Chapter I Introduction to Project The chapter describes the basic premise of the project. It also sets forward the path in which the project was planned and is being completed. Background As a student of Fourth Semester MBA with specialization in Finance and Marketing, I was searching for a project area which should go along with my career in Finance division of banking industry and utilizes most of my Finance skills and knowledge. So it was narrowed down to the study of Internet Banking. Objectives The main objectives of the study are: To understand the concept of Internet banking and importance, to bank as well as customers. • To get aware of various aspects of net banking • To build up SWOC analysis of Internet banking. • To build up various solutions for drawbacks in net banking Scope of study The study is made taking consideration of whole State Bank of India. With reference to experience availed at Amravati camp branch. Need of the Study This study is needed to find out the working of Internet Banking of SBI and its importance to customer as well as to bank.
Data Collection The data is to be collected from website of different banks and Reserve Bank of India. The project is divided into various chapters dealing with various issues in the project. There are in total seven chapters. The title of each chapter is shown below: Chapter I contain Introduction to Project, Chapter II contain History of Internet Banking Chapter II contains working of internet banking in SBI Chapter IV SWOC analysis Chapter V contain the Recommendations and Suggestions Chapter VI will be Conclusion Future scope
The study of this topic will help to get the knowledge about process of internet banking and usefulness to banking industry. As the study contains the 360 degree information regarding SBI and its internet banking, Hence the study will lead to new ways to tackle the problems and the SWOC of SBI in respect of internet banking. This was all about how the project will go ahead and the findings from it. The next chapter deals with the Company Profiles Chapter 2 INTERNET BANKING The chapter describes in brief about INTERNET BANKING. Internet:- INTRODUCTION: -
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There is a sea change in the media world. While most consumers see the news papers, the same magazines and listen to the same radio programs, behind this bland public exterior there is a seething world of innovation, acquisition, global partnership and divorces, births and deaths… all of it most readily interpreted as the inevitable result of the technological revolution that is in the process of merging telephones, computers, televisions in to a single all singing, all dancing magic kit that will, very possible, change all of our lives more than we can imagine some day
There are 2 ways you can respond to this 1 is to panic, which may mean simply curling up in a corner and wishing that it would all go away. The other is to embrace the new religion with messianic fervor and go out to proclaim the millennium. I welcome you to the new emerging world of the Info-High-Way, destined to redefine the world of communications: HISTORY: - It is said that necessity is the mother of invention. And true, it is seeds of Internet were sown in the ashes of the world war
Having bombed the cities of Hiroshima and Nagasaki, US military was forced to provide the answer to the question – What if someone bombed the USA? So for many years after the war, most of the US military research concentrated on ways and means to survive the nuclear holocaust. And one of the most important strategic problems was- “How would us authorities communicate with each other in the aftermath of a nuclear attack? ” computers were already there. But, communication networks were connected to each in a private fashion- in sort of chains: somewhat like an electricity line to your home.
This means that if even one chain in the middle were blown up, the whole network would collapse. Then in the 1960’s the problem was taken by America’s foremost military think tank, the Rand Corporation. After a lot of ideas were put up and knocked down, Paul baron- a rand “thinker” hit upon an idea. “What if the network was not built like a chain but like a fish net? ” he said. If one strand on the fish net broke the net would still be functional. After spending many agonizing hours over it, he came up with 11-volume report for the pentagon.
But, as fate would have it was rejected. By then, young engineers were impressed by the idea and worked on it. Well before the end of the decade, the first net was created and called ARPANET, connecting four American research organizations- university of Utah, university of California in Los Angeles and Santa Barbara, and Stanford research institute. Internet as a communication medium and as a repository of information has caught the imagination of computer users. This has fuelled an unparalleled growth in the number of Internet users.
VARIOUS PARTS OF INTERNET: - The Internet is made up of terminal computers through which subscribers access the net; gateways servers which connect the users to the rest of the network (of computers); servers which host information in them; and, the communication network over which data actually flows. Internet offers its users a variety of services. The subscribers may have access to all or any of the following services depending upon the type of connection that one has subscribed for: 1) E-Mail 2) World Wide Web (WWW) 3) File Transfer Protocol (FTP) 4) Telnet 1 The net banking, thus, now is more of a norm rather than an exception in many developed countries due to the fact that it is the cheapest way of providing banking services. 3 Internet banking refers to the use of the Internet as a remote delivery channel for banking services. Such services include traditional ones, such as opening a deposit account or transferring funds among different accounts, and new banking services, such as electronic bill presentment and payment (allowing customers to receive and pay bills on a bank’s Web site). Banks offer Internet banking in two main ways.
An existing bank with physical offices can establish a Web site and offer Internet banking to its customers as an addition to its traditional delivery channels. A second alternative is to establish a “virtual,” “branchless,” or “Internet-only” bank. The computer server that lies at the heart of a virtual bank may be housed in an office that serves as the legal address of such a bank, or at some other location. Virtual banks may offer their customers the ability to make deposits and withdraw funds via ATMs or other remote delivery channels owned by other institutions. The impact of E-transaction and authentication issues in banking 5 It's hardly great news that there has been tremendous growth in the use of the Internet and other electronic facilities to process financial transactions. According to the Federal Deposit Insurance Corp. , transactional Web sites have more than doubled each year for the past six years, growing from one in 1995 to nearly 2,500 in 2000. 6 This growth is a reflection of the fact that over the past few years, financial leaders have been considering various ways in which to allow their customers to transact business using the Internet.
This objective is now reaching beyond the financial services industry into non-electronic business segments, such as the building supply industry. Furthermore, this growth is likely to continue to climb as the number of Internet users, Internet connection speed, and the number of transactional Web sites continues to increase. The number of adults using PC banking is also growing. With this growth, there is an increased awareness of the benefits of using online transaction processing, thereby fueling the thought that all business should be electronically facilitated. Gartner predicts that worldwide business-to-business (B2B) e-commerce will total $3. 6 trillion by 2003 and $8. 5 trillion in 2005. Online financial activity had a slower start, but has had steady growth, from 6 million users in 1998 to 27. 5 million users in 2000. During 2000, only 30 percent of the Internet-capable households were using some form of Internet banking, indicating that there is tremendous room for increased use. 8 The e-Commerce Value Chain 9 Consider that the consumer and the merchant are on either ends of the electronic commerce value chain, with the authentication network and transaction processor (bank) in the middle.
Banks have traditionally been the trusted agents, have the largest customer base, and have received the initial benefits from electronic commerce. Value has begun a steady migration to the ends of the value chain. Customers can receive and pay bills from one point using products from multiple issuers. Merchants can influence and enhance the consumer experience by providing innovative and time-saving means of doing business. Merchants can add value to the payment process, for example, by offering discounted prices for electronic payment. 0 Merchants can also reduce their costs by receiving electronic payments, which results in reducing and sometimes eliminating the need for data entry, as well as reducing the error rate and the time to investigate and correct the data. By increasing and effectively managing cash flow, merchants may also be able to reduce costs associated with lines of credit. 11 Digital Signatures 12 On October 1, 2000, the Electronic Signatures in National and Global Commerce Act was signed. This act states that an agreement, contract, or transaction signed electronically is enforceable in a court of law.
Accordingly, financial services institutions can now legally transact business using electronic signatures, allowing transactions such as mortgages, funds transfers, opening and closing of accounts, benefits enrollment, and beneficiary designations to occur in an electronic environment. 13 The law defines an electronic signature as "an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record. Fortunately, the legislation does not attempt to define acceptable technologies except to indicate that the technologies must be mutually acceptable to the transacting parties. Since a valid signature can be as simple as a digital image of a signature (enabled through an electronic pen and pad) or as complex as today's public key infrastructure (PKI) and associated encryption methods, the technology decision maker must define relevant business objectives and understand the risks, such as cost and unauthorized use associated with alternative implementations. 4 There are possible additional benefits to the implementing organization. These include reduced transaction timelines, reduction in paper processing costs, facilitation of customer migration to the Internet as a business channel, and increased online transaction security. 15 When compared to physical signatures, e-signature technologies are, in general, a more secure authentication method. Many financial institutions are studying the possible implementation of a public key infrastructure (PKI) system that will allow them to exchange electronic information securely with unknown parties. 6 PKI is the delivery channel for public key cryptography, a method that allows the parties to a transaction to keep a communication private through the use of a two-part key made up of public and private components. To encrypt messages, the published public keys of the recipients are used. To decrypt the messages, the recipients use their unpublished private keys, known only to them. Quite simply, if the signer's private key is not compromised, which can happen by releasing the password or allowing access to the device containing the private key, a document cannot be digitally signed
What Is Internet Banking? 17 Internet Banking System is a system that has been developed in order to help clients with the daily day-to-day transactions. Internet banking systems means that clients can now do banking at the leisure of their homes. 18 Also known as online banking, the system allows both transactional and non-transactional features. 19 Online banking or internet banking allows customers to conduct financial transactions on a secure website operated by the retail or virtual bank 20 21 History 2 The term online banking was first started in 80’s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. ‘Home banking’ can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the city’s major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotext system.
Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidized by the telecom provider and the UK, where the Prestel system was used. 23 The UK’s first home online banking services was set up by the Nottingham Building Society (NBS) in 1983 . The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Home link') allowed on-line viewing of statements, bank transfers and bill payments.
In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Home link system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. 4 Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct, 1994. Later on it was adopted by worldwide banks Chapter III Internet banking at Banks The chapter describes the facts about working of internet banking in state bank of India. Changes brought in Information Technology by banks:- • In the next decade internet facility was provided for individuals • All SBI branches were connected and ATM’S were launch • 2001 - KMPG appointed consultant for preparing IT Plan for the Bank. • Later on Core banking proposed by the IT consultancy company. 2002 – All branches computerized but on decentralized systems, there the initiative of core banking took place • 2008- more than 6500 branches (95% of business) on Core Banking Solution (CBS) • Internet Banking facility for Corporate customers were also launched in early 2008 • More Interfaces developed with e-Commerce & other sites through alternate channels like ATM & Online Banking • All Foreign Offices were brought on Centralized Solution • Large network is playing the role of backbone for connectivity across the country • Multiple Service Providers are providing the links – BSNL, MTNL, Reliance, Tata & reliance which are making the system errorless and provide high speed. • Multiple Technologies to support the networking infrastructure – Leased lines, Dial-up, CDMA & VSAT CBS - Core Banking System Components [pic] Services provided by banks in internet banking Chapter deals with the information related to various services an products of internet banking RETAIL BANKING:- The Retail banking application is an integration of several functional areas, and enables customers to: ? Issue Demand Drafts online ? Transfer funds to own and third party accounts ? Credit beneficiary accounts using the VISA Money Transfer, RTGS/NEFT feature ? Generate account statements Setup Standing Instructions ? Configure profile settings ? Use eTax for online tax payment ? Use ePay for automatic bill payments ? Interface with merchants for railway and airline reservations ? Avail DEMAT and IPO services CORPORATE BANKING:- The corporate banking application provides features to administer and manage corporate accounts online. The corporate module provides roles such as Regulator, Admin, Uploader, Transaction Maker, Authorizer, and Auditor. These roles have access to the following functions: ? Manage users, define rights and transaction rules on corporate accounts ? Access accounts in several branches with a single sign-on mechanism ?
Upload files to make bulk transactions to third parties, supplier, vendor and tax collection authorities. ? Use online transactional features such as fund transfer to own accounts, third party payments, and draft issues ? Make bill payments over the Internet. ? Authorize, modify, reschedule and cancel transactions, based on rights assigned to the user ? Generate account statement ? Enquire on transaction details or current balance Value added services: ? Tax payments to central and state governments through site to site integration. ? Supply Chain Finance( e-VFS- Electronic Vendor Finance Scheme) ? Direct Debit Facility ? E Collection Facilities for: ? Core Banking Transactions Internet Bank transactions for incoming RTGS/NEFT Transactions ? Internet banking transactions for SBI and associate banks ? Debit facility where suppliers can directly debit their customer’s account through internet banking PRODUCTS AND SERVICES:- • E-Ticketing • E-Tax • Bill Payment • RTGS/NEFT • E-Payment • Fund Transfer • Third Party Transfer • Demand Draft • Cheque Book Request • Account Opening Request • Account Statement • Transaction Enquiry • Demat Account Statement • Donation E-Ticketing with your credentials and go to Payment and transfer and click on make donation link. After selecting the debit account select the religious/charitable institution whom you want to offer donation.
After successful payment you can print an E-receipt for the donation made. 1) E-TICKETING :- You can book your railway, air and bus tickets online through online. To book your train ticket, just log on to irctc. co. in and create an ID there at if you do not have one. Submit your travel plan and book the ticket(s)-either • i-ticket (where the delivery of tickets will be made at your address) or • E-tickets (wherein after successful payment transactions, an e-ticket is generated which can be printed any time. For an e-ticket, the details of photo identity card will required to be filled in) And select bank in the payment options. You will be redirected to Internet Banking site of your bank.
After submitting the respective ID and password, you can select your account. After a successful debit, Railways will generate the ticket. E-ticket can be printed by you whereas the i-ticket will be dispatched by IRCTC at the given address. Service charges @ Rs. 10/- per transaction shall be levied in addition to the cost of the ticket. Cancellation of E-ticket can be done by logging on to IRCTC's site; refund amount will be credited to your account directly within 2-3 days. For cancellation of i-ticket, you shall be required to submit your ticket at a computerized counter of Railways and on cancellation; the amount shall be credited back to your account.
You can also book your Air ticket through the e-ticketing feature. Logon to Indian Airlines website to make a payment for an e-ticket through State Bank of India, you need to select SBI as the payment option. The payment request will be redirected to Internet Banking site. The request may be processed based on values sent from the airlines website. Once a transaction is processed, an appropriate response will be sent to airlines site to update the status of the transaction. You can print the E-ticket immediately. To book bus tickets to destinations in Karnataka, log on to the KSRTC website. Provide details about the start and end points of your journey, date of journey and number of tickets.
Verify availability of seats on the selected date and confirm the transaction. Select OnlineSBI to make the payment. Provide your credentials and select the SBI account that will be debited for the payment. You are provided a KSRTC reference number for your e-Ticket. 2) E-TAX:- You can pay your taxes online through E-Tax. This facility enables you to pay TDS, Income tax, Indirect tax, Corporation tax, Wealth tax, Estate Duty and Fringe Benefits tax. Click the e-Tax link in the home page. You are displayed a page with two links Direct Tax and Indirect Tax. Click the Direct Tax link. You will be redirected to the NSDL site where you can select an online challan based on the tax you wish to pay. Provide the PAN, ame and address, assessment year, nature of payment and bank name. On selecting the bank name as SBI and submitting the form, you will be redirected to the Internet Banking site. After submitting the respective ID and password, you can select your account for making payment of taxes. After payment is successful you can print the E-Receipt for the payment. The E-receipt can be printed at a later date also and the same can be retrieved from: Enquiries > Find Transactions > Status Enquiries > Click on the respective transaction to print the tax receipt. The Indirect Tax link is used to make Central Excise and Service Tax payments to Central Board of Excise and Customs.
The online payment feature facilitates anytime, anywhere payment and an instant E-Receipt is generated once the transaction is complete. The Indirect Tax payment facility is available to Registered Central Excise/Service Tax Assessee who possesses the 15 digit PAN based Assessee Code. You can make CBEC payments using the Indirect Taxes link available in the Payments/Transfers tab. You need to provide your assessee code as registered with CBEC and select the minor heads towards which you intend to pay tax. Select the appropriate tax type and enter the tax amount. Select an account for debiting the total tax amount. You can use any of your transaction accounts to make the payment. If a payment is successful, CBEC provides a link to generate an E-Receipt for the payment.
Internet banking customers can pay tax through site to site integration. For government agencies, which are not Internet-enabled, OnlineSBI offers the Government Tax Payment facility. This facility is available as a post login feature in the retail and corporate banking sites of the Online SBI portal. Please note that the cut-off time for OLTAS and CBEC payment is 8 P. M. IST. Any transactions created after the cut off time will be processed after 7 A. M. on the following day. 3) Bill Payment :- A simple and convenient service for viewing and paying your bills online. • No more late payments • No more queues • No more hassles of depositing cheques
Using the bill payment you can 'view and Pay various bills online, directly from your SBI account. You can pay telephone, electricity, insurance, credit cards and other bills from the comfort of your house or office, 24 hours a day, 365 days a year. Simply logon to http://www. onlinesbi. com/ with your credentials and register the biller to which you want to pay, with all the bill details. Once the bill is uploaded by the biller, you can make payment online. You can see 'how do i' to learn the steps for using the facility. You can also set up Auto Pay instructions with an upper limit to ensure that your bills are paid automatically whenever they are due.
The upper limit ensures that only bills within the specified limit are paid automatically, thereby providing you complete control over these payments. The e-PAY service is available in various cities across the country and you can now make payments to several billers in your region. 4) RTGS/NEFT :- You can transfer money from your State Bank account to accounts in other banks using the RTGS/NEFT service. The RTGS system facilitates transfer of funds from accounts in one bank to another on a "real time" and on "gross settlement" basis. This system is the fastest possible interbank money transfer facility available through secure banking channels in India.
RTGS transaction requests will be sent to RBI immediately during working hours post working hours requests are registered and sent to RBI on next working day. You can also schedule a transaction for a future date. You can transfer an amount of Rs. 1 lac and above using RTGS system. National Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account with the other participating bank. RBI acts as the service provider and transfers the credit to the other bank's account. NEFT transactions are settled in batches based on the following timings 1. 6 settlements on weekdays - at 09:00, 11:00, 12:00, 13:00, 15:00 and 17:00 hrs. 2. 3 settlements on Saturdays - at 09:00, 11:00 and 12:00 hrs. Please note that all the above timings are based on Indian Standard Time (IST) only.
In order to transfer the funds to an account with other bank, kindly ensure that the bank branch of the beneficiary is covered under the RGTS/NEFT payment system. It is recommended that you choose the Bank/ Branch from the drop down option provided under the link "Add Interbank beneficiary". Please exercise care to provide the correct account number and name of the beneficiary. 5) E-Payment :- You can pay your insurance premium, mobile phone bills and also you can purchase mutual fund units by coming from the biller’s website and selecting state bank of India in the payment option. LIC PREMIUM: For paying premium of LIC policy logon to www. licindia. com and register your policy details. When the premium is due select State Bank of India in the make payment option.
SBI Mutual FUND: You can invest in the SBI Mutual Fund schemes online. Logon to www. sbimf. com and select the scheme in which you want to make investment in the payment option select State Bank of India. CCAVENUES: Enjoy shopping at the CCAvenue Shopping Mall and purchase from a wide variety of products and services through CCAvenue Certified Vendors. Make payments for your purchases using your Internet enabled SBI accounts. 6) Fund Transfer :- The Funds Transfer facility enables you to transfer funds within your accounts in the same branch or other branches. You can transfer aggregating Rs. 1 lakh per day to own accounts in the same branch and other branches.
To make a funds transfer, you should be an active Internet Banking user with transaction rights. Funds transfer to PPF account is restricted to the same branch. Just log on to retail section of the Internet Banking site with your credentials and select the Funds Transfer link under Payments/Transfers tab. You can see all your online debit and credit accounts. Select the debit account from which you wish to transfer funds and the credit account into which the amount is to be credited. Enter the amount and remarks. The remarks will be displayed in your accounts statement for this transaction. You will be displayed the last five funds transfer operations on your accounts.
On confirming the transaction, you will be displayed a confirmation page with the details of the transaction and the option to submit or cancel the funds transfer request. A reference number will be generated for your record. 7) Third Party Transfer :- You can transfer funds to your trusted third parties by adding them as third party accounts. The beneficiary account should be any branch SBI. Transfer is instant. You can do any number of Transactions in a day for amount aggregating Rs. 1lakh. To transfer funds to third party having account in SBI, you need to add and approve a third party, you need to register your mobile number in personal details link under profile section.
You will receive a One Time SMS password on your mobile phone to approve a third party. If you do not have a mobile number, third party approval will be handled by your branch. Only after approval of third party, you will be able to transfer funds to the third party. You can set limits for third party transactions made from your accounts or even set limits for individual third parties. 8) Demand Draft :- The Internet Banking application enables you to register demand drafts requests online. You can get a demand draft from any of your Accounts (Savings Bank, Current Account, Cash Credit or Overdraft). You can set limits for demand drafts issued from your accounts or use the bank specified limit for demand drafts.
You can opt to collect the draft in person at your branch, quoting a reference to the transaction. A printed advice can also be obtained from the site for your record. Alternatively, you may request the branch to courier it to your registered address, and the courier charges will be recovered from you. If you have any queries, kindly approach your branch, quoting the reference number generated for the request. 9) Cheque Book Request :- You can request for a cheque book online. Cheque book can be requested for any of your Savings, Current, Cash Credit, and Over Draft accounts. You can opt for cheque books with 25, 50 or 100 cheque leaves.
You can either collect it from branch or request your branch to send it by post or courier. You can opt to get the cheque book delivered at your registered address or you can provide an alternate address. Cheque books will be dispatched within 3 working days from the date of request. Just log on to retail section of the Internet Banking site with your credentials and select the Cheque Book link under Requests tab. You can view all your transaction accounts. Select the account for which you require a cheque book; enter the number of cheque leaves required and the mode of delivery. Then, submit the same. 10) Account Opening Request:- OnlineSBI enables you to open a new account online.
You can apply for a new account only in branches where you already have accounts. You should have an INB-enabled account with transaction right in the branch. Funds in an existing account are used to open the new account. You can open Savings, Current, Term Deposit and Recurring Deposit accounts of Residents, NRO and NRE types. Just log on to retail section of the Internet Banking site with your credentials and select the New Account link under Requests tab. You can see all types of accounts. Select the account and account type you wish to open and submit the same. Then, you need to select the branch and enter the initial amount to open the account.
You can select any of your accounts for debiting the initial amount. Then, submit the transaction. Your new account opening request will be processed by the branch. 11) Account Statement :- The Internet Banking application can generate an online, downloadable account statement for any of your accounts for any date range and for any account mapped to your username. The statement includes the transaction details, opening, closing and accumulated balance in the account. You can generate the online account statement for any date range or for any month and year. The account statement can be viewed online, printed or downloaded as an Excel or PDF file.
You also have the option to select the number of records displayed in each page of the statement. The options are 25, 50, 75, 100 and ALL. 12) Transaction Enquiry :- OnlineSBI provides features to enquire status of online transactions. You can view and verify transaction details and the current status of transactions. Your VISA transactions can also be viewed separately. Just log on to retail section of the Internet Banking site with your credentials and select the Status Enquiry link under the Enquiries tab. You will be displayed all online transactions you have performed. To view details of individual transactions, you need to click the Transaction Reference number link.
You are displayed the debit and credit account details, transaction amount, narration and transaction status 13) Demat Account Statement :- OnlineSBI enables you to view Demat account statement and maintain such accounts. The bank acts as your depository participant. In the third party site, you can mark a lien on your Demat accounts and use the funds to trade on stock using funds in your SBI savings account. You can view Demat account details, and generate the following statements: statement of holding, statement of transactions, statement of billing. 14) Donation:- You can make donation to religious and charitable institution by using Internet Banking of SBI. Simply log on to http://www. onlinesbi. om/ with your credentials and go to Payment and transfer and click on make donation link. After selecting the debit account select the religious/charitable institution whom you want to offer donation. After successful payment you can print an E-receipt for the donation made. Chapter 6 SWOC analysis of internet banking The chapter describes Strengths, Weaknesses, opportunities, challenges of banks. Strengths:- • Greater reach to customers • Quicker time to market • Ability to introduce new products and services quickly and successfully • Ability to understand its customers’ needs • Customers are given access to information easily across any location • Greater customer loyalty Easy online application for all accounts, including personal loans and mortgage • 24 hours account access • Quality customer service with personal attention Weaknesses:- • Lack of awareness among the existing customers regarding internet banking • Obsolesce of technology take place very soon specially in terms of security on internet. • Procedure for applying for id and password for using services related to internet banking takes time. • Lack of knowledge is found regarding internet banking in employees of SBI • Implementation of newer technology is little bit complicated • Employees needs training to obtain knowledge regarding I-banking Opportunities:- Approximately 95% of customers are not using internet banking. • Core competency can be achieved in terms of banking if focus is made on awareness of internet banking • Can become 1st virtual bank of India. • Concentration of various services should be made using internet banking Challenges:- • Maintaining Business Edge over competitors in the context of sameness in IT infrastructure • Multiple vendor support is necessary for working of highly complex technology • Maintaining secured IT infrastructure for business operations • Alternative must be there in case of failure of system Chapter 7 RESEARCH METHODOLOGY Purpose of the study
The main purpose of this study to get an overview of the internet banking sector in the Indian economy and study as to how it has helped change the banking habits of various individuals Research Objectives of the study Objectives of a project tell us why project has been taken under study. It helps us to know more about the topic that is being undertaken and helps us to explore future prospects of the topic. Basically it tells what all have been studied while making the project. The various research objectives of the study are: 1. To study the internet banking facilities offered by the banks to its customers 2. To study as to how much internet banking has penetrated in the minds of the customers 3. To gain insights about functioning of internet banking. 4.
To explore the future prospects of internet banking. 5. To study the benefits that are provided to the individual under internet banking Research Methodology Research is a process through which we attempt to achieve systematically and with the support of data the answer to a question, the resolution of a problem, or a greater understanding of a phenomenon. This process, which is frequently called research methodology, has eight distinct characteristics: 1. Research originates with a question or problem. 2. Research requires a clear articulation of a goal. 3. Research follows a specific plan of procedure. 4. Research usually divides the principal problem into more manageable sub-problems. 5.
Research is guided by the specific research problem, question, or hypothesis. 6. Research accepts certain critical assumptions. 7. Research requires the collection and interpretation of data in attempting to resolve the problem that initiated the research. 8. Research is, by its nature, cyclical; or more exactly, helical. Descriptive research is used in this project report in order to know about cash management services to clients and determining their level of satisfaction. This is the most popular type of research technique, generally used in survey research design and most useful in describing the characteristics of consumer behavior. The method used were following: ? Questionnaire method Direct Interaction with the clients. Research Design: - There are three kinds of research designs namely; • Exploratory • Descriptive • Causative MODE OF DATA COLLECTION ? Primary Data: - The sources of Primary data were questionnaires and personal interviews. ? Secondary data: - the sources of secondary data were internet, books and newspaper articles. Sample design Doing research via sampling was important because of impossibility of finding all of a population, as well as other restrictive parameters like cost, time etc. Our sampling decision should be in-coordination with the research and data objectives. The method opted for taking samples was `Non-probability sampling’.
It was a `Purposive Non-probability sampling/ Judgement Sampling’ was used. The key assumption underlined this type of sampling is that, with sound judgement or expertise, and an appropriate strategy, one can carefully and consciously choose the elements to be included in the sample, so that samples can be developed that are suitable for one’s needs. Sample Size: - 100 METHOD OF DATA COLLECTION Instruments for data collection: - The research instruments used for this survey were structured questionnaires. The questionnaires were designed to find the satisfaction levels of internet banking users. Questionnaire: - A questionnaire consists of a set of questions prepared to respondents for their answers.
Because of its flexibility, the questionnaire is by far the common instrument used to collect primary data. Closed Ended as well as Open Ended questionnaire were used in my market research. Chapter 8 ANALYSIS & FINDINGS 1. Are you aware of net banking services offered by the banks? (a) Yes (b) No [pic] Analysis of the above diagram It is good for the banks as most of the respondents were aware of the internet banking and all the services provided under internet banking 2. In which company bank do you have your account? (a)Axis bank (b)Standard Chartered Bank (c)HSBC Bank (d)HDFC Bank (e)State Bank of India [pic] Analysis of the above diagram
It was witnessed that today public sector bank State bank of India has the largest customer base but the private banks are also catching up and after State bank of India HDFC has the highest customer base . Multi-national banks are also making their presence noticeable in the Indian scenario 3. Do you feel safe in disclosing your details on net? (a)Yes (b)No [pic] Analysis of the above diagram This question witnessed a fifty fifty answer from most of the respondents, few of the respondents felt safe in disclosing their details but still there were a lot people who felt unsafe in disclosing and feared their personal information may used by some other person 4. Are you satisfy with your bank services? (a)Yes (b) No [pic] Analysis of the above diagram
It is very interesting to see that most of the respondents are happy from the services their respective bank is providing ,the rest of the respondents felt there is a scope of improvement still they were also happy 5. What are your main transactions you would prefer to do by net (a)Money transfers (b)Checking of your current balance (c)Create Fixed Deposits Online (d)Request a Demand Draft (e)Pay Bills (f)Order a Cheque Book (g)Request Stop Payment on a Cheque [pic] Analysis of the above diagram It is interesting to see that a respondent would like to do all the transactions which one does personally on a visit to the bank. Thus, internet banking has a promising future ahead 6. Are you aware of the benefits of net banking which are available? (a)Yes (b)No [pic] Analysis of the above diagram
It is pretty amazing to see that most of the respondents are aware of the benefits of internet banking 7. Are you aware of the methods which can be undertaken to make any kind of fraud (a)Yes (b)No [pic] Analysis of the above diagram It’s pretty tragic but most of the respondents are unaware of the techniques which can be taken up for any type of fraud 8. Are you aware of all the methods which can be taken up to secure your transaction? (a)Yes (b)No [pic] Analysis of the above diagram Even with the increasingly knowledge of internet banking most of the respondents are unaware the softwares and methods taken up by the bank to secure each and every transaction. 9.
Does your bank educate you about the internet banking services being offered? (a)Yes (b)No [pic] Analysis of the above diagram Most of the respondents felt that they are not properly educated of internet banking and its benefits to them. 10. Would you prefer using net banking instead of visiting your bank every now and then? (a)Yes (b)No [pic] Analysis of the above diagram It was witnessed that most of the respondents preferred using internet banking over there conventional banking system. Thus , internet banking has a bright future ahead 11. What benefits do you see in internat banking? (a) Convenience (b) Speed (c) Transparency (d) Time [pic] Analysis of the above diagram
Most of the respondents felt that the transparency provided by internet banking is the highest motivating factor for an individual to use internet banking ,rest speed convenience and time are also the other motivating factors FINDINGS An old Chinese saying goes: If you don't know where you are going - you will never get there. ? Many people suddenly choosing their personal computers as the new way to view and manage their money. why? Quite simple - because it is a valuable option to have. (refer question no. 1) ? Every day more and more people are turning to the Technology for their personal banking. It is a safe, convenient way to shop for financial services, maintain bank accounts and conduct business 24 hours a day. (refer question no. 3) ?
Now, if you are already thinking about Technology as a tool in Banking you could probably set some of these goals: ? Selling financial products and services ? Cutting operational costs ? Branding & Market recognition ? Keeping profitable customers ? Bank customers can save time by banking online. There is no need to stand in one more line to perform the most basic transactions when they can be done quickly from the desktop PC anytime, day or night. (refer question no. 11) ? Moreover complicated transactions or investment decisions, people like having direct control over their finances themselves. They find it convenient to access all of their financial information in one place. ? Ease of use is one of the most important factors.
Navigation through online banking should be simple and intuitive. ? Customers also choose banks whose online services are reliable. (refer question no. 9) ? Most Banks now offers a comprehensive range of financial products and services, including a FREE checking account and internet bill paying services. (refer question no. 5) In addition, an array of checking accounts are available in which you may also request a FREE check card. Hence most Banks of following Electronic Banking or Internet Banking FREE Benefits for the bank should always reflect benefits for the customer of banking services. ? Cutting operational cost ? Cutting transaction costs results in higher profit margin for the banks.
As every Bank wants to be profitable E-banking is becoming necessity for survival. Electronic banking provides enormous benefits to consumers in terms of the ease and cost of transactions ? Taking over customers from competition ? Banks seeking new customers can use advantages of new distribution channels and acquire most profitable customer from their competition. It is a fact that people using E-banking are the ones who consider time as money and are the one with loads of money. Majority of banks see 80% of their business coming just 20% of the client base. This 20% customer base is vulnerable if the bank does not appreciate their time. ? Building stronger customer relations Offering new services, results in improved customer experience and stronger customer retention. ? Bigger share in customer’s wallet ? It is well known fact that customers tend to keep their finances in one place. Banks holding customer accounts therefore have opportunity to cross sell different products and services. Recent studies show that banks in the USA lost 20% of their most valuable customers in favor of non-bank FI flexible enough to offer diversified services and products. ? Identifying profitable customers ? Customers using E-banking services have higher balances than average branch teller customers. Investments are more than twice higher than the average. SUGGESTIONS
To prevent online banking from remaining an expensive additional channel that does little to retain footloose customers, banks must act quickly. The first and most obvious step they should take is to see to it that the basic problem fueling dissatisfaction have been addressed. In addition, to meet the challenge of online brokerage and other new entrants, banks would need to add “supermarkets” selling products such as mortgage, mutual funds and insurance. The banks should take up responsibility of educating the customers and all the benefits of internet banking There is a need felt for the banks to promote the online banking services and proper promotional activities are not taking place.
Banks need to appeal to customers who may not be technologically sophisticated, and should not require an engineering degree to get started or use the service. CONCLUSION From all of this, we have learnt that information technology has empowered customers and businesses with information needed to make better investment decisions. At the same time, technology is allowing banks to offer new products, operate more efficiently, raise productivity, expand geographically and compete globally. A more efficient, productive banking industry is providing services of greater quality and value. E-banking has become a necessary survival weapon and is fundamentally changing the banking industry worldwide. Today, the click of the mouse offers customers banking services at a much lower cost and also empowers hem with unprecedented freedom in choosing vendors for their financial service needs. No country today has a choice whether to implement E-banking or not given the global and competitive nature of the economy. The invasion of banking by technology has created an information age and commoditization of banking services. Banks have come to realize that survival in the new e-economy depends on delivering some or all of their banking services on the Internet while continuing to support their traditional infrastructure. The rise of E-banking is redefining business relationships and the most successful banks will be those that can truly strengthen their relationship with their customers.
Technology innovation and fierce competition among existing banks have enable a wide array of banking products and services, being made available to retail and wholesale customer through an electronic distribution channel, collectively referred to as e-banking. Banks have traditionally been in the forefront of harnessing technology to improve product and efficiency. Technology is altering the relationships between banks and its internal and external customers. Technology has also eroded the entry barriers faced by many industries. With one time investment, technology has brought about superior products and channel management with a special focus on customer relationship. The incremental costs incurred for expansion and diversification are also more beneficial.
The major driving force behind the rapid spread of e-banking is its acceptance as an extremely cost effective delivery channel. But on the flipside, it is associated with risks such as reputation risk, security risk, cross-border risk and strategic risk, which are unique to e-banking. Banks need to have an effective disaster recovery plan along with comprehensive risk management tool is significant not only to the bank but also to the banking system as a whole. Internet has created plenty of opportunities for players in the banking sector. While the new entrants have the advantage of latest technology, the good-will of the established banks gives them a special opportunity to lead the online world.
By merely putting existing service online won’t help the banks in holding their customer close. Instead, banks must learn to capitalize their customer’s different online financial-services relationships BIBLIOGRAHY • Internet Banking in India-Part I- Dr A. K. Mishra • Hsbc bank :- www. hsbc. co. in • THE BUSINESS LINE. • Bank netindia- http://www. banknetindia. com/banking/ibkgintro. htm • Ez articles:- http://ezinearticles. com/? A-Brief-History-of-Internet-Banking&id=353450 • Express cmputers: http://www. expresscomputeronline. com/20020916/indtrend1. shtml • E-finance by Vasant C Joshi, Annexure QUESTIONNAIRE Dear Respondent, I am student.
I am doing this research to compare different services provided by bank to its clients. 1. Are you aware of net banking services offered by the banks? (a) Yes (b)No 2. In which company bank do you have your account? (a)Axis bank (b)Standard Chartered Bank (c)HSBC Bank (d)HDFC BANK (e)STATE BANK FOF INDIA 3. Do you feel safe in disclosing your details on net? (a)Yes (b)No 4. Are you satisfy with your bank services? (a)Yes (b) No 5. What are your main transactions you would prefer to do by net (a)Money transfers (b)Checking of your current balance (c)Create Fixed Deposits Online (d)Request a Demand Draft (e)Pay Bills (f)Order a Cheque Book (g)Request Stop Payment on a Cheque 6.
Are you aware of the benefits of net banking which are available (a)Yes (b)No 7. Are you aware of the methods which can be undertaken to make any kind of fraud (a)Yes (b)No 8. Are you aware of all the methods which can be taken up to secure your transaction (a)Yes (b)No 9. Does your bank educate you about the netbanking services being offered? (a)Yes (b) No 10. Would you prefer using net banking instead of visiting your bank every now and then? (a)Yes (b)No 11. What benefits do you see in internat banking? (a) Convenience (b) Speed (c) Transparency (d) Time Personal Information Name: Age: Sex: ( )Male ( ) Female Phone No: Occupation: [pic]
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