E-Banking

Introduction E-Banking or Electronic Banking is a major innovation in

the field of Banking. Earlier Banking was conducted in a very traditional

manner, there were no such innovations. Information revolution led to the evolution of internet ,

which lead to E-Commerce continued by evolution of E-Banking.

History Of E-Banking

E-Banking History dates back to 1980s. The term online became popular in the late '80s and

referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line

Stanford federal credit union was the first who offer online internet banking services to all of its members in 1994.

Later on snapped up by other banks like Well Fargo, Chase Manhattan and Security First Bank.

What Is an E-Bank?

Traditional banking business assumes:Customer desk at bank’s buildingOffice hours from 8.00 am to 7.00 pm

Customers have:Their job during the dayFamily or other activities after the job

Collision!

What can we do about it?

What Is an E-Bank?

Logical answer is to use e-channels:

Internet WAP based mobile network Automated telephone ATM network SMS and FAX messaging Multipurpose information kiosks Web TV and others …

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E-channels enable financial transactions from anywhere and allow non-stop working time.

E-BANKING Modern banking is virtual banking. Virtual Banking means a customer cannot see the bank

but with the help of technology he can conduct the banking activities anywhere in the world.

The major types of virtual banking services includes:1. Automated Teller Machines (ATMs)2. Smart Cards3. Phone banking4. Home banking5. Internet banking

Electronic Delivery Channels

Today’s banks are offering various delivery channels to provide products & services to their customers.

The IT has helped banks in increasing the range of their products & services and also in marketing them more effectively

The major channels are :-1. ATMs2. Smart Cards3. Telebanking4. Internet banking

Automated Teller Machines (ATMs)

ATMs are widely used electronic channels in banking. It is a computer controlled device at which the customers can

make withdrawals, check balance without involving any individuals.

To use this system customers are given a plastic card which contains the customer’s name & account no.

Customer is given a pin number. Whenever he wants to use it he needs to enter pin number.

Mostly ATMs are near to branches but nowadays ATMs are available at places like malls, theaters, stations etc.

Smart Cards

It is a chip based card (micro chip containing monetary value)

When a transaction is made using the card, the value is debited & balances comes down.

It is used for making purchases without the need of any pin.

It is a powerful card which carries out functions of ATM card , Credit Card , Debit Card.

Tele-banking It means banking over phone. Mainly used for marketing banking services. A customer can do entire Non-Cash related

banking over phone anywhere at anytime With fall in mobile phone rates mobile banking

will emerge as one of the most cost effective delivery channel.

Internet Banking It has helped in banking at the click of a

mouse. In internet banking , customer of a bank

with a pc can log on to the bank website & conduct basic functions.

Advantages of E-Banking Round the clock banking. User friendly. Low cost. Portable banking. Quality banking. Speed banking.

Limitations of E-Banking Start-up cost. Training & maintenance. Security. Legal issues.

Online Banking Frauds

While online banking has been around for many years, but no cases of fraud have been reported until recently. Since the beginning of the year 2004, reports of fraud cases nearly explode.

Password + Fishing

The "phishing" scheme involves using fake emails and/or fake websites. Criminals send emails that appear to be from the customer's bank that direct customers to a fake website.

The first half of 2008 alone has seen 20,000 reported phishing incidents – where users are sent phony emails taking them to fake banking websites trying to get hold of their account details – compared with just over 5,100 cases two years ago.

Phishing

Spyware is generally considered to be software that is secretly installed

on a computer and takes things from it without the permission or knowledge of the user

Trojan horse

The "Trojan horse" scheme is based on embedding a computer virus type software program onto the customer's PC. Trojans often tie themselves into the keyboard driver and record keystrokes

Skimming

Skimming is a more advanced version of an identity theft. Fraudsters illegally copy the information from the magnetic strip on the back of your plastic without interfering with the legitimate payment transaction.

Q&A