26366405 E Banking in Pakistan Eps

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[E-BANKING IN PAKISTAN] Internet Banking &EPS

Acknowledgement

August 9, 2009

Well we, when writing this acknowledgement would like to acknowledge first

to Allah.

My second acknowledgement would go to our parents for their hospitality

and patience.We would like to acknowledge Mr. Saghir Muhammad for giving us anopportunity to do this research and for polishing us manifold. Our utmostregards go to her for guiding us and bearing with us through the semester.

Making this report has immensely helped us in understanding the vitality

and importance of internet banking

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Letter of Authorization

August 9, 2009

To: Talha Suhail

Syed Taha Hameeduddin

From: Mr. Saghir Muhammad

Course Instructor

For Summer Semester 2009, you are assigned to prepare a report on the

Internet Banking & EPS.

Yours sincerely,

Mr. Saghir Muhammad

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Executive Summary

This report is based on the research conducted regarding the internetbanking in Pakistan.

Following the overview of the Internet Banking in Pakistan, we have includedthe literature review that helped us fill the gaps of our research. Next wehave defined our purpose, problem statement, research objectives, andscope.

We have used questionnaires and focus group to collect our data. Thequestionnaire was formulated in such a way that it caters to all ourhypotheses.

The later part of the report includes the findings we observed from ourresults and limitations that we faced during our work. We have further givensuggestions for the Internet banking in Pakistan in general.

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TABLE OF CONTENTS

S.NO CONTENTSPG

NO.

1 Introduction 6

2 Overview of E-Banking in Pakistan 8

3 Literature Review 11

4 Research Problem 15

5 Research Objectives 16

6 Hypothesis 17

7 Research Methodology 188 Hypothesis 1 19

9 Online Products and Service by UBL 20

10 Comparison of Banks 24

11 Findings and Conclusion 25

12 Hypothesis 2 26

13 Analysis 29

14 Findings 40

15 Suggestions & Conclusion 42

16 Annexure 44

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Introduction

One of the major forces behind the changes happening to business today istechnology, which is creating new products, services market opportunities anddeveloping more information and system oriented business and managementprocesses.

As an information medium, the Internet offers different information services

that have been developed over the time. The services are e.g. electronicmail, file transfer protocol, and the worldwide web (www). The internet hasno central owner, but the connected networks are owned and administratedby different universities, companies, authorities and other organizations.

Electronic commerce refers to the use of electronic means and technologiesto conduct commerce in various settings, such as business-to-business (B2B)and business-to-consumer (B2C). The enabling technologies, of course, arealso used for non-commercial activities such as entertainment,communication, filing and paying taxes, managing personal finance,research and education, which may still include the services of onlinecompanies. E-commerce is the application of information technology tofacilitate business exchanges among different parties.

Banking is one of the most information intensive sectors and is an idealdomain for the successful development of E-Commerce. Internet bankingrefers to the use of the Internet as a remote delivery channel for bankingservices .For banks, technology has emerged as a strategic resource forachieving higher efficiency, control of operations, productivity andprofitability. For customers, it is the understanding of their anywhere,anytime, anyway banking dream. This has prompted the banks to embrace

technology to meet the increasing customer expectation and face the toughcompetition. Internet banking would help banks present a potentially lowcost alternative to brick and mortar branch banking. Internet bankingservices are crucial for long-term survival of banks in the world of electroniccommerce. The market for Internet banking is forecasted to grow sharply inthe next few years, affecting the competitive advantage enjoyed bytraditional branch banks. Indeed, it also was estimated that financial

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institutions that failed to respond to the need for Internet banking serviceswould likely lose more than 10% of their customers base by the year 2000.

Internet banking involves consumers using the Internet to access their bank

account and to undertake banking transactions. At the basic level, Internetbanking can mean the setting up of a web page by a bank to give informationabout its product and services. At an advance level, it involves provision offacilities such as accessing accounts, funds transfer, and buying financialproducts or services online. This is called transactional'' online banking.

There are two ways to offer Internet banking. First, an existing bank withphysical offices can establish a web site and offer Internet banking in additionto its traditional delivery channels. Second, a bank may be established as abranchless, Internet only or virtual bank. Broadly the levels of banking

services offered through Internet can be categorized in three types: (i) TheBasic Level Services use the banks websites which disseminate informationon different products and services offered to customers and members ofpublic in general. It may receive and reply to customers queries through e-mail (ii) In the next level are Simple Transactional Websites which allowcustomers to submit their instructions, applications for different services,queries on their account balances, etc, but do not permit any fund-basedtransactions on their accounts (iii) The third level of Internet bankingservices are offered by Fully Transactional Websites which allow thecustomers to operate on their accounts for transfer of funds, payment ofdifferent bills, subscribing to other products of the bank and to transactpurchase and sale of securities, etc. Most of the banks providing Internetbanking products and services offer, to a large extent, an identical andstandard package of banking services and transactional capabilities.

A website plays very significant and key role in Internet banking. Websites

should be able to convey all the information for both current customers and

potential new customers via the Internet. If the content of the site fails to

pass sufficient information on account capabilities, then the site is not

fulfilling its objectives. The banks website provides a better way for

communication.

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Overview of Internet Banking in Pakistan

Globally banking is no longer confinedto the four walls of a branch. Manycountries are far ahead of the facilitiesbeing available in Pakistan. Theinitiative in e-Banking in the countrywas taken a bit late, but now focusedefforts are being made to catch up withrest of the world.

The level of low banking, a few yearsback, was confined to the four walls ofbranch. With the entry of private banks,having limited number of branches, investment in technology was chosen, asalternative, to overcome this deficiency. The advent and common use ofInternet, leading to e-commerce, forced the banks globally to incorporate e-banking. Pakistani banks are still far behind their global counter parts. Onesuch example is complete lack of merchant accounts in Pakistan.

However, lately a task force was established to study and implement

formation of Electronic Clearing House (ECH). Simultaneously, the localbanks also went for on-line banking, though still not a norm. Another stepforward was installation of ATMs by the banks. While some banks have theirown ATMs, some other banks started using a dedicated network. In thissystem an ATM card holder of a particular bank could use teller machinesinstalled by all the sponsors of this network. The system is working to asatisfactory level.

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Challenges of the E-Banking Revolution

Electronic banking is the wave of the future. It provides enormous benefits toconsumers in terms of the ease and cost of transactions. But it also posesnew challenges for country authorities in regulating and supervising thefinancial system and in designing and implementing macroeconomic policy.

Electronic banking has been around for some time in the form of automaticteller machines and telephone transactions. More recently, it has beentransformed by the Internet, a new delivery channel for banking servicesthat benefits both customers and banks. Access is fast, convenient, andavailable around the clock, whatever the customer's location (see illustrationabove). Plus, banks can provide services more efficiently and at substantiallylower costs. For example, a typical customer transaction costing about $1 ina traditional "brick and mortar" bank branch or $0.60 through a phone callcosts only about $0.02 online.

Electronic banking also makes it easier for customers to compare banks'services and products, can increase competition among banks, and allowsbanks to penetrate new markets and thus expand their geographical reach.Some even see electronic banking as an opportunity for countries withunderdeveloped financial systems to leapfrog developmental stages.Customers in such countries can access services more easily from banks

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abroad and through wireless communication systems, which are developingmore rapidly than traditional "wired" communication networks.

The flip side of this technological boom is that electronic banking is not only

susceptible to, but may exacerbate, some of the same risksparticularlygovernance, legal, operational, and reputationalinherent in traditional

banking. In addition, it poses new challenges. In response, many national

regulators have already modified their regulations to achieve their main

objectives: ensuring the safety and soundness of the domestic banking

system, promoting market discipline, and protecting customer rights and the

public trust in the banking system. Policymakers are also becoming

increasingly aware of the greater potential impact of macroeconomic policyon capital movements.

Literature Review

INDIA

India is still in the early stages of E-

banking growth and development.

Competition and changes in technology

and lifestyle in the last five years havechanged the face of banking. The

changes that have taken place impose

on banks tough standards of competition and compliance. The issue here is

'Where does India stand in the scheme of Ebanking.' E-banking is likely to

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bring a host of opportunities as well as unprecedented risks to the

fundamental nature of banking in India.

The impact of E- Banking in India is not yet apparent. Many global research

companies believe that E-banking adoption in India in the near future would

be slow compared to other major Asian countries. Indian E-banking is still

nascent, although it is fast becoming a strategic necessity for most

commercial banks, as competition increases from private banks and non

banking financial institutions.

Despite the global economic challenges facing the IT software and services

sector, the outlook for the Indian industry remains optimistic.

The Reserve Bank of India has also set up a "Working Group on E-banking to

examine different aspects of E-banking. The group focused on three major

areas of E-banking i.e. (1) Technology and Security issues (2) Legal issues

and (3) Regulatory and Supervisory issues. RBI has accepted the guidelines

of the group and they provide a good insight into the security requirements

of E-banking.

BRITAIN

All most all the leading bankinginstitutions in the United Kingdomprovide the facility of internetbanking. All of the banks andfinancial institutions endow withservices that are available throughinternet facility and the security istheir main assurance.

Through online banking you can get loan and mortgage facility by just fillingonline applications, you can check your account balance any time and thebank statements can be viewed online also.

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You can verify the transactions and many banks supply information oftransactions for the last few months. Paying of bills is also very easy thesedays with online banking.

Bank of Scotland as well as Halifax is the two of United Kingdoms very wellknown banks. They have been long known for the trustworthy services. Theyhave many branches and their internet services are also good.

The Northern Bank is a renowned bank and in their website you will find allthe relevant information. Through the website of Co-operative Bank you canget the necessary details of their working methods.

Through the internet banking you can get the services of insurance, privateloans, investment plans and all of these can be done through simple onlineapplication.

Some of the other banks which provide useful assistance through theirinternet banking are those of HSBC; NatWest; One Account, The; StandardLife Bank; Barclays; Nationwide; First Direct; The Co-operative Banksinternet bank smile; Abbey and many other but you can get the assurancefor good customer service.

Internet banking has gained huge popularity among the people of UnitedKingdom. Many of the banks in United Kingdom are being explored for thefunctions of buyer empowerment and also for the attributes of the internetbanking.

Online banking has long been an important area of interest so many studiesare done to make new developments to meet the various expectations.[1]

[1]http://pcinternetbanking.com/internet-banking-in-the-united-kingdom/

UNITED STATES

Internet banking has gained itspopularity over the years and hasenhanced internet based capabilitiesand online marketing as well as e-banking. It saves a lot of time and youget full information of every transaction

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you have made. Internet banking in the United States has quite a goodimpact on the people there.

According to a study report around 53 million and possibly more than that ifnot less Americans are using the benefits of banking online, the ratio beingone out of four for adults.

But there are many bank users who dont trust financial institutions forbanking online for the sake of protecting their account. They are onlyfocusing on the negatives rather than the positives. Though online bankingreduces on road robberies but personality thievery, various scams and otheronline robberies has led many people not to trust the institution.

Recent studies say that for this reason 40% of the users that may be almostsame to nearly 70 million or more adults having bank accounts do not have

faith in online transactions.

Recently several governmental forces and a number of industries havejoined hands to fight against the online frauds to provide the users a decentunderstanding and faith on this service.

In spite of the negatives involved, worries and security faults it has notsucceeded totally in turning away people for the benefits associated with itare more worthy. The users without any theft concern are making highbalance transactions showing great loyalty and trust on their institution.

They are also sharing their experience on the benefits of online banking totheir family and friends and referring them to do the same. This has led tothe growth of internet access and is estimated to grow itself as people startbecoming more internet savvy and technologically literate.[2]

[2]http://pcinternetbanking.com/internet-banking-in-australia/

AUSTRALIA

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Internet Banking in Australia has been ahuge source for increase in nationalincome and prospect. Many investmentsare made so that the scenario grows in a

much more positive way. The report ofWallis Inquiry presented the facts thatinternet banking is an important fieldwhich faces major competition.

There is no denying the fact that favorable conditions prevail in Australia for

further growth and development in the internet banking sector. The good

communication systems that are all the more improving have helped out the

internet banking process. And the reality that majority people know how to

operate a computer is another boost to the internet banking facility.

ABA Industry Standard has mentioned some provisions for internet bankingin Australia. The scope of services that the banks must provide if they are

supplying internet banking facility are those of:

Service of registration of the client online

The funds can be transferred between the accounts

The consumers can enquire about their balances of the accounts

Payment of bill to the creditors

Funds can be transferred involving the third parties

Applications for loan can be submitted online

The calculations for different financial aspects can be done online

Updates and reviews for the respective investments will be submitted

Initially only two out of fifty-two banks in Australia had started the internet

banking facility. But gradually the number has increased subsequently. Some

of the most successful banks of Australia are those of Commonwealth Bank;Advance Bank; Metway; ANZ; National Australia Bank; Bendigo Bank Limited;

Citibank Australia; Deutsche Bank; Macquarie Bank Limited and many more.

Internet banking has made all the banking functionality easy and effective.

The fact that needs consideration is that the customers must not sacrifice

with the privacy of their transaction information.[3]

[3] http://pcinternetbanking.com/internet-banking-in-the-united-states

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Research Problem

The Internet Banking in Pakistan has not been able to make its mark since itsinception. It has undergone many challenges and threats and the main

reason for that is the lack of education and research and development in thisparticular field. The government has not yet taken any significant stepsrather than just passing an ordinance in order to provide the banks a greaterplatform to grow their horizons inthe field of internet banking tomeet the global benchmark.However, UBl has emerged as theonly bank in Pakistan with widerange of product and services forits consumers of all levels alongwith few other banks. Even the waybanks in Pakistan market theirother products and servicesthrough advertisements; there hasnot been a great deal of focus formarketing the e-products andservices. Other than that not even a related work force of information andtechnology and the machinery to is available nor even looked in by banks tofocus in this area.

The other major hurdle that banks come across is the lack of awarenessamong general public and the consumers or customers of the bank. This isbecause lack of education and information available to them. However itsthe responsibility of the banks to educate their customers and shift themtoward the modern banking system and to make them understand itsadvantages and importance which banks in Pakistan fail to do so.

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Research Objectives

The main objectives of this study are:

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

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Hypothesis

Hypothesis 1;

Is UBL the benchmark in e-banking in Pakistan?

Hypothesis 2;

Has internet banking penetrated in the minds of the customers?

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Research Methodology

DATA COLLECTION METHODS

The selection of the data collection methods is one of the key aspects of aresearch design. Data can be described as primary or secondary based uponits source.

Secondary research data are data that have been collected for someother related research study previously conducted. Not much researchstudies have been done related to this topic but some relevant secondarydata has been observed. Through internet research, some important points

have been acquired from some articles about Internet banking around theworld specifically India, Britain, United States and Australia. Other secondarydata has been collected from reputable research journals and some relevantinternet search engines such as Yahoo and Google. We have conducted aseries of semi-structured interviews to determine the business studentsattitudes towards e-banking.

Primary research data is collected expressly to help solve the problem athand.As this research study is exploratory study so data has been collected

through the use of various survey methods such as personal interviews andquestionnaires. The practices involved, asking informal questions fromuniversity students about their perception towards e-banking.

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Hypothesis 1;

Is UBL the benchmark in e-banking in Pakistan?

Methodology of Data collection

Exploratory ResearchHere, research is designed to allow an investigator to just look around

with respect to some

phenomenon, with the aim being to develop suggestive ideas. The purpose is

to gather as much

information as possible concerning a specific problem. Exploratory research is

often used when a

problem is not well known, or the available knowledge is not absolute. The

technique that is best

suited for information gathering when performing an exploratory research is

interviews.

Therefore, data was gathered from 19 different banks with the help of all the

classmates who searched the data through internet and through personal

interviews form personnel in different banks assigned to them.

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Online Services & Products by UBL

My Accounts

Simple and intuitive 24/7 access to youraccounts. You can keep an eye on cash flows,transactions and check real-time accountbalances.

Manage Multiple Accounts

Using net banking, the customers can managemore than one account. All accounts are linked,which enables them to perform fund transfersand set auto transfers between these accounts.24/7 Account AccessUBL net banking lets you bank when and whereyou want to, so you can manage your finances

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on your schedule -24 hours a day, 7 days aweek. It is the safe, fast and FREE way to viewyour account in the comfort of your home

UBL net banking Goes Mobile!UBL net banking has now become your 24/7companion.

Pakistans favorite Internet banking destination UBL net banking is now accessible to our valuedcustomers through any GPRS (Internet) enabledmobile phone.

With its unparalleled features of instant fundstransfers, bill payments, and purchase of

prepaid vouchers, UBL net banking on mobileInternetis bringing these amazing featurescloser to you. You no longer have to reach out tothe nearest computer.

Thats right you can now access your UBL bankaccount 24 hours a day 7 days a week -anywhere, anytime, any mobile phone

All you need to do is enable the GRPS (Internet)on your mobile phone and logon to the UBL netbanking webpage like you do on your computer.

Real-Time Account Balance & Summarynet banking offers easy, 24-hour access to theaccount information. The customers can see anoverview of the listed accounts in a summarizeform with the available account balance. Usingnet banking, the customer can also keep an eyeon their cash flows, transactions and check their

balances before paying their bills or schedulinga transfer.

Download StatementReal -time account statements can be viewed,printed and e-mailed. Customers can specify thedate range for viewing the account statementand also graphically analyze account statement.

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Moreover statements can be downloaded invarious types of formats.

Access your Credit Card and Cashline AccountBeing a UBL account holder, customers can paytheir monthly credit card bills online, providedyour Credit Card Account is linked. Net bankingalso facilitates Cashline customers to view theiraccount and carry out transactions on theinternet.

Pay Anyone

Transfer funds from net banking account toanyone instantly .Pay Anyone lets you authorizespecific deposits in any UBL account or deliver acheque to anyone, anywhere in Pakistan .Theprocess is fast, easy and secure.

Fund Transfer with Portfolionet banking allows customers to manage morethan one account online .Customers can easilyview and perform fund transfers within theirlinked accounts.

Door Step Check DeliveryUBL net banking offers customers an efficientand most convenient delivery of funds to theirbeneficiaries anywhere in Pakistan, throughTezraftaar cheque delivery in Pakistan.Customers can simply add their beneficiariesand instruct fund transfers from their internetbanking account.

Third Party Fund Transfer

Customer can transfer funds from net bankingaccount to any UBL third party account instantly.To transfer funds to a third party account, thecustomer is required to add the account to hisportfolio. Once added, the customer can instructtransfers to third party account.

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Pay Bills & prepaid

Prepaid Vouchers

Utility Bills

Mobile Bills

UBL Bills

UBL Funds

Investments

Online Shopping

Alerts

Customers can set alerts to track movements in the listed

accounts. The customer can assign a target for alerts.

Alerts can be of the following types.

Balance AlertStatement Alert

Transaction AlertCheque Tracking AlertLow/High Balance Alert

Customers can perform all the above transactions and

more, from the comfort and convenience of your home or

office internet-connected computer, at any time of the

day or night

Mobile Internet Access

UBL net Banking on Mobile Internet

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UBL net banking Pakistans favorite Internet bankingdestination, was introduced four years ago with a set offirst-of-its-kind features.

As the Internet usage in Pakistan grew over the years,UBL net banking became one of the fastest growingInternet banking services. Now that mobile phones havebecome a necessity even for the common man in thecountry, UBL wants to give its customers more power andconvenience making their UBL account more accessiblethan ever before.

Introducing United Banks Internet banking on mobilethrough the Wireless Application Protocol (WAP) is yetanother effort by the bank to bring innovation &

convenience to its customers. To maintain the standardsof excellence and provide maximum quality, we arecurrently offering the following features of UBL netbanking on Mobile Internet:

UBL Bank Account Statement UBL Credit Card Balance Inquiry Pay Anyone Pay Utility/mobile Bills Buy Prepaid vouchers[4]

[4] https://www.ubl.com.pk/ebank/features/

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Findings

The data collected shows that the hypothesis considered proved to becorrect because UBL right now the only bank with most e-services and

products for its customers. Though it has many rivals like Dubai Islamic

Bank, MCB and Standard Chartered Bank which are providing almost the

same services but UBL has excelled by providing NRP services which Dubai

Islamic bank is not. So it makes UBL leader in internet banking in Pakistan

and therefore we can say that today UBL is the benchmark through which we

can compare other banks from.

Conclusion

UBL is the leader in internet banking in Pakistan today. There are many local

and other international banks with great reputations and with bigger

clientele but are not providing much e-services and products. The main

reason is that consumers trust lies more in conventional banking because of

slow web interface, lack of knowledge, fraud and other risks associated.

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Hypothesis 2;

Has internet banking penetrated in the minds of the

customers?

Sample design

Doing research via sampling was important because of impossibility offinding all of a population, as well as other restrictive parameters like cost,time etc. Our sampling decision should be in-coordination with the researchand data objectives. The method opted for taking samples was `Non-

probability sampling. It was a `Purposive Non-probability sampling/Judgment Sampling was used. The key assumption underlined this type ofsampling is that, with sound judgment or expertise, and an appropriatestrategy, one can carefully and consciously choose the elements to beincluded in the sample, so that samples can be developed that are suitablefor ones needs.

Sample Size: - 30

Questionnaire: -

A questionnaire consists of a set of questions prepared to respondents fortheir answers. Because of its flexibility, the questionnaire is by far thecommon instrument used to collect primary data. Closed Ended as well asOpen Ended questionnaire were used in my market research.

Drafting of a Questionnaire: -

The formulation of the questionnaire, i.e., the structure and the disguise tobe used in the questionnaire depends upon the kind of information that is

desired. Questionnaire was prepared over a period of 5 days by intensivebrainstorming. A copy of the questionnaire has been attached as anannexure to the project.

Since my objective was to derive out the maximum information out of thepassengers without making the whole exercise boring and troublesome, Idecided to keep majority of the questionnaire close-ended.

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In order to generate and sustain the interest of the respondents, the initial

questions pertained to the gathering of simple information like theknowledge of internet banking, the choice of their bank and the main areasof their transactions. Since, I had to balance the twin objectives of gatheringmaximum information and at the same time retaining the interest of thecustomers, I was compelled to squeeze in a lot of questions and club themup in a single question.

LIMITATIONS

The following are the limitations with this report

1. MORE FAITH ON THE CONVENTIONAL BANKING SYSTEM.

People have more faith on the conventional banking system rather than theinternet banking

2. BUSY SCHEDULE.

People were mostly unwilling to talk because of their heavy schedule or theyget annoyed with the phone calls or even if they are asked about this face toface.

3. RISKY PROFILE.

Some people think that transferring money is having a lot of risk and rather awaste of time so they dont want to transfer their money in from theirrespective accounts

4. FRAUD

The very common difficulty in online trading is Fraud which can be faced byany customer. Fraud can take place in many ways like stolen of Password,

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ANALYSIS

1. Are you aware of net banking services offered by thebanks?

(a) Yes

(b) No

Analysis of the above diagram

It is good for the banks as most of the respondents were aware ofthe internet banking and all the services provided under internetbanking

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2. In which company bank do you have your account?

(a) UBL

(b) Standard Chartered Bank

(c) HBL

(d) MCB

(e) Others


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It was witnessed that today MCB has the largest customer base andafter MCB, HBL has the highest customer base .Multi-national banksare also making their presence noticeable in the Pakistani scenario

3. Do you feel safe in disclosing your details on net?

(a) Yes

(b) No


This question witnessed a fifty fifty answer from most of therespondents, few of the respondents felt safe in disclosing theirdetails but still there were a lot people who felt unsafe in disclosing

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and feared their personal information may used by some otherperson

4. Are you satisfy with your bank services?

(a) Yes

(b) No


It is very interesting to see that most of the respondents are happyfrom the services their respective bank is providing ,the rest of therespondents felt there is a scope of improvement still they werealso happy

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It is interesting to see that a respondent would like to do all thetransactions 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 areavailable?

(a) Yes

(b) No

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It is pretty amazing to see that most of the respondents are awareof the benefits of internet banking

7. Are you aware of the methods which can be undertaken tomake any kind of fraud?

(a) Yes

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(b) No


Its pretty tragic but most of the respondents are unaware of thetechniques which can be taken up for any type of fraud.

8. Are you aware of all the methods which can be taken up tosecure your transaction?

(a) Yes

(b) No

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Even with the increasingly knowledge of internet banking most ofthe respondents are unaware the softwares and methods taken upby the bank to secure each and every transaction.

9. Does your bank educate you about the internet bankingservices being offered?

(a) Yes

(b) No

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Most of the respondents felt that they are not properly educated ofinternet banking and its benefits to them.

10. Would you prefer using net banking instead of visiting yourbank every now and then?

(a) Yes

(b) No

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It was witnessed that most of the respondents preferred usinginternet banking over there conventional banking system. Thus,internet banking has a bright future ahead

11. What benefits do you see in internet banking?

(a) Convenience

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An old Chinese saying goes: If you don't know where you aregoing - you will never get there.

Many people suddenly choosing their personal computers asthe new way to view and manage their money. Why? Quitesimple - because it is a valuable option to have.(refer question no.1)

Every day more and more people are turning to theTechnology for their personal banking. It is a safe, convenient wayto 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 toolin 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 isno need to stand in one more line to perform the most basictransactions when they can be done quickly from the desktop PCanytime, 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 inone place.

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Ease of use is one of the most important factors. Navigationthrough online banking should be simple and intuitive.

Customers also choose banks whose online services arereliable.(refer question no.9)

Most Banks now offers a comprehensive range of financialproducts and services, including a FREE checking account andinternet bill paying services.(refer question no.5)

In addition, an array of checking accounts is available in which youmay also request a FREE check card. Hence most Banks offollowing Electronic Banking or Internet Banking FREE

Benefits for the bank should always reflect benefits for thecustomer of banking services.

Taking over customers from competition

Banks seeking new customers can use advantages of newdistribution channels and acquire most profitable customer fromtheir competition. It is a fact that people using E-banking are theones who consider time as money and are the one with loads ofmoney. Majority of banks see 80% of their business coming just20% of the client base. This 20% customer base is vulnerable if thebank does not appreciate their time.

Building stronger customer relations Offering new services, results in improved customerexperience and stronger customer retention.

Bigger share in customers wallet

It is well known fact that customers tend to keep theirfinances in one place. Banks holding customer accounts thereforehave opportunity to cross sell different products and services.

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Recent studies show that banks in the USA lost 20% of their mostvaluable customers in favor of non-bank FI flexible enough to offerdiversified services and products.

Identifying profitable customers

Customers using E-banking services have higher balancesthan average branch teller customers. Investments are more thantwice higher than the average.

SUGGESTIONS

To prevent online banking from remaining an expensiveadditional channel that does little to retain footloose customers,banks must act quickly.

The first and most obvious step they should take is to see toit that the basic problem fueling dissatisfaction have beenaddressed.

In addition, to meet the challenge of online brokerage andother new entrants, banks would need to add supermarketsselling 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 onlinebanking services and proper promotional activities are not takingplace.

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Banks need to appeal to customers who may not betechnologically sophisticated, and should not require anengineering degree to get started or use the service.

CONCLUSION

From all of this, we have learnt that information technology hasempowered customers and businesses with information needed tomake better investment decisions. At the same time, technology isallowing banks to offer new products, operate more efficiently,raise productivity, expand geographically and compete globally. Amore efficient, productive banking industry is providing services ofgreater quality and value.

E-banking has become a necessary survival weapon and isfundamentally changing the banking industry worldwide. Today,the click of the mouse offers customers banking services at a muchlower cost and also empowers them with unprecedented freedomin choosing vendors for their financial service needs. No countrytoday has a choice whether to implement E-banking or not giventhe global and competitive nature of the economy. The invasion ofbanking by technology has created an information age andcommoditization of banking services. Banks have come to realize

that survival in the new e-economy depends on delivering some orall of their banking services on the Internet while continuing tosupport their traditional infrastructure.

The rise of E-banking is redefining business relationships and themost successful banks will be those that can truly strengthen theirrelationship with their customers.

Technology innovation and fierce competition among existingbanks have enable a wide array of banking products and services,being made available to retail and wholesale customer through anelectronic distribution channel, collectively referred to as e-banking. Banks have traditionally been in the forefront ofharnessing technology to improve product and efficiency.Technology is altering the relationships between banks and itsinternal and external customers. Technology has also eroded theentry barriers faced by many industries. With one time investment,technology has brought about superior products and channelmanagement with a special focus on customer relationship. The

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incremental costs incurred for expansion and diversification arealso more beneficial.

The major driving force behind the rapid spread of e-banking is itsacceptance 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 uniqueto e-banking. Banks need to have an effective disaster recoveryplan along with comprehensive risk management tool is significantnot only to the bank but also to the banking system as a whole.Internet has created plenty of opportunities for players in thebanking sector. While the new entrants have the advantage oflatest technology, the good-will of the established banks givesthem a special opportunity to lead the online world. By merelyputting existing service online wont help the banks in holding theircustomer close. Instead, banks must learn to capitalize their

customers different online financial-services relationships

Annexure

QUESTIONNAIRE

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?

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(a) UBL

(b) Standard Chartered Bank

(c) HBL

(d) MCB

(e) Others

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 bynet?

(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

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6. Are you aware of the benefits of net banking which areavailable?

(a) Yes

(b) No

7. Are you aware of the methods which can be undertakento make any kind of fraud?

(a) Yes

(b) No

8. Are you aware of all the methods which can be takenup to secure your transaction?

(a) Yes

(b) No

9. Does your bank educate you about the net banking services

being offered?

(a) Yes

(b) No

10. Would you prefer using net banking instead of visiting yourbank every now and then?

(a) Yes

(b) No

11. What benefits do you see in internat banking?

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(a) Convenience

(b) Speed

(c) Transparency

(d) Time

Personal Information

Name:

Age:

Sex: ( ) Male ( ) Female

Phone No:

Occupation:

References/Bibliography

Website

http://pcinternetbanking.com/internet-banking-in-australia/

http://pcinternetbanking.com/internet-banking-in-the-united-kingdom/

http://pcinternetbanking.com/internet-banking-in-the-united-states/

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http://pcinternetbanking.com/internet-banking-in-australia/http://pcinternetbanking.com/internet-banking-in-the-united-kingdom/http://pcinternetbanking.com/internet-banking-in-australia/http://pcinternetbanking.com/internet-banking-in-the-united-kingdom/


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www.qla.net.pk

epubl.luth.se

ubl.com.pk and all banks websites mentioned in chart in pg24

http://ezinearticles.com/?A-Brief-History-of-Internet-Banking&id=353450

http://www.expresscomputeronline.com/20020916/indtrend1.shtml

E-Finance by Avinash Shankar

www.ubl.com.pk
http://www.qla.net.pk/http://ezinearticles.com/?A-Brief-History-of-Internet-Banking&id=353450http://www.expresscomputeronline.com/20020916/indtrend1.shtmlhttp://www.ubl.com.pk/http://www.qla.net.pk/http://ezinearticles.com/?A-Brief-History-of-Internet-Banking&id=353450http://www.expresscomputeronline.com/20020916/indtrend1.shtmlhttp://www.ubl.com.pk/

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