Online Banking

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An academic presentation to introduce online banking to people.

Transcript of Online Banking

  • 1. On-Line Banking Global Trends and Local Prospects RITUL SONANIA 2005H124416 BITS-Pilani 4 thMarch 2006

2. Index

  • Definition of Online banking
          • The difference between PC banking and Internet Banking
  • The Importance of Online banking
          • Pros & Cons
  • Past, Present & Future
          • Services Offered
          • Usage Rates
          • Faced Problems, and problems solved
  • Online banking in India
          • Evolution
          • Current scenario
  • Conclusion

3. What is On-line Banking

  • CONVENIENT
  • FAST
  • CHEAP
  • INEVITABLE

4. Why is it Important

  • For Customers:
      • No need to mess up in queues.
      • They need bank to be always available.
  • For Banks:
      • The most important reason being ECONOMICS.
      • Each Internet transaction typically costs the bank one cent.
      • Compare that with 27 cents for each ATM transaction.
      • USD 1.07 every time user visits to a tellers window !!!

5. Cost per Transaction 6. PC vs. Internet Banking

  • PC Banking(also known as Home Banking):
      • The use of proprietary financial software running on a computer in the home.
      • Direct dial-in into the banks servers.
  • Internet Banking:
      • Similar in functionality to PC Banking
      • Allows access through a browser eliminating the need for proprietary software
      • Can be accessed through a regular Internet connection, through the sites public web site.

7. Past, Present & Future

  • Past:
        • No automated services
        • Onlybrochureware
    • Present:
        • Interactive Bank(Includes formatted email service, online calculator)
        • Intermediate Cyberbank(Lets customers consult accounts online)
        • Advanced Cyberbank(Fully transactional for transfers, payments, sales)
    • Future:
        • Interfaced Services

[ a] Services Offered 8. Past, Present & Future Past Present Future SimpleBrochure Interfaced Services Advanced Cyberbank Intermediate Cyberbank Interactive Bank Advanced Brochure [ A] Services Offered 9. Services Presently Available Product / Function Standard Services ATMs Checking Credit Cards Customer Services Home Equity Loans ATM locator with addresses Balance & transactionhistory Download to OFX enabledsoftware Available credit & Tn. History FAQs and Emails/contacts Rates & pay. Calculators Balance & Trans. History Investments Yields, Prospectus & Sign-up Forms 10. Services of the Future

  • PUSH services -
      • alerts, emails, webcasting, outbound messaging
        • Cellular Financial Processors
          • Linking Banking with GSM
    • Privacy Protection
      • & Fraud-prevention services

11. Past, Present & Future

  • [ b] On-line Banking Penetration in U.S Households

5MM 1997 9MM 1998 15MM 1999 22MM 2000 28MM 2001 12. Online banking Problems

  • On-line bankers need & want the following 5 features :
  • A sophisticated security system
  • Low fees
  • Real-time information & detailed account info.
  • 24 Hour customer service features
  • Wide array of products

13. Indian Scenario

  • Started ATM service in mid 90s.
  • Banking masters, ICICI & Citibank were on top in 2001.
  • By 2002, 50% major private sector banks were online (partially).
  • By 2003, SBI started Internet Banking (on lower level).
  • By 2005 all major banks are providing full Internet Banking.
  • There is no Internet-only bank in India.
  • Presently less than 2% of all Indian customers are using this.

14. On-Line Banking is the kind of breakthrough service, like ATMs, that will change the defition of banking but most certainly traditional banking survives in India. Conclusion