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APresentation

onINTERNET BANKING

Prepared By :

Patel Devang Patel Kalpesh Patel Kunal Patel Maulik Patel Nilesh

Prayagraj Trivedi

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Contents

Introduction to Internet Banking

What is Internet Banking?

Need for Internet Banking

How Internet Banking works?

Types of Internet Banking

Charges of Internet Banking

Feature of Internet Banking

The Boon side of Internet Banking

The Bane side of Internet Banking

Opportunities of Internet Banking

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What is Internet Banking?

Internet banking refers to systems that enable bank customers to accessaccounts and general information on bank products and services through apersonal computer (PC) or other intelligent device. A system of banking inwhich customers can view their account details, pay bills, and transfermoney by means of the Internet

financial services accessed via the Internet's World Wide Web. An Internet bank exists only on the Internet, the global network of computer networkswithout any "brick and mortar" branch offices. Banks use the Internet todeliver information about financial services, replace transactions done inbranch offices, which eliminates the need to build new branches, and toservice customers more efficiently .

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Internet banking refers to systems that enable bank customers to get access

to their accounts and general information on bank products and servicesthrough the use of banks website, without the intervention orinconvenience of sending letters, faxes, original signatures and telephoneconfirmations .

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Need for internet banking

Internet banking provides faster, accurate, efficient service at the touch of

a button from any where any place on any time at very low cost.

Phenomenal growth of customers and branches

Banks initiating new technological innovations have an edge over other

banks

The internet offers an avenue to the issue of competitive advantage in the

face of redefinition of financial service industry.

Time has come for banks to bring fundamentals change in their strategy

to redefine customer banker relationship.

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How Internet Banking Works?

Internet banking works much like traditional banking. The primarydifference is you are accessing your account and information, makingpayments and reconciling statements using your computer rather thanpaper or the phone to complete transactions. Instead of going down toyour local branch office when you bank online you can accomplish

multiple tasks at once with the click of a button.

Online banking is rapidly becoming more and more popular asconsumers recognize the advantages online banking has to offer. For

one most banks charge fewer fees if you take advantage of their onlinebanking services. You can also stop receiving paper statements if youlike in many cases and conduct 95% of your business over the Webwhen you take advantage of Internet banking.

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Types of Internet Banking

Informational

This is the basic level of Internet banking. Typically, the bank hasmarketing information about the banks products and services on a stand-alone server. The risk is relatively low, as informational systems typicallyhave no path between the server and the banks internal network. This level

of Internet banking can be provided by the bank or outsourced. While therisk to a bank is relatively low, the server or Web site may be vulnerable toalteration.

Communicative

This type of Internet banking system allows some interaction between the banks systems and the customer. The interaction may be limited toelectronic mail, account inquiry, loan applications, or static file updates.Because these servers may have a path to the banks internal networks, therisk is higher with this configuration than with informational systems.

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Transactional

This level of Internet banking allows customers to execute transactions.Since a path typically exists between the server and the banks oroutsourcers internal network, this is the highest risk architecture and musthave the strongest controls. Customer transactions can include accessingaccounts, paying bills, transferring funds, etc.

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Charges of Internet Banking

Currently all services under Internet Banking are free of cost except for the

following:

Funds Transfer to another Bank (RBI EFT) : Rs. 15 per transaction

Visa Card to Card transfer : Rs. 15 per transaction Online Railway ticket booking : Rs.10 per ticket

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Features of Internet Banking

Account Information

Demat Account Information

Online Instructions and Requests

Customer Service

Online Payment Services

Bill Payment and Presentment

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Boon Side of Internet Banking

Cost Reduction

Increased customer base

Marketing and communication

Increased consumer loyalty and satisfaction

High profit consumers Ability to attract new consumers

With the ability to view your account at anytime, it is easier to catch

fraudulent activity in your account before much damage is done Internet banking offers a great deal more convenience than you could

get from a conventional bank.

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Bane Side of Internet banking

Risk Associated With Internet Banking Operational risk:

Operational risk, also referred to as transactional risk is the mostcommon form of risk associated with internet-banking. It takes the form

of inaccurate processing of transactions, non enforceability of contracts,compromises in data integrity, data privacy and confidentiality,unauthorized access / intrusion to banks systems and transactions etc.

Security risk:Security risk arises on account of unauthorized access to a banks

critical information stores like accounting system, risk managementsystem, portfolio management system, etc. A breach of security couldresult in direct financial loss to the bank. For example, hackers operatingvia the Internet, could access, retrieve and use confidential customerinformation and also can implant virus

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Legal risk

Legal risk arises from violation of, or non-conformance with laws, rules,regulations, or prescribed practices, or when the legal rights andobligations of parties to a transaction are not well established.

Cross border risks

Internet banking is based on technology that, by its very nature, isdesigned to extend the geographic reach of banks and customers. Suchmarket expansion can extend beyond national borders. This causes various

risks.

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Credit risk

credit risks the risk that a counter party will not settle an obligation for fullvalue, either when due or at any time thereafter.

Liquidity Risk

This risk arises out of a banks inability to meet its obligations when theybecome due without incurring unacceptable losses, even though the bank may ultimately be able to meet its obligations.

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OPPORTUNITIES

New payment features

Web account opening

Only (virtual) banks

Invoice payment mgt.

Online credit cards payment

Electronic cheque for B2B payment

Email payment system

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Thank You..