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Transcript of FINAL PROJECT Ready TODAY
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FINAL PROJECT
REPORT
SUBMITTED TO:
Mr.Saeed Ahmed
SUBMITTED BY:
Danish Basit (14511)
M.Zeeshan (14040)
Shoaib Ahmed Baig (13969)
Date:
23/12/2010
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TABLE OF CONTENTS
S/NO CONTENTS PG/NO
1 LETTER OF AKNOWLEGDMENT 3
2 LETTER OF TRANSMISAL 4
3 WHAT IS E-BANKING 5
4 DEVELOPMENT OF EBANKING 6
5 TYPES OF E-BANKING IS VARIED 7
6 TYPES OF E-BANKING 8
7 ATM 9
8 TELE BANKING OR PHONE BANKING 10
9 ADVANTAGES OF PHONE BANKING 11
10 MOBILE BANKING 12
11 PC AND DIGITAL TV BANKING 13
12 INTERNET BANKING 14
13 THREE TYPES OF INTERNET BANKING 15
14 ADVANTAGES OF INTERNET BANKING 16
15 WIRELESS OR PDA BANKING 17
16 WIRELESS APPLICATION PROTOCOL 18
17 EBANKING SERVICES 20-21
18 BENEFITS AND DISADVANTAGES OF EBANKING 22-23
19 SCOPE OF EBANKING IN PAKISTAN 24-25
20 CONCLUSION 26
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LETTER OF ACKNOWLEDGMENT
It has been a pleasure to be SAEED AHMED's students. We would like to thank him for giving us
the chance to apply the theories of IT in business in the real world.
His lectures have been very interesting. We are extremely grateful to him and appreciate his
efforts for providing us full support, encouragement and valuable guidance.
Sincere regards
M.Zeeshan
Shoaib Ahmed Baig
Danish Basit
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LETTER OF TRANSMITTAL
17THDecember, 2009
Saeed Ahmed,
Project supervisor & Course Instructor Iqra
University
Dear Sir,
This is the final report based on the topic "Global Positioning System", as requested it is being
submitted to you on December 17, 2009. The report has been prepared keeping in mind the topic
that was the Global Positioning System.
The report is constructed by the group members if it lack something then we are sorry.
M.Zeeshan Danish Basit Shoaib Ahmed Baig
(14040) (14511) (13969)
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What is E-Banking?
E -banking is defined as:Electronic banking is an umbrella term for the process by which a customer may
perform banking transactions electronically without visiting a brick-and-mortar
institution. The following terms all refer to one form or another of electronic banking:
personal computer (PC) banking, Internet banking, virtual banking, online banking,
home banking, remote electronic banking, and phone banking. PC banking and Internet
or online banking are the most frequently used designations. It should be noted,
however, that the terms used to describe the various types of electronic banking are
often used interchangeably.
Various authors define E-Banking differently but the most definition depicting the
meaning and features of E-Banking are as follows:
Banking is a combination of two, Electronic technology and Banking.
Electronic Banking is a process by which a customer performs banking Transactions
electronically without visiting a brick-and-mortar institutions
Electronic banking is also called Cyber banking , virtual banking and online banking .
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Development of E-Banking
HISTORY:-
E-Banking made its debut in UK and USA during 1920s. It became prominently popular during
1960s through electronic funds transfers and credit cards. The concept ofWeb-based banking
came into existence, in Europe and USA in the beginning of 1980s.
1980s :
- Rapid development of the Internet
- E-commerce
Early 1980s :
- Access to their accounts with the computer of the bank
May 1995 :
Wells Fargo - the first bank in the world to offer customer access to their accounts over
the internet .
Allows customer to see their accounts online
Hong Kong (September 1999):
y Bank of East Asia first launched internet banking
y Mortgage applications, personal loans and stock trading
y Basic banking function
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TYPES OF BANKNG IS VARIED
This is online
banking because
customer get
services from big
distance
This is a direct
banking because
customer gets the
service at the spot
This is a wireless
banking because no
wire is connected
in this type of
banking
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Types of E-Banking
Automated Teller Machine
(ATM)
Tele banking or phone
banking
Mobile banking
PC banking
Internet banking
Wireless or PDA baking
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1- ) Automated Teller Machine (ATM)
ATM: This system is known as
anytime money because with
this service the person having
the ATM card can withdraw
cash any time he want. Since
the ATM machine can be built
any where like near markets
and railway stations etc , so
one can easily with draw
money from it .
ADVANTAGES:-
y Environmenntal
y Communication
y Competitiveness
y Cost
y Convenience
1- ) Accepting deposits and
dispenses cash
2- ) Convenient in handling
accounts
3- ) First electronic channel
introduced
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2- ) Tele-banking or Phone Banking
WHAT IS TELE BANKING:
Telephone banking is a service feature offered by many banking institutions. The process
involves using the keypad on a touch-tone telephone to perform a variety of banking functions.
Along with traditional banks, phone banking is also utilized extensively by online
banking institutions, including banks that conduct business primarily with the use of telephone
technology.
The concept of telephone banking has been around for several decades. Initially, the process
required manual intervention by a bank employee. Customers would call into the bank, answer
questions to verify their identities, and submit queries to the service
representative. While somewhat labor intensive, this approach did make it
possible to conduct a number of banking transactions from the comfort of
home.
HISTORY:
It came into operation in the 1970s in the developed countries like the US. It is accessible for
corporate customers that have large volumes of payments to effect and dispose of a fully
automated accounting system. They can establish a Computer to Computer link with their
bank and in this way exchange truly paperless credit transfers which are handled all the
way
How Its Work:
This facility is available with the help ofVoice Response System (VRS or IVR). This systembasically, accepts only TONE dialed input. Like the ATM customer has to follow particular
process, initially account number and telephone PIN are fed for the process to start. Also
the VRS system provides the users within additional facilities such as changing existing
password with the new desire .
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Advantages of Tele-banking:-
i. Balance inquiry and transaction inquiry
ii. Inquiry of term deposit account
iii. Statement of account by Fax, e-mail or ordinary mail.
iv. Cheque book request
v. Stop payment which is on-line and instantaneous.
vi. Transfer of funds
vii. Utility Bill Payments
viii. Voice out of last five transactions.
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3- ) Mobile Banking
What is mobile banking:
Mobile banking comes in as a part of the banks initiative to offer multiple channel banking
providing convenience for its customer. A versatile multifunctional, free service that is
accessible and viewable on the monitor of mobile phone. Mobile phones are playing great
role in banking- both directly and indirectly. They are being used both as banking and
other channels.
SMS-banking:
The Short Message Service (SMS) is a GSM service to exchange text messages up to 140
byte (or 160 characters of 7 bit). The transmission of mobile-originated short messages is
carried out by the short message service center (SMSC) of the particular network operator.
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4- ) PC & Digital TV Banking
PC Banking:
PC Banking - The forerunner to Internet banking has been around since the late 1980's and is
still widely used today. Individual banks provide software which is loaded on to an SME's office
computer. The SME can then access their bank account via a modem and telephone link to the
bank. Access is not necessarily via the Internet.
PC banking makes things easier
You can access your account just from your home PC, 24 hours per day, 7 days per week. All
you need is a computer with an internet connection, and a card reader, which can be obtained
at your Fortis Bank. The card reader gives you unique codes based on your bank card and pin
number, so your account stays safe.
PC banking goes faster
Because you dont need to go all the way to your local bank office, you save a lot of time that
you dont want to be wasting in traffic. A lot of information and reports can be obtained with a
few clicks, and transactions can be done without signing papers. Most of your time will be
spend on going to the website and logging in, so it is advisable to do all your banking at acertain time. For example, Every Monday you log in and do your transactions and
administration. Now you just log in once and process all transfers and reports at once.
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Digital TV Banking:Digital TV Banking- Using the standard digital reception equipment (set top box and remote
control), users can access their bank account. Abbey National and HSBC services are available
via Digital TV providers. One of its main selling points is that no account details are transmitted
via the World Wide Web.
Advantages:
24 hour, 7 day a week access
No need to queue as you would at a bank
Disadvantages:
Limited use of your account compared to other methods
Costs are incurred when accessing your account (charged at local rate)
There is no personal interaction between yourself and the bank (employee/advisor)
You cannot deposit physical cash using TV banking i.e. cheques, cash in hand. This would
require a personal visit to the bank
If your Sky TV system fails to functio you cannot access TV banki
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5- ) INTERNET BANKING
Internet Banking lets you handle many banking transactions via your personal computer. For
instance, you may use your computer to view your account balance, request transfers betweenaccounts, and pay bills electronically. Internet banking system and method in which a personal
computer is connected by a network service provider directly to a host computer system of a
bank such that customer service requests can be processed automatically
The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions have used
powerful computer networks to automate million of daily transactions; today, often the only
paper record is the customers receipt at the point of sale. Now that their customers areconnected to the Internet via personal computers, banks envision similar advantages by
adopting those same internal electronic processes to home use. Banks view online banking as a
powerful value added tool to attract and retain new customers while helping to eliminate
costly paper handling and teller interactions in an increasingly competitive banking
environment
It generally implies a service that allows customers to use some form of computer to access account-
specific information and possibly conduct transactions from a remote location - such as at home or at
the workplace. The obvious advantage to the consumer is convenience--one bank recently used the
advertising motto "bank naked" to emphasize the customer's freedom to conduct routine banking
transactions from the comfort and security of his/her home 24X7.
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THREE TYPES OF INTERNET BANKING
INFORMATIONAL
This is the basic level of Internet or E-Banking.
Typically, the bank has marketing information
about the banks products and services
The risk is relatively low, as informational systemstypically have no path between the server and the
banks internal network.
COMMUNUCATIVE
This type of Internet banking systems is relatively more
riskier than the informational system, as banks share
some information to the clients also such as bankaccounts, loan applications and account enquiry etc.
Because these servers may have a path to the banks
internal networks that is why the risk is higher.
TRANSACTIONAL
This level of Internet banking allows customers to
execute transactions. Since a path typically exists
between the server and the bank or outsourcers
internal network, the risk is at its peak, for this bank
may also perform some sort of security applications to
lower the risk at transactional system
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y Convenience
y Transaction speed
y Efficiency
y Effectiveness
ADVANTAGES OF INTERNET BANKING
Unlike your corner bank, online
banking sites never close; theyre
available 24 hours a da .
Online bank sites generally execute
and confirm transactions at or quicker
than ATM processing speeds.
You can access and manage all of your
bank accounts, from one secure site.
Many online banking sites now offer
sophisticated tools, including account
aggregation, stock quotes, rate alert,
etc.
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6- ) WIRELESS OR PDA BANKING
With a phone number and a special PIN number a
customer can access to his account balance from his
cellular device.
Allows user to pay bills, transfer funds between
accounts and check accounts from anywhere.
Offers wireless banking.
Security is an important issue in Wireless Banking.
Newsbytes reports that wireless banking users will
number over 7 million in the US by 2005.
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The most widespread solution for mobile banking is based on micro-websites following
the WAP standard (Wireless Application Protocol). The function of WAP banking is in many
ways similar to the function of Electronic banking using http. The client sends a request
and gets a response with page content which is stored on or dynamically generated by a
standard web server. The main difference is in the usage of a WAP gateway for the
conversion of the protocols. At banks must be considered that very sensitive data isprocessed. While a normal content provider doesnt has to observe special security
precautions, and in some cases can even use the services of extern providers, has to
secure its web server and WAP Gateway especially against unauthorized access. This is
especially necessary because of the fact that inside the WAP Gateway the encryption
protocol is converted from SSL/TLS to WTLS with the effect that data is not encrypted
while it is processed. While authentication is assured via a PIN (personal identification
number) of the user, authorization for transactions is realized via transaction numbers
(TAN).
7- ) Wireless Application Protocol
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E-BANKING SERVICES
Bill payment service
Fund transfer
Credit card
Debit Card
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Bill payment service:Bill payment service Each bank has tie-ups with various utility companies, service providers and
insurance companies, across the country. It facilitates the payment of electricity and telephone
bills, mobile phone, credit card and insurance premium bills. To pay bills, a simple one-time
registration for each biller is to be completed. Standing instructions can be set, online to pay
recurring bills, automatically. One-time standing instruction will ensure that bill payments do
not get delayed due to lack of t ime. Most interestingly, the bank does not charge customers for
online bill payment.
Fund transfer:
Any amount can be transferred from one account to another of the same or any another bank.
Customers can send money anywhere in India. Payees account number, his bank and the
branch is needed to be mentioned after logging in the account. The transfer will take place in a
day or so, whereas in a traditional method, it takes about three working days. ICICI Bank says
that online bill payment service and fund transfer facility have been their most popular online
services.
Credit card:Credit card customers
A credit card is part of a system of payments named after thesmall plastic card issued to users
of the system. It is a cardentitling its holder to buy goods and services based on theholder's
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promise to pay for these goods and services. The issuerof the card grants a line of credit to the
consumer (or the user)from which the user can borrow money for payment toa merchant or as
a cash advance to the user.Credit card users have a lot in store. With Internet banking,
customers can not only pay their credit card bills online but also get a loan on their cards. Not
just this, they can also apply for an additional card, request a credit line increase and God forbidif you lose your credit card, you can report lost card online.
Debit Card:
Debit cards are also known as check cards. Debit cards look likecredit cards or ATM (automated
teller machine) cards, butoperate like cash or a personal check. Debit cards are differentfrom
credit cards. While a credit card is a way to "pay later," adebit card is a way to "pay now." When
you use a debit card, yourmoney is quickly deducted from your checking or savingsaccount.
Debit cards are accepted at many locations, includinggrocery stores, retail stores, gasoline
stations, and restaurants.You can use your card anywhere merchants display your card's brand
name or logo. They offer an alternative to carrying a checkbook or cash.
Debit Card Debit Card is an identity card issued by a bank to a customer, which the customer
can use to buy goods. The price of the goods is charged to customer's bank account.
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BENEFITS FOR SMALL BUSINESS:-
Benefits for Customers
BENEFITS OF E-BANKING
It enables a business;
To run its operations more
effectively
Lower cost than traditional
financial
Management mechanisms
Communication
- communicate easily
Environmental
- Abolishing the uses of paper
Others
- Offering one-stop-shop solutions
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Benefits for Banks
Banks have quickly leveraged the capabilities of and Web 2.0 technologies and adopted the
online banking model. Every mainstream bank now offers a host of banking services and
products to an ever increasing base of customers. Through online banking, banks have been
able to reach out to millions of customers not in their geographical area of operations and offer
more products and a relatively better, convenient and flexible banking experience than that
prevalent in traditional, fixed-location branches.
More CustomersThrough online banking, better service levels and strategic marketing initiatives, banks are able
to reach out to more customers than possible through traditional banking through physical
location branches.
Online Only Products and ServicesLeveragability--and amenability of new technologies, tools and widespread broadband Internet
acceptance--has made it possible for banks to offer a whole host of online only products and
services to customers, such as CDs, e-bank statements, financial calculators, and news feeds.
Broader Customer BaseBanking online has afforded customers user-friendly features of Websites, robust security
technologies, privacy protection measures, and mainstream Internet acceptance. Banks can
reach out to a broader customer base beyond the geographical confines of their locations or
base operations.
Attractive Rates and IncentivesBetter management practices, consolidated operations and streamlined savings from managing
and delivering online banking services allow banks to offer attractive rates and other incentives
to customers.
Cost SavingsBanks save a significant amount of operational capital from not having to open brick and
mortar branches in new locations and far-flung areas. These savings are passed onto the
consumer in the form of reduced or no fees for inter-bank and even intra-bank money.
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A need for customer skill to deal with computers and browsers.
E.g. Elderly, Housewives Inconvenient
It will make the customer have some confusion or delay.
Security Risk
Security Risk Of E-Banking
Increasing number of fraud net bank websites
Fake emails purporting to be sent from banks
Use of Trojan Horse programs to capture user IDs and passwords
DISADVANTAGE OF E-BANKING
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E-Banking in Pakistan Opportunities & Challenges
The State Bank Of Pakistan and other commercial banks are quite aware of the Changing needs
of customers in Pakistan. The SBP has promulgated Electronic Transaction
Ordinancein2002.This provides legal recognition for electronic settlement of transaction in
banking sector. At the present the 40% of the commercial bank branches have been automated
.The online banking which is the wave of future is now on the move in Pakistan and is
progressing is satisfactorily
Scope of E-Banking In Pakistan
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E-Banking in Pakistan Opportunities & Challenges
Generally speaking, three factors, quickness, easiness and cheapness have become the
catchwords for the competitiveness and usefulness of all the business operations. Particularly it
is commonplace today to say that banking is undergoing a radical transformation. The
symptoms are new products, new players, new channels etc. This transformation is taking place
across all sectors of the banking industry.Electronic banking is the wave of the future. It
provides enormous benefits to
consumers in terms of the ease and cost of transactions. But it also poses new challenges for
country authorities in regulating and supervising the financial system and in designing and
implementing macroeconomic policy. Electronic banking has been around for some time in the
form of automatic teller machines and telephone transactions. More recently, it has been
transformed by the Internet, a new delivery channel for banking services that benefits bothcustomers and banks. Access is fast, convenient, and available around the clock, whatever the
customer's location (see illustration above). Plus, banks can provide services more efficiently
and at substantially lower costs. For example, a typical customer transaction costing about $1 in
a traditional "brick and mortar" bank branch or $0.60 through a phone call costs only about
$0.02 online.
Liberalization, privatization and globalization have been recognized as the key elements
propelling the world towards the present era, characterized by rapid changes and increased
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challenges in various fields. In order to meet the challenges of competition unleashed in the
global arena, it has become an imperative on the part of captains of various segments of the
economy to open up to harvest the advantages that are forthcoming from such global
challenges. It is in this context, the most vibrant and important sector, the banking sector,
started gearing up to face the challenges of such ground realities. Accordingly, severalmeasures were initiated and implemented for improving and strengthening the competitive
position of the banking industry vis--vis the foreign banks. Such measures include e-Banking
entry into mutual funds and insurance sector business. Electronic banking also makes it easier
for customers to compare banks services and products, can increase competition among banks,
and allows banks to penetrate new markets and thus expand their geographical reach. Some
even see electronic banking as an opportunity for countries with underdeveloped financial
systems to leapfrog developmental stages. Customers in such countries can access services
more easily from banks abroad and through wireless communication systems, which are
developing more rapidly than traditional "wired" communication networks.
Banking is service-oriented industry, which has peculiarity to implement various social as well
as commercial objectives. It is an instrument for the development of the economy of the
country. Banks have two roles to play. They create a runway for the free flow of capital
necessary for the growth of the economy. At the same time it must attend to lending and
deposit mobilization in order to make profit for its survival and growth. Banking, though, is now
not a high profit service industry in most countries. In many countries banks are affected by
loan losses and this has a great impact on the health of the banks. This has resulted in the poor
quality of service. Complaints of deterioration in service are viewed in several quarters. Getting
customer patronage and goodwill are becoming a great task and a challenge for banks.The
flipside of this technological boom is that electronic banking is not only susceptible to, but may
exacerbate, some of the same risksparticularly governance, legal, operational, and
reputationalinherent in traditional banking. In addition, it poses new challenges. In response,
many national regulators have already modified their regulations to achieve their main
objectives: ensuring the safety and soundness of the domestic banking system, promoting
market discipline, and protecting customer rights and the public trust in the banking system.
Policymakers are also becoming increasingly aware of the greater potential impact of
macroeconomic policy on capital movements.
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CONCLUSION
With increased developments, we are seeing the demand for the traditional
service delivery points and branch networks diminishing, while that of internet
service based takes on the central role. But that does not mean that the whole of
the tradional system will be diminished or will be wiped out completely, because
there are several types of works which can be more effectively dont by the
tradional labor system rather than ebanking .
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