TRAINING REPORT

ON
AWARENESS

OF PEOPLE REGARDING E- BANKING

At
AXIS BAMK

Submitted to Punjabi Uni e!"it#$ Patia%a In &a!tia% 'u%'i%%ment o' t(e !e)ui!ement" 'o! t(e a*a!d o' de+!ee o' ,AS-ER OF BUSINESS AD,INIS-RA-ION

SUBMITTED TO MRS.

SUBMITTED BY:RAJ SINGH

DE.LARA-ION
We, hereby declare that the work presented herein is genuine work done originally by us a group of three persons RAJ SINGH , ROLL NO10403 has been published or submitted elsewhere for the requirement of a degree programmer. Any literature, data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section.

(Student's name & Signature)

A.KNOWLEDGE,EN-

Nothing concrete can be achieved without an optimal combination of inspiration and perspiration. We would like to take a moment to thank those invaluable suggestions and support led to the completion of this pro ect. !his pro ect report wouldn"t have been completely but for his able guidance and the precious time he has given to us from his very busy schedule. #is selfless service has made this ourney quite interesting and a feeling to go a long way. We acknowledge the contribution of the staff members who added to the luster of the pro ect by their suggestions and help. $ast but not least we are very grateful to all those who helped us in one%way or the other way at every stage of our work. We are thankful to all the respondents whose valuable information helped us considerably in the successful completion of our study.

&

PREFA.E

With the rapid globali'ation of the (ndian economy, enterprises are faced with ever changing competitive environment. )nterprises are adopting strategies aimed at developing competitive advantages based on enhanced customer value in terms of product differentiation, quality, speed, service and costs. (n the post liberali'ation era, with the deregulation of the (ndian economy, the financial services sector is witnessing a complete metamorphosis and technology is playing a very significant role in this regard. *ver the last decade (ndia has been one of the fastest adopters of information technology, particularly because of its capability to provide software solutions to organi'ations around the world. !his capability has provided a tremendous impetus to the domestic banking industry in (ndia to deploy the latest in technology, particularly in the (nternet banking and e%commerce arenas. +anks are growing in si'e by mergers and acquisitions, which have been driven by communication and technology. !echnology is playing a ma or role in increasing the efficiency, courtesy and speed of customer service. (t is said to be the age of )%banking.

E/E.U-I0E SU,,AR1
-omeone has rightly said that practical e.perience is far better and closer to the real world than mere theoretical e.posure. !he practical e.perience helps the students to view the real business world closely, which in turn widely influences their perceptions and arguments their understanding of the real situation. /esearch work constitutes the backbone of any management education programmer. A management student has to do research work quiet frequently during his entire span. !he aim of the research study is to analy'e the awareness and preferences of people regarding )% +anking in 0alalabad 1w2 city or know the perception or satisfaction level of people towards the e%banking. 3or this purpose the 144 respondents from 0alalabad 1w2 city has been chosen. (n the first phase, there is introduction to )%+anking, )%banking evaluation , )%banking products, /isk management, 5riving forces, !he (ndian scenario, present scenario, /eview of literature. After that a market research is performed with a sample si'e of 144 respondents. !he research study was limited to 0alalabad 1w2. #ere, in our survey, we have contacted the respondents through personal interviews with the help of questionnaire. !he main ob ective of the research to study to study the awareness level of service class, business class people and students regarding )%banking, to find out the frequency and the factors influencing the usage, to gauge the satisfaction level of people, to understand the problems encountered in its effective penetration 2 (n the last phase of the report findings, suggestions and conclusions have been drawn.

-ABLE OF .ON-EN-S
SR2 NO2 1.1 1.1.1 1.1.2 1.1.& 1.1., 1.1.6 1.2. 1.& 1., 1.,.1 1.,.2 1.,.& 1.,., 7A/!(89$A/PAGE NO2 .3AP-ER-I 4 IN-RODU.-ION OF -3E SUB5E.(N!/*598!(*N 6-78 )%banking and its evolution )%banking products /isk management 5riving forces !he (ndian scenario

N))5 AN5 -8*7) *3 -!95: *+0)8!(;)- *3 -!95: /)-)A/8# <)!#*5*$*=: /esearch 5efinition -ampling 5esign <ethods of 5ata 8ollection and analysis

5ata Analysis and (nterpretation > .3AP-ER-II 4 RE0IEW OF LI-ERA-URE 2.1 /);()W *3 $(!)/A!9/) 79-76

.3AP-ER-III 4 DA-A PRESEN-A-ION$ ANAL1SIS AND IN-ERPRE-A-ION &.1 5ata 7resentation, Analysis and (nterpretation :;-<<

.3AP-ER-I0 4 SU,,AR1$ .ON.LUSIONS $LI,I-A-IONS = ,.1 ,.2 ,.& ,., RE.O,,ENDA-IONS 3indings of the -tudy $imitations of the study /ecommendations 8onclusion <8-<6

.3AP-ER- 0 BIBLIOGRAP31 6.1 +ibliography .3AP-ER-0II 4APPENDI/ @uestionnaire LIS- OF -ABLES -ABLE NO2 72? 72> 727 72: 72< 728 729 72@ 72@2? 726 72?; 72?? PAR-I.ULARS Accounts of customers Awareness level regarding )%+anking -ource from which the respondents get the knowledge about the e%banking services Awareness of )%+anking services 9sage of )%banking services /epresentation of frequency of usage 3actors influencing the level of usage +enefits of )%+anking 8orrelation matri. of factors influencing the level of usage 9sage of different modes

8;-8>

?.1

87-89

PAGE NO2 ,4%66

7roblems identified by the users of )%+anking services /easons for not using )%+anking services as rated by the non users 8orrelation <atri. of reasons for not using )% +anking services as rated by the non users

72?>

-atisfaction level

LIS- OF GRAP3S

GRAP3 NO2 72? 72> 727 72: 72< 728 729 72@ 726 72?; 72?? 72?>

PAR-I.ULARS Accounts of customers Awareness level regarding )%+anking -ource from which the respondents get the knowledge about the e%banking services Awareness of )%+anking services 9sage of )%banking services /epresentation of frequency of usage 3actors influencing the level of usage +enefits of )%+anking 9sage of different modes 7roblems identified by the users of )%+anking services /easons for not using )%+anking services as rated by the non users -atisfaction level

PAGE NO2 :;-<;

.3AP-ER-I
B

IN-RODU.-ION -O SUB5E.-

?2? IN-RODU.-ION

What is E-Banking
)lectronic banking is one of the truly widespread avatars of )%commerce the world over. ;arious authors define )%+anking differently but the most common definitions depicting the meaning and features of )%+anking are as follows> )%+anking is a combination of the two, )lectronic technology and +anking.

)lectronic banking is a process by which a customer performs banking transactions electronically without visiting a brick%and%mortar institution.

)%+anking denotes the provision of banking and related services through e.tensive use of information technology without direct recourse to the bank by the customer.

BanA In'o!mation teB(no%o+#

.u"tome!

1.1.1 E o%ution o' E-banAin+

!he story of technology in banking started with the use of punched card machines like Accounting <achines or $edger 7osting <achines. !he use of technology, at that time, was limited to keeping books of the bank. (t further developed with the birth of online real time system and vast improvement in telecommunications during late 1CA4"sand 1CB4"s. (t resulted in a revolution in the field of banking with Dconvenience bankingE as a bu''word. !hrough 8onvenience banking, the bank is carried to the doorstep of the customer. !he 1CC4"s saw the birth of distributed computing technologies and /elational 5ata +ase <anagement -ystems. !he banking industry was simply waiting for these technologies. Now with distribution technologies, one could configure dedicated machines called front%end machines for customer service and risk control while communication in the batch mode without hampering the response time on the front%end machine.

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(nte

-!aditiona% banAin+ =unpowder 7ersonali'ed services, time consuming, limited access

0i!tua% o! E-banAin+ Nuclear charged /eal time transactions, integrated platform, all time access

nse 8ompetition has forced banks to rethink the way they operated their business. !hey had to reinvent and improve their products and services to make them more beneficial and cost effective. !echnology in the form of )lectronic +anking has made it possible to find alternate banking practices at lower costs.

<ore and more people are using electronic banking products and services because large section of the banks future customers base will be made up of computer literate customers, the banks must be able to offer these customers products and services that allow them to do their banking by electronic means. (f they fail to do this they will, simply, not survive. New products and services are emerging that are set to change the way we look at money and the monetary system.

11

?2?2> E -BANKING PRODU.-S

Automated teller machine 1A!<2 !elebanking or 7hone +anking <obile banking (nternet banking

Auto !t"# t"$$"%

!&'()" *ATM+

!hese are cash dispensing machines, which are frequently seen at banks and other locations such as shopping centers and building societies. !heir main purpose is to allow customer to draw cash at any time and to provide banking services where it would not have been viable to open another branch e.g. on university campus.

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!he machines allow the users to draw any sum up to limited amount, view the current position on their account and order a new cheque book. !o obtain money from the unit the customer needs a special A!< card and personal identification number 17(N2. !he story of the humble cash%dispensing machine started around three decades back. (n (ndia, #-+8 set the trend and set up the first A!< machine here in 1CBA. -ince then, they have become a common sight in many of our metros. With more than B44,444 machines worldwide, A!<s have made hard cash ust seconds away all throughout the day at every corner of the globe. 3or the customers advantage now the banks are looking for newer services. (8(8( bank launched its fully networked FA!< on wheels" in 8handigarh, which literally brings the A!< to the doorstep of the customer. -ome of the advantages of A!< to customers are Ability to draw cash after normal banking hours. @uicker than normal cashier service. 8omplete security as only the card holder knows the 7(N. 5oes not ust operate as a medium for obtaining cash. 8ustomer can sometimes use the services of other bank A!<s.

An ATM is simply a data terminal with two input and four output devices. Like any other data terminal, the ATM has to connect to, and communicate through, a host processor. The host processor is analogous to an (nternet service provider (IS ! in that it is the gateway through which all the various ATM networks "ecome availa"le to the cardholder (the person wanting the cash!.

1&

<ost host processors can support either leased%line or dial%up machines. $eased%line machines connect directly to the host processor through a four%wire, point%to%point, dedicated telephone line. 5ial%up A!<s connect to the host processor through a normal phone line using a modem and a toll%free number, or through an (nternet service provider using a local access number dialed by modem. $eased%line A!<s are preferred for very high%volume locations because of their thru%put capability, and dial%up A!<s are preferred for retail merchant locations where cost is a greater factor than thru%put. !he initial cost for a dial%up machine is less than half that for a leased%line machine. !he monthly operating costs for dial%up are only a fraction of the costs for leased%line.
A bank or financial institution may own the host processor, or an independent service provider may own it. Bank-owned processors normally support only bank-owned machines, whereas the independent processors support merchantown

-e%ebanAin+ o! P(one BanAin+

!elephone +anking is relatively new )lectronic +anking product. #owever it is fast becoming one of the most popular products. 8ustomers can perform a number of transactions from the convenience of their own home or officeG in fact from anywhere they have access to a phone. 8ustomers can do following 8heck balances and statement information !ransfer funds from one account to another

1,

7ay certain bills *rder statements or cheque books 5emand 5raft /equest

-(i" 'aBi%it# i" a ai%ab%e *it( (e%& o' 0oiBe Re"&on"e S#"tem C0RSD2 -(i" "#"tem ba"iBa%%#$ aBBe&t" on%# -ONE dia%ed in&ut2 LiAe t(e A-, Bu"tome! (a" to 'o%%o* &a!tiBu%a! &!oBe""$ initia%%# aBBount numbe! and te%e&(one PIN a!e 'ed 'o! t(e &!oBe"" to "ta!t2 A%"o t(e 0RS "#"tem &!o ide" t(e u"e! *it(in additiona% 'aBi%itie" "uB( a" B(an+in+ eEi"tin+ &a""*o!d *it( t(e ne* de"i!ed$ in'o!mation about ne* &!oduBt"$ Bu!!ent inte!e"t !ate"$ etB2

,obi%e banAin+
<obile +anking comes in as a part of the banks initiative to offer multiple channel banking providing convenience for its customers. A versatile multifunctional, free service that is accessible and viewable on the monitor of mobile phone. <obile phones are playing great role in (ndian +anking H both directly and indirectly. !hey are being used both as banking and other channels.

-tandard 8hartered"s <%alert alerts its customers on e.change rates twice a day. !he ob ective is to meet its clients treasury requirements. A -tandard 8hartered customer can also access its account through the mobile phone by sending an -<-.

A+N Amro uses mobile phones to alert its customers on their credit card transaction. D8ard alertE, which come in the form of an -<- are not necessarily a customer"s demand.

16

+oth #538 and (5+( are offering instant mobile refill facility through A!< and -<- banking.

Inte!net banAin+
!he advent of the (nternet and the popularity of personal computers presented both an opportunity and a challenge for the banking industry. 3or years, financial institutions have used powerful computer networks to automate millions of daily transactionsG today, often the only paper record is the customerIs receipt at the point of sale. Now that its customers are connected to the (nternet via personal computers, banks envision similar economic advantages by adapting those same internal electronic processes to home use. +anks view online banking as a powerful Jvalue addedJ tool to attract and retain new customers while helping to eliminate costly paper handling and teller interactions in an increasingly competitive banking environment. (n (ndia first one to move into this area was (8(8( +ANK. !hey started web based banking as early as August 1CCA.

1?

Debit .a!d
An electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services. !his removes the need for bank clients to go to the bank to remove cash from their account as they can now ust go to an A!< or pay electronically at merchant locations. !his type of card, as a form of payment, also removes the need for checks as the debit card immediately transfers money from the clientIs account to the business account .!he ma or benefits to this type of card are convenience and security. Along with the convenience of accessing account funds at anytime it also removes the hassles associated with having to write checks as payment like showing (5 and associated fees. 5ebit cards are also considered to be a safer form of payment as a code is required to access the account funds, while checks can be easily stolen. 5ebit card facilities the purchase or payment by cardholder. he represent the card to merchant establishment after a purchase and signs on payment slip. !he merchant verify the signature electronically by inserting the card into an electronic data capture machine that links up with card holder bank to a payment of gateway. !he bank debit the money from the card holder account and verifies the transaction .thus at the point of purchase or debit card worth like credit card in one significant aspect (.e. the credit card e.tends credit to card holder .while a debit card debit the money from his account during the transaction. !his permit that that a card holder can spent money only if his account permits.

1A

.!edit .a!d
A credit card is an instrument which provides instantaneous credit facilities to his holder to avail variety of goods at the merchant outlets .(t is made up of plastic and hence popularly known as plastic money .!he eligibility condition for issuing these cards describe certain minimum income ranges between /s.64,444 to 144444 p.a. !he aim of the issuer bank is to provide this facilities to growing middle income group and people above them .!he card holder is issue a plastic card on which described the name of issuer bank, card no. ,the name of its holder and his or her signature .!he issuing bank endorse member which agree to accept these cards for accepting the payment for goods and services sold .<ember establishment includes various commercial establishment ,shops ,travel agency ,railways ,hotels and domestic and international airlines. when a card holder make purchase or avail if any service at a member establishment .he signs a charge slip to customer and presents the others to the respective issuing bank which makes payment to member establishment after deducting its commission which may ranges 2L to ,L.

Types of internet banking

9nderstanding the various types of (nternet banking products will help e.aminers assess the risks involved. 8urrently, the following three basic kinds of (nternet banking are being employed in the marketplace>

In'o!mationa% M !his is the basic level of (nternet banking. !ypically, the bank has marketing information about the bank"s products and services on a stand%alone server. !he risk is relatively low, as informational systems typically have no path between the server and the bank"s internal network. !his level of (nternet banking can be provided bythe bank 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 unauthori'ed alterations to the bank"s server or Web site.

.ommuniBati e M !his type of (nternet banking system allows some interaction between the bank"s systems and the customer. !he interaction may be limited to

1B

electronic mail, account inquiry, loan applications, or static file updates 1name and address changes2. +ecause 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 place to prevent, monitor, and alert management of any unauthori'ed attempt to access the bank"s internal networks and computer systems. ;irus controls also become much more critical in this environment. -!an"aBtiona% M !his level of (nternet banking allows customers to e.ecute transactions. -ince a path typically e.ists between the server and the ban k"s or outsourcer"s internal network, this is the highest risk architecture and must have the strongest controls. 8ustomer transactions can include accessing accounts, paying bills, transferring funds, etc.

Growth in Internet Banking

.om&etition F -tudies show that competitive pressure is the chief driving force behind increasing use of (nternet banking technology, ranking ahead of cost reduction and revenue enhancement, in second and third place respectively. +anks see (nternet banking as a way to keep e.isting customers and attract new ones to the bank.

.o"t E''iBienBie" F +anks can deliver banking services on the (nternet at transaction costs far lower than traditional brick%and%mortar branches. !he actual costs to e.ecute a transaction will vary depending on the delivery channel used. /ough estimates assumes teller cost at /s. 1 per transaction, A!< transaction cost at ,6 paise, phone banking at &6 paise, debit cards at 24 paise and (nternet +anking at 14 paise per transaction. !hese costs are e.pected to continue to decline.

Geo+!a&(iBa% ReaB( F (nternet banking allows e.panded customer contact through increased geographical reach and lower cost delivery channels. (n fact some banks are doing business e.clusively via the (nternet M they do not have traditional banking offices and only reach their customers online. *ther financial institutions are using the

1C

(nternet as an alternative delivery channel to reach e.isting customers and attract new customers. B!andin+ F /elationship building is a strategic priority for many banks. (nternet banking technology and products can provide a means for banks to develop and maintain an ongoing relationship with their customers by offering easy access to a broad array of products and services. +y capitali'ing on brand identification and by providing a broad array of financial services, banks hope to build customer loyalty, cross% sell, and enhance repeat business. .u"tome! Demo+!a&(iB" M (nternet banking allows banks to offer a wide array of options to their banking customers. -ome customers will rely on traditional branches to conduct their banking business. 3or many, this is the most comfortable way for them to transact their banking business.

Ad anta+e" o' Inte!net BanAin+

.on enienBe4 Unlike your corner bank, online banking sites never close; they're available
! hours a day, seven days in a week, and they're only a mouse click away.

Ubi)uit#4

"f 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, !#$.

-!an"aBtion "&eed4 E''iBienB#4

%nline bank sites generally e&ecute and confirm transactions at or

'uicker than A() processing speeds.

*ou can access and manage all of your bank accounts, including "+As, ,-s,

even securities, from one secure site.

E''eBti ene""4

)any online banking sites now offer sophisticated tools, including account

aggregation, stock 'uotes, rate alerts and portfolio managing programs to help you manage all of your assets more effectively. )ost are also compatible with money managing programs such as .uicken and )icrosoft )oney.

.u"tome! "ati"'iBation" >%=reater customer satisfication by offering unlimited access to the bank ,not unlimited by the walls of the customers they can avoid travelling with cash

Un%imited net*o!A>%)%banking provides unlimited network to the bank and is not limited to number of branches .any 78 connected to a modem and a telephone having an internet connection can provide cash withdrawal needs of the customer.

24

ReduBe" %oad>%$oad on branches can be considerably reduced by establishing centrali'ed data base and by taking over some of the accounting function.

Di"ad anta+e" o' Inte!net BanAin+

Start-up may take time:

(n order to register for your bankIs online program, you will

probably have to provide (5 and sign a form at a bank branch. (f you and your spouse wish to view and manage your assets together online, one of you may have to sign a durable power of attorney before the bank will display all of your holdings together.

Learning curve:

+anking sites can be difficult to navigate at first. 7lan to invest some

time andNor read the tutorials in order to become comfortable in your virtual lobby.

BanA "ite B(an+e"4

account information.

/ven the largest banks periodically upgrade their online programs,

adding new features in unfamiliar places. "n some cases, you may have to re-enter

-(e t!u"t t(in+4

0or many people, the biggest hurdle to online banking is learning to

trust it. -id my transaction go through1 -id " push the transfer button once or twice1 Best bet2 always print the transaction receipt and keep it with your bank records until it shows up on your personal site and#or your bank statement.

Inte!net BanAin+ Se! iBe"

<ost online banking sites offer these basic services4

;iew account balances, including checking, savings, (/As and securities 21

Access account history !ransfer funds between accounts -chedule future transfers 7ay bills electronically
3chedule automatic recurring bill payment

<any online banking sites also offer these capabilities>

Account aggregation> ;iew balances and market values of online accounts held at other institutions, including investments, credit cards, rewards programs and (/As

-end payments to individuals via e%mail !rade stocks and mutual funds !rack real%time stock quotes /eceive trust and stock statements online ;iew images of bill statements, checks and deposit slips 5ownload site information into money management programs such as @uicken and <icrosoft <oney

/eceive Web alerts vie e%mail, wireless devices and private banking site $ive chat with customers

Li"t" o' "ome banA" o''e!in+ ebanAin+ in India

BanA Name A+N A</* +ank -eB(no%o+# 0endo! (nfosys 1+ankAway2 Se! iBe o''e!in+ Net+anking

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Abu 5habi 8ommercial +ank +ank of (ndia 8enturion +ank 8itibank 8orporation +ank 5eutsche +ank 3ederal +ank =lobal !rust +ank #538 +ank #-+8 (8(8( +ank (5+( +ank (ndus(nd +ank 7un ab National +ank -tandard 8hartered +ank -tate +ank of (ndia 9!( +ank +ank of 7un ab

(nfosys 1+ankAway2 (%fle. $ogica *rbitech 1now 7olaris2 (%fle. -anche' (nfosys 1+ankAway2 i%fle.N -atyam (nfosys, (8(8( (nfotech (nfosys 1+ankAway2 8/2 (nfosys 1+ankAway2 (n%#ouse -atyamN+roadvision (nfosys 1+ankAway2

A58+ Net$ink +*(online <y8+*$ 8itibank *nline 8orpNet db direct 3edNet ibankOgtb Net+anking *nlineOhsbc (nfinity i%net banking (ndusNet (nternet +anking <e -tandard 8hartered *nline onlinesbi.com (connect *nline ebanking

E%eBt!oniBBanAin+ Ri"A"

2&

)lectronic banking creates new risk control challenges for banks. 3rom a supervisory perspective, risk is the potential that events, e.pected or une.pected, may have an adverse impact on the bank"s earnings or capital. !he risks are credit, interest rate, liquidity, price, foreign e.change, transaction, compliance, strategic, and reputation. !hese categories are not mutually e.clusive and all of these risks are associated with )lectronic banking. .!edit Ri"A

8redit risk is the risk to earnings or capital arising from an obligo r"s failure to meet the terms of any contract with the bank or otherwise to perform as agreed. 8redit risk is found in all activities where success depends on counter party, issuer, or borrower performance. (t arises any time bank funds are e.tended, committed, invested, or otherwise e.posed through actual or implied contractual agreements, whether on or off the banks balance sheet

-!an"aBtion Ri"A

!ransaction risk is the current and prospective risk to earnings and capital arising from fraud, error, and the inability to deliver products or services, maintain a competitive position, and manage information. !ransaction risk is evident in each product and service offered and encompasses product development and delivery, transaction processing, systems development, computing systems, comple.ity of products and services, and the internal control environment.

.om&%ianBe Ri"A

8ompliance risk is the risk to earnings or capital arising from violations of, or nonconformance with, laws, rules, regulations, prescribed practices, or ethical standards. 8ompliance risk also arises in situations where the laws or rules governing certain bank products or activities of the bank"s clients may be ambiguous or untested. 8ompliance risk e.poses the institution to fines, civil money penalties, payment of damages, and the voiding of contracts. 8ompliance risk can lead to a diminished reputation, reduced franchise value, limited business opportunities, reduced e.pansion potential, and lack of

2,

contract enforceability. <ost (nternet banking customers will continue to use other bank delivery channels. Accordingly, banks will need to make certain that their disclosures on (nternet banking channels, including Web sites, remain synchroni'ed with other delivery channels to ensure the delivery of a consistent and accurate message to customers.

Re&utation Ri"A

/eputation risk is the current and prospective impact on earnings and capital arising from negative public opinion. !his affects the institutio n"s ability to establish new relationships or services or continue servicing e.isting relationships. !his risk may e.pose the institution to litigation, financial loss, or a decline in its customer base. /eputation risk e.posure is present throughout the organi'ation and includes the responsibility to e.ercise an abundance of caution in dealing with customers and the community. A ban k"s reputation can suffer if it fails to deliver on marketing claims or to provide accurate, timely services. !his can include failing to adequately meet customer credit needs, providing unreliable or inefficient delivery systems, untimely responses to customer inquiries, or violations of customer privacy e.pectations. St!ate+iB Ri"A

-trategic risk is the current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. !his risk is a function of the compatibility of an organi'ation"s strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation.

?2?27 Ri"A ,ana+ement

3inancial institutions should have a technology risk management process to enable them to identify, measure, monitor, and control their technology risk e.posure. /isk management of new technologies has three essential elements> !he planning process for the use of the technology. (mplementation of the technology.

26

!he means to measure and monitor risk.

(n a survey conducted by the *nline +anking Association, member institutions rated security as the most important issue of online banking. !here is a dual requirement to protect customersI privacy and protect against fraud. A multi%layered security architecture comprising firewalls, filtering routers, encryption and digital certification ensures that your account information is protected from unauthori'ed access> 3irewalls and filtering routers ensure that only the legitimate (nternet users are allowed to access the system. )ncryption techniques used by the bank 1including the sophisticated public key encryption2 would ensure that privacy of data flowing between the browser and the system is protected. 5igital certification procedures provide the assurance that the data you receive is from the banking system

1.1.4 Driving Forces in E-Banking

!he business strategist <ichael 7orter identified five competitive forces which tend to drive down the profitability of any industry as comprising> barriers to entry, many small suppliers, many small buyers, few substitutes and few competitors Applying this version of 7orter"s 3ive 3orces <odel to the banking industry, he observed that one of the critical factors H barriers to entry H no longer e.ists in banking. 8ompetitors can come from any industry to JdisintermediateJ banks 1i.e., eliminate banks as the interface between customers and suppliers2. 7roduct differentiation is very difficult for banks, since most of the products sold in retail banking are constrained by legal or industry regulations and, in any case, are readily imitated <ost countries have deregulated their banking sector so government policies no longer form an entry barrier to banks" competitors. !echnological know%how in banking also provides little protection to e.isting banks. (t is argued that the 2?

only significant entry barrier is likely to be the brand name of the service providers in retail banking. An application of Porters Five Forces model to the banking industry -(!eat o' ne* ent!ant" H #(=# (ndustry competitors % $*W Ba!+ainin+ &o*e! o' bu#e!" % #(=# Ba!+ainin+ &o*e! o' "u&&%ie!" % $*W -(!eat o' "ub"titute" % $*W =riffin 11CC?2 observes that since the 1CB4s, banks have been merging to remain significant in terms of assets, and to ensure that there are a small number of significant players in the industry. !heoretically, the bargaining power of suppliers would be high in this industry, as there are a small number of fairly large players in the industry. 1Kotler,1CCA2. #owever, the tendency of banks to amalgamate, rationali'ing operational costs 18ronin, 1CCB2 and thus diminishing the number of banking organi'ations in any country, is being offset by means of the development of online banks and financial intermediaries in areas such as home lending 13ellenstein and /onwood, 24442. +y contrast, the bargaining power of consumers is increasing. -witching costs are becoming lower 1with (nternet banking gaining momentum2 and consumer loyalties are harder to retain 1Nem'ow, 1CCC2 !he threat of substitutes to banking in terms of competition from the non%bank financial sector is increasing rapidly.. Attitudes are also shifting from direct transactions to savings and investment, as the baby boomers reach their forties and fifties !he application of 7orter"s model to the banking industry shows clearly that this sector, which has now reached the mature stage of its lifecycle, is under threat. 5ial 11CC62 points out that banking demonstrates the typical attributes of an oligopoly H such as risk avoidance and relatively undifferentiated customer service H which have made it susceptible to encroachment by software giants such as <icrosoft, who are attempting to replace banks as intermediaries -ome specific factors which have conspired to create the new competitive environment for banking include> changing consumer needs and perceptions, globali'ation, technological innovations, and competition from non%banking entities.

-(e Indian "Bena!io

2A

(ncreasingly, consumers e.pect online services from their financial institutions. !he trend toward electronic delivery of products and services is particularly important to the financial services industry, where the shift is partly a result of consumer demand, but is also partly a result of the ruthlessly competitive environment 1=eyer,1CCA2. +anking institutions are countering their competitors by leveraging e8ommerce technologies and various service offerings online. )lectronic banking was first introduced by large companies to simplify the management of their salary and payroll problems +y contrast, home banking is a comparatively recent concept which is essentially a Fspin%off" of the Web !hough many banks offered Fhome banking services" from a 78 during the 1CB4s and 1CC4s, the concept was initially a failure due to the lack of a critical mass of 78s and computer literate customers, as well as to the somewhat limited user interfaces initially available #ome banking, however, is gaining in popularity with increasingly literate consumers and a wider installed 78 base. +anks initially used dial%up services or provided software which was both e.pensive to customers and lacking in user friendly features. $ater, on%line services were set up from retail branches to provide subscriber%based online services, although these still lacked generic features and a user%friendly interface. With the evolution of the (nternet and the World Wide Web, online banking become crucial to growth in the sector -eit' and -tickel 11CCB2 note that consumer behaviour in banking changed partly as a result of changes in the amount of spare time available to individuals. !hey observe that mobility, independence of time and place, and fle.ibility have become key words in consumer banking. (nternet is increasingly considered a strategic weapon by banks, which are leveraging it as a distribution channel to offer comple. products at the same quality they can provide from their physical branches, at a lower cost, to more potential customers, without boundaries. (ndeed, the (nternet has been one of the key drivers in promoting e8ommerce in the banking sector. (ndia is still in the early stages of )%banking growth and development. 8ompetition and changes in technology and lifestyle in the last five years have changed the face of banking. 2B

!he changes that have taken place impose on banks tough standards of competition and compliance. !he issue here is H IWhere does (ndia stand in the scheme of ebanking.I )%banking is likely to bring a host of opportunities as well as unprecedented risks to the fundamental nature of banking in (ndia. !he impact of )% +anking in (ndia is not yet apparent. <any global research companies believe that ebanking adoption in (ndia in the near future would be slow compared to other ma or Asian countries 1)%business, 0une, 24422. Nair 11CCC2 observes that (ndian )%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. According to NasscomIs (nternet survey in 2441 on the (nternet usage trends, the number of active (nternet subscribers in (ndia is e.pected to increase to over 1B million and the user base to over &4 million by 244, H 46. (t also found that more than 244 cities and towns in (ndia have (nternet connectivity. !he Nasscom % <cKinsey study in 2442 revealed that despite the global economic challenges facing the (! software and services sector, the outlook for the (ndian industry remains optimistic. !he /eserve +ank of (ndia has also set up a JWorking =roup on )%banking to e.amine different aspects of )%banking. !he group focused on three ma or areas of )%banking i.e. 112 !echnology and -ecurity issues 122 $egal issues and 1&2 /egulatory and -upervisory issues. /+( has accepted the guidelines of the group and they provide a good insight into the security requirements of )%banking. !he importance of the impact of technology and information security cannot be doubted. !echnological developments have been one of the key drivers of the global economy and represent an instrument that if e.ploited well can boost the efficiency and competitivity of the banking sector. #owever, the rapid growth of the (nternet has introduced a completely new level of security related problems. !he problem here is that since the (nternet is not a regulated technology and it is readily accessible to millions of people, there will always be people who want to use it to make illicit gains. !he security issue can be addressed at three levels. !he first is the security of customer information as it is sent from the customerIs 78 to the Web server. !he second is the security of the environment in which the (nternet banking server and customer information database reside. !hird, security measures must be in place to 2C

prevent unauthori'ed users from attempting to long into the online banking section of the website. 3rom a legal perspective, security procedure adopted by banks for authenticating users needs to be recogni'ed by law as a substitute for signature. (n (ndia, the (nformation !echnology Act, 2444, in section &122 provides for a particular technology 1vi'., the asymmetric crypto system and hash function2 as a means of authenticating electronic record. Taxation of E-commerce transaction has been one of the most debated issues that are yet to be resolved by (ndia and most other countries. !he e.plosive growth of e%commerce has led many e.ecutives to question how their companies can properly administer ta.es on (nternet sales. Without sales ta., online sellers get a price advantage over brick and mortar companies. While e%commerce has been causing loss of ta. revenues to the =overnment, many politicians continue to insist that the Net must remain ta.%free to ensure continued growth, and that collecting sales ta.es on Net commerce could restrict its e.pansion. Nasscomm survey 2441 has suggested that (ndia should support a permanent ban on ta.es on (nternet access, a permanent ban on custom duties on electronic transmissions, international ta. rules that are neutral, simple and certain and simplification of state and local sales ta.es. !he 8entral +oard of 5irect !a.es, which submitted its report in -eptember 2441, recommended that e%commerce transaction should be ta.ed ust like traditional commerce. Also /+( is about to become the first =overnment owned digital signature 8ertifying Authority 18A2 in (ndia. !he move is e.pected to initiate the electronic transaction process in the banking sector and will have far reaching results in terms of cost and speed of transactions between government% owned banks. !hus efficiency, growth and the need to satisfy a growing tech%survey consumer base are three clear rationales for implementing )%banking in (ndia. !he four forces%customers, technology, convergence and globali'ation have the most important effect on the (ndian financial sector and these changes are forcing banks to redefine their business models and integrate technology into all aspect of operation.

?2> Need and "Bo&e o' t(e "tud#4-

&4

!his study is important and essential both for the bank management and the users of )% +anking services. +y conducting this study e%banking management would become aware about the preferences, satisfaction level and problems encounter by e%banking users and thus this study will help the e.ecutives to amend the services according to the customer preferences

?27

ObjeBti e" o' t(e Stud#

!he present study focused at studying the )%banking preferences over traditional banking among service class in fero'epur city. !he main ob ectives of the study were>

1. !o know about what is e%banking. 2. !o know what services are included in e%banking. &. !o study the awareness level of people regarding e%banking. ,. !o find the frequency and factor influencing the usage. 6. !o know whether people are satisfied with e%banking services.

RESEAR.3 ,E-3ODOLOG1

&1

/esearch means a search for knowledge or gain some new knowledge and methodology can properly refer to the theoretical analysis of the methods appropriate to a field of study or to the body of methods and principles particular to a branch of knowledge. A /esearch methodology has a specified framework for collecting the data in an effective manner. /esearch methodology means a Jdefining a problem, defining the research ob ectives, developing the research plan, collecting the information, analy'ing the information and presentation of findings.J -uch framework is called J/esearch 5esignJ. !he research process that was followed by me consisting following stepsG AD Re"ea!B( De'ine !he definition of problem includes the study of DAwareness of people regarding )%+anking E. . BD Re"ea!B( De"i+n

!he present study seeks to identify the e.tent of preference of e%banking over traditional banking among people% service and business class and also students in fero'epur 8ity. !he research design is e.ploratory in nature. !he research has been conducted on people within fero'epur . !his step of the study consists of developing the most efficient plan for gathering the relevant data. !he following factors were under focus in the research plan> aD Data de"i+n4 !he data design involves different aspects like > P !he nature of the data P !he data sources P !he data frequency and the data tools. bD Natu!e o' data4 !he nature of the data that has been used in this pro ect is both primary and secondary in nature. !he first hand information"s bearing on any research, which has been collected by the researcher, or his agent or assistant is called Fprimary data". *nce the primary data has been put to use, the original characters disappear and the that becomes secondary. !he data which has been collected, compiled and presented earlier by any agency, is termed as Fsecondary data".

.D Sam&%in+ De"i+n4 (t is a definite plan for obtaining a sample from a given population. (t refers to the technique or the procedure the researcher would adopt in selecting items for the sample. !he sampling plan or design calls for the following decisions>

&2

a. Uni e!"e4 /esearch sample unit refers to the geographical area that ( have covered while conducting the research. !he universe of my study is fero'epur 8ity. b. Sam&%e Unit4 Who is to be surveyedQ !he target population must be defined that will be sampled. (t is necessary to develop a sampling frame so that everyone in the target population has an equal chance of being sampled. !he sample unit pertaining to my study is the service class people, business class and students of fero'epur 8ity. B2 Sam&%e SiGe4 #ow many people will be surveyedQ !his refers to number of respondents to be selected from the universe to constitute a sample. An optimum sample is one that fulfills the requirements of efficiency, reliability and fle.ibility. !he sample si'e of 144 served the purpose of my study. d2 Sam&%e ,et(od4 !he sampling method used is non%probability convenience sampling 1where the researcher selects the most accessible population members from which to obtain information2. DD ,et(od" o' Data .o%%eBtion and ana%#"i" 4 !he researcher can get two types of data> a2 b2 7rimary 5ata -econdary 5ata

a. P!ima!# Data4 7rimary data is a data which did not e.ist earlier and is being collected by the researcher first time for its specific ob ectives. !he primary data is collected through questionnaires by conducting personal interview and telephonic interviews of the respondents of fero'epur region. b. SeBonda!# data4 Any data which have been collected earlier for some purpose are the secondary data. (ndirect collection of data from sources containing past or recent past information like bank"s brochures, annual publication, books etc. -econdary sources used are> !e.t books, internet sites, newspaper articles, bank brouchers etc.

Data .o%%eBtion

&&

Keeping in mind the ob ectives of the study, the primary data was collected from a sample of 144 respondents belonging to fero'epur by personally administering the questionnaire which was framed and tested the study.

Sam&%in+ teB(ni)ue (n this research study, non H probability convenience sampling is opted for. 8onvenience sampling is done purely on the basis of convenience or accessibility. !he questionnaire was of structured type and contained questions relating to different dimensions of )% +anking awareness among service class such as level of usage, factors influencing the usage of e%banking services, benefits accruing to the users of e%banking services, problems encountered. An attempt was also made to elicit reasons for its non usage. Ana%#"i" o' Data and di"Bu""ion With the proliferation of technology in the society and its increased prevalence among all the classes, the present study was conducted to measure the e.tent to which the banking transactions were technology driven among the service class, business class and students. 5ata after collection has been processed and analy'ed in accordance with the outline laid down in the research plan. 5ata obtained during the study has been systematically tabulated and interpreted with the help of tables and pie charts.

.3AP-ER4-II

&,

Re ie* o' Lite!atu!e

-everal studies and researches have drawn attention to the role and adoption of technology in +anking sector, )%banking, its adaptation and the e.periences of private sector banks with )% banking. -ome of the important studies during the recent years are being discussed in this section Wai-.(in+ PoonC>;;@D 4- !he purpose of this paper is to e.plore the determinants of usersI adoption momentum of e%banking in <alaysia. (n this article the author shows the problems when people uses the e%banking and the advantages of e%banking . 7rivacy and security are the ma or sources of dissatisfaction, which have momentously impacted usersI satisfaction. ,iB(a% Po%a"iA C>;;6D4- !his research seeks to identify empirically the factors underlying the decision to adopt online banking in 7oland. With the help of this study we find some factors that influence the people to use the online banking the factors that has been observed are as follow. (n our study is the link between the decision to open an online account and the perceived level of security of internet transactions. ,i%ind Sat(#e C?666D4- !his research help to define the factors affecting the adoption of (nternet banking by Australian consumers. !his research shows that security concerns and lack of awareness about (nternet banking and its benefits stand out as being the obstacles to the adoption of (nternet banking in Australia. Wa%'!ied ,2 La""a!$ .(!i" ,ano%i"$ S(a!on S2 La""a!C>;;<D4- !his paper e.plores the relationships between consumer innovativeness, self%efficacy on the internet, internet attitudes and online banking adoption, while controlling for personal characteristics While results confirm the positive relationship between internet related innovativeness S#% ie La'o!et$ /iao#an LiC>;;<D4- !he aim of this study is to investigate the market status for onlineNmobile banking in 8hina. With the recent and forecasted high growth of 8hinese electronic banking, it has the potential to develop into a world%scale internet economy and requires e.amination.

&6

,iB(a% Po%a"iA$ -oma"G Piot! Wi"nie*"AiC>;;6D4- !his paper seeks to identify empirically the factors underlying the decision to adopt online banking in 7oland. =enerally, the behaviour of 7olish internet users and that of consumers in more developed countries e.hibit similar traits.

5oa)uin A%da"-,anGano$ .a!%o" La""a%a-Na a!!e$ .a!%a RuiG-,a'e$ Si% ia SanGB%a"C>;;6D4- !he purpose of this paper is to analyse how consumer innovativeness can be used as a variable to positively influence internet banking adoption both directly and reducing consumer perceived risk.

Si!i%uBA RotB(anaAitumnuai$ ,a!A S&eeBeC>;;7D4- <any !hai banks are currently implementing (nternet banking. +anks that offer service via this channel claim that it reduces costs and makes them more competitive. #owever, many corporate customers are not highly enthusiastic about (nternet banking.

Ne%"on O%# Ndubi"iC>;;8D4- !his paper e.amines the determinant structure of customers" attitude systemIs characteristics on adoption of internet banking 1(+2 by <alaysian bank customers. !he results of the study reveal that the attitudinal factors play a significant role in internet banking adoption..

Ba!!# 3o*B!o't$ Robe!t 3ami%ton$ Pau% 3e*e!C>;;>D4- !his paper seeks to develop our understanding of consumer attitudes towards bank delivery channels. Accordingly, a questionnaire was designed to obtain information about which delivery channels consumers had used when acquiring four types of financial service.

&?

A!e' A2 A%-A"(ban$ ,o(ammed A2 Bu!ne#C>;;?D4- 8urrently, the banking industry is facing increasingly demanding customers and quickly eroding competitive edges. /ecent technological breakthroughs in various areas, however, offer opportunities for the banks to e.cel in customer service quality and convenience.

Anita Li'en H(aoC>;;@D4- !he purpose of this paper is to identify risk factors that discourage 8hinese consumers from adopting internet banking services 1(+-2. !his market is e.periencing fast growthG however, an in%depth understanding of 8hinese consumers within this is lacking..

3eiAAi Ka!ja%uoto$ ,inna ,atti%a$ -a&io PentoC>;;>D4- !he study e.plored the effect of different factors affecting attitude formation towards (nternet banking 1online banking2 in 3inland. !he purpose of this paper is to determine those factors that influence the formation of attitude towards (nternet banking on the one hand, and their relation to the use of online banking services, on the other.

-ommi LauAAanenC>;;9D4- !he aim of the paper is to e.plore and compare customer value perceptions in internet and mobile banking. !he purpose especially is to compare customer perceived value and value creation between internet and mobile bill paying service.

Kata!iina ,aen&aaC>;;8D4- !he purpose of the paper is to e.plore (nternet banking services 1(+-2, consumers availing the services and the potential development possibilities of the services in the challenging operational environment.

Kari Pikkarainen, Tero Pikkarainen, Heikki Karjaluoto, Seppo Pahnila(2006):Although research into the adoption and use of online banking services has grown in many parts of the world, the centre of attention has been largely on determinants of online banking.

Gue!!e!o$ ,a!io ,a!tIneG C>;;>D4-<ario <artRne' =uerrero in his paper titled D7rofiling the Adoption of *nline +anking -ervices in the )uropean 9nionE offers an empirical investigation on the adoption of online banking services among )uropean

&A

citi'ens. !he above survey indicates that although a number of research studies relating to different aspects of )%banking, its adoption, different e.periences with e%banking, its viability and ethics involved in e%banking, but no study has been conducted which is class specific. As it is evident, that service class people don"t have sufficient time and access to banks during the traditional banking hours, so their e%banking adoption and usage should be more.

.3AP-ER4-III DA-A PRESEN-A-ION$ ANAL1SIS AND IN-ERPRE-A-ION

!he study has been conducted on the topic entitled, A*a!ene"" o' &eo&%e !e+a!din+ E% BanAin+,E (n this research study, the primary data was collected through questionnaire method. !he analysis of the research study has been shown below> 1 J4?4- (n which banks do you have your accountQ a. -tate +ank of (ndia b. 7un ab National +ank c. d. #538 +ank (8(8( +ank

-ab%e no4-72? State banA o' India 66 ,BL Punjab nationa% banA &4 2?L 3DF. 16 1&L I.I.I 16 1&L

G!a&( no4-72?

&B

icici 13% hdfc 13% state bank of india 48%

punjab nationa bank !"%

J4>4- While opening up the account, were you aware of )%banking services provided by your bankQ a. 3ully aware b. #ad an idea c. No

A*a!ene"" o' &eo&%e !e+a!din+ e-banAin+ "e! iBe &!o ided b# t(e banA *(i%e o&enin+ an aBBount
-ab%e no4-72> Fu%%# a*a!e ,2 &AL 3ad an idea 6& ,?L No idea 24 1AL -ota% 116 144

&C

G!a&( no-72>

A#ARENE$$ A%O&T E'%AN(ING $ER)I*E$

($% #$% )*LL+ A,A-. /A0 A1 I0.A 12 I0.A

&'%

J474- I' an"*e! to )ue"tion no2> i" B$ how did you get to know about )%banking services of your bankQ c. 7ersonal visit d. ).ecutive from the bank e. Advertisements f. 3riendsN /elatives

o!rce fro" which the respon#ents get the know$e#ge abo!t the e-banking services
-ab%e no- 727 Pe!"ona% i"it 12 14L EEeButi e '!om banA 1, 11L Ad e!ti"ement " &A 2CL F!iend"K!e%ati e " 1B 1,L Ot(e!" ,? &?L

,4

G!a&( - 727

$O&R*E$ O+ A#ARENE$$ A%O&T E'%AN(ING

3% ((% #$%

.-S21AL 5ISIT .6.7*TI5.S )-2M T/. 8A19 A05.-TIS.M.1TS )-I.10S:-.LATI5.S 43% 2T/.- S2*-7.S

(&%

Q:4:- If answer to question no.2 is a or b, which of the following /-banking services are you aware of1

g. A!< h. 5ebit 8ard i. 8redit 8ard . 7hone banking k. <obile banking l. (nternet banking

%wareness of E-Banking services

-ab%e no- 72: A-, CA 2?.,& L Debit .a!d ?? 1A.CBL .!edit .a!d ?, 1A.,,L P(one BanAin+ ,C 1&.&6L ,obi%e BanAin+ ,4 14.BCL Inte!net BanAin+ 61 1&.BCL -ot a% &?A 144

,1

G!a&(- 72?
,e ati-e a.a,eness about diffe,ent e'bankin/ se,-ices
nu0be, of ,espondents (4; (;; <; '; &; 4; ; ATM 0e"it card 7redit card hone "anking Mo"ile "anking Internet "anking Series(

E'bankin/ se,-ices

J4<- 5o you use )%banking servicesQ a. :es b. No

&sers of E-banking services

-ab%e no4-72< U"e!" B4 ?C.6L Non u"e!" &6 &1.6L -ota% 116 144

,2

G!a&( - 72< &$AGE O+ E'%AN(ING

#;% +es 1o $;%

J4-84- (f answer to question no.6 is yes, how frequently do you use each of the following servicesQ 3actors a b c d e f A!< 5ebit 8ard 8redit 8ard 7hone +anking <obile +anking (nternet +anking *nce in a *nce in a *nce in a *nce in a day week fortnight month (nfrequen tly

,&

G!a&(- 728
+RE1&EN*2 O+ &$AGE O+ 3I++ERENT E'%AN(ING $ER)I*E$
RE4ATI)E %&$AGE (;;% <;% ';% &;% 4;% ;% ATM 0e"it card 7redit card hone "anking Mo"ile "anking Internet "anking infre=uently once in a month once in a fortnight once in a week once in a day

E'%AN(ING $ER)I*E$

'epresentation of fre(!ency of !sage Tab$e no- ).*

Da # Wi A-, Debit .a!d .!edit .a!d P(one BanAi "e , 2 1 4 &?.& ? 1B.1 B C.4C 4 L Wee A*i"e &1 11 6 2 66.& ? 1C.? , B.C& &.6A L Fo!tn i+(t%# 1& A ? & &A.1 , 24 1A.1 , B.6A L ,o nt(%# 11 14 ? A 26.6 B 2&.2 ? 1&.C 6 1?.2 B L In'!e )uent% # C B 1B 1& 1&.B 6 12.& 1 2A.? C 24 ?B &.16 &B 2.A1 &? 26 2.4& 1.A? L -ot a% WA S

,,

n+ ,obi%e BanAi n+ Inte!n et BanAi n+

A.1,

11., &

,.?6

1&.B 6

1C 2.1?

&?.& ?

&

6.&?

6.A1

1?.2 B

12.& 1

2,

2.64 11 144 6? 144 &6 144 ,& 144 ?6 144

J494- Which of the following factors influence you the most to use )%banking servicesQ <ore 3actors A + 8 5 ) 3 = # ( All time availability )ase of use Availability of resources Nearness (ntegrated platform 5irect access Accuracy of information 3riendsN /elatives -tatus symbol -trongly than average average $ess than Average Not at all

Factors inf$!encing the $eve$ of !sage

St!on+% # A%% time 6? ,o!e t(an a e!a+e B A e!a+ e 11 Le"" t(an a e!a+e 1

Ta$e no-).+
No t at a%% & -ot a% AC WA S ,.,& Ran A 1

,6

a ai%abi%it# Ea"e o' u"e Re"ou!Be" Nea!ne"" Inte+!ated P%at'o!m Di!eBt aBBe"" ABBu!aB# o' In'o!mation F!iend"K Re%ati e" Statu" "#mbo% G!a&(- 729

&2 1A 21 12 &2 1A & A

22 1? 1B 14 12 1& B 11

A 1& 1, 1& A 1& 1, 1,

2 2 6 , 2 & A A

1 1 4 1 4 1 B 14

?, ,C 6B ,4 6& ,A ,4 ,C

,.2B &.C, &.C6 &.A4 ,.,4 &.BC 2.AB 2.C?

& 6 , A 2 ? C B

+A*TOR$ IN+4&EN*ING 4E)E4 O+ &$AGE

3; <; $; '; >; &; #; 4; (; ; -esources Integrated All time Accuracy Status

1ot at all Less than average Average More than average Strongly

Tab$e ).+% ,orre$ation "atri- of factors inf$!encing the $eve$ of !sage

A B . D E F ,!&to%A%% time a ai%abi%it# Ea"e o' u"e Re"ou!Be" Nea!ne"" Inte+!ated P%at'o!m Di!eBt aBBe"" A 1.44 4.B, 4.?, 4.A4 4.6? 4.C? B 4.B, 1.44 4.BA 4.C4 4.?A 4.C6 ,? . 4.?, 4.BA 1.44 4.CB 4.C& 4.AC D 4.A4 4.C4 4.CB 1.44 4.C2 4.B, E 4.6? 4.?A 4.C& 4.C2 1.44 4.?? F 4.C? 4.C& 4.AC 4.B, 4.?? 1.44 G 4.A& 4.B? 4.CB 4.CB 4.C? 4.B&

G 3 I

ABBu!aB# o' In'o!mation F!iend"K Re%ati e" Statu" "#mbo%

4.A& %4.?4 %4.&B

4.B? %4.6? %4.2,

4.CB %4.4A 4.2&

4.CB %4.1C 4.4A

4.C? 4.1A 4.&?

4.B& %4.6C %4.&,

1.44 %4.4C 4.1A

@>B>% Which of the following benefits accrue to you, while using )%banking servicesQ m. !ime saving c. )asy processing b. d. (ne.pensive d. )asy fund transfer

.ario!s benefits accr!ing fro" E-Banking services to its !sers -ab%e no-72@
-ime "a in+ ?C ,?.&1L IneE&en"i e 21 1,.4CL Ea"# &!oBe""in+ && 22.16L Ea"# 'und t!an"'e! 1C 12.A6L Ot(e!" A ,.A4L

G!a&(- 72@ %enefits of e'bankin/

TIM. SA5I1? I1.6 .1SI5. .AS+ -27.SSI1?

.AS+ )*10 T-A1S)..M.-?.17+ S9I1 SA5I1? 2T/.-S

,A

J464- Which mode do you use for conducting the following transactionQ 7ersona l ;isit 1 A + ABBount !e%ated t!an"aBtion" .(e)ue !e%ated t!an"aBtio 8 N" .!edit .a!d !e%ated t!an"aBtion" 5 ,i"B t!an"aBti on" A!<N 5ebit 8ard 2 7hone <obile Net (f you have all of the previous options which +anking one would you use 1kindly 6 mention the number 1%62

+anking +anking & ,

&sage of #ifferent "o#es for con#!cting specifie# transaction -ab%e no M 726

Pe!"ona ,ode" Account transactions, 8heque transactions, 8redit card related transactions, <iscellaneous transactions L 62.A 12.B, ,B 16.C6 B.2, 14.2A related &C4 C6 11B ?1 A? related % 0i"it A-,K Debit Ba!d P(one banAin+ ,obi%e banAin+ Net BanAin+

J4?;4- /ate the problems identified while using )%banking servicesQ 3actors !ime consuming (nsecurity A!< out of order Amount debited but not withdrawn 7roblem of change in mobile number 7assword forgotten 8ard misplaced 8ard misuse =rievous <a or Average <inor (gnorable

A + 8 5 ) 3 = #

G!a&(- 72?; PRO%4E5$ ARI$ING O&T O+ E' %AN(ING

$; '; >; &; #; 4; (; ; ATM out of order Time consuming ro"lem of change in 7ard misplaced

Ignora"le Minor Average Ma@or ?rievous

/rob$e"s i#entifie# by the !sers of E-Banking services -ab%e no- 72?;

,C

,!&to%A + 8 -ime Bon"umin+ In"eBu!it# A-, out o' o!de! Amount debited but not *it(d!a*n P!ob%em o' ) B(an+e in mobi%e numbe! Pa""*o!d 'o!+otten .a!d mi"&%aBed .a!d mi"u"e

G!ie o u" 4 4 4

,aj o! & 11 12

A e!a +e 12 11 1?

,in o! 1C 11 2?

I+no!ab %e 26 12 B

-ota % 6C ,6 ?2

WA S 1.BB 2.,A 2.62

RanA " B 6 ,

&

1&

1&

&C

2.&1

12

12

,2

2.&B

3 = #

B B 12

, A 1&

1& 1& 2

1B 1, B

11 B 12

6, 64 ,A

2.?& 2.B? &.11

& 2 1

@>11>% Kindly rate the following reasons enlisted for not using the )%banking servicesQ <ore than average Average

3actors a No need1 -atisfied with

#ighly important

$ess than average

$east important

64

b c d e 3

traditional banking2 (t seems like a botheration (nsecurity No access to internetNmobile $ack of operational knowledge #idden costs

'easons for not !sing E-Banking services as rate# by the non !sers -ab%e no- 72??
3i+(%# ,!&to%im&o!ta nt No needC Sati"'i A ed *it( t!aditiona% banAin+D It "eem" %iAe a bot(e!ation 8 In"eBu!it# No aBBe"" to inte!netKmo bi%e LaBA o' ) o&e!ationa% Ano*%ed+e 3idden Bo"t" 12 A 12 12 16 6B 2.B1 , C 6 1& 14 1? 6& 2.?, 6 1A 11 21 A 1& ?C &.1A 1 A 4 C 1? &4 ?2 2.44 ? 1C B 22 ? 22 AA 2.C6 & ,o!e t(an a e!a +e A e!a +e Le"" t(an a e!a +e Lea"t im&o!ta nt -ot a% WA S Ran A"

21

1,

1?

?,

&.11

61

-ab%e 72??-A 8orrelation <atri. of reasons for not using )%+anking services as rated by the non users A A No need C Sati"'ied *it( t!aditiona% banAin+D B It "eem" %iAe a bot(e!ation . In"eBu!it# D No aBBe"" to inte!netKmobi%e E LaBA o' o&e!ationa% Ano*%ed+e F 3idden Bo"t" 1.44 4.&A 4.B2 4.A2 4.?& 4.B1 B . D E F

4.&A 4.B2 4.A2

1.44 %4.1C 4.B?

%4.1C 1.44 4.&1

4.B? 4.&1 1.44

4.BB 4.1C 4.C2

4.&4 4.?& 4.64

4.?& 4.B1

4.BB 4.&4

4.1C 4.?&

4.C2 4.64

1.44 4.??

4.?? 1.44

@>12>% !o what e.tent are you satisfied with your +anks" )%banking servicesQ n. #ighly -atisfied o. -atisfied p. Neutral q. 5issatisfied -ab%e no- 72?> 3i+(%# "ati"'ied &6 &4.6L +!a&(- 72?> Sati"'ied 64 ,&.6L Neut!a% 24 1A.,L di""ati"'i ed 14 CL SSSSSSSSSSS SSSSSSSSS SSSSSSSSSSS SSSSSSSSSSS

62

dissatisfied 9% neut,a 18%

hi/h 6 satisfied 37%

satisfied 44%

.3AP-ER 4- I0 SU,,AR1$ .ON.LUSIONS$ LI,I-A-IONS = RE.O,,ENDA-IONS

:2? Findin+" o' t(e "tud#

<ost of the service class people are aware of )%banking, either fully or partially. Advertisements play a ma or role in making service class aware of )%banking. A!<s are the most preferred choice among service class followed by debit card, credit card, phone banking, mobile banking and internet banking in terms of the frequency of usage. Amongst the various factors influencing the usage, all time availability is ranked as the ma or motivating factor, followed by direct access, ease of use, nearness. 3riends and relatives and status symbol were rated as the least motivating factors.

6&

As regards the benefits accruing, !ime saving came out to be the ma or benefit followed by easy processing, ine.pensive and easy fund transfer.

(nsecurity seems to be a ma or problem in the usage of )%banking which arises from the misuse and misplacement of the card. Amongst the reasons by the non%users of )%banking, (nsecurity again was considered the most de%motivating factor, followed by fear of hidden costs and no need. *ut of the three hypothesis formulated in the study, one hypothesis proved to be true i.e. the e%banking usage does not depend on whether the person is male or female and *ther two hypothesis were re ected and it was concluded that e%banking usage is influenced by the level of income and the age factor

4.2

Limitation"

While undertaking this study, ( faced certain physical and geographical limitations. )ven though every possible effort to make this pro ect report authentic, accurate and complete in itself was made, still various hurdles came into the way. !he limitations of the study include> /eluctance on the part of respondents to provide an accurate account of their personal details. -cope of the study being limited to fero'epur , the findings of the study cannot be generali'ed for the universe on the whole. !his study being based on the assumption that an interviewer is providing accurate and reliable information may not hold true in every case

4.

ReBommendation"

(nternet banking would drive us into an age of creative destruction due to non%physical e.change, complete transparency giving rise to perfectly electronic market place and customer supremacy. !he question to be asked right now is JWhat the (ndian +anks should doJ Whatever is the strategy chosen and options adopted, certain key parameters would determine the bankIs success on web>

6,

3or long%term success, a bank may follow> Adopting a webs mindset 8atching on the first moverIs advantage /ecogni'ing the core competencies Ability to deal multiplicity with simplicity -enior <anagement initiative to transform the organi'ation from inward to outward looking Aligning roles and value propositions with the customer segments /edesigning optimal channel portfolio Acquiring new capabilities through strategic alliances.

!he above can be implemented in four steps> 3amiliari'ing the customer to new environment by demo version of software on bankIs web site. !his should contain tour through the features which are to be included. (t will enable users to give suggestions for improvements, which can be incorporated in later versions wherever feasible. -econd phase provides services such as account information and balances, statement of account, transaction tracking, mailbo., check book issue, stop payment, financial and customi'ed information. !he third phase may include additional services such as fund transfers, 55 issue, standing instructions, opening fi.ed deposits, intimation of loss of A!< cards. !he last step should include advanced corporate banking services like third party payments, utility bill payments, establishment of $N8s, 8ash <anagement -ervices etc. )nhanced plan for the customers in future can include requests for demand drafts and pay orders and many more to bring in the ultimate in banking convenience. 66

-ecurity features of (nternet +anking should be administrated to the customers. <ake (nternet +anking understandable to the customer, so that they can adapt its more. <ore of the facilities in (nternet +anking should be offered.

All the above strategies will help banks in translating their traditional business model into an (nternet one, falling into three main categories *ne stop shop ;irtual one%stop%shop +est of breed supplier.

.onB%u"ion
!he awareness of e%banking and usage of e%banking is all set to increase among various peoples. -ome customers are not using the services due to hurdling factors like insecurity and fear of hidden costs etc. -o banks should forward with measures to remove the apprehensions of customers therefore now demand for e%banking is increasing day%by% day. 8ustomers are aware and satisfied about e%banking services provided by bank because of its effectivity. A!<s are most preferred choice amongst customers. 3urther, with increasing consumer demands, banks have to constantly think of innovative customi'ed services to remain competitive. )%+anking is an innovative tool that is fast becoming a necessity. (t is successful strategic weapon for banks to remain profitable in a volatile and competitive market place of today.

.3AP-ER-0 BIBLIOGRAP31
,AGAHINES

6?

7roduct and !echnology =roup, (8(8( +ank D8orporate +anking> 9sing !echnology in !ransactionsE (83A( /eader, 0anuary 244,, pg. no. A1%A? D3rom 7hysical to ;irtual +ankingE, (ndian <angement, -eptember 244&

5OURNAL
Wai%8hing 7oon1244B2 D9sersI adoption of e%banking servicesE 0ournal of +usiness T (ndustrial <arketing ;ol 2&,:ear> 244B, pp> 6C%?C 0oaquRn AldUs%<an'ano , 8arlos $assala%NavarrV 1244C2D!he role of consumer innovativeness and perceived risk in online banking usageE (nternational 0ournal of +ank <arketing ;olume> 2A,:ear> 244C,pp <ichal 7olasik 1244C2D)mpirical analysis of internet banking adoption in 7olandE (nternational 0ournal of +ank <arketing ;olume 2A, :ear 244C,pp &2%62 <ilind -athye 11CCC2DAdoption of (nternet banking by Australian consumersE (nternational 0ournal of +ank <arketing, voG 1A, year 1CCC, pp &2,%&&, <ilind -athye11CCC2 DAdoption of (nternet banking by Australian consumers> an empirical investigationE 0ournal> (nternational 0ournal of +ank <arketing, ;ol 1A ,:ear>1CCC , pp>,B%62 Walfried <. $assar, 8hris <anolis, -haron -. $assar124462 D!he relationship between consumer innovativeness, personal characteristics, and online banking adoptionE 0ournal (nternational 0ournal of +ank <arketing ,;ol 2& ,:ear 2446,pp> ?B% ?C -ylvie $aforet, Wiaoyan $i124462 D8onsumers" attitudes towards online and mobile banking in 8hinaE0ournal (nternational 0ournal of +ank <arketing, ;ol 2& ,:ear 2446 , pp>?A%?B <ichal 7olasik, !omas' 7iotr Wisniewski1244C2 D)mpirical analysis of internet banking adoption in 7olandE0ournal (nternational 0ournal of +ank <arketing, ;ol 2A, :ear 244C,pp> ,B%?2

6A

0oaquin Aldas%<an'ano, 8arlos $assala%Navarre, 8arla /ui'%<afe, -ilvia -an'% +las1244C2 D!he role of consumer innovativeness and perceived risk in online banking usageE 0ournal (nternational 0ournal of +ank <arketing, :ear 244C, ;ol 2A,pp>A2%A,

-iriluck /otchanakitumnuai, <ark -peece1244&2 D+arriers to (nternet banking adoption> a qualitative study among corporate customers in !hailandE 0ournal (nternational 0ournal of +ank <arketing, :ear 244& ,;ol 21 ,pp>62%6,

Nelson *ly Ndubisi1244?2 D8onsumer attitudes, systemIs characteristics and internet banking adoption in <alaysiaE0ournal <anagement /esearch News,:ear 244? ,;ol 2C, 7p 1?%2A

+arry #owcroft, /obert #amilton, 7aul #ewer124422 D8onsumer attitude and the usage and adoption of home%based banking in the 9nited KingdomE 0ournal (nternational 0ournal of +ank <arketing, ;ol 24 ,:ear 2442 ,pp>1B%1C

Aref A. Al%Ashban, <ohammed A. +urney124412 D8ustomer adoption of tele% banking technology>the case of -audi ArabiaE 0ournal (nternational 0ournal of +ank <arketing ,;ol 1C ,:ear 2441,pp>&2%&B

Anita $ifen Xhao1244B2 D7erceived risk and 8hinese consumersI internet banking services adoptionE 0ournal (nternational 0ournal of +ank <arketing, ;ol 2? ,:ear 244B, 7p 646%626

#eikki Kar aluoto, <inna <attila, !apio 7ento124422 D(nternet vs mobile banking> comparing customer value perceptionsE 0ournal +usiness 7rocess <anagement 0ournal, ;ol 1& ,:ear 244A,pp>A2%AB

6B

BOOKS
<alhotra, !. 5., D )lectronic +anking and (nformation !echnology in +anksE -ultan 8hand and -ons, New 5elhi,2442. -.- Kaptan T N.-. 8houbey. D(ndian +anking in )lectronic )ra.

WEBSI-ES
http>NNwww.infosys.comNfinacleNsolutionsNsolutionsSebanking.asp http>NNen.wikipedia.orgNwikiNonlineSbanking http>NNemeraldinsight.comN14.114BN http>NNemeraldinsight.comN14.114BN14??22,4A14A6BC6A http>NNwww.essaytown.netNlibNessay http>NNwww.academon.comNlibNpaperN26&16.html http>NNwww.arraydev.comNcommerceN ibcN http>NNwww. +anknetindia.com,244& http>NNwww.mit.gov.inNegNhome.asp,244& http>NNwww.arraydev.comNcommerceN ibcNCB4?%4?.htm http>NNwww.dit.netNitnewsNnews uneCCNnews une22.htm http>NNwww.internetworldstats.comNstate6.htmYme http>NNwww.internetnews.comNbus%newNarticleN4.? 6A6&6144.htm http>NNwww.mir.com.myNlbNbudget2442Ninde..htm http>NNwww,new.e isdc.orgN sNincludeNgetdoc.phplidZ1?AandarticleZ1B,and modeZpdf

6C

.3AP-ER4-0I ANNEE/URE JUES-IONNAIRE

1 Which banks do you have your accountQ a. -tate +ank of (ndia b. 7un ab National +ank c. d. #538 +ank (8(8( +ank

While opening up the account, were you aware of )%banking services provided by your bankQ a. 3ully aware b. #ad an idea c. No

&

I' an"*e! to )ue"tion no2> i" B$ how did you get to know about )%banking services of your bankQ a. 7ersonal visit b. ).ecutive from the bank c. Advertisements d. 3riendsN /elatives

I' an"*e! to )ue"tion no2> i" a o! b$ which of the following )%banking services are you aware ofQ a. A!< b. 5ebit 8ard c. 8redit 8ard d. 7hone banking e. <obile banking f. (nternet banking

5o you use )%banking servicesQ

?4

a. :es

b.

No

1I' No$ an"*e! )ue"tion no2 ?; di!eBt%#2. ? (f answer to question no.6 is yes, how frequently do you use each of the following servicesQ FaBto!" a b B d e ' A-, Debit .a!d .!edit .a!d P(one BanAin+ ,obi%e BanAin+ Inte!net BanAin+ OnBe in a da# OnBe in a *eeA OnBe in a 'o!tni+(t OnBe in a mont( In'!e)ue nt%#

A. Which of the following factors influence you the most to use )%banking servicesQ ,o!e FaBto!" A B . D E F G A%% time a ai%abi%it# Ea"e o' u"e A ai%abi%it# o' !e"ou!Be" Nea!ne"" Inte+!ated &%at'o!m Di!eBt aBBe"" ABBu!aB# o' St!on+%# t(an a e!a+e a e!a+e Le"" t(an A e!a+e

Not at a%%

in'o!mation 3 F!iend"K Re%ati e" I Statu" "#mbo%

B. Which of the following benefits accrue to you, while using )%banking servicesQ a. !ime saving ?1 c. (ne.pensive

d. )asy processing

d.

)asy fund transfer

C. Which mode do you use for conducting the following transactionQ I' #ou (a e a%% o' Pe!"ona% 0i"it A-,K Debit .a!d t(e &!e iou" P(one ,obi%e Net o&tion" *(iB( one *ou%d #ou u"e CAind%# mention t(e numbe! ?-<D ? A B . ABBount !e%ated t!an"aBtion" .(e)ue !e%ated t!an"aBtion" .!edit .a!d !e%ated t!an"aBtion" D ,i"B t!an"aBt ion" > 7 : < BanAin+ BanAin+ BanAin+

14. /ate the problems identified while using )%banking servicesQ A B FaBto!" -ime Bon"umin+ In"eBu!it# G!ie ou" ,ajo! A e!a+e ,ino! I+no!ab%e

?2

. D E F + (

A-, out o' o!de! Amount debited but not *it(d!a*n P!ob%em o' B(an+e in mobi%e numbe! Pa""*o!d 'o!+otten .a!d mi"&%aBed .a!d mi"u"e

11. Kindly rate the following reasons enlisted for not using the )%banking servicesQ 3i+(%# FaBto!" a b B d e ' No needC Sati"'ied *it( t!aditiona% banAin+D It "eem" %iAe a bot(e!ation In"eBu!it# No aBBe"" to inte!netKmobi%e LaBA o' o&e!ationa% Ano*%ed+e 3idden Bo"t" im&o!ta nt ,o!e t(an a e!a+e A e!a+e Le"" t(an a e!a+e Lea"t im&o!ta nt

12. !o what e.tent are you satisfied with your +anks" )%banking servicesQ b. #ighly -atisfied c. -atisfied d. Neutral e. 5issatisfied f. #ighly dissatisfied Re"&ondentN" P!o'i%e Name Age > SSSSSSSSSSSSSSSS > SSSSSSSSSSSSSSSS ?& InBome %e e% &e! mont( $ess than /s. 14,444 SSSSSSSS SSSSSSSS SSSSSSSS SSSSSSSS SSSSSSSS

=ender 1<N32 > SSSSSSSSSSSSSSSS 7rofession > SSSSSSSSSSSSSSSS *rganisation > SSSSSSSSSSSSSSSS

/s.14,444 to /s.24,444 /s.24,444 to /s.&4,444 <ore than /s.&4,444

Thanks for participating in the survey.

?,