Thesis On Internet Banking

The threats and opportunities in the e-banking line are increased due to the introduction of internet. The threat of e-banks and the point of equality concept are very highly used by the current competitors. There are rivals such as CIMB clicks, Hong Leong online banking and many more which cause Maybank2u.com unable to monopolize the market. As a consequence, the customers can exchange brands easily. Moreover, the customer of Maybank are likely to concern with the safety matter of online banking. They prefers to do transaction in the classic ways more than online banking due to their lacking of confidence toward security and safety matter of online banking. They are scared of hacker that might intercept their information. But other than that, the bank may significantly affected by the present macroeconomic situation across the global and adjustment in economic policies in South East Asian countries. This happened because Maybank’s goal is to widen Islamic business in markets such as Singapore and Indonesia as part of their target on the ASEAN

As their name suggests, they only execute their operations online. Customers can only be in contact with their money over the internet since they do not have any physical branches. Because online-only banks require lower overhead costs, they have the capability to offer more free services and higher interest rates compared to a traditional bank. Online banking provides many customers the convenience of handling their business at any physical location as long as they have access to internet. This is possible because of the variety of services that online banks provide despite limiting interaction to only the internet. Some of their services include applying for loans online, transferring funds and paying bills online. While the convenience of being able to access banking through the internet is worthwhile, there are limits to it. For example, making large deposits to the bank is limited and can only be made through the mail, they don’t service cashier checks for transactions, and withdrawing money from the account is very inconvenient. Luckily, the role of the internet in financial transactions is becoming increasingly prominent so that spending money online is more accessible, but it is important to understand both the benefits as well as restraints of online banking. Nowadays, many large brick-and-mortar banks have caught on and provide some online services in attempts to

In order to build relationships with its customers FIR needs to step away from the mind set that the use of the internet is no longer dominated by males and the women and older generations are moving towards the use of computers and handheld devices to conduct business. Fir needs to focus on internet security and protecting the interests of its clients and that the market is more competitive, “brick and mortar” banks have become more competitive in the use of internet banking along with the provided customer service.

The use, acceptance, adoption and application of internet technology to businesses to boast their performances are not something new. Saffu et al., (2008), states that there has been a significant increase in the use and application of e-commerce in businesses in the past decade. E-commerce has benefits such as reduction in costs, increased business opportunities, reduced lead time and providing more personalized service to the customers (Turban et al., 2008). Internet banking or e-banking is one of the many tools of e-commerce adopted by the banking industry. Tools of information technology such as internet banking have significantly improved the quality of services offered by the banking

According to a recent study by University of Michigan, in an examination of 214 bank Websites, more than 75 percent of bank websites have at least one design flaw that could lead to the theft of customer information and flaws are ones that even an expert user would find difficult to detect and unlike bugs, cannot be fixed with a patch. It was recommended to use SSL throughout the entire website and to avoid using links to third-party sites. Secure banking websites have become an integral part of our day-to-day life from our personal to our job-related business. A survey conducted by Pew Internet states 42% of all internet users bank online. With 24/7 access from around the world users can view balances, transfer funds and lots more at their convenience using online

In 2009, 10 million customers used mobile banking and this is expected to grow to 37 million by 2014. Customers that use mobile banking are not the same as online customers. Customers that use mobile banking represent a different segment of the market that other banking customers. Security issues, a perceived low value and expense, were the primary reasons that customers did not switch to mobile banking. Potential customers were reluctant to try a new banking service that are represented an extra cost and they were also afraid of losing control of their finances. Debit cardholders were the most active users. It was convenient for them because they could check their account at any time. Customers that used this service changed their usual banking channels and as a result -the bank had a higher retention for these users of online services.

Internet as a strong means of communication has greatly helped to boost the online banking process and making it a future demand of today’s banking industry.

ABSTRACT ……………………………………………………………………….. iii OZ ………………………………………………………………………………….. iv ACKNOWLEDGEMENTS ………………………………………………………....vi LIST OF TABLE ………………………………………………………………..…...x LIST OF FIGURES ………………………………………...…………………..…...xi 1 AN INTRODUCTION TO INTERNET BANKING…………………………..….1 1.1 Background of the Study ………………………………………………..…...1 1.2 Definition of internet banking …………………………………………...…...2 1.3 The Aim of the Study ……………………………………………………..…5 1.4 The Scope of the Study …………………………………………………..…..5 2 LITERATURE REVIEW ………………………….…………………………..…..7 3 INTERNET

Due to the nature of the online environment it is difficult for banks to build trust and relationships with their customers. The Internet is extremely impersonal due to its global audience, the bricks and mortar location of the local branch with a smiling advisor is much more inviting in comparison to a cold lifeless computer screen. Also the learning process involved in using e-banking can be daunting, customers must invest their time and effort into learning more to use and navigate their way around the sites. Internet banking can also be time consuming to set up and registration numbers and access codes can be misplaced, stolen or forgotten. Although

E-banking is the term used for new age banking system. E-banking is also called online banking and it is an outgrowth of PC banking. E-banking uses the internet as the delivery channel by which to conduct banking activity, for example, transferring funds, paying bills, viewing checking and savings account balances, paying mortgages and purchasing financial instruments and certificates of deposits (Mohammed, et. a.l, 2009). It is difficult to infer whether the internet tool has been applied for convenience of bankers or for the customers’ convenience. But ultimately it contributes in increasing the efficiency of the banking operation as well providing more convenience to customers. Without even interacting with the bankers, customers transact from one corner of the country to another corner. Electronic banking has experienced explosive growth and has transformed traditional practices in banking (Gonzalez, 2008). As per prediction of Maholtra and Singh, (2007) the e- banking is leading to a paradigm shift in marketing practices resulting in high performance in the banking industry. Delivery of service in banking can be provided efficiently only when the background operations are efficient. An efficient background operation can be conducted only when it is integrated by an electronic system. The components like

Technology is revolutionizing every field of human endeavor and activity. One of them is introduction of information technology into capital market. The internet banking is changing the banking industry and is having the major effects on banking relationship. Web is more important for retail financial services than for many other industries.

The research is focused on what are the customer’s perceptions about internet banking and what are the drivers that drive consumers. How consumers have accepted internet banking and how to improve the usage rate were the focus of research area in this study.

Besides opportunities of this channel, banks and financial institutions across the world face new challenges to the ways they operate, deliver services and compete with each other in the financial sector. Driven by these challenges, banks and financial institutions have implemented delivering their services using this channel (Chan&Lu, 2004; Cronon, 1997). Internet banking refers to the use of the Internet as a delivery channel for banking services, which include all traditional services such as balance enquiry, printing statement, fund transfer to other accounts, bill payment, and so on, and new banking services such as electronic bill presentment and payment (Frust, Lang&Nolle, 2000) without visiting to bank branch (Mukherjee&Nath, 2003; Sathye, 1999). Many commercial banks and financial institutions have implemented Internet banking services over the past decade. Compared with traditional over the counter banking, Internet banking does not offer face-to-face contact in what is essentially a one-to-one service relationship with the individual. As a result, Internet banking must deliver higher quality in order to compete. Understanding customer’s expectations and how they feel about their perceived services is becoming a very serious concern. Internet banking continuous success comes from two groups: new customers and repeat customers. Since it always costs more to attract new customers than to retain

The banking system is facing the challenges with stiff competition and advancement of technology, the services provided by banks have become more easy and convenient. The competitive character has been promoted by facilitating the entry of foreign banks. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking are introduced. The entire system has become more convenient ad swift. Time is given more importance than money.

Over the last few decades information technology has played an important role in Indian economy. It has affected all the industries especially the banking industry and has provided a way for the banks to differentiate their products and services. The traditional way of financial services delivered to customers called the branch based operations which had been used by the banks for more than 200 years, has been replaced by the advent of multiple technologies and application. For instance, Automated Teller Machine (ATM) displaced cashier tellers, telephone represented by call centers replaced the bank branch, the internet replaced mail, credit cards and electronic cash replaced bank transactions. The reason was the numerous key advantages that banks could gain by providing electronic banking services. In this way they had lower transactions cost, 24 hour trading, more extended business territory and also increased efficiency in daily banking process. The Banking Sector is also facing very stiff competition. In order to succeed such competition, they must offer a wide array of products with the latest technology. At present many banks and financial institutions are actively developing new electronic banking products for their customers throughout the world (Alagheband 2006) . The key players of banking industry are its customers and all the efforts made by the banks are to satisfy the desirable needs of