Case -The Indian Internet Banking Journey

Case Summary The case, 'The Indian Internet Banking Journey' examines the concept of Internet banking, its benefits and problems. It also discusses the initiatives taken by ICICI bank, the pioneer and leading provider of Internet banking services in India. The case explores the reasons for the limited growth of Internet banking in India and discusses its future as well. Question and Views. Que 1. The common internet banking services offered by banks are: 1. Transactional activities like funds transfer, bill pay, loan applications and transactions. 2. Non-transactional activities like request for cheque book, stop payment, online statements, updating your contact information. Advantages

Internet banking account is simple to open and easy to operate. Internet banking is quite convenient as you can easily pay your bills, can transfer funds between accounts, etc. Now you do not have to stand in a queue to pay off your bills; also you do not have to keep receipts of all the bills as you can now easily view your transactions. Internet banking is available all the time, i.e. 24x7. You can perform your tasks from anywhere and at any time; even in night when the bank is closed or on holidays. The only thing you need to have is an internet connection. Internet banking is fast and efficient. Funds get transferred from one account to the other very fast. You can also manage several accounts easily through internet banking. Through Internet banking, you can keep an eye on your transactions and account balance all the time. This facility also keeps your account safe. This means that by the ease of monitoring your account at anytime, you can get to know about any fraudulent activity or threat to your account before it can pose your account to severe damage. Internet banking is also a great medium for the banks to endorse their products and services. The services include loans, investment options, and many others.

Disadvantages.

Understanding the usage of internet banking might be difficult for a beginner at the first go. Though there are some sites which offer a demo on how to use internet banking, but all does not offer this facility. So, a person who is new to internet baking might face some difficulty. You cannot have access to internet banking if you dont have an internet connection; thus without the availability of internet access, internet banking may not be useful. Security of transactions is a big issue. Your account information might gethacked by unauthorized people over the internet. Password security is a must. After getting your net banking password, do change it and memorize it otherwise your account may be misused by someone who gets to know your password inadvertently. You cannot use internet banking, in case, the banks server is down. Another issue is that sometimes it becomes difficult to note whether your transaction was successful or not. It may be due to the loss of internet connectivity in between, or due to a slow connection, or the banks server is down.

Que 2. Online banking (or Internet banking or E-banking) allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution, which can be a retail or virtual bank, credit union or building society. To access a financial institution's online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password (under various names) for customer verification To access online banking, the customer would go to the financial institution's website, and enter the online banking facility using the customer number and password.

Need of Secure System Architecture. To save from unauthorized login A system designed to prevent unauthorized access to or from a private network. A security analyzer constantly monitors login attempts and recognizes failures that could indicate a possible unauthorized attempt to log into an account.

Data security Data security between the customer's web server and the bank's web server is handled through a security protocol called Secure Sockets Layer (SSL). SSL provides data encryption, data integrity and server authentication for an Internet connection. Que 3. No I dot agree with the statement, As Internet is useful for both and average middle-class Customer too. Following are benefits he can get are as follows. A bank customer can perform some non-transactional tasks through online banking, including

viewing account balances viewing recent transactions downloading bank statements, for example in PDF format viewing images of paid cheques ordering cheque books download periodic account statements Downloading applications for M-banking, E-banking etc.

Bank customers can transact banking tasks through online banking, including

Funds transfers between the customer's linked accounts Paying third parties, including bill payments (see, e.g.,Shopping) and telegraphic/wire transfers Loan applications and transactions, such as repayments of enrollments Register utility billers and make bill payments

Que 4. Future of Internet Banking. Identification of issues: Apart from the security issues, there are a host of other problems like:

PC user base in India is extremely low compared to global standards. The Internet user base is limited. Lack of infrastructure to advanced technology based banking services.

 The absence of a regulatory framework for Internet banking transactions in India. The mindset of the Indian consumer, who prefers personal interactions and is not very comfortable, doing transactions through the Internet. Limited awareness about the potential of Internet banking on the part of banks. Identification of alternatives: The internet user base must be advanced and the people are to be educated. The infrastructure is to be maintained so that the framework of banking system can be enhanced. Awareness must be created among the people to educate the potential of Internet Banking. Conclusion However, analysts felt the biggest gain was BoM's IT-savvy employees. By 2001, ICICI bank had emerged as one of the leading providers of Internet banking services in India. The bank was reportedly moving towards becoming a full-fledged e-commerce company in a couple of years. Nachiket Mor, Head of ICICI Treasury said, "The Seven-Eleven supermarket chain in Japan has recently applied for a banking license. This is the way world is moving. If supermarkets get into banking, then it is also time for banks to get into the selling of consumer durables." The Internet banking will be future of great expansion of Banks and as well as Country too.