ONLINE BANKING SERVICES

Executive Summary
“E-banking”-The execution of financial services via internet reducing cost and increase in
convenience for the customer to access the transaction. e- banking is an umbrella term for
the process by which a customer may perform banking transactions electronically without
visiting a brick-and-mortar institution. The following terms all refer to one form or another of
electronic banking: personal computer (PC) banking, Internet banking, virtual banking,
online banking, home banking, remote electronic banking, and phone banking PC banking
and Internet or online banking are the most frequently used designations. It should be noted,
however, that the terms used to describe the various types of electronic banking are often
used interchangeably. The ever-increasing speed of internet enabled phones & personal

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assistant, made the transformation of banking application to mobile devices, this creative a
new subset of electronic banking i.e. mobile banking. In 1999 & 2000 mobile banking as an
established channel, still seems to be a distant prospect. The internet is revolutionizing the
way the financial industry conducts business online, has created new players who offer
personalize services through the web portal. This increase to find new ways and increase
customer loyalty to add the value to this product and services. Banks also enables customer
lifestyle needs by changing and increasing preference for speed and convenience are eroding
the traditional affinity between customer and branch offices as a new technology disinter
mediates traditional channels, delivering the value proposition hinges on owing or earning the
customer interface and bringing the customer a complete solution which satisfies their needs.
Smart card is a new trend which provides the opportunity to build an incremental revenue
stream by providing an ideal platform for extended application and services. Banks are well
positioned to play central role unit in future M-commerce market.
Banks have strong relationships with corporate and business customers and a wide experience
in providing them with corporate banking services. Bank provides a multimedia of small and
large retailers with acquiring functionality in credit card transactions. Customers have trusted
relationships with banks and a lower propensity to switch banking providers.

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INDEX
Sr. no Contents Page No.
1 INTRODUCTION 1
2 TYPES OF ONLINE BANKING
3 OBJECTIVES
4 FEATURES
5 ADVANTAGES AND DIS-ADVANTAGES
6 PROCEDURE OF TRANSFER OF FUNDS
7 ROLE OF RBI
8 E-BANKING STRATEGIES
9 E-BANKING TRENDS OF 2017
10 MANAGEMENT OF E-BANKING
11 RISK MANAGEMENT
12 NEW DEVELOPMENTS
13 CHALLENGES
14 E-BANKING SERVICES
15 SOFTWARE SPECIFICATION
16 FEASIBILITY STUDY
17 CASE STUDIES
18 CONCLUSION
19 BIBLIOGRAPHY AND WEBLIOGRAPHY

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INTRODUCTION
E-banking is the wave of the future. It provides enormous benefits to consumers in terms of
ease and cost of transactions, either through Internet, telephone or other electronic delivery.
Electronic finance (E finance) has become one of the most essential technological changes in
the financial industry. E-finance as the provision of financial services and markets using
electronic communication and computation. In practice, e-finance includes e-payment, e-
trading, and e-banking. According to the definitions from the Bank for International
Settlement. (BIS, 2003), e-payment creates considerable efficiencies and is superior to
traditional paper based solution. E-trading is referred to as a wide variety of systems that
provide electronic order routing, automated trade execution, and electronic dissemination of
pre-trade and post-trade information. With the help of the e-trading systems, the transactions
can be executed at a remote server and information can be conveyed to a remote location.
And e-banking means the provision of retail and small value banking products and services
through electronic channels and large value electronic payments and other wholesale banking
services delivered electronically. Although clients have enjoyed great convenience of e
banking and bankers have improved cost efficiency of banks e-banking may lead to unstable
financial environments. In other words, e-banking could make the financial markets less
manageable by the regulators. Internet banking refers to the deployment over the Internet of
retail and wholesale banking services. It involves individual and corporate clients, and
includes bank transfers, payments and settlements, documentary collections and credits,
corporate and household lending, card business and some others. Since its inception Internet
banking has experienced strong and sustained growth. According to Jupiter Media, Internet
traffic for all United States banks which grew by 77.6 per cent between July 2000 and July
2001, compared with overall World Wide Web traffic growth of 19.8 per cent over the same
period. Another source estimated that the share of United States households using Internet
banking will increase from 20 per cent in 2001 to 33 per cent in 2005, and that by 2010 there
might be 55 million users. Internet banking operations currently represent between 5 per cent
and 10 per cent of the total volume of retail banking transactions both in the United States
and in Europe. This is less than the share of Internet securities trading, estimated at between
20 and 25 per cent of the total, but much more than overall business-to-consumer (B2C) e-
commerce, which represent least then total 2 % of the retail trade.

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Meaning of online banking

Online banking is very popular and has become a necessity in this modern century. E-
banking or Electronic Banking means that banking transaction are carried out using
computer. Any user having a computer and a borrower can access the bank website and use
the services of the bank.
Online banking (or internet banking) allows consumer of a financial institution to conduct
financial transaction on a secure website operated by the institution, which can be a retail or
virtual bank, credit union or society. It may include of any transactions related to online
usage.

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TYPES OF ONLINE BANKING

The common assumption is that Internet banking is the only method of online banking.
However, this is not strictly the case, as several types of service are currently available
1) PC Banking -:
The forerunner to Internet banking has been around since the late 1980's and is still
widely used today. Individual banks provide software which is loaded on to an SME's
office computer. The SME can then access their bank account via a modem and
telephone link to the bank. Access is not necessarily via the Internet.
2) Internet Banking -:
Using a Web browser, a user can access their account, once the bank's application
server has validated the user's identity.

3) Digital TV Banking -:
Using the standard digital reception equipment (set top box and remote control) users
can access their bank account. Abbey National and HSBC services are available via
Digital TV providers. One of its main selling points is that no account details are
transmitted via the World Wide Web;
4) Text Phone Banking -:
HSBC have introduced this service to allow customers with text phones to check their
balance, pay bills and transfer money.
5) Mobile Banking -:
Mobile banking (also known as M-banking) is term used for performing balance
checks, account transactions, payment, credit application and other banking
transaction through a mobile device such as a mobile phone or Personal Digital
Assistant (PDA).
Mobile banking is a term used to refer to systems that allow customers of a financial
institution to conduct a number of financial transactions through a mobile device such
as a mobile phone or tablet.
Mobile banking differs from mobile payments, which involve the use of a mobile
device to pay for goods or services either at the point of sale or remotely, analogously
to the use of a debit or credit card to effect an EFTPOS payment.

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Establishment and Development of mobile banking.

 Introduction of GPRS technology and personal office Mobile services in late 1999
and in 2000.
 Introduction of mobile money (2000) and Third Generation Mobile
(late 2001).
 The earliest m-banking services were offered over SMS (called SMS Banking).

Internet banking can be split into two distinct groups:

Traditional banks and building societies use the Internet as an add-on services with
which to give businesses access to their accounts.
New Internet-only banks have no bricks and mortar presence on the High Street.
Therefore, they have lower overheads and can offer higher rates of interest and lower
charges.

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OBJECTIVES OF THE PROPOSED SYSTEM

The development of the new system contains the following activities which try to automate
the entire process keeping in view of the database integration approach. Following are the
Objectives of the proposed system:
1. The administrators have grates accessibility in collecting the consistent information that is
very much necessary for the system to exist and coordinate.
2. The system at any point of time can give the customers information related to them
Accounts and accounts status
The balance enquiry
The fund transfer standards
The cheque book request
3. The system can provide information related to the different types of accounts that
are existing within the bank.
Demate account
Current account
4. The system can provide the bank administration with information on the number of
customers who are existing in the system.
5. The system at any point of time can provide the information related to the executed
transactions by the customer.
6. The system with respect to the necessities can identify all the history details of the
trial participants along with their outcome of the results.
7. The system with respect to the necessities can provide the status of research and
development process that is under schedule within the organization currently.
8. With proper storage of the data in a relational environment the system can
Applegate itself to cater to the standards of providing a clear and easy path for future
research standards that may arise due to organizational policies.

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Features of Internet banking

The features available from an on-line bank account are similar to those
which are available via 'phone banking or visiting the local branch. Online
banking features do differ between the banks, but usually include:
1. Bill Pay Service: –
One of the biggest reasons for going with an online bank is to get really good bill payment
services. Different banks handle bill payment different ways. Here are some things to think
about:
1. How many bills are you allowed to pay per month?
2. What are the fees for going over the limit?
3. Can the bill payment send physical checks to merchants who aren’t set up to take
electronic payments?
4. Do checks come from your account or from a third-party service? For privacy reasons, it
might be better to be able to pay someone without giving them your bank account number on
the check. On the other hand, if the checks actually come from your account, the money
doesn’t get taken out until the check is cashed.
5. Can you set up reoccurring payments?
2. Electronic Bill Notification : –
With electronic bills, your merchant (credit card company, gas company, electric company,
etc.) sends an electronic bill to your bank. You can set it up to pay automatically or notify
you for approval. This can be particularly good for people who are on the road because it
reduces the amount of physical mail you have to somehow get read or forwarded to you.
3. Online Check Images: –
Most banks will show you an image of the check, which makes it really easy to balance your
account if you can’t remember what a particular payment was for. (Ideally, you should
minimize the number of physical checks you write to reduce fraud.)
4. Online Deposit Slip Images: –
Most banks just record the total with no image. It will let you see an image of each deposit
slip. Having the images available can be very helpful if you ever have to prove something for
tax purposes or need to remember where that $2581 deposit came from.
5. Ease of Opening New Accounts: –
Once you have an account at the bank, you should be able to open additional accounts
entirely online and just transfer money into it. For example, I set up a traditional IRA last

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year and it took me about 3 minutes to set up, deposit my money from checking and invest it
in an index fund.
6. Reporting Tools: –
Most banks offer basic reporting tools that will let you see how much you have spent in each
category you’ve created. This may not be an issue if you use desktop money management
software, but it still can be handy if you are traveling and want to see how much you’ve paid
on your mortgage over the past 12 months.
7. Linked Accounts: –
Can you link your bank account with a brokerage account? Can you add your minor children
as custodial accounts and manage them all centrally? If you and your spouse both set them up
IRAs, is it easy to view them both along side the rest of your finances, or do you have to have
a separate login for each IRA to keep them on separate SSNs? These are small things that
many banks don’t support, but it starts getting really complicated when you have to manage a
bunch of accounts instead of having a single place to manage all of your money.
8. Convenient Deposit Methods: –
Since you may not be anywhere near the physical location of your bank, make sure you
understand how to deposit money. Payroll can be set up on direct deposit, but there will be
times when you need to deposit checks. Does the bank provide postage paid envelopes and
deposit slips? Some banks work with FedEx or UPS stores to allow you to send in a deposit
overnight for free.
9. Low ATM Fees and Convenient Locations: –
If you need to get cash, will the bank refund the ATM fees? Are there only certain ATMs that
are free, and if so, are they located near places you normally go? Are the ATMs available
nationwide so you can use them on vacation? What are the fees for using the ATM
internationally and how is the exchange rate handled?
10. Integration with Desktop Software: –
If you use Microsoft Money, Quicken or something similar, you’ll want to make sure your
bank supports it. Make sure you understand if downloading transactions require you to login
and manually download a file, or if your money management software can directly connect
and download new transactions. If you are using Quicken on a Mac, make sure the bank is
paying Quickens extortion fee so the files will work with Mac users.

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11. Many Account Types: –

Some banks only offer basic checking and savings accounts. Ideally you want a bank that
makes it easy to open money market accounts, IRAs, health savings accounts, etc. If you
have to go to another institution to open a different type of account, it is more difficult to
manage especially if you are on the road. You want to be able to easily open a CD to take
advantage of a higher interest rate, easily open an IRA to help reduce your tax liability, etc.
12. Free Money Transfer: –
Be sure to consider how easy it is to move money in and out of the account. You should be
able to set up links with your accounts from other institutions to transfer money back and
forth as necessary. Make sure you understand what type of fees are associated with these
transfers. Good banks should allow a certain number of transfers per month with no fee.
13. Security Balanced with Convenience: –
Some banks spend so much effort trying to keep things secure that you’ll find yourself
automatically logged out of their website while you try to balance your account. You want
security but you don’t want it to get in the way of you doing your banking. Also check into
what type of additional security features are available. For example, some banks will offer
you an RSA keychain with a number that changes every 60 seconds. In addition to your
password, you will need the number from that key in order to get access to your account.
14. Ease of Use: –
This is something that most banks seem to struggle with. Right now I have my personal
account with one online bank and my business accounts with another. I dread using the
business accounts and I absolutely love using my personal account. At first I thought I was
just more familiar with the bank where my personal accounts are, but I finally realize that it
comes down to the ease of use.
Transfer of funds between accounts;
It brings efficiency in CRM (Customer Relationship Management)
Make Payment of bills
Introduces new & innovative products &services.
View balance and statements.
Brings door to door services.
Create, view and maintain Standing Orders
Have evolutionary trend at a global scenario.
Customer can View Direct Debits.

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Advantages of Internet Banking

Internet Banking has several advantages over traditional one which makes operating an
account simple and convenient. It allows you to conduct various transactions using the bank's
website and offers several advantages. Some of the advantages of online banking are:
 Easy to opening & closing of online accounts and simply to operate the account
 Make the payments of merchandise transaction through Online payment, Debit cards
& Credit cards.
 It gives reliefs to their customer from carrying heavy cash.
 Enables prompt & speedy operation to clients.
 It saves lot of time to their customers & convenient to access.
 It is available all the time, i.e. 24x7. You can perform your task from anywhere and at
any time; even in night when bank is closed or on holidays. The only thing you need
to have is an active internet connection.
 It is quite convenient as you can easily pay your bills, can transfer fund between one
account to another accounts, etc. now you do not have to keep receipts of all the bill
as you can now easily view your transaction
 It is fast and efficient. Fund get transferred from one account to the other account is
very fast. You can also manage several account easily through online banking.
 Through online banking, you can keep an eye on your transaction and account balance
all the time. This facility also keeps your account safe.

Beneficial for bank in following ways:

 The bank gain goodwill as the customers are satisfied with prompt transaction.
 The network of the bank is not limited as it is connected to every branches of the
bank.
 The work pressure of the bank decreases.

Disadvantages of Internet Banking:

 Customer may have to face risky transaction & fraud.
 Failure of power supply cause to break down of system.
 Loss of heavy income at times of settlement of higher magnitude.
 Cost involved in training staff may not be profitable specially in times of attrition.

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 Development of an attitude of lethargy.

 In online banking, not a maintain relationship with the bank employees.
 Understanding the usage of internet banking might be difficult for a beginner at the
first go. Through there are some sites which offer a demo on how to access online
accounts, but not all banks offer this facility. So, a person who is new, might face
some difficulty.
 Security of transaction is a big issue. Your account information might get hacked by
unauthorized people over the internet.
 You cannot have access to online banking services if you don’t have an internet
connection, thus without the availability of internet access, it may not be useful.

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PROCEDURE OF TRANSFER OF FUNDS

There is two measure source to transfer funds using e-banking
1 .RTGS (Real-time gross settlement systems)
 Real-time gross settlement systems (RTGS) are specialist funds transfer systems
where the transfer of money or securities takes place from one bank to another on a
"real time" and on a "gross" basis. Settlement in "real time" means a payment
transaction is not subjected to any waiting period, with transactions being settled as
soon as they are processed. "Gross settlement" means the transaction is settled on one-
to-one basis without bundling or netting with any other transaction. "Settlement"
means that once processed, payments are final and irrevocable.
 RTGS systems are typically used for high-value transactions that require and receive
immediate clearing. In some countries, the RTGS systems may be the only way to get
same day cleared funds and so may be used when payments need to be settled
urgently. However, most regular payments would not use a RTGS system, but instead
would use a national payment system or network that allows participants to batch and
net payments. RTGS systems are usually operated by a country's central bank as it is
seen as a critical infrastructure for a country's economy. Economists believe that an
efficient national payment system reduces the cost of exchanging goods and services,
and is indispensable to the functioning of the interbank, money, and capital markets.
A weak payment system may severely drag on the stability and developmental
capacity of a national economy; its failures can result in inefficient use of financial
resources, inequitable risk-sharing among agents, actual losses for participants, and
loss of confidence in the financial system and in the very use of money.

Procedure of funds transfer using RTGS

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2. NEFT (National Electronic Funds Transfer)

 National Electronic Funds Transfer (NEFT) is one of the most prominent electronic
funds transfer system of India. Started in November 2005, NEFT is a facility provided
to bank customers to enable them to transfer funds easily and securely on a one-to-
one basis. It is done via electronic messages. This is not on real-time basis like RTGS
(Real Time Gross Settlement). This is a "net" transfer facility which is executed in
hourly batches resulting in a time lag. NEFT facilities are available in 30,000 bank
branches all over the country and work on a batch mode. RBI explains this scheme as
"National Electronic Funds Transfer (NEFT) is a nation-wide payment system
facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and
corporates can electronically transfer funds from any bank branch to any individual,
firm or corporate having an account with any other bank branch in the country
participating in the Scheme." NEFT has gained popularity due to it’s saving on time
and the ease with which the transactions can be concluded, This reflects from the
fact that 42% of all electronic transactions in the 2008 financial year were NEFT
transactions

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Step-1:
Customer fills an application form providing details of the beneficiary (like
name, bank branch name, IFSC, account type and account number) and the
amount to be remitted. The remitter authorizes his/her bank branch to debit
his account and remit the specified amount to the beneficiary. This facility is
also available through online banking and some banks offer the NEFT facility
even through the ATMs.
Step-2:
The originating bank branch prepares a message and sends the message to its
pooling Centre (also called the NEFT Service Centre).
Step-3:
The Pooling Centre forwards the message to the NEFT Clearing Centre
(operated by National Clearing Cell, Reserve Bank of India, Mumbai) to be
included for the next available batch.
Step-4:
The Clearing Centre sorts the funds transfer transactions destination bank-
wise and prepares accounting entries to receive funds from the originating
banks (debit) and give the funds to the destination banks (credit). Thereafter,
bank-wise remittance messages are forwarded to the destination banks
through their pooling centre (NEFT Service Centre).
Step-5:
The destination banks receive the inward remittance messages from the
Clearing Centre and pass on the credit to the beneficiary customers’
accounts.

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Procedure of funds transfer using NEFT

DIFFRENCE BETWEEN RTGS AND NEFT

A. Timing:
As mentioned above, NEFT operates in hourly batches. Currently, it has 11 settlements from
9am to 7pm on weekdays and five settlements from 9am to 1pm on Saturdays. So, in case
you initiate a transaction after a settlement time you have no option but to wait till the next
settlement time. But that’s not the case with RTGS transactions, since they are processed
constantly throughout the RTGS business hours. The service window for RTGS at banks is
available from 9am to 4.30pm on week days and from 9am to 1.30pm on Saturdays for
settlement at the RBI end. Keep in mind that the timings that each bank follows may vary.
B. Amount:
As far as NEFT goes, it does not have a minimum or maximum limit of amount you can
transfer. But the maximum amount per transaction is limited to Rs 50,000 for cash-based
remittance and remittance to Nepal. As far as RTGS goes, it is mostly meant for large
transactions. The minimum amount that can be remitted through it is Rs 2 lakh. RTGS does
not have an upper ceiling for transactions.

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C. Charges:
For NEFT, inward transactions (when you receive funds via NEFT) are free, as no charges are
to be levied from the person to whom fund are being transferred to. When you use NEFT to
make an outward transaction (when you send funds via NEFT) at a bank branch for amounts
up to Rs 1 lakh, the charge is up to Rs 5 plus service tax. For transactions above Rs 1 lakh and
up to Rs 2 lakh, the charge is up to Rs 15 plus service tax. for transactions above Rs 2 lakh,
the charges can’t exceed Rs 25 plus service tax. For RTGS, inward transactions (when you
receive funds through RTGS) are free. For outward transactions (when you send funds via
RTGS), if the amount is between Rs 2 lakh and Rs 5 lakh, the charges will be up to Rs 30 per
transaction. If the amount transferred is above Rs 5 lakh, the charges can’t exceed Rs 55 per
transaction.
3. IMPS (IMMEDIATE PAYMENT SERVICES)
Immediate Payment Service (IMPS) is an instant real-time inter-bank electronic funds
transfer system in India. IMPS offers an inter-bank electronic fund transfer service through
mobile phones. Unlike NEFT and RTGS, the service is available 24/7 throughout the year
including bank holidays.
It is managed by the National Payments Corporation of India (NPCI) and is built upon the
existing National Financial Switch network. In 2010, the NPCI initially carried out a pilot for
the mobile payment system with 4 member banks (State Bank of India, Bank of India, Union
Bank of India and ICICI Bank), and expanded it to include Yes Bank, Axis Bank and HDFC
Bank later that year. IMPS was publicly launched on November 22, 2010. Currently, there
are around 53 commercial banks, 101 Rural/District/Urban and cooperative banks signed up
for the IMPS service.

List of participating banks in IMPS

 Allahabad Bank
 Andhra Bank
 Axis Bank
 Bank of Baroda
 Bank of India
 Bank of Maharashtra
 Canara Bank
 Central Bank of India
 Citi-bank
 Dena Bank
 HDFC Bank
 HSBC
 ICICI Bank
 IDBI Bank
 IDFC Bank
 Indian Bank
 Kotak Mahindra Bank
 Punjab National Bank
 Standard Chartered Bank
 State Bank of India
 Syndicate Bank
 Yes Bank

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 Role of RBI in Computerization of Banks in India

Computerization became popular in the western countries right from the Sixties. Main
Frames were extensively used both by the Public Institutions and Major Private
Organizations. In the Seventies, Mini Computer became popular and Personal Computers in
early Eighties, followed by introduction of several software products in high level language
and simultaneous advancement in networking technology. This enabled the use of personal
computers extensively in offices & commercial organization for processing different kinds of
data.
However, in India organized Trade Unions were against introduction of computers in Public
Offices. Computerization was restricted to major scientific research organizations and
Technical Institutes and defense organizations. Indian Railways first accepted
computerization for operational efficiency.
The Electronics Corporation of India Ltd. was set up in 1967 with the objective of research &
development in the fields of Electronic Communication, Control, instrumentation, automation
and Information Technology. CMC Ltd (Computer Maintenance Corporation of India Ltd.)
was established in 1976 to look after maintenance operations of Main Frame Computers
installed in several organizations in India, to serve the gap, when IBM left India, due to the
directive of the then Central Government.
In the Private Sector the first major venture was TCS (Tata Consultancy Services) which
started functioning from 1968. In the year 1980 a few batch-mates of IIT Delhi pioneered the
effort to start a major education center in India to impart training in Information Technology
and their efforts resulted in the setting up of NIIT in 1981. Aptech Computer Education was
established in 1986 following the experiment of NIIT.
Before large scale computerization, computer education became popular in India and coveted
by bright students, when several Engineering Colleges and Technical Institutes introducing
Post Graduate Degree courses in Computer Engineering. The booming hardware and
software industry in the West attracted Indian students and many of them migrated for better
opportunities to the U.S.A. and settled there. We have today the paradox of India being one
of the major powers possessing diverse talents in fields of software development, but at the
same time, we are still a decade back to the using computerized service extensively in the
country and bringing the facility to the realms of the common man.
Rapid development of business and industry brought manual operations of data, a saturation
point. This acted as an overload on the growing banking operations. Government owned
banks in general found the "house-keeping" unmanageable. Several heads of accounts in

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particular inter-bank clearing and inter-branch reconciliation of accounts went totally out of
control.
Low productivity pushed cost of wages high and employees realized that unless they agreed
for computerization further improvement in their wage structure was not possible.
In the year 1993, the Employees' Unions of Banks signed an agreement with Bank
Managements under the auspices of Indian Banks' Association (IBA). This agreement was a
major breakthrough in the introduction of computerized applications and development of
communication networks in Banks.
The first initiatives in the area of bank computerization, however, stemmed out of the
landmark report of the two committees headed by the former Governor of the Reserve Bank
of India and currently Governor of Andhra Pradesh, His Excellency, Dr.C.Rangarajan. Both
the reports had strongly recommended computerization of banking operations at various
levels and suggested appropriate architecture.
In the 'seventies, there was a four-fold increase in the number of branches, five-fold increase
in advances and a six-fold increase in deposits'. Mechanization was seen as the best solution
to the "problems inherent in the manual system of operations, their adverse impact on
customer services and the grave dangers to banks in the context of increasing incidence of
frauds.
The first of these Committees, viz. the Committee on the Mechanization of the Banking
Industry (1984) was set up for the first time to suggest a model for mechanization of bank
branches, regional / controlling offices and Head Office necessitated by the explosive growth
in the geographical spread of banking following nationalization of banks in 1969.
In the first phase of computerization spanning the five years ending 1989, banks in India had
installed 4776 ALPMs at the branch level, 233 mini computers at the Regional/Controlling
office levels and trained over 2000 programmers/systems personnel and over 12000 Data
Entry Terminal Operators. The Reserve Bank too had embarked upon an ambitious program
to bring about state-of-the-art technology in the clearing process and had introduced MICR
clearing at 4 centers and computerized clearing settlement at 9 centers.
Against this backdrop, the Committee on Computerization in Banks was set up once again
under Dr.Rangarajan's Chairmanship to draw up a perspective plan for computerization in
banks. In its report submitted in 1989, the Committee acknowledged the gains of the initial
efforts and sought to move away from the stand-alone dedicated systems to an on-line
transaction processing environment in branch banking. It recommended that the thrust of

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bank computerization for the following 5 years should be to fully computerize the operations
at both the front and back offices of large branches then numbering around 2500.

Progress Made after the Report of the Second Committee

Computerization efforts among the Public-Sector Banks (PSBs) in India, which account for
over 80 per cent of the assets of the entire banking system, has been substantial. Of the
45,439 branches of the PSBs as on September 30, 1998, as many as 3,668 branches serving
customers directly had been fully computerized with a complement of more than 65,000
computer nodes/PCs. A total of 6961 branches have been partially computerized - with
Advanced Ledger Posting Machines, Electronic Accounting Machines and Personal
Computers. Of the 336 service branches, 149 had been fully computerized and 166 had been
partially computerized.

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Internet banking strategies

Internet banking strategy can be generally very challenging, but more challenging in an
economic environment infested with high degree of corruption, insecurity, bad governance,
poverty, and financial system instability. Due to its global nature, Internet banking, under
such situation, is threatened by the easiness at which off-line crimes are transmitted into
online businesses, and the difficulty in building trusts and confidence in online business
relationships. Using the Nigerian case, this chapter aims at establishing some theoretical link
between offline country image and Internet banking reputation. The chapter summarizes the
structural and regulatory challenges in the Nigerian banking system. It represents and relates
the country’s socioeconomic conditions with its Internet business reputation; and lays down
past regulatory and global efforts to control the menace of the Nigerian version of Internet
frauds. The last two sections of the chapter, respectively, suggest some future research
direction and conclude the chapter.

1. It’s not all about the rate: -

Mortgage shoppers are not rate driven… at least nowhere near as much as lenders tend to
believe. According to the 2014 National Survey of Mortgage Borrowers, 77% of new home
buyers applied for a mortgage with just one lender. Almost half didn’t even shop before
completing an application! They are looking for information and guidance — someone to
walk them through the home buying process.

2. Focus more attention to existing customers: -

Acquisition costs are lower; the trust factor is high and it’s a convenient call to make. So
stimulate more calls by boosting your cross-marketing efforts. Use internal signage, email
marketing and pop-up messages on your mobile banking apps to remind customers you are a
source for mortgage advice and service. Don’t offer bargain-basement rates. These customers
are willing to pay a little more for personal service.

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 ONLINE BANKING SERVICES

3. Two audiences: new home buyers vs. refi borrowers: -

Unlike new home buyers, refinance customers are rate-sensitive and opportunistic. Because
they don’t need a new home, they can afford to wait until rates drop low enough to make
refinancing worth their while… then they’ll pounce. Loyalty is not a big factor to re-fi
shoppers. They are not looking for much handholding; they have been through the mortgage
process before. While they will likely get a quote from their current lender, they will shop the
internet and go with the lowest rate. Lure them in with low rates or be content with those few
willing to pay a little more for convenience or advice.

4. Leverage content marketing channels: -

Launch a content marketing campaign to attract and retain mortgage prospects. By adding
home-buying and mortgage content to your website, you’ll boost readership and add new
prospects. Content is well received. Almost three-quarters of retail customers prefer their
introduction to brands or products be through articles rather than ads. (Roper Public Affairs
2011). Because first-time home buyers want mortgage information, the more useful the
information placed on-site, the higher your rankings on internet searches — an important
source of leads. Search engines can often deliver 40% or more of all total applications.
Blogs can be successful elements in a content marketing strategy. Whether on topics such as
FICO scoring, preparing a house for sale or lending options, there’s a wealth of information
of interest for appealing to shoppers. Internal loan originators or processors are often good
sources for a monthly article. Video is another powerful option. Tape your loan officer
answering five or six of the most commonly asked questions or have them explain the most
frequent errors in completing a loan application. Place them on your website or on You Tube.
Once on-site, your goal is to keep shoppers returning and ultimately nudge them towards
completing an application. Interesting, well-written information will help. Hiring a journalist
is often a good idea. Avoid using syndicated or non-original material. Search engine
algorithms deduct points and lower rankings when web material has been used elsewhere.
Although web content requires time and money to build, it tends to be a continuing and cost-
efficient source for leads.

5. Pay-per-click search engine marketing: -

Fresh, useful content will increase organic search rankings, however a faster (albeit more
expensive way) to reach shoppers is by displaying your ad next to search results. Advertisers

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can bid for popular key phrases such as “lowest mortgage rates”, “no-fee mortgages” or “loan
refinancing”. Depending on the number of advertisers bidding for the same key words, prices
can range from a few cents per click to a high dollar amount. Once advertisers set a budget,
costs are deducted as shoppers click on the ads. Click through rates can be measured and
words optimized for maximum efficiency. Since search engines are often used to make rate
comparisons or to gather information prior to purchase, these leads are highly valued.

6. Obsess over the shopper’s digital UX: -

Fill your mortgage website with engagement options. Web content should be useful,
objective and curated for freshness regularly but, make sure they are also sprinkled with
engagement opportunities. Engagement options are hooks that entice the shopper to click on a
button or take an action. This may to ascertain current rates, subscribe to a rate watch,
calculate a loan payment, call with an inquiry or complete a pre-application. Engagement
points are valuable for two other reasons: they screen prospects that are worth cultivating and
they inform you where the shopper stands on the path to an application. Are they examining
mortgage options, reading rate watch alerts or in the middle of completing a pre-app?
Knowing their location on the buying path, allows you to call or send a customized text
offering help.

7. Tap the power of shopping sites for financial consumers: -

Two good digital advertising options are Bank rate and Nerd Wallet. Popular destinations for
comparing checking, savings and mortgage products, they charge advertisers on the basis of
visitor impressions. Lending Tree takes a somewhat different approach. They promise
mortgage or refinance quotes from area lenders in minutes then turn around and sell those
leads to clients. Zillow compares lenders, too, but their niche is giving consumers the
estimated value of homes in the area. Plug in an address and you get the estimated value of
your home and your future neighbors. Perhaps, more of a differentiator than a precise tool,
Zillow attracts considerable traffic and is a good vehicle for display ads. Pay-per-click and
mobile-only options are available, too.

8. Harness the power of big data: -

There’s lots of talk about big data in the banking industry, but not a lot of action. Most banks
and credit unions are paralyzed by the possibilities big data presents. Where do they start?
What resources do they need? Luckily, there are other companies who are not only well-

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versed in the strategies and mechanics of big data, they are also sitting out mountains of
relevant information that you can leverage in your mortgage lending campaigns.
For instance, consider advertising on Facebook. Define your prospect area, the product
you’re selling and the social media giant can feed your ad to those people with the highest
propensity for buying. I’m not saying they read all your posts but Facebook has a huge
database of personal information to help pinpoint top prospects. (You can read about how
Navy FCU generated nearly $100 million in loans on Facebook in this article here on The
Financial Brand.)
Another option is to buy an email list of potential buyers from a firm specializing in
predictive modelling. Companies such as Accurate data can help you create an ideal prospect
list, analyze results and tweak both the offer and audience to maximize peak performance.

9. The remarkable impact of retargeting: -

Few tactics are more cost-efficient for snagging mortgage prospects than digital remarketing.
The website shoppers who visit for rate information or content are excellent prospects. You
can court them for the next few months after visiting your site by putting a cookie on their
browser. When they peruse other websites, your mortgage ad will pop up with a link urging
them to return and apply for a loan. Web retailers use remarketing extensively. If you have
ever left items in a shopping cart and moved on to another site, you have probably received
messages reminding you to return and check out. Sometimes they lure you back with a
discount.
10. Using digital channels can sharpen your aim:-
Dig deeper and you’ll find plenty of other companies that target home-buyers. Most are easy
to use, affordable and customizable to small geographic areas. Unlike the mass distribution of
print and electronic media, digital avoids waste. By narrowcasting to a specific audience and
carefully analyzing data, you can end up with a highly effective marketing strategy.

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Top 5 Retail Banking Trends and Predictions for 2017

1. Removing Friction from the Customer Journey

An optimal customer journey makes every step and touchpoint in the buying cycle
streamlined, efficient, consistent and personalized from the consumer perspective. Financial
institutions need to re-imagine their core journeys from front to back by addressing key
customer pain points, identifying new opportunities to delight customers in differentiated
ways.
The relatively poor performance by a majority of traditional financial services organizations
in delivering a customer-focused digital account opening, onboarding and cross-selling
process is an opportunity for those institutions that want to embrace the potential of becoming
a “Digital Bank”.
The key takeaways from the previously published report, which surveyed banks and credit
unions about digital new account opening, onboarding and cross-selling include:
 Most financial institutions can’t open a new account entirely online or on a mobile
device.
 Only 16% of financial organizations provide a tablet assist account opening option in a
branch.
 Branch based ID verification and/or signatures/supporting documentation are required
at the majority of organizations.
 Multichannel digital account opening (save and resume) is not supported at most
financial institutions.
 New account opening abandonment rates are high for institutions that offer online or
mobile account opening.
 Only 55% of banks and credit unions have a “structured” onboarding process.
 Only 22% of financial institutions onboard new customers with the “optimal” amount
of communication.
 Only 30% of banks and credit unions market products within the mobile banking app.
 Community banks are falling behind both larger banks and credit unions in digitizing
the customer journey.
The consumer expects a simple and seamless digital experience. If this can be achieved, it
will be reflected in improved satisfaction, loyalty and referral scores. If the digital consumer
does not experience a positive end-to-end digital process, new account opening abandonment
or existing relationship attrition is likely.

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“The upshot of the Wells Fargo scandal will be that banks will seek to prove that they have
their customers’ best interests in mind when marketing and cross-selling to them. The result
will be a focus on “we’re here to help you improve your financial health,” and a positioning
of PFM-related tools and apps as ways to measure and improve financial health.”

2. Use of Data, and Advanced Analytics

Data is the fuel of the digital economy and the foundation for all the trends and predictions in
2017. Unfortunately, while the consumer has indicated a willingness to share information
about themselves with banks and credit unions, the ability for financial institutions to
leverage this insight has been far short of optimal.
The Digital Banking Report, Power of Personalization in Banking, found that many
customers will share their data with bank brands if they get something valuable in return. The
desired reward? Offers customized to their individual wants and needs.
Unfortunately, the clear majority of organizations are collecting customer data and not doing
anything with it that benefits the customer. Beyond neglect, this practice could also be killing
an organization’s future and ensuring greater share of wallet go to your competitors.
In the IBM report, “The Cognitive Bank: Decoding Data to Bolster Growth and Transform
the Enterprise“, it is emphasized that tapping into huge quantities of dormant, bank-owned
data is essential to offering the individualized engagement that customers demand. It is also
proposed that cognitive systems can continually build knowledge and learning, providing the
insight needed to increase efficiency and effectiveness throughout the organization. In other
words, the one to one future on steroids.
Ultimately, cognitive computing enables banks to exploit the benefits of available data by:
Providing deeper and more personalized customer insight
Supporting more-informed decisions across the whole bank
Accelerating operational and organizational efficiency

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By combining internal and external data (both structured and unstructured), banks and credit
unions can position their organizations at the center of rapidly evolving banking ecosystems.
Because legacy banking organizations have such a wealth of knowledge, cognitive banking
organizations can provide ‘doorways’ for existing fintech firms to build relationships with
households they could not reach or serve before.

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3. Supporting Integrated Multichannel Delivery

Most consumers continue to use multiple channels to conduct their banking based on
transaction type and individual behavior patterns. To migrate more transactions to digital
channels, financial institutions must move their sole focus away from cost reduction, and
instead focus on improving the integrated multichannel experience.
Part of the reason physical branches remain open is because of the preference of consumers
to continue to use branches for activities such as opening an account, cashing or depositing
checks and seeking financial advice. As has been noted in previous reports, the reliance on
branches should be taken with a grain of salt since many institutions have made the process
of opening accounts digitally exceedingly difficult, and/or have not done an adequate job of
educating consumers on services such as mobile deposit capture.

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4. Testing Open Banking APIs

APIs were not even listed as a 2016 trend, but was #4 in 2017. The use of open APIs provides
the opportunity for combinations of products and services beyond traditional banking. As
mentioned by Ron Shevlin in last year’s trends report, traditional financial services firms can
leverage their existing customer relationships to create the foundation of platformification™
with traditional organizations at the center of the relationship

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5. Partnerships Between Banking and Fintech

The rise of interest in the fintech sector has been caused by increasing unmet consumer
demands for digital banking solutions fueled by digital advances in many other sectors (retail,
hospitality, travel, etc.). These consumer demands, combined with reduced barriers to entry
in some markets, have improved the availability of funding for the sector and have increased
the interest in potential partnerships.
The future of collaboration and competition between legacy financial organizations and new
fintech providers remains somewhat uncertain. Banks and credit unions must continue to
explore strategic options, however, as technology changes and regulations evolve.

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MANAGEMENT OF ONLINE BANKING

It is not intended that the book should replace texts on existing management practices in its
focused field, but rather that it be used as a complement to them. The main target audiences
include undergraduate as well as postgraduate students of business administration, general
management and technology management as well as practitioners of e-banking. The expected
contributions to the academic community include development of a deeper understanding of
the issues involved in e-banking as well as practical suggestions on how to tackle these
issues. Apart from the introductory chapter, all other chapters are written as independent
pieces so readers of this book can choose to consult the part of the book which is most
relevant to the problem in hand.
E-banking forces most financial institutions to re-examine their systems and practices and to
look for new ways to deliver their services over the Web. To do that effectively they seek to
improve work flow, reduce paper work, provide online document imaging for users and
create industry wide standards in order to improve cost efficiencies and profitability. This
leads to many technical, managerial and strategic issues. Chapters I, II, and III present an
overview of these issues, which will be covered in greater depth in subsequent chapters.
E-banking related technical issues may include developing an infrastructure to ensure 24-
hour availability, integrating backend, front end and other supporting tools to create a
seamless experience for the customer, and collection/analysis of data which enables the
provision of timely information to the management for effective decision making.

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RISK MANAGEMENT FOR E-BANKING ACTIVITIES

For an increasing number of banks there may be a strategic reason for engaging in electronic
banking and electronic money activities. In addition, greater use of electronic banking and
electronic money may increase the efficiency of the banking and payment system, benefiting
consumers and merchants. At the same time, as the preceding discussion indicates, there are
risks for banks engaging in electronic banking and electronic money activities. Risks must be
balanced against benefits; banks must be able to manage and control risks and absorb any
related losses if necessary. Risks from electronic banking and electronic money activities
should also be evaluated in the context of other risks the bank faces. Even though electronic
banking and electronic money activities may represent a relatively small portion of the
overall activities of banks currently, supervisors may still require senior management’s
assurance that critical systems are not threatened by the risk exposures banks take. The rapid
pace of technological innovation is likely to change the nature and scope of risks banks face
in electronic money and electronic banking. Supervisors expect banks to have processes that
enable bank management to respond to current risks, and to adjust to new risks. A risk
management process that includes the three basic elements of assessing risks, controlling risk
exposure, and monitoring risks will help banks and supervisors attain these goals. Banks may
employ such a process when committing to new electronic banking and electronic money
activities, and as they evaluate existing commitments to these activities. It is essential that
banks have a comprehensive risk management process in place that is subject to appropriate
oversight by the board of directors and senior management. As new risks in electronic
banking and electronic money activities are identified and assessed, the board and senior
management must be kept informed of these changes. Prior to any new activity being
commenced, a comprehensive review should be conducted so that senior management can
ensure that the risk management process is adequate to assess, control and monitor any risks
arising from the proposed new activity.

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As noted in the prior section, e-banking has unique characteristics that may increase an
institution's overall risk profile and the level of risks associated with traditional financial
services, particularly strategic, operational, legal, and reputation risks. These unique e-
banking characteristics include:
 Speed of technological change,
 Changing customer expectations,
 Increased visibility of publicly accessible networks (e.g., the Internet),
 Less face-to-face interaction with financial institution customers,
 Need to integrate e-banking with the institution's legacy computer systems,
 Dependence on third parties for necessary technical expertise, and
 Proliferation of threats and vulnerabilities in publicly accessible networks.
Management should review each of the processes discussed in this section to adapt and
expand the institution's risk management practices as necessary to address the risks posed by
e-banking activities.

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NEW DEVELOPMENT IN ONLINE BANKING SECURITIES

The advent of electronic identity theft
Then thieves discovered another vault: our identity information. Instead of making a massive
frontal attack on a bank in an attempt to get at the bank’s customer accounts, they began to
launch a million stealthy small attacks, using a million individuals’ account credentials, on a
few thousand banks, spread over time. It required a few more computer clicks, but the result
was the same.
Identity theft replaced outright bank theft as the number one financial crime, in large part
because criminals perfected the art of identity theft before institutions could respond. When
they did, their response looked a bit like the proverbial herd of wild animals: A separation
existed between the diligent and strong banks, on the one hand, and the others who lag.
Passive and active online security strategies
The strongest banks developed a two-pronged attack to identity theft. Their first line of attack
was passive identification protocols, like passwords and PINs. These are geared to verify it’s
you making the request, not some unauthorized rogue. The advantages are: It’s simple and
unique for every customer. Banks store those PINs and passwords separately from our
account information, even on different networks with separate encryption to make it harder
for thieves to extract the codes and be able to use them to impersonate you.
To circumvent any deficiencies with passive protocols, banks added departments devoted
to active online security. These experts analyze your buying patterns and react to anything
out of the ordinary by reaching out to you to confirm any transaction that doesn’t fit your
pattern. My bank called me two weeks ago to ask if I was buying gas in Mexico. I wasn’t,
and their alert limited their damage to one purchase and mine to waiting four days for a new
card. The downside of active online security is it’s expensive and still not foolproof.
New online security measures are being developed around biometrics
As banks sought a simpler solution that would also be more affordable and criminal-proof, it
pointed to a passive system as opposed to high-staff, active systems. The area showing the
most promise in this regard is what’s called biometric identification. “Biometric,” in this
instance, refers to identifiers based on one or more unique parts or surfaces of the human
body.
Fingerprints are well known as an accurate means of identifying an individual, because, as we
all know, no two people have identical fingerprints. The same applies to other body parts,
such as the iris of an eye. Something else that’s unique to every person is the vein patterns

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inside our fingers. Hitachi developed a scanner which shines light through a person’s finger
and digitizes the unique pattern of veins inside the finger.
The benefit of the vein scanner is that nobody can capture fingerprints from a glass or
counter, or capture an iris pattern from a photograph. Your vein pattern is impossible to
capture, other than by a scanner.
The downside of biometric identifiers is they all still get translated to zeroes and ones in a
computer file — and, if that file resides on a central computer, it’s vulnerable to being copied
and used by cyber thieves.
However, two recent developments may constitute a breakthrough in online bank security by
addressing this vulnerability in a unique way.

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CHALLENGES FOR E-BANKING REVOLUTION

This changing financial landscape brings with it new challenges for bank management and
regulatory and supervisory authorities. The major one’s stem from increased cross-border
transactions resulting from drastically lower transaction costs and the greater ease of banking
activities, and from the reliance on technology to provide banking services with the necessary
security.

REGULATORY
RISK

CHALLENGES FOR
REPUTATIONAL
RISK
E-BANKING LEGAL RISK
REVOLUTION

OPERATIONAL
RISK

1) Regulatory risk:
Because the Internet allows services to be provided from anywhere in the world, there is a
danger that banks will try to avoid regulation and supervision. What can regulators do? They
can require even banks that provide their services from a remote location through the Internet
to be licensed. Licensing would be particularly appropriate where supervision is weak and
cooperation between a virtual bank and the home supervisor is not adequate. Licensing is the
norm, for example, in the United States and most of the countries of the European Union. A
virtual bank licensed outside these jurisdictions that wishes to offer electronic banking
services and take deposits in these countries must first establish a licensed branch.
Determining when a bank's electronic services trigger the need for a license can be difficult,
but indicators showing where banking services originate and where they are provided can
help. For example, a virtual bank licensed in country X is not seen as taking deposits in
country Y if customers make their deposits by posting checks to an address in country X. If a

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customer makes a deposit at an automatic teller machine in country Y, however, that

transaction would most likely be considered deposit taking in country Y. Regulators need to
establish guidelines to clarify the gray areas between these two cases.
2) Legal risk:
Electronic banking carries heightened legal risks for banks. Banks can potentially expand the
geographical scope of their services faster through electronic banking than through traditional
banks. In some cases, however, they might not be fully versed in a jurisdiction's local laws
and regulations before they begin to offer services there, either with a license or without a
license if one is not required. When a license is not required, a virtual bank—lacking contact
with its host country supervisor may find it even more difficult to stay abreast of regulatory
changes. As a consequence, virtual banks could unknowingly violate customer protection
laws, including on data collection and privacy, and regulations on soliciting. In doing so, they
expose themselves to losses through lawsuits or crimes that are not prosecuted because of
jurisdictional disputes.
Money laundering is an age-old criminal activity that has been greatly facilitated by
electronic banking because of the anonymity it affords. Once a customer opens an account, it
is impossible for banks to identify whether the nominal account holder is conducting a
transaction or even where the transaction is taking place. To combat money laundering, many
countries have issued specific guidelines on identifying customers. They typically comprise
recommendations for verifying an individual's identity and address before a customer account
is opened and for monitoring online transactions, which requires great vigilance.
In a report issued in 2000, the Organization for Economic Cooperation and Development's
Financial Action Task Force raised another concern. With electronic banking crossing
national boundaries whose regulatory authorities will investigate and pursue money
laundering violations. The answer, according to the task force, lies in coordinating legislation
and regulation internationally to avoid the creation of safe havens for criminal activities.
3) Operational risk:
The reliance on new technology to provide services makes security and system availability
the central operational risk of electronic banking. Security threats can come from inside or
outside the system, so banking regulators and supervisors must ensure that banks have
appropriate practices in place to guarantee the confidentiality of data, as well as the integrity
of the system and the data. Banks' security practices should be regularly tested and reviewed
by outside experts to analyze network vulnerabilities and recovery preparedness. Capacity

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planning to address increasing transaction volumes and new technological developments

should take account of the budgetary impact of new investments, the ability to attract staff
with the necessary expertise, and potential dependence on external service providers.
Managing heightened operational risks needs to become an integral part of banks' overall
management of risk, and supervisors need to include operational risks in their safety and
soundness evaluations.
4) Reputational risk:
Breaches of security and disruptions to the system's availability can damage a bank's
reputation. The more a bank relies on electronic delivery channels, the greater the potential
for reputational risks. If one electronic bank encounters problems that cause customers to lose
confidence in electronic delivery channels as a whole or to view bank failures as systemwide
supervisory deficiencies, these problems can potentially affect other providers of electronic
banking services. In many countries where electronic banking is becoming the trend, bank
supervisors have put in place internal guidance notes for examiners, and many have released
risk-management guidelines for banks.
Reputational risks also stem from customer misuse of security precautions or ignorance about
the need for such precautions. Security risks can be amplified and may result in a loss of
confidence in electronic delivery channels. The solution is consumer education—a process in
which regulators and supervisors can assist. For example, some bank supervisors provide
links on their websites allowing customers to identify online banks with legitimate charters
and deposit insurance. They also issue tips on Internet banking, offer consumer help lines,
and issue warnings about specific entities that may be conducting unauthorized banking
operations in the country.

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E-BANKING SERVICES

Online Services:
1. Account Summary:
Accounts which are ‘Internet Banking Enabled’ may be displayed along with the
Current Balance, Total Balance, Unclear Balance and Available Balance etc. (Savings
/Current / Overdraft /Term Deposit / Loan Accounts).
2. Overdraft Details:
Limit and Drawing Power for OD Accounts, Repayment Schedule for Loan Accounts
may be viewed.
3. Transactions Details:
User may view, download and print of the last 14 transactions or for specified period
of selected account.
4. Online Requests:
User may request for Stop Payment for a particular Cheque or Range of Cheques in
select accounts, Revoke of Stop Payment of Cheques already stopped. User may also
change his contact no. (phone no., mobile no., email etc.)
5. Funds Transfer between own Accounts:
User may transfer funds from one account (with requested transaction facility) to
his/her another account to the extent of fund transfer limit fixed by the bank from time
to time, subject to the available balance, by selecting ‘from’ & ‘to’ accounts.
6. Adding of Account in Beneficiary List:
If amounts are frequently transferred to a particular account, then the facility of
adding that account in beneficiary list will be available by providing a nick name to
that account.
7. Viewing of Beneficiary Accounts:
User may view all the beneficiaries that have been added and may also modify the
details of a beneficiary by selecting that beneficiary.
8. Fund transfer to other Beneficiary Account:
User may transfer fund from his/her account (with requested transaction facility) to
any other third party account, maintained with any of our CBS Branch, to the extent
of fund transfer limit fixed by the bank from time to time, subject to the available

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balance, by selecting his/her account and giving either third party’s account number
or selecting a beneficiary.
9. Standing Order:
User may give standing order for transfer of funds from one account to another to be
executed on a predefined frequency (daily /monthly / month end). User may also
amend or cancel the standing order so given.
10. Payment Facilities:
User may use E-Payment facility for payment of Direct (CBDT) and Indirect (CBEC)
taxes by debiting the account online and may print cyber receipt & challan also.
11. Open Demate Account:
Online banking provides the demate account services to the consumer. In demate
account the person buying and selling the securities like shares, bond, debentures, etc.
in electronic form to reduce the errors and frauds.
12. Online Enquiry:
 Cheque Enquiry: User may enquire status of a Cheque or Range of Cheques
issued in an account.
 Cheque Book: User may enquire for Cheque Book issued in an account.
 Outward Cheque Enquiry: User may also enquire status of specific Cheque
or all Cheques deposited in an account.
 TDS Detail: User may view the Tax Deducted at source details.
13. Other Options:
 Contact Detail. User may view address detail.
 Change Login Password: User may change login ID password as per
guideline available on website.
 Change Transaction Password: User may change transaction password as
per guidelines available on website.
 Change User Preference: User can change their User-Id, however the same
can be change only once. User may set his/her display preference.
 Login History: User may view, save and delete the login history.

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SOFTWARE SPECIFICATION
1-: Client on Internet:
Web browser (any) operating system (any)
2-: Client on Intranet:
Client software, Web Browser, Operating System (any)
3-: Web server:
Apache Tomcat or Glassfish, Operating System (any)
4-: Database Server:
MS-access, Operating System (Microsoft
Windows<any version>)
5-: Development End:
Net beans (J2EE, Java, Servers, JSP), MS-Access (DB tool).

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FEASIBILITY STUDY
A significant transformation in banking system has occurred in the world. The online system
of banking and improvements has been made through recognizing difficulties encountered by
the customer and the authority. Both qualitative and quantitative research, through
parent/career surveys. Focus groups and staff training sessions have influenced the online
process. As a result, this had produced an efficient and user friendly system, that relies on an
effective online form, but on the coordination between ban and its customer.

A comprehensive feasibility study of social, economical and technical

aspects have also been made and implemented as below: -
A] Social Feasibility
1-It has simplified the banking procedure.
2-Customers and banking authority had a huge acceptance to the notion.
3- It had a good social impact and no objections or problems regarding the project is found
B] Economic Feasibility
1- The project is economically Feasible since we are getting ample economic support
required for the project from banking authorities.
C] Technical Feasibility
1-Minimum requirement for execution of the project is a java supporting operating system
since the connection to the database will be made using JSP and SERVER, minimum of 64
MB of RAM, a database software, a server and a web browser with which we were
previously equipped.
PRIMARY DATA (QUESTIONNAIRE).
1) What do you feel about overall online services quality of your bank?
A) Excellent.
B) Very good.
C) Good.
D) Average.

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5
4.5
4.5
4
4
3.5
3.5
3
3
2.5
2
1.5
1
0.5
0
Excellent. Very good. Good. Average.

2) How often do you use internet banking for the transaction purpose?
A) Occasionally.
B) Frequently.

5
4.3

3
2.5

0
Occasionally. Frequently.

3) In which banking sector, do you have your online account?

A) Public.
B) Private.

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40%

60%

public private

4) Do you trust the security of online banking services?

A) Completely.
B) Somewhat.
C) Note at all.

0
completely somewhat not at all

5) What would encourage you to use the online services?

A) Reward.
B) Similar services.
C) Free transaction.

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0
Reward. Similar services Free transaction.

6) What extend do you prefer the use of internet banking over Credit/ Debit card?
A) Never.
B) Very often.
C) Always.

0
Never Very often Always

7) Performance for online bill payment services.

A) Yes.
B) No.

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40%

60%

Yes No

8) What extent do you prefer the use of online fund transfer?

A) Yes.
B) No.

Yes, 35%

No, 65%

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9) Which Banking Sector provide effective and efficient online banking services.
A) Public.
B) Private.

Public
40%
Private Public
60%
Private

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CONCLUSION
Thus, reaching to the conclusion of our project we observe that Traditional banks offer many
services to their customers, including accepting customer money deposits, providing various
banking services to customers, and making loans to individuals and companies.
Compared with traditional channels of offering banking services through physical branches,
e-banking uses the Internet to deliver traditional banking services to their customers, such as
opening accounts, transferring funds, and electronic bill payment.
E-banking can be offered in two main ways. First, an existing bank with physical offices can
also establish an online site and offer e-banking services to its customers in addition to the
regular channel. For example, Citibank is a leader in e-banking, offering walk-in, face-to-face
banking at its branches throughout many parts of the world as well as e-banking services
through the World Wide Web. Generally, e-banking is provided without extra cost to
customers. Customers are attracted by the convenience of e-banking through the Internet, and
in turn, banks can operate more efficiently when customers perform transactions by
themselves rather than going to a branch and dealing with a branch representative.
E-banking services are delivered to customers through the Internet and the web using
Hypertext Markup Language (HTML). In order to use e-banking services, customers need
Internet access and web browser software. Multimedia information in HTML format from
online banks can be displayed in web browsers. The heart of the e-banking application is the
computer system, which includes web servers, database management systems, and web
application programs that can generate dynamic HTML pages.
One of the main concerns of e-banking is security. Without great confidence in security,
customers are unwilling to use a public network, such as the Internet, to view their financial
information online and conduct financial transactions. Some of the security threats include
invasion of individuals' privacy and theft of confidential information.
On October 1, 2000, the electronic signatures bill took effect, recognizing documents signed
online as legal. Some banks plan to begin using electronic checks as soon as they can work
out various security measures.
The range of e-banking services is likely to increase in the future. Some banks plan to
introduce electronic money and electronic checks. Electronic money can be stored in
computers or smart cards and consumers can use the electronic money to purchase small
value items over the Internet.

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BIBLIOGRAPHY
 E-BANKING THE GLOBAL PERSPECTIVE BY GUPTA VIVEK
 E-COMMERCE IN INDIAN BANKING INDUSTRY BY BHASIN
 BANKING IN THE NEW MILLENIUM-N RAJSHEKAR

WEBLIOGRAPHY
 www.onlinebanking.net/online-banking-services/
 www.onlinebanking.net/benifits/concern of online banking
 www.citibank.com
 www.hdfcbank.com
 en.instopedia.org/wiki/electronic-commerce

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