Main Concerns In Internet Banking Information Technology Essay

Main Concerns In mesh Banking Information Technology EssayThe inter loot brinking is changing the banking persistence and is having the major effects on banking relationships. hitherto the Morgan Stanley Dean Witter net research emphasised that Web is more important for retail pecuniary function than for many other industries. Internet banking involves use of Internet for delivery of banking products go. It falls into four main categories, from train 1 minimum functionality sites that offer only gravel to deposit account data to Level 4 sites highly sophisticated offers enabling merged sales of additional products and approach to other financial proceedss- such as investment and insurance. In other words a successful Internet banking solution offers exceptional rates on Savings, CDs, and IRAs Checking with no monthly fee, free bill payment and rebates on asynchronous transfer mode surcharges creed cards with slump rates Easy online applications for all account s, including personal loans and mortg times 24 hour account political program of attack Quality node service with personal attentionDRIVERS OF CHANGEAdvantages previously held by large financial institutions have shrunk considerably. The Internet has leveled the playing field and afforded open access to customers in the global commercializeplace. Internet banking is a cost-effective delivery channel for financial institutions. Consumers be embracing the many benefits of Internet banking. Access to ones accounts at anytime and from any location via the World Wide Web is a convenience unknown a piffling time ago. Thus, a banks Internet presence transforms from brouchrew atomic number 18 status to Internet banking status once the bank goes finished a technology integration effort to enable the customer to access information about his or her specific account relationship. The six primary drivers of Internet banking allow ins, in order of primacy are Improve customer access Faci litate the offering of more services Increase customer loyalty Attract tonic customers Provide services offered by competitors Reduce customer attritionINDIAN BANKS ON WEBThe banking industry in India is facing unprecedented competition from non-traditional banking institutions, which now offer banking and financial services over the Internet. The deregulation of the banking industry coupled with the emergence of new technologies, are enabling new competitors to enter the financial services market quickly and efficiently.Indian banks are going for the retail banking in a big way. However, a good deal is still to be achieved. This study which was conducted by students of IIML shows whatsoever interesting events Throughout the country, the Internet Banking is in the parturient stage of adoptment (only 50 banks are offering varied kind of Internet banking services). In general, these Internet sites offer only the most basic services. 55% are so called entry level sites, offering little more than company information and basic marketing materials. Only 8% offer move on transactions such as online funds transfer, transactions cash management services. Foreign Private banks are much sophisticated in terms of the number of sites their level of development.EMERGING CHALLENGESInformation technology analyst firm, the Meta Group, recently reported that financial institutions who dont offer home banking by the year 2000 will become marginalized. By the year of 2002, a large sophisticated and highly competitive Internet Banking Market will develop which will be driven by Demand side pressure due to increasing access to low cost electronic services. Emergence of open standards for banking functionality. Growing customer awareness and need of transparency. spheric players in the fray Close integration of bank services with web based E-commerce or crimson disintermediation of services by means of direct electronic payments (E- Cash). More convenient international transactions due to the fact that the Internet along with general deregulation trends, eliminate geographic boundaries. Move from one stop obtain to Banking Portfolio i.e. unbundled product purchases.Certainly some existing brick and mortar banks will go out of business. But thats because they break away to respond to the challenge of the Internet. The Internet and its underlying technologies will change and transform not just banking, entirely all aspects of finance and commerce. It represents much more than a new distribution opportunity. It will enable nimble players to leverage their brick and mortar presence to improve customer satisfaction and gain share. It will force lackadaisical players who are struck with legacy cost basis, out of business-since they are unable to bring to play in the new context.MAIN CONCERNS IN INTERNET BANKINGIn a survey conducted by the Online Banking Association, member institutions rated aegis as the most important issue of online banking. Th ere is a dual affectment to protect customers loneliness and protect against fraud. Banking Securely Online Banking via the World Wide Web provides an overview of Internet commerce and how one company handles furbish up banking for its financial institution clients and their customers. Some basic information on the transmission of confidential data is presented in Security and Encryption on the Web. PC Magazine Online also offers a primer How Encryption Works. A multi-layered security architecture comprising firewalls, filtering routers, encryption and digital certification ensures that your account information is protected from unauthorised access Firewalls and filtering routers ensure that only the legitimate Internet users are allowed to access the system. Encryption techniques used by the bank (including the sophisticated public key encryption) would ensure that privacy of data flowing between the browser and the infinity system is protected. Digital certification procedures provide the assurance that the data you receive is from the Infinity system.Concluding mapClaus Nehmzow, a Principal in the Information Technology Group in London at Booz Allen Hamilton, writes of some compelling research findings and offers his projections for European banks in The Internet Will Shake Backings Medieval Foundations. He believes the low transaction cost will make banking on the Net irresistible, but also that this will require institutions to carefully consider and plan customer relations programs. It is believed that everything will be determined by kernel and context, and where execution will be key. From a customer and service provider perspective, this is where the world is moving-it is going to be real-time, on-line, personalisation for both marketing and the service experience. If existing banks dont want to disappear, it is this challenge of Integration that they need to embrace in order to win and survive. The more things change, the less they change. In t he months and years-ahead are going to be how Service Providers integrate and market their offerings across different channels. The strategic and executional battles of the future are going to be fought for melodic phrase Integration. What does Channel Integration means? It means that an institution presents an identical face to the customer-be it in the branch, on the web, at an ATM or for that matter, through a sales representative or a broker. An identical face, an identical message. Or better still, messages that reinforce each other. If a sales representative tries to sell you a housing loan, you queer e-mail a day later reminding you about the loan. Thats called Integrated Sales, which results in additive economic action at law and improved efficiencies of communications. Channel Integration across the phone web can clearly lead to a gain of several percentage points of GDP. The beauty of this approach is that one channel does not displace another. They nourishment on eac h other to create incremental value for the customer, as well as the institution. The incremental value comes from two distinct sources. Firstly, you reduce inefficiencies. You dont send people junk mail because you know that they are not likely to buy a particular product or service today. That results in net saving for the economy. Secondly, you persuade people at the right time (the right time from the customers perspective, not from the service providers perspective) to opt for a tailor made offering. This too increases value. Actually, this has to do with the Internet itself, and more to with the underlying technologies of the Internet which allow incremental efficiency, and empowers the customer to make more enlightened and timely choices. Lastly the product arena is another issue which becomes important. It will take a technological revolution to make available advanced banking products on the net and given the rate at which the technology is developing we can expect this to slip away in near future.STRATEGIES TO BE ADOPTED BY INDIAN BANKSInternet banking would drive us into an age of creative destruction due to non-physical exchange, complete transparency giving rise to perfectly electronic market place and customer supremacy. The question to be asked right now is What the Indian Banks should do Whatever is the strategy chosen and options adopted, certain key parameters would determine the banks success on web1. For long term success, a bank may follow Adopting a webs mindset Catching on the first movers advantage Recognising the core group competencies Ability to deal multiplicity with simplicity Senior Management initiative to transform the organisation from inner to outward looking Aligning roles and value propositions with the customer segments Redesigning optimal channel portfolio Acquiring new capabilities through strategic alliances.2. The above can be implemented in four steps Familiarising the customer to new environment by demo version of software on banks web site. This should contain halt through the features which are to be included. It will enable users to give suggestions for improvements, which can be incorporated in later versions wherever feasible. Second phase provides services such as account information and balances, bidding of account, transaction tracking, mail box, check book issue, stop payment, financial and customised information. The third phase may include additional services such as fund transfers, DD issue, standing instructions, opening fixed deposits, intimation of exhalation of ATM cards. The last step should include advanced corporate banking services like third political party payments, utility bill payments, establishment of L/Cs, Cash Management Services etc. Enhanced 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.All the above strategies will help banks in translating their traditi onal business mannequin into an Internet one, falling into three main categories One stop shop Virtual one-stop-shop Best of enshroud supplier.