Monday, April 22, 2013
1.INTRODUCTION
For
longtime technology has made us gape at its possible virtues. We read about
existing experiments in scientist labs. We heard of some queer happenings. It
all appealed to us. We often fell short experiencing them. No more.
The pace
or penetration of technology in our lives has awakened us from our dreams. Web
banking is another addition in a series of technological wonders in the recent
past. It makes our lives convenient. Imagine checking your account balance from
the cozy comports from your home on a click of mouse. Internet has
revolutionized one of the oldest trades in human civilization banking.
Today’s
banks are no more housed in dingy places where employees sit upon ledger books,
taking eternity to check the balance in your account. The banking sector has
undoubtedly been early adopter of technology. From computerization to
networking to ATMS and now E-banking, banks have moved up the value of chain.
2.WHAT IS WEB BANKING?
Internet banking has
been called web banking, online banking, electronic banking, home banking, pc
banking, and net banking. These are the similar Internet based products that
help conduct remote banking transactions via the World Wide Web. The Internet
may be as old as the hills. But many Indian banks have begun to realize its
enormous potential only recently. Internet banking systems include account
enquiries, funds transfer, electronic bill payment, transaction histories and
account reconciliation capacities, all provided in a online and real time in
simple terms it does not involve any physical exchange of money, that is, all
money transactions takes place electronically, from one account to another
using internet.
3. THE EVALUTION OF WEB BANKING
Typically, most banks
follows five-stage cycle that is mark of entrants to generic e-business.
However, these are m\not stage to another but continuous changes of different
digress in the life of an Internet bank.
3.1. EXPLORATION
In this first stage ,
a bank enters the arena with an email address. But without its websites, while
this allows its customers to communicate with it, such communication is
severally limited to that small number branches offices which are fortunate to
have an access to this e-mail account.
3.2. INITIATION
The bank makes its first
active presence by putting up a website that provides general information about
itself, deposits, and loan products, application forms for downloading about
itself ,deposits and loan products application forms for downloading , and
e-mail options for enquires and feedback. For example at www.vijaybank.com you can get information
about NRI and other services, and www.statebankofindia.com
gives you investment information. Further more, Allahabad bank has introduced
educational and car loan at their local branch in a typical click – and –
bricks approach. These websites are static, in a sense that they do not allow
online transactions for their customers.
3.3. INTERACTION
At this stage, banks
permit their customers to transact electronically with them . Customers open
accounts, make changes to their profiles, can request for cheques , and view
and print statements of their accounts. Movement of funds may be initially,
limited between accounts (current and loan, for example) within the same bank
and what the customers get are essentially products of the host bank.
Transactions re timeless (24*7 banking), and essentially fro NRI’s , borderless
too, but within the narrow constraints of forex regulations institutions such
as bank of Matura Ltd, and global trust
bank are in this stage where as HDFC
expects to offer internet enabled products only by the end of this year.
3.4.EXPANSION
It is here that banks
begin to offer non-banking products . That range from investment items such as
mutual funds, dematerialization services and online portfolio investments to
online purchases of credit cards, gifts, music books and movie tickets.
3.5.CONVERGENCE
In this last
foreseeable stage a ban would be offer B2C and B2B deals, which are small value
transactions and have large unit value. The deeper water’s of B2B products are
yet to be tested. These are recurring transactions of large value. HDFC bank
had entered the market in February this year, and their performance will be
eagerly watched.
4. TWO OPPROCHES TO ONLINE SERVICES
4.1 DAIL-IN AND INTERNET
Newer Internet based
systems allow customer to simply dial in and use the banks software are
software provided by an Internet service provider, such as America online
(AOL).
Customers
use any computer to access the internet and then the bank via modem.
4.1.1 ADVANTAGES
Ease of use, portable often cheaper.
4.1.2 DISADVANTAGES
Less versatile fewer
features.
4.2 CLIENT BASED SYSTEMS
The “client-based”
systems, in which customers use their own software, generally use personal
financial managers-specialized computer programs that help customers carry out
a verity of personal finance activities.
These programs
typically allow customers to do much of their work offline, and then dial in to
complete their bank transactions. These client- based systems have advantage of
allowing customers to ingrate all their banking information with other personal
finance data using a single program.
Although these
software products can be purchased at computer stores, the versions offered by
the institutions are enhanced to adapt their systems. Some banks will allow
customers to download the program for free, or will mail a copy to customers
free or for a small fee. Shopping elsewhere is likely to reduce the efficiency
of the system.
For those who already
own’s a personal program or enjoy learning how to use new software, the
client-based approach works well. However, switching accounts from one bank to
another may also require switching to new personal financial software ,
and customers will have to invest some
time (and possibly the purchase price of the new program) in order to make the
switch. It could also entail transfer of a lot o information from one program
to another.
A few banks have
developed proprietary software for online banking, which is usually free.
Again, changing banks would present the drawbacks associated with learning a
new program.
A handful of banks
currently allow customers to choose between the older online banking systems or the internet however, this is
excepted to be a transitional approach that will stay in place only until
the entire online banking customers switch to the internet . David smith,
director of access management at city bank ,one of the first banks to offer
both approaches , said the older system might well be eliminated within a year
as customer switch to internet banking .
Customers use money
management software and their own computers to access the bank using a modem
and a phone line.
4.2.1 ADVANTAGES
Option of working
offline and then signing on over the phone line, reducing costs.
Integration of
banking and personal finance information for more detailed and comprehensive.
4.2.2 DISADVANTAGES
Switching banks
require new software and re entry of data.
The two approaches
has distinct advantages and disadvantages for customers. Yet bank customers who
do not yet use electronic banking would probably do well to choose internet
banking because the older systems are likely to faced out during the next few
years.
5.
WHAT YOU WILL NEED TO CREATE AN ACCOUNT?
Thank you for choosing a first Indiana account. We’re looking forward to being your bank. Before you begin, you should know that applicants must be at least 18 years old and a resident of central Indiana. Please have the following information nearby to make the application process quick and easy.
o
Your social security number to
protect your bank account information.
o
Your driver’s license, so you can
enter the number exactly as it appears on the card.
o
Your e-mail address, so we can
communicate with your throughout the account opening process.
o
Co-applicant information, if you
are opening a joint account.
o
The name of the account you wish to
apply for.
o
Your residential address.
o
If you receive mail at a P.O.Box,
you will also need your street address to enter in the initial account holder
information. Your P.O.Box address may be entered in the mailing address
section.
5.1 HOW WILL YOU MAKE
YOUR OPENING DEPOSIT?
For checking accounts:
Here are the methods you may use to
open your checking account.
·
Credit Card – You may use Visa or
MasterCard to open your account. Please have the name as it appears on your
statement, the account number and expiration date. Your initial deposit must be
$25.
·
Check by Mail - Once your
application is approved, we’ll send you a postage paid envelope to return a
check to us.
Transfer from another first Indiana
account – If you’re transferring from a First Indiana account has your account
number handy.
·
Transfer from another bank – To
transfer from an account at another bank, you will need your account number,
the name of your financial institution, and their routing number. If the funds
are coming from your checking account, please have a check nearby and we’ll
show you where this information can be found. If you are transferring from a
savings or other account that doesn’t offer checks, you will need to ask your
bank for this information. Your initial deposit must be $25.
Once your account is funded, First
Indiana will issue a VISA debit card to the primary account holder. Additional
cards can be obtained by contacting First Indiana.
For cds and savings accounts:
You
may open a CD or Savings account for any amount with the following methods.
·
Check by Mail – Once your
application is approved, we’ll send you a postage paid envelope to return a
check to us.
·
Transfer From Another Account - If you’re transferring from a First
Indiana account have your account have your account number handy. You will be
able to make changes or corrections before submitting your application.
6. THE PROCESS OF USING CREDIT
CARDS:
A typical process of using credit
cards is shown in figure. The procedure varies depending upon the agreement
among brand, issuer and acquirer.
v
The major steps in the process are:
·
A potential cardholder requests an
issuing bank, from in which the cardholder may have an account, the issuance of
a card band (like VISA or Master card).
·
The issuing bank approves (or
denies) the application.
·
If approve, a plastic card is
physically delivered to the customer’s address by mail.
·
The card is activated as soon as
the cardholder calls the bank for initiation and signs the back of the card.
v
The cardholder shows the card to a merchant
whenever he or she needs to pay for a product or service.
v
The merchant then asks for approval from the
brand company, and the transactions paid by credit. The merchant keeps a sales
slip.
v
The merchant sells the slip to the acquiring
bank and pays a feel for the service. This is called a capturing process.
v
The acquiring bank requests the brand to clear
for the credit amount and gets paid. Then the brand asks for clearance to
issuer bank.
v
The amount is transferred from
issuer to brand. The same amount is deducted from the cardholder’s account in
the issuing bank.
WEB
BANKING:
ADVANTAGE:
7. WEB BANKING:
7.1 ADVANTAGES:
·
Get current account balances at any
time: you can easily check the status of checking, saving and money market
account.
·
Obtain charge and credit card
statement: you can even set up your account to pay off cards automatically
every month.
·
Pay bills: electronic payments from
your accounts are normally credited the same day or the next. The cost of
paying bills electrically may well be less than the postage involved in sending
out a large no of payments each month.
·
Transfer money between accounts: no
more waiting lines, deposit slips and running to ATMs.
·
Balance your accounts: if you are
the kind of person who to forgets record ATMs withdrawals, online banking may
help you get organized. Just down load the transactions and import them into
your register.
·
Send e-mail to your bank: got a
problem with your account? You can send a quick note to your online bank
representative.
·
Additional services: customers of
some banks receive free phone banking with their online banking services.
7.2
DISADVANTAGES:
There are also disadvantages.
·
Customer Mindset:
Despite being it-savvy many customers are afraid of
the new technology. One fear is that the credit card number may be captured and
misused for other purchases. Lack of time, and apathy could be other reasons.
However with the speedy entry of skilled it people, there would be a better
understanding of the use of secured lines passwords and firewalls, with a
strong likelihood that public fear would wane.
·
Access Casts:
To
the average Indian, the Internet is not very attractive because of high
telephone rental, access charges and low access speeds. For the individual, a
good internet ready pc may not be available for less than however there are
positive indications: access charges have been falling and a few free
connections like www.cheecoo.com.pc
costs have also fallen. Our market driven economy has seen the average family
invest heavily into a variety of white goods even in the rural areas. There is
no reason why the pc should not affordable at current prices. And finally, with
the launch of new satellites and entry of new ISPs, faster Internet access
speeds may soon became a reality.
8. SECURITY:
An industry that deals in funds cannot
but have the best security that is available the customer’s first contact with
bank is acknowledged with a unique name (ID) and a password to begin
transactions. The login serves to electronically and identifies the customers
to the bank.
Customers are repeatedly advised to
repeat their passwords frequently, and not to share it with others or even
write it down.
However passwords have been sometimes
found to be unreliable. Therefore, bank’s computers scramble customers’
messages so that if they cannot be deciphered. The scrambling process converts
the entire message and the related data, like time and date into a hash number
using a unique private cryptographic key of the customer.
Although, 40-bit encryption is the
current international grade standard, banks, in U.S. This prevents encrypted
information being written on to the hard disk of the customer, so that an
unauthorized user is unable to read it. Additionally, each time the customer
logs on; he uses a new lock and key provided by the scrambler.
Lastly banks also firewalls in place
to ensure that unauthorized users do not break into their computers. Constant
monitoring of their systems provides their customers the highest possible level
of Security.
9. CONCLUSION:
No more waiting in long log queues.
Just log in into your accounts into your account and logout with the cash.
These are the words that best describe the way banking is moving forward.
