IN THE NAME OF ALLAH THE MOST MERCIFUL THE MOST BENEFICENT

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PRESENTATION

MONEY BANKING & FINANCE

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ASSIGNED BY

MISS. AYESHA SABA

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TOPIC

SCOPE OF INTER NET OR E . BANKING

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PRESENTED BY
HAROON RASHEED
CLASS :B.COM 1ST ROOL NO :03

INFORMATICS COLLEGE OF SCIENCE AND TECHNOLOGY FSD

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Contents
 What is E-Banking ?  Development of E-Banking  Types of Banking is Varied by Diagram  Types of E-Banking  E-Banking Products  Benefits of E-Banking  Disadvantages and Risk of E-banking  Scope of E-Banking in Pakistan
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What is E-Banking ?
E -banking is defined as:
Banking.
 Electronic Banking is a process by which a customer performs
Electronic banking is one of the truly widespread avatars of E-commerce the world over. Various authors define E-Banking differently but the most definition depicting the meaning and features of E-Banking are as follows:

 Banking is a combination of two, Electronic technology and

banking Transactions electronically without visiting a brick-andmortar institutions

 Electronic banking is also called Cyber banking , virtual banking

and online banking .

In short, Electronic banking is the delivery of banking services to the customers through the use of electronic communication primarily the internet
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BANK
Information technology

Customer

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Development of E-Banking
History
1980s :
Rapid development of the Internet TCP/IP system (communication system) E-commerce
E-Banking made its debut in UK and USA during 1920s. It became prominently popular during 1960s through electronic funds transfers and credit cards. The concept of Webbased banking came into existence, in Europe and USA in the beginning of 1980s. It has been estimated that 40 percent of banking transactions would be done through net at present. Today, a wide range of services are being rendered by banks using the electronic media. Since many years, banks have been operating inter-city transfer of money through demand drafts, mail transfers and telephonic transfers from one city to other or even within the same city and also from bank to bank through telephones. It facilitates availability of funds the next day itself. It is a matter of great satisfaction that the e-Commerce is greatly assisted by the e-Banking through electronic cash cheques and smart cards. It is one of the trend setting paperless mode of effecting payment by two kinds; I) Electronic Credit Clearing, and II) Electronic Debt Clearing. The followings are other delivery channels of banking.
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Early 1980s :
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Access to their accounts with the computer of the bank

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Development of E-Banking

May 1995 :
Wells Fargo - the first bank in the world to offer customer access to their accounts over the internet .
 Allows customer to see their accounts online

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Development of E-Banking

Hong Kong (September 1999 ):

Bank of East Asia - first launched Internet banking
 Mortgage applications  personal loans  stock trading

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TYPES OF BANKNG IS VARIED

This is a direct banking because the customer get any services on the spot.

This is a online banking because the customer get services from many distance

This is a wireless or PDA(personal digital assistance) banking because in this type no any wire is connected and customer get services at any where. when he want. 13

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Types of E-Banking
MAIN TYPES OF E-BANKING SYSTEM
 Automated Teller Machine (ATM)  Tele banking or Phone Banking  Mobile Banking  Pc Banking & Digital TV banking  Internet Banking  Wireless or PDA Banking

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e-Banking CSFs
e-Business
Infrastructure Cost effectiveness Market segmentation Multi channel delivery Payment streams Risk management e-Banking

e-Banking: e-Trade

e-Business

Clearing Bank A
Bank Server

Bank B Settlement
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Types of E-Banking
Automated Teller Machine (ATM)
  

First electronic channel introduced Accepting deposits and dispenses cash Convenient in handling accounts

AUTOMATIC TELLER MACHINE (ATM): This system is known as "Any Time Money" because it allows customers who have an ATM card to withdraw money at any time from the bank without interacting with human teller. Since the ATM machine can be installed anywhere like petrol bunks, markets, railway stations etc, and can well be linked to the main computer. It allows customers to transact with the bank 24 hours a day and 365 days a year. They allow the customers to transfer money to and from accounts to view account information, to deposit cheques or cash, to order cheques, to receive cash etc.

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Types of E-Banking
Automated Teller Machine (ATM)
Using an ATM, customers can access their bank accounts in order to make cash withdrawals (or credit card cash advances) and check their account balances. Many ATMs also allow people to deposit cash or checks, transfer money between their bank accounts, pay bills, or purchase goods and services. ATMs are known by various casual terms including cash machine, hole-in-the-wall, cash point or Banc mat (in Europe and Russia).

Some of the advantages of ATM to customers are:    

Ability to draw cash after normal banking hours Quicker than normal cashier service Complete security as only the card holder knows the PIN Does not just operate as a medium of obtaining cash. Customer can sometimes use the services of other bank ATM.

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Types of E-Banking
Tele banking or Phone Banking
It came into operation in the 1970s in the developed countries like the US. It is accessible for corporate customers that have large volumes of payments to effect and dispose of a fully automated accounting system. They can establish a Computer to Computer link with their bank and in this way exchange truly paperless credit transfers which are handled all the way from the originator to the beneficiary's account without any paper involved.

HISTORY

How Its Work

This facility is available with the help of Voice Response System (VRS or IVR). This system basically, accepts only TONE dialed input. Like the ATM customer has to follow particular process, initially account number and telephone PIN are fed for the process to start. Also the VRS system provides the users within additional facilities such as changing existing password with the new desired.

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Types of E-Banking
Tele banking or Phone Banking
Some of the advantages of TELE-BANKING are:
        

Automatic balance voice out for the default account. Balance inquiry and transaction inquiry in all Inquiry of all term deposit account Statement of account by Fax, e-mail or ordinary mail. Cheque book request Stop payment which is on-line and instantaneous Transfer of funds with CBS which is automatic and instantaneous Utility Bill Payments Renewal of term deposit which is automatic and instantaneous Voice out of last five transactions.

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Types of E-Banking
Mobile Banking
Mobile banking comes in as a part of the banks initiative to offer multiple channel banking providing convenience for its customer. A versatile multifunctional, free service that is accessible and viewable on the monitor of mobile phone. Mobile phones are playing great role in banking- both directly and indirectly. They are being used both as banking and other channels.

Its most commonly used type is SMS Banking

SMS-banking The Short Message Service (SMS) is a GSM service to exchange text messages up to 140 byte (or 160 characters of 7 bit). The transmission of mobile-originated short messages is carried out by the short message service center (SMSC) of the particular network operator. The SMSC is receiving the message from the mobile device and routing it to the destination device. For generating mobile-terminated short messages, it is possible that a company or a special service provider runs an own SMSC. Thus, a bank could generate SMS from bank data like account balance or account movements and send it to the mobile device of the customer. This technique is used at SMS-banking: The customer sends an SMS with a request to the bank, and gets the desired data as an answer.
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Types of E-Banking
PC & Digital TV Banking PC Banking
PC Banking - The forerunner to Internet banking has been around since the late 1980's and is still widely used today. Individual banks provide software which is loaded on to an SME's office computer. The SME can then access their bank account via a modem and telephone link to the bank. Access is not necessarily via the Internet.

Digital TV Banking
Digital TV Banking- Using the standard digital reception equipment (set top box and remote control), users can access their bank account. Abbey National and HSBC services are available via Digital TV providers. One of its main selling points is that no account details are transmitted via the World Wide Web.

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Types of E-Banking
Inter Net or Online Banking
The advent of the Internet and the popularity of personal computers presented both an opportunity and a challenge for the banking industry. For years, financial institutions have used powerful computer networks to automate million of daily transactions; today, often the only paper record is the customer s receipt at the point of sale. Now that their customers are connected to the Internet via personal computers, banks envision similar advantages by adopting those same internal electronic processes to home use. Banks view online banking as a powerful value added tool to attract and retain new customers while helping to eliminate costly paper handling and teller interactions in an increasingly competitive banking environment

I n t e r N e t B A N K I N g

Internet Banking lets you handle many banking transactions via your personal computer. For instance, you may use your computer to view your account balance, request transfers between accounts, and pay bills electronically. Internet banking system and method in which a personal computer is connected by a network service provider directly to a host computer system of a bank such that customer service requests can be processed automatically without need for intervention by customer service representatives. The system is capable of distinguishing between those customer service requests which are capable of automated fulfillment and those requests which require handling by a customer service representative. The system is integrated with the host computer system of the bank so that the remote banking customer can access other automated services of the bank. The method of the invention includes the steps of inputting a customer banking request from among a menu of banking requests at a remote personnel computer; transmitting the banking requests to a host computer over a network; receiving the request at the host computer; identifying the type of customer banking request received; automatic logging of the service request, comparing the received request to a stored table of request types, each of the request types having an attribute to indicate whether the request type is capable of being fulfilled by a customer service representative or by an automated system; and, depending upon the attribute, directing the request either to a queue for handling by a customer service representative or to a queue for processing by an automated system.

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Types of E-Banking
Three Types of Inter net Banking
Informational
This is the basic level of Internet or E-Banking. Typically, the bank has marketing information about the bank s products and services on a stand-alone server. The risk is relatively low, as informational systems typically have no path between the server and the bank s internal network. This level of Internet banking can be provided by the banks or outsourced. While the risk to a bank is relatively low, the server or web site may be vulnerable to alteration. Appropriate controls therefore must be in place to prevent unauthorized alterations to the
bank s server or web site.

Communicative

This type of Internet banking systems and the customer. The interaction between the bank s system and the customer. The interaction may be limited to electronic mail, account enquiry, loan applications, or static file updates (name and address change). Because these servers may have a path to the bank s internal networks, the risk is higher with this configuration than with informational systems. Appropriate controls need to be in the place to prevent, monitor, and alert management of any unauthorized attempt to access the bank s internal networks and computer systems. Virus controls also become much more critical in this environment. This level of Internet banking allows customers to execute transactions. Since a path typically exists between the server and the bank or outsourcer s internal network, this is the highest risk architecture and must have the strongest controls. Customer transactions can include accessing accounts, paying bills, transferring funds etc. 23 CREATED BY:HAROON RASHEED 1/14/2012

Transactional

Types of E-Banking
ADVANTAGES OF INTERNET BANKING


Convenience
If you re out of state or even out of the country when a money problem arises, you can log on instantly to your online bank and take care of business, 24\7.

Unlike your corner bank, online banking sites never close; they re available 24 hours a day, seven days a week, and they re only a mouse click away.

Ubiquity

Transaction speed
You can access manage all of bank accounts, securities, from secure site. and your even one

Online bank sites generally execute and confirm transactions at or quicker than ATM processing speeds.

Efficiency

Effectiveness

Many online banking sites now offer sophisticated tools, including account aggregation, stock quotes, rate alert and portfolio managing program to help you manage all of your assets more effectively. Most are also compatible with money managing programs such as quicken and Microsoft money
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Types of E-Banking
Wireless or PDA Banking
 Wireless banking is gaining popularity.  With a phone number and a special PIN number a customer has access to his account balance from his cellular device.  Allows user to pay bills, transfer funds between accounts and check accounts from anywhere.  Net bank ,td bank offers wireless banking.  Security is an important issue in Wireless Banking.  Newsbytes reports that wireless banking users will number over 7 million in the US by 2005.

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Types of E-Banking
Wireless Application Protocol

WAP-banking
The most widespread solution for mobile banking is based on microwebsites following the WAP standard (Wireless Application Protocol). The function of WAP banking is in many ways similar to the function of Electronic banking using http. The client sends a request and gets a response with page content which is stored on or dynamically generated by a standard web server. The main difference is in the usage of a WAP gateway for the conversion of the protocols. At banks must be considered that very sensitive data is processed. While a normal content provider doesn t has to observe special security precautions, and in some cases can even use the services of extern providers, has to secure its web server and WAP Gateway especially against unauthorized access. This is especially necessary because of the fact that inside the WAP Gateway the encryption protocol is converted from SSL/TLS to WTLS with the effect that data is not encrypted while it is processed. While authentication is assured via a PIN (personal identification number) of the user, authorization for transactions is realized via transaction numbers (TAN). This concept, known from the electronic banking, forces the user to carry a TAN list with him in order to make transactions

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E-Banking Products
E-Banking Services
 Bill payment service  Fund transfer  Credit card  Debit Card  Investing through Internet banking  Railway pass  Recharging your prepaid phone  Shopping at your fingertips  E-Cheque  Smart Card
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E-Banking Services
Bill payment service
Bill payment service Each bank has tie-ups with various utility companies, service providers and insurance companies, across the country. It facilitates the payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills. To pay bills, a simple one-time registration for each biller is to be completed. Standing instructions can be set, online to pay recurring bills, automatically. One-time standing instruction will ensure that bill payments do not get delayed due to lack of time. Most interestingly, the bank does not charge customers for online bill payment.

Fund transfer
Fund transfer Any amount can be transferred from one account to another of the same or any another bank. Customers can send money anywhere in India. Payees account number, his bank and the branch is needed to be mentioned after logging in the account. The transfer will take place in a day or so, whereas in a traditional method, it takes about three working days. ICICI Bank says that online bill payment service and fund transfer facility have been their most popular online services.

Credit card
Credit card customers Credit card users have a lot in store. With Internet banking, customers can not only pay their credit card bills online but also get a loan on their cards. Not just this, they can also apply for an additional card, request a credit line increase and God forbid if you lose your credit card, you can report lost card online.
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Debit Card
Debit Card Debit Card is an identity card issued by a bank to a customer, which the customer can use to buy goods. The price of the goods is charged to customer's bank account.

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E-Banking Services
Investing through Internet banking
Investing through Internet banking Opening a fixed deposit account cannot get easier than this. An FD can be opened online through funds transfer. Online banking can also be a great friend for lazy investors. Now investors with interlinked demat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their demat account. Moreover, some banks even give the facility to purchase mutual funds directly from the online banking system. So it removes the worry about filling those big forms for mutual funds, they will now be just a few clicks away. Nowadays, most leading banks offer both online banking and demat account. However if the customer have there demat account with independent share brokers, then need to sign a special form, which will link your two accounts.

Railway pass
Railway pass This is something that would interest all the aam janta. Indian Railways has tied up with ICICI bank and you can now make your railway pass for local trains online. The pass will be delivered to you at your doorstep. But the facility is limited to Mumbai, Thane, Nasik, Surat and Pune. The bank would just charge Rs 10 + 12.24 percent of service tax.

Recharging your prepaid phone

Recharging your prepaid phone Now there is no need to rush to the vendor to recharge the prepaid phone, every time the talk time runs out. Just top-up the prepaid mobile cards by logging in to Internet banking. By just selecting the operator's name, entering the mobile number and the amount for recharge, the phone is again back in action within few minutes.

Shopping at your fingertips

Shopping at your fingertips Leading banks have tie ups with various shopping websites. With a range of all kind of products, one can shop online and the payment is also made conveniently through the account. One can also buy railway and air tickets through Internet banking.
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E-Banking Services
A smart
A smart card usually contains an embedded 8-bit microprocessor (a kind of computer chip). The microprocessor is under a contact pad on one side of the card. Think of the microprocessor as replacing the usual magnetic stripe present on a credit card or debit card. The microprocessor on the smart card is there for security. The host computer and card reader actually "talk" to the microprocessor. The microprocessor enforces access to the data on the card. The chips in these cards are capable of many kinds of transactions. For example, a person could make purchases from their credit account, debit account or from a stored account value that's reload able. The enhanced memory and processing capacity of the smart card is many times that of traditional magnetic-stripe cards and can accommodate several different applications on a single card. It can also hold identification information, which means no more shuffling through cards in the wallet to find the right one -- the Smart Card will be the only one needed. Smart cards can also be used with a smart card reader attachment to a personal computer to authenticate a user. Smart cards are much more popular in Europe than in the U.S. In Europe the health insurance and banking industries use smart cards extensively. Every German citizen has a smart card for health insurance. Even though smart cards have been around in their modern form for at least a decade, they are just starting to take off in the U.S.

E-CHEQUE
An e-Cheque is the electronic version or representation of paper cheque. The Information and Legal Framework on the E-Cheque is the same as that of the paper cheques. It can now be used in place of paper cheques to do any and all remote transactions. An E-cheque work the same way a cheque does, the cheque writer "writes" the e-Cheque using one of many types of electronic devices and "gives" the e-Cheque to the payee electronically. The payee "deposits" the Electronic Cheque receives credit, and the payee's bank "clears" the e-Cheque to the paying bank. The paying bank validates the e-Cheque and then "charges" the check writer's account for the check

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Benefits of E-Banking

 

Benefits for Banks Benefits for Small to Medium Businesses Benefits for Customers

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Benefits of E-Banking
Benefits for Banks
  

Larger customer coverage Reducing the costs of operations Promoting their services and products internationally Increasing the customer satisfaction and providing a personalized relationship with customers
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Benefits of E-Banking
Benefits for Small to Medium Businesses

To run its operations more effectively Lower cost than traditional financial management mechanisms

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Benefits of E-Banking
Benefits for Customers
Communication
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communicate easily Environmental

Abolishing the uses of paper Others

Offering one-stop-shop solutions

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Disadvantages on E-banking
A need for customer skill to deal with computers and browsers. E.g. Elderly, Housewives Inconvenient

Site change it will make the customer have some confusion or delay. Security Risk

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Security Risk of E-Banking

Increasing number of fraud net bank websites Fake emails purporting to be sent from banks Use of Trojan Horse programs to capture user IDs and passwords

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Scope of E-Banking In Pakistan

E-Banking in Pakistan Opportunities & Challenges
The State Bank Of Pakistan and other commercial banks are quite aware of the Changing needs of customers in Pakistan. The SBP has promulgated Electronic Transaction Ordinancein2002. which provides legal recognition for electronic settlement of transaction in banking sector. At the present the 40% of the commercial bank branches have been automated .The online banking which is the wave of future is now on the move in Pakistan and is progressing is satisfactorily

Generally speaking three factors

Quickness Easiness cheapness

Firstly

Generally speaking, three factors, quickness, easiness and cheapness have become the catchwords for the competitiveness and usefulness of all the business operations. Particularly it is commonplace today to say that banking is undergoing a radical transformation. The symptoms are new products, new players, new channels etc. This transformation is taking place across all sectors of the banking industry. That is why banks urgently need to improve their ability, to think strategically about IT investments. Only those banks that use their technology resources effectively have the opportunity to secure real competitive advantage in this fast-changing industry through real product or service differentiation.
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Scope of E-Banking In Pakistan

E-Banking in Pakistan Opportunities & Challenges
liberalization, privatization and globalization have been recognized as the key elements propelling the world towards the present era, characterized by rapid changes and increased challenges in various fields. In order to meet the challenges of competition unleashed in the global arena, it has become an imperative on the part of captains of various segments of the economy to open up to harvest the advantages that are forthcoming from such global challenges. It is in this context, the most vibrant and important sector, the banking sector, started gearing up to face the challenges of such ground realities. Accordingly, several measures were initiated and implemented for improving and strengthening the competitive position of the banking industry vis--vis the foreign banks. Such measures include e-Banking entry into mutual funds and insurance sector business

Secondly

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Scope of E-Banking In Pakistan

E-Banking in Pakistan Opportunities & Challenges
banking is service-oriented industry, which has peculiarity to implement various social as well as commercial objectives. It is an instrument for the development of the economy of the country. Banks have two roles to play. They create a runway for the free flow of capital necessary for the growth of the economy. At the same time it must attend to lending and deposit mobilization in order to make profit for its survival and growth. Banking, though, is now not a high profit service industry in most countries. In many countries banks are affected by loan losses and this has a great impact on the health of the banks. This has resulted in the poor quality of service. Complaints of deterioration in service are viewed in several quarters. Getting customer patronage and goodwill are becoming a great task and a challenge for banks.

Thirdly

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Comparison
Comparison E-banking system of Pakistan with E-Banking system of South Africa

ALLPAY Biometrically enabled Human assistance Expansion to include other banking services

MOBILE ATMs Reaching the under-banked Flexible reach Migrating transaction behavior

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CONCLUSION

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