Dessert at Ion Final (2)

8/7/2019 Dessert at Ion Final (2)

1/5

Global view of e-banking

In the days of virtualization where working mothers and travelling sales-team prefer to use flexi-time and remote jobs profile; Internet is being adopted as a parallel medium of communication,

transaction, and social networking.

One of the major forces behind the changes happening to business today is technology, which is

creating new products, services market opportunities and developing more information and

system oriented business and management processes. As an information medium, the Internet

offers different information services that have been developed over the time. The services are

e.g. electronic mail, file transfer protocol, and the worldwide web (www). The internet has no

central owner, but the connected networks are owned and administrated by different universities,

companies, authorities and other organizations.

Electronic commerce refers to the use of electronic means and technologies to conduct

commerce in various settings, such as business-to-business (B2B) and business-to-consumer

(B2C). The enabling technologies, of course, are also used for non-commercial activities such as

entertainment, communication, filing and paying taxes, managing personal finance, research and

education, which may still include the services of online companies. E-commerce is the

application of information technology to facilitate business exchanges among different parties.

Banking is one of the most information intensive sectors and is an ideal domain for the

successful development of E-Commerce. Internet banking refers to the use of the Internet as a

remote delivery channel for banking services .For banks, technology has emerged as a strategic

resource for achieving higher efficiency, control of operations, productivity and profitability. For

customers, it is the understanding of their anywhere, anytime, anyway banking dream. This has

prompted the banks to embrace technology to meet the increasing customer expectation and face

the tough competition. Internet banking would help banks present a potentially low cost

alternative to brick and mortar branch banking. Internet banking services are crucial for long-

term survival of banks in the world of electronic commerce

Internet banking is fast gaining momentum across the globe for its convenience and ease of

conducting transactions at a speed and service levels never dreamt of, a decade ago.

Internet Banking gaining considerable adoption in developed and to a lesser extent in developing

countries.Bankers across the world have realized that customer using online banking have lesser

attrition in comparison to other channel of banking and offer a relatively loyal customer to the

bank.


2/5

In the first generation of Internet Banking, i.e. pre Y2K era, banks in the developed world

provided basic facilities such as view balance, e-statements, check-book request, stop payment

instructions, Electronic bill payment (EBP) etc. In Post Y2K era banks aggressively adopted

various services such as Electronic Bill Presentment and payment (EBPP), customized reporting,

account aggregation over multiple bank accounts, Investment banking, also portfolio/ investment

management, comprehensive money management, and trade finance etc. Y2K was also an era

when few Internet only banks were established, and out of which these only Japanese have

truly survived by now. Rest of the world is struggling to keep this internet only concept alive.

In the present regime and beyond, the banks are concentrating on targeting the incremental

service-level in online banking value-chain e.g. developing creative ways of countering security

threats, targeting comprehensive supply chain management for entire life cycle of a transaction

utilizing straight through processing (STP) , aligning internet banking with multiple channels to

offer the best-in-breed technological upgrades to the customer including Electronic Fund

Transfer (EFT) / bulk transfers using RTGS, mobile banking services etc. Internet Banking is

also been used as mode to create profile driven marketing campaign for various banking

products.

The market for Internet banking is forecasted to grow sharply in the next few years, affecting the

competitive advantage enjoyed bytraditional branch banks. Indeed, it also was estimated that

financialinstitutions that failed to respond to the need for Internet banking services would likely

lose more than 10% of their customers base.


3/5

Overview of e-banking in Pakistan

Globally banking is no longer confined to the four walls of a branch. Many countries are far

ahead of the facilities being available in Pakistan. The initiative in e-Banking in the country wastaken a bit late, but now focused efforts are being made to catch up with rest of the world.

The level of low banking, a few years back, was confined to the four walls of branch. With the

entry of private banks, having limited number of branches, investment in technology was chosen,

as alternative, to overcome this deficiency. The advent and common use of Internet, leading to e-

commerce, forced the banks globally to incorporate e-banking. Pakistani banks are still far

behind their global counter parts. One such example is complete lack of merchant accounts in

Pakistan.

However, lately a task force was established to study and implement formation of ElectronicClearing House (ECH). Simultaneously, the local banks also went for on-line banking, though

still not a norm. Another step forward was installation of ATMs by the banks. While some banks

have their own ATMs, some other banks started using a dedicated network. In this system an

ATM card holder of a particular bank could use teller machines installed by all the sponsors of

this network. The system is working to a satisfactory level.

Though efforts are being made to increase the number of on-line branches, it is still a capital

intensive proposal. It is getting popular in urban areas, but has not become common in rural

areas, mainly due to low literacy level in the country. However, some analysts believe that with

the passage of time, confidence in the system and increasing use, traffic to branches in urbanareas will go down considerably.

The global market for electronic transactions is growing at a phenomenal rate. Pakistan should

not sit back and ignore this global phenomenon. To actively participate in the global economy,

Pakistan must develop its ecommerce infrastructure. This comprise of three ingredients: legal

framework, security of transactions and e-readiness of the banks.


4/5

Problem discussion and justification

The Internet Banking in Pakistan has not been able to make its mark since its inception. It has

undergone many challenges and threats and the main reason for that is the lack of education and

research and development in this particular field. The government has not yet taken any

significant steps rather than just passing an ordinance in order to provide the banks a greater

platform to grow their horizons in the field of internet banking to meet the global benchmark.

However, UBl has emerged as the only bank in Pakistan with wide range of product and services

for its consumers of all levels along with few other banks. Even the way banks in Pakistan

market theirother products and servicesthrough advertisements; there hasnot been a great deal of

focus for marketing the e-products andservices. Other than that not even a related work force of

information andtechnology and the machinery to is available nor even looked in by banks to

focus in this area.

Problem justification:

The major hurdle that banks come across is the lack of awarenessamong general public and the

consumers or customers of the bank. This isbecause lack of education and information available

to them. However its the responsibility of the banks to educate their customers and shift them

toward the modern banking system and to make them understand its advantages and importance

which banks in Pakistan fail to do so. Thus to gain deeper understanding of the issues in

Pakistan, this research is conducted to explore the adoption of e-banking in developing countries

like Pakistan.


5/5

Research Objectives

The various research objectives of the study are:

1. To study the internet banking facilities offered by the banks to its customers

2. To study as to how much internet banking haspenetrated in the minds of the

customers

3. To gain insights about functioning of internet banking.

4. To explore the future prospects of internetbanking.

Dessert at Ion Final (2)

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