On-Line BankingOn-Line BankingGlobal Trends and Local ProspectsGlobal Trends and Local Prospects
RITUL SONANIARITUL SONANIA2005H1244162005H124416BITS-PilaniBITS-Pilani
44thth March 2006 March 2006
IndexIndex
Definition of Online bankingDefinition of Online bankingThe difference between PC banking and Internet Banking
The Importance of Online bankingThe Importance of Online bankingPro’s & Con’s
Past, Present & FuturePast, Present & Future Services OfferedUsage RatesFaced Problems, and problems solved
Online banking in IndiaEvolutionCurrent scenario
ConclusionConclusion
What is On-line BankingWhat is On-line BankingCONVENIENTCONVENIENT
FAST
CHEAPCHEAPINEVITABLEINEVITABLE
Why is it ImportantWhy is it Important
• For Customers:For Customers:• No need to mess up in queues.
• They need bank to be always available.
• For Banks: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 !!!
Cost per TransactionCost per Transaction
0
5
1015
20
25
3035
40
45
50
Branch PC Banking ATM Internet
PC vs. Internet BankingPC vs. Internet Banking
• PC Banking PC Banking (also known as Home 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: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.
Past, Present & FuturePast, Present & Future Past:Past:
– No automated services – Only brochureware
Present: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:Future:– Interfaced Services
[[a] Services Offereda] Services Offered
Past, Present & FuturePast, Present & Future
PastPast
PresentPresent
FutureFuture
Simple Simple BrochureBrochure
InterfacedInterfacedServicesServices
AdvancedAdvancedCyberbankCyberbank
IntermediateIntermediateCyberbankCyberbank
InteractiveInteractiveBankBank
AdvancedAdvancedBrochureBrochure
[[A] Services OfferedA] Services Offered
Services Presently AvailableServices Presently AvailableProduct / FunctionProduct / FunctionProduct / FunctionProduct / Function Standard ServicesStandard ServicesStandard ServicesStandard Services
ATMsATMs
CheckingChecking
Credit CardsCredit Cards
Customer ServicesCustomer Services
Home Equity LoansHome Equity Loans
ATM locator with addresses
Balance & transaction history Download to OFX enabled software
Available credit & Tn. History
FAQs and Emails/contacts
Rates & pay. Calculators Balance & Trans. History
InvestmentsInvestments Yields, Prospectus & Sign-up Forms
Services of the FutureServices of the Future
•PUSHPUSH services -services -alerts, emails, webcasting, outbound alerts, emails, webcasting, outbound
messagingmessaging
– Cellular Financial ProcessorsCellular Financial Processors LinkingLinking Banking Banking
with GSMwith GSM
– Privacy ProtectionPrivacy Protection
&& Fraud-prevention servicesFraud-prevention services
Past, Present & FuturePast, Present & Future[b][b] On-line Banking Penetration in U.S HouseholdsOn-line Banking Penetration in U.S Households
5 MM5 MM
199719979 MM9 MM
19981998
15 MM15 MM
19991999
22 MM22 MM
20002000
28 MM28 MM
20012001
Online banking ProblemsOnline banking Problems
On-line bankers need & want the following 5 features:
• A sophisticated security systemA sophisticated security system
• Low feesLow fees
• Real-time information & detailed account info.Real-time information & detailed account info.
• 24 Hour customer service features 24 Hour customer service features
• Wide array of productsWide array of products
Indian ScenarioIndian Scenario• Started ATM service in mid 90’s.Started ATM service in mid 90’s.
• Banking masters, ICICI & Citibank were on top in 2001.Banking masters, ICICI & Citibank were on top in 2001.
• By 2002, 50% major private sector banks were online By 2002, 50% major private sector banks were online (partially).(partially).
• By 2003, SBI started Internet Banking (on lower level).By 2003, SBI started Internet Banking (on lower level).
• By 2005 all major banks are providing full Internet Banking.By 2005 all major banks are providing full Internet Banking.
• There is no Internet-only bank in India.There is no Internet-only bank in India.
• Presently less than 2% of all Indian customers are using this.Presently less than 2% of all Indian customers are using this.
On-Line Banking is the kind of On-Line Banking is the kind of breakthrough service, like ATMs, that breakthrough service, like ATMs, that will change the defition of banking but will change the defition of banking but
most certainly traditional banking most certainly traditional banking survives in India.survives in India.
ConclusionConclusion
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