tool

in Banking you could probably set some of these goals:
 Selling financial products and services
 Cutting operational costs
 Branding & Market recognition
 Keeping profitable customers
 Bank customers can save time by banking online. There is

no need to stand in one more line to perform the most basic
transactions when they can be done quickly from the desktop PC
anytime, day or night.(refer question no. 11)
 Moreover complicated transactions or investment decisions,

people like having direct control over their finances themselves.
They find it convenient to access all of their financial information in
one place.
43
Internet Banking &
 Ease of use is one of the most important factors. Navigation

through online banking should be simple and intuitive.
 Customers also choose banks whose online services are

reliable.(refer question no.9)
 Most Banks now offers a comprehensive range of financial

products and services, including a FREE checking account and
internet bill paying services.(refer question no.5)
In addition, an array of checking accounts is available in which you

may also request a FREE check card. Hence most Banks of
following Electronic Banking or Internet Banking FREE
Benefits for the bank should always reflect benefits for the
customer of banking services.
 Taking over customers from competition

 Banks seeking new customers can use advantages of new
distribution channels and acquire most profitable customer from
their competition. It is a fact that people using E-banking are the
ones who consider time as money and are the one with loads of
money. Majority of banks see 80% of their business coming just
20% of the client base. This 20% customer base is vulnerable if the
bank does not appreciate their time.
 Building stronger customer relations

 Offering new services, results in improved customer
experience and stronger customer retention.
 Bigger share in customer’s wallet
 It is well known fact that customers tend to keep their
finances in one place. Banks holding customer accounts therefore
have opportunity to cross sell different products and services.
44
Internet Banking &
Recent studies show that banks in the USA lost 20% of their most
valuable customers in favor of non-bank FI flexible enough to offer
diversified services and products.
 Identifying profitable customers
 Customers using E-banking services have higher balances

than average branch teller customers. Investments are more than
twice higher than the average.
SUGGESTIONS
 To prevent online banking from remaining an expensive

additional channel that does little to retain footloose customers,
banks must act quickly.
 The first and most obvious step they should take is to see to
it that the basic problem fueling dissatisfaction have been
addressed.
 In addition, to meet the challenge of online brokerage and

other new entrants, banks would need to add “supermarkets”
selling products such as mortgage, mutual funds and insurance.
 The banks should take up responsibility of educating the

customers and all the benefits of internet banking
 There is a need felt for the banks to promote the online

banking services and proper promotional activities are not taking
place.
45
Internet Banking &
 Banks need to appeal to customers who may not be

technologically sophisticated, and should not require an
engineering degree to get started or use the service.

CONCLUSION
From all of this, we have learnt that information technology has
empowered customers and businesses with information needed to
make better investment decisions. At the same time, technology is
allowing banks to offer new products, operate more efficiently,
raise productivity, expand geographically and compete globally. A
more efficient, productive banking industry is providing services of
greater quality and value.
E-banking has become a necessary survival weapon and is

fundamentally changing the banking industry worldwide. Today,
the click of the mouse offers customers banking services at a much
lower cost and also empowers them with unprecedented freedom
in choosing vendors for their financial service needs. No country
today has a choice whether to implement E-banking or not given
the global and competitive nature of the economy. The invasion of
banking by technology has created an information age and
commoditization of banking services. Banks have come to realize
that survival in the new e-economy depends on delivering some or
all of their banking services on the Internet while continuing to
support their traditional infrastructure.
The rise of E-banking is redefining business relationships and the

most successful banks will be those that can truly strengthen their
relationship with their customers.
Technology innovation and fierce competition among existing

banks have enable a wide array of banking products and services,
being made available to retail and wholesale customer through an
electronic distribution channel, collectively referred to as e-
banking. Banks have traditionally been in the forefront of
harnessing technology to improve product and efficiency.
Technology is altering the relationships between banks and its
internal and external customers. Technology has also eroded the
entry barriers faced by many industries. With one time investment,
technology has brought about superior products and channel
management with a special focus on customer relationship. The
46
Internet Banking &
incremental costs incurred for expansion and diversification are

also more beneficial.
The major driving force behind the rapid spread of e-banking is its
acceptance as an extremely cost effective delivery channel. But on
the flipside, it is associated with risks such as reputation risk,
security risk, cross-border risk and strategic risk, which are unique
to e-banking. Banks need to have an effective disaster recovery
plan along with comprehensive risk management tool is significant
not only to the bank but also to the banking system as a whole.
Internet has created plenty of opportunities for players in the
banking sector. While the new entrants have the advantage of
latest technology, the good-will of the established banks gives
them a special opportunity to lead the online world. By merely
putting existing service online won’t help the banks in holding their
customer close. Instead, banks must learn to capitalize their
customer’s different online financial-services relationships
Annexure
QUESTIONNAIRE
1. Are you aware of net banking services offered by the banks?
(a) Yes
(b) No
2. In which company bank do you have your account?
47
Internet Banking &
(a) UBL
(b) Standard Chartered Bank
(c) HBL
(d) MCB
(e) Others
3. Do you feel safe in disclosing your details on net?
(a) Yes
(b) No
4. Are you satisfy with your bank services?
(a) Yes
(b) No
5. What are your main transactions you would prefer to do by

net?
(a) Money transfers
(b) Checking of your current balance
(c) Create Fixed Deposits Online
(d) Request a Demand Draft
(e) Pay Bills
(f) Order a Cheque Book
(g) Request Stop Payment on a Cheque
48
Internet Banking &
6. Are you aware of the benefits of net banking which are

available?
(a) Yes
(b) No
7. Are you aware of the methods which can be undertaken

to make any kind of fraud?
(a) Yes
(b) No
8. Are you aware of all the methods which can be taken

up to secure your transaction?
(a) Yes
(b) No
9. Does your bank educate you about the net banking services
being offered?
(a) Yes
(b) No
10. Would you prefer using net banking instead of visiting your
bank every now and then?
(a) Yes
(b) No
11. What benefits do you see in internat banking?
49
Internet Banking &
(a) Convenience
(b) Speed
(c) Transparency
(d) Time
Personal Information
Name:
Age:
Sex: ( ) Male ( ) Female
Phone No:
Occupation:
References/Bibliography
Website
http://pcinternetbanking.com/internet-banking-in-australia/
http://pcinternetbanking.com/internet-banking-in-the-united-kingdom/
http://pcinternetbanking.com/internet-banking-in-the-united-states/
50
Internet Banking &
www.qla.net.pk
epubl.luth.se
ubl.com.pk and all banks websites mentioned in chart in pg24
http://ezinearticles.com/?A-Brief-History-of-Internet-Banking&id=353450
http://www.expresscomputeronline.com/20020916/indtrend1.shtml
E-Finance by Avinash Shankar
www.ubl.com.pk
51

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Internet Banking &

[E-BANKING IN PAKISTAN] EPS

My second acknowledgement would go to our parents for their hospitality

We would like to acknowledge Mr. Saghir Muhammad for giving us an

Making this report has immensely helped us in understanding the vitality

To: Talha Suhail

Syed Taha Hameeduddin

From: Mr. Saghir Muhammad

Mr. Saghir Muhammad

Mr. Saghir Muhammad

Institute of Business Management

Dear Mr. Saghir Muhammad,

If you have any questions and/or comments regarding the interpretation of

Talha Suhail S. Taha Hameeduddin

This report is based on the research conducted regarding the internet

Following the overview of the Internet Banking in Pakistan, we have included

2 Overview of E-Banking in Pakistan 8

9 Online Products and Service by UBL 20

11 Findings and Conclusion 25

15 Suggestions & Conclusion 42

As an information medium, the Internet offers different information services

Electronic commerce refers to the use of electronic means and technologies

Banking is one of the most information intensive sectors and is an ideal

Overview of Internet Banking in Pakistan

The level of low banking, a few years

However, lately a task force was established to study and implement

A factor which is the key issue in e-banking is low penetration level of

The global market for electronic transactions is growing at a phenomenal

Challenges of the E-Banking Revolution

Electronic banking is the wave of the future. It provides enormous benefits to

Electronic banking also makes it easier for customers to compare banks'

abroad and through wireless communication systems, which are developing

bring a host of opportunities as well as unprecedented risks to the

All most all the leading banking

Internet banking has gained its

Recently several governmental forces and a number of industries have

Internet Banking in Australia has been a

• Service of registration of the client online

• The funds can be transferred between the accounts

• The consumers can enquire about their balances of the accounts

• Payment of bill to the creditors

• Funds can be transferred involving the third parties

• Applications for loan can be submitted online

• The calculations for different financial aspects can be done online

• Updates and reviews for the respective investments will be submitted

The various research objectives of the study are:

1. To study the internet banking facilities offered by

2. To study as to how much internet banking has

3. To gain insights about functioning of internet

DATA COLLECTION METHODS

Primary research data is collected expressly to help solve the problem at

Methodology of Data collection

Online Services & Products by UBL

Simple and intuitive 24/7 access to your

Manage Multiple Accounts

24/7 Account Access

on your schedule -24 hours a day, 7 days a

UBL net banking Goes Mobile!

Pakistan’s favorite Internet banking destination –

With its unparalleled features of instant funds

That’s right you can now access your UBL bank

All you need to do is enable the GRPS (Internet)