Internet Banking

Abstract

We have discussed internet banking and security issues. Then we have given comparison of internet banking in developed countries and developing countries on the basis of security and infrastructure issues. Examples of banks are given from Pakistan (HSBC) and Sweden (Nordea). And services of both banks are compared on the basis of infrastructure and security issues.

Introduction

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Internet banking enables users to make financial transactions on a secure website operated by their bank. Banking some around or yet in some underdeveloped countries, bank transaction is done by paper work e. g. using cheaque Book to withdraw cash, but with the passage of time when Information Technology is so much in, then this paper work is seem to be hazard for an organization to maintain numbers of customer and also customer have no to stand in queue to just with draw cash then the Internet-Banking come to in origin. Internet-Banking is easy to maintain by Bankers as well as by customer.Now a day’s customer also preferred those banks which provide Inter-Banking facility. So we can say that when IT and Bank work to gather then this terminology is called Internet-Banking.

At the beginning Internet banking was used mainly as an information presentation medium in which banks advertised their products and services on the Web sites. With the advancement of information technology and secured electronic transaction technologies, banks have started Internet banking both as a transactional as well as for advertisement purpose.Now writing checks, paying bills, transferring funds, printing statements, and inquiring about account balances is possible onlie. Internet banking is now “one stop service and information unit” that is giving great benefits to both banks and consumers. Internet banking services are necessary for survival of banks in the world of electronic commerce. Internet banking is spreading fastly in developing countries, affecting the competitive advantage enjoyed by traditional branch banks.Due to advancement in information technology banking without internet banking seems nothing.

So, every bank in the world wants to give services online as much as possible. Internet banking is developed countries has support of better infrastructure while in developing countries support of better infrastructure is not available. So, giving internet banking in developing countries is difficult for a bank. Some banks are providing better ebanking services in developed countries but same banks are not proving better ebankin services in developing countries.Internet banking is increasing day by day. Mostly bank now switch there system from paper work to Online scenario but some how of the activity is still available in hard form because underdeveloped countries still not fully equipped with Internet-Banking as the strength of usage of Internet Banking in European/Scandinavian region is much high. Features of online Banking The common features of online banking fall into several categories Transactional Applications such as applying for a loan, opening a new account, etc.

Utility and electronic bills payment Money transfer between user’s own accounts or to another person’s account Purchase or sale anything from internet Non-transactional Bank statements Financial Institution Administration Support of multiple users with different levels of authority Transaction approval process Personal financial management support Some online banks allow the customers to manage all of their accounts in one place whether they are with their main bank or with other institutions. These are common ways to perform a transaction.  Debit cards (Atm machine, shoping on stores etc. ) Credit cards (online shoping, payments etc. ) Direct banking via web (money transfer from account to account, payments etc) Better design of website is also important to attract costumers. First page of web must be designed in a way that it conveys important messages as well as it opens in less time. Bank increasingly switch to website system or e-banking side to catch the customers not only to inquire about the account balance, interest and exchange rates but also to made several online transaction activities.

This up gradation of every bank systems come up in a race of to be ahead from other bank by which the bank look for new challenges in bank management, rules and supervision authorities to check the e-banking service is working smoothly and properly and customer can’t be affect by this new rules and catch more and more customers to promote the Bank. Security issues Security is main issue of internet banking because a lot of money is involved during transactions. A costumer will not satisfied untill he has clear views about security of his money. At the beginning of ebanking only informational stuff was available on websites.And there are not so much security issues. But with advancement now almost all type of transactions are done via web. So, there are many threats available to ebanking.

Protection through single password authentication is not secure in Internet shopping sites. Basically there exist two different security methods for online banking.

The PIN and TAN system where the PIN is a password, used for the login and TANs are one-time passwords to authenticate transactions. TANs can be sent to user by postal letter. The most secure way of using TANs is to generate them by need using a security token.These token generated TANs depend on the time and a unique secret, stored in the security token and called two-factor authentication.

Signature based online banking where all transactions are signed and encrypted digitally.

The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation. Security token devices Security tokens are used to prove identity of a user electronically. The token is used in addition to or in place of a password to prove that the customer is who they claim to be.These tokens are generated for a short period of time and these are different every time. Token devices are so small that a user can use as keychain. That have small keypads to allow entry of a PIN and a small screen to show numbers. Special designs include a USB connector, RFID functions or Bluetooth wireless interface to enable transfer of a generated key number sequence to a client system.

Stealing Information Methods There are many ways to steal some one’s information and Most are based on deceiving the user to steal login data and valid TANs. Two most popular attacks are phishing and pharming.Phishing is an simple way of hacking carried out by Highly Skilled IT Professionals who used social engineering techniques to made IT Users fool in very easy way and snatch the information which benefits them but it will cause heavy damage to IT users. To avoid phishing always keep update to date to how these attacks are carried out. Pharming is an another way of hacking techniques carried out by Highly Skilled IT Professional who used to redirect the secure traffic to the fake domain name from where the information going to be sealed and used them according to what these information is stealed.Using trojan horse and keylogers are other ways. These type of softwares work in background and send the typed information to unothorised persons.

Signature based online banking is attacked in a way, that correct transactions are shown on the screen and faked transactions are signed in the background. “Man in the Browser attack” where a Trojan horsesgives access to hacker to make changes in victem’s account number and amount. Ways to avoid Attacks There exist several ways to avoid attacks.

Digital certificates provided by banks are used against phishing and pharming.Class-3 card readers are used to avoid manipulation of transactions by the software in signature based online banking.

Anti virus softwares are used to protect systems against Trojan horses. Users should use virus scanners and be careful with downloaded software or e-mail attachments.

Ethical overview In Internet Banking internet privacy is a major concern of today. Privacy over the Internet has raised certain ethical issues in internet banking usage, which need to be dispensed with. While providing to the privacy needs of the Internet users, we need to implement certain ethics.Consideration of the ethics of eBusiness has slim towards to focus on areas relating to the instability of information collected and held electronically and transferred via computer to computer communication. These include privacy of information about individuals, accuracy of information, ownership of information and intellectual property and accessibility of information held. There are numbers of theories regarding the Ethical behavior but as per IT infrastructure these ethical behavior must be considered and also have to reviewed these rules according to IT Infrastructure.

1) Kantianism Ethics

2) Utilitarianism Ethics Kantianism: According to Kantianism the one should obey the rules such a way that the principle of one's action could serve as a universal law implemented by a domain or organization.

In internet banking we mostly fit this theory to Database Administrator who has the access of all the information of the customer. If Database Administrator found some issue in database and it is only possible by accessing that data in real format then this is not an ethical issue because in Internet Banking other information viewed without any permission is against the Kantianism.So as in Information Technology some time we have to go against the rules and we have to work more against Ethical Theories regarding Information Technology.

Utilitarianism: According to Utilitarianism the positive aspects of work done by any one should be delivered to more and more peoples, and the negative aspects much are less. In Internet Banking the Utilitarianism theory play important role for any Banking sector. Mostly Banking sectors provided the 4/7 services to there customers to provide as much support they want in getting more and more customers by doing positive aspects and if there customer are not satisfied by the services bank provide then the Utilitarianism theory didn’t implemented. Comparison of ebanking in developed and developing countries.

We have compared Internet banking in developing and developed countries on the basis of available infrastructure to banks and security issues. Better ebanking on the basis of better infrastructure In developed countries almost all shoping markets are connected to banks.User can pay money with cards and as well as directed banking. E shoping is avaiable easily. Ther are a lot of e shops available. User can purchse any thing of his need without going to market with his online account. This type of infrastructure is plus point for bank to give better e services to users.

While in developing countries all shoping markets are not connected to banks. Less e shops arte available. So banks can not provide better e services. Better ebanking on the basis of better security The main requirement of every costumer is security of his money and secure transactions.Those banks which have better security feachers are growing rapidly and providing better e services. Some banks provide insurance of money in case of loss. But they charge separate fee for this.

We have taken examples of two banks, one from developed country (Sweden, Nordea) and other from developing country (Pakistan, HSBC). Internet Banking in Pakistan (HSBC) HSBC is an international bank and it’s also work in Pakistan with Internet Banking facility. The Bank provides the following features as online banking.

Online Services like Account, Credit Card transactions and balances check.

Money Transfer between your accounts or to rest of the world. View Detail Transaction Template Bill Payment of Credit Card Utility Bills Payment Open another Accounts Find online Help 24/7

Easily change of address ; Personal Information Change of pin codes ; other security data HSBC Online Service Could Be Availed with following. Windows XP (SP2) with IE 7.

0 or Netscape 8. 1. 2 (Firefox mode) MAC OS with Firefox 2. 0 Windows 2000 with IE 6. 0 (SP1) The HSBC internet banking also provide security measures its end and also required participation from customers shows as follow.Customer Participation:

• Always make your password using the combination of upper and lower case letters, numbers combination e. g.
• Don’t try to use your personnel term that other can be judge like family name, date of birth or your contact numbers.
• Always change your password on regular basis so that its make less noticeable by using online change password service.
• Never expose your password to anyone and never wrote it down on a paper. Always used a computer enabled with a personnel firewall because this is especially built to protect your computer from direct attack of hackers. Always keep your PC up-to-date by download the update patches for latest protection.
• Do not try to do your internet banking from public or shared places like internet cafe because you don’t know which software are installed on public computer.
• Always properly terminated the Internet Banking session using “Logoff” button to ensure you end the session made.
• Never leave your Internet Banking session unattended in any case.
• Always close the other web activity while your Internet Banking session because it will protect your computer from being exposed directly to your Internet Banking activity. Never installed unregistered software on your computer you used mostly for Internet Banking.
• Always confirm the HSBC certificate by double click the “Lock” icon in web browser when opened HSBC website to ensure that your open the proper HSBC website.
• Always disable “Auto Complete” function from Internet Explorer because by doing this we can made the system to not to remember any data activity like password and you can do this by visiting the “Auto Complete” from Tools in explorer.
• Always disable your file and printer sharing activity to direct expose of your computer from other peoples in a network if you used a group of networks. HSBC Security Participation
• You are individually recognized by your Internet Banking ID and password every time you bank online.
• Your financial information is secure by Secure Socket Layer (SSL) 128-bit encryption, the most protected form available commercially.
• If you disremember to log off after banking online, we trigger an automatic 'timeout' after a period of idleness to prevent illegal access. The pages you have surveyed during your banking session terminate to prevent the pages from being kept in your browser cache, ensuring that no one can view these pages again and your financial information.
• We also track the number of logon tries. if we find three consecutive incorrect passwords have been attempted, we will immediately disable online access and customers will need to contact us again to re-establish the access? Nordea Nordea is providing almost all types of e banking. And sweden has powerfull infrastructure to facilitate nordea.Almost all shops accepts Nordea cards.

Eshoping is available with Nordea cards as well as direct banking. Users has faith on bank due to powerfull security measures of Nordea. Website of nordea is accesable almost on all operating systems. Security at Nordea Nordea offer three different types of security solutions.

E-code, the login and via the internet and telephone (card reader without cable + card). Personal code for simplified login via Internet and telephone. e-ID card in, the login and via the internet (card reader with cable).

Codes and cards are valuable documents.Remember that your codes and cards are valuable documents. Store them in a safe place, but never together. If you lose your codes or your e-ID, you can block them by calling the bank.

Security measures

When you shop online. Never enter your PIN code when shopping at a store on the Internet. If you trade often and pay by card, plug in to our services more secure card purchases on the Internet.

That way you never provide your real card number when you shop. In many stores there are also alternative payment e-payment, which is a direct transfer between two accounts with us - your own and shop. Be critical of all the emails you get where someone asks you to surrender your personal and sensitive information. Nordea will contact you never e-mail or telephone to ask you for personal information. Should you make any financial transactions are always in our system, after you identified yourself. Then Nordea know who you are and you as a customer be sure that you are communicating with Nordea.

Never click on links in emails unless you are absolutely sure that the message is genuine.

It is better to write the address directly into your browser or contact the sender o ensure that the message is genuine.

Never click on attachments in e-mail if you're not entirely sure what it is. Never share sensitive or financial information in an unsecured Web page, or by regular mail, which is not encrypted. Regular e-mail is more secure than sending information on a postcard.

Never give out your personal code or PIN to debit and credit cards on the Internet, even if you get the question from someone who you perceive to be credible. Regularly check your bank statements. Report immediately any questions by calling the Customer Service Centre.

React immediately if you suspect that someone else is pretending to be received by Nordea on the Internet. Once you have logged into our Internet pages is protected against unauthorized access. The image of a padlock in the status bar at the bottom of your browser shows that the pages are protected. If you click on the padlock, a window appears with a security certificate. The certificate is a section that reads: Awarded to gfs. nb. se.

Then you know that it is Nordea you are communicating with.

• Write yourself the address into your browser. Our address to the home page always begins with http://www. ordea. se Some key differences between Nordea and HSBC
• In HSBC user have to give his account number and pin code in almost all transactions. So if there is a virus in computer.There are chances to hack that account and un authorised use is possible.
• But in nordea in almost 95 % transactions account number and pin code is not used in computer. Account page is accessable via personal number and temporary code generated by security device. Pin code is used in that device which has no link with computer. So there are almost no chance of hacking of account even computer has virus.
• HSBC has less infrastructure for ebanking while Nordea has very much developed infrastructure. There is less awareness of ebanking in the country of HSBC while people of country of Nordea has very much aware of ebanking.
• Website of HSBC is less secured as compared to Nordea.

Conclusion

Ebanking is evolving rapidly in developed as well as in developing countries. But factors like better infrastructure, better security measures, awareness etc are giving edge to ebanking in developed countries while developing countries are struggling to overcome these factors.Ebanking is need of time in changing world of information technology.

References

1. Factors Influencing the Adoption of Internet Banking by Margaret Tan and Thompson S. H. Teo National University of Singapore.
2. Finance & Development by Saleh M Nsouli and Andrea Schaechter Washington. 5. 6. 7. The Ethics Of Ebanking by Dr. Lisa Harris and Dr. Laura J. Spence. http://www. hsbc. com. pk http://www. nordea.se

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