Online Banking - FIN464
Online Banking - FIN464
Online Banking
FIN464, Assignment # 2
Online Banking
FIN 464
SEC- 2
PREPARED FOR:
PREPARED BY:
SUBMISSION DATE
9th December, 2007
FIN464, Assignment # 2
Online Banking
Subject: Submission of the project on the problems and prospect of online banking in
Bangladesh
Dear Sir,
We, four group members were assigned the project on The problems and prospect of
online banking in Bangladesh for the course Bank Management (FIN 464).
This project is very much relevant to what we are learning in this course. Since this is a
new course for us, the project has helped us a lot in understanding the practical aspects of
online banking in our country. During group work we found it quite absorbing and
enjoyable. As a result of which the group participation was maximum and the outcome
was quite productive.
Despite the time constraints and other problems, we have tried our best to make the
project as logical as we could. All the group members worked hard to bring out the best
and present you an absorbing and enthralling case.
Therefore, we would be obliged if you could please accept this report. If any further
assistance are needed please contact us at [email protected].
Sincerely yours,
FIN464, Assignment # 2
Online Banking
ACKNOWLEDGEMENT
We are grateful to, faculty, BBA program of North South University for providing us
such an opportunity to do this assignment and hence learn about the features of online
banking, advantages and disadvantages of online banking, prospects of online banking.
We also thank Mr. Mohammad Monirul Hasan, Officer Collection, Consumer Banking
Division, Standard Chartered Bank, for providing us information during this assignment.
We are deeply indebted to them for their valid suggestion, trend setting guidelines and
sensible advice.
Finally, we thank to our parents and friends who gave us their moral support and help for
preparing this assignment.
FIN464, Assignment # 2
Online Banking
EXECUTIVE SUMMERY
For doing the second group assignment on problem and prospects of online banking in
Bangladesh and a comparative and gap analysis of online banking between Bangladesh
and global perspective we have done a research on the all the products, services and
facilities that the banks provide to their customers in other countries, especially in the
developed countries. Then we analyzed what the banks are providing to their customers
regarding e-banking in Bangladesh and what are the current prospectus of them.
According to the analysis and research weve found out that in Bangladesh, banks are not
providing enough online banking facilities services to their customers because of poor
hardware and software infrastructure, political legislation, poor security management and
also because of not having proper bank management and employees to manage it
efficiently. However, as day by day Bangladeshs economy is going towards development
and banking sectors are doing well gradually, so to gain competitive advantage they need
to go for huge diversification of product portfolio and attract customers by proving new
product and services and for that the e-banking could be one of the best solution for them
and for that, the number of products, services and facilities that are fall under e-banking
should be enhanced and it is already growing.
FIN464, Assignment # 2
Online Banking
Introduction
07
07
Methodology
08
Limitations
08
Online Banking
Online Banking from global perspective
09
21
26
33
41
Recommendation
45
Conclusion
58
Introduction
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Online Banking
This report is prepared for to get an overall idea of online banking. At primary level we
got the idea of online banking or e-banking from our Bank Management class. Then by
preparing this report we got an overall of idea of online banking features, advantages and
disadvantages of online banking system etc. Though online banking is very important for
a bank and it takes the bank one step ahead, so to learn about it is very important.
Objectives of the Study
To know what is online banking.
To find different features of online banking.
To find out the features of online banking available in Bangladesh.
To determine the problem regarding online banking.
To determine the prospects of online banking.
Scope of the Study
We worked on online banking. Online banking is a recent concept in our country as we
have got the topic Problem and prospects of online banking. Online banking is very
popular in the entire world. But it is new in our country. A wide range of online banking
features is available in developed countries. Most of those online banking features are not
available in our country. Only few banks are offering online banking facilities. And
features of online banking in our country are very limited. There are many problems of
online banking in our country. It is possible to make online banking concept successful in
our country by overcoming all the problems. By establishing of online banking system
we can make our countrys banking sector successful. To do this first we have to figure
out the problem and look into the prospects of online banking in Bangladesh. We also
need to introduce all the features, which are available in other developed countries.
FIN464, Assignment # 2
Online Banking
To prepare the report qualitative research are done. We gathered the necessary
information regarding the issues. In this purpose we did different analysis to identify
problems and prospects of online banking. Secondary sources were used to complete this
report.
Primary sources:
We did observational study of the online banking and its features. We took interview of
some executives who are dealing with online banking system of their banks.
Secondary sources:
For the purpose of the research we did secondary study. Published surveys and different
web sites related to online banking are the secondary sources, which were used to prepare
the report with extensive information. We also use different books to collect information.
Limitations of the Study
To prepare the report we faced different difficulties. These are given bellow:
Availability of data: Though online banking is a recent issue in our country
so to collect the data we faced difficulties because they were not available.
Lack of time: Time allocation to complete the whole study is too short.
FIN464, Assignment # 2
Online Banking
Business features
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Online Banking
e-billing
Certain electronic billing applications also provide the ability to electronically settle
payment for goods or services. Customers of banks and billing companies can use the
internet or the phone to conveniently remit payments as well as access their billing
information. The service is also supported by customer service representatives (CSRs)
contacted directly by the consumer to facilitate payments or receive general assistance
and answer questions.
EBPP provides billing companies the ability to demonstrate to their customers that they
are technologically-advanced companies with a primary concern for customer
convenience and satisfaction. In addition, EPBB can produce substantial savings to
traditional print & mail billing and payment remittance. An added benefit is a significant
reduction in the use of paper. Electronic bill payment is a now-common feature of online
banking, similar in effect to a giro, allowing a depositor to send money from his demand
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account to a creditor or vendor such as a public utility or a department store to be credited
against a specific account. The payment is optimally executed electronically in real time,
though some financial institutions or payment services will wait until the next business
day to send out the payment. The bank can usually also generate and mail a paper cheque
or banker's draft to a creditor who is not set up to receive electronic payments.
Most large banks also offer various convenience features with their electronic bill
payment systems, such as the ability to schedule payments in advance to be made on a
specified date, the ability to manage payments from any computer with a web browser,
and various options for searching one's recent payment history: when did I last pay
Company X? To whom did I make my most recent payment? In many cases one can also
integrate the electronic payment data with accounting or personal finance software.
Balances and transactions
In most of global internet banking, balances and transactions shows the current balance of
all customers linked accounts including Savings Accounts, Loans, Business Overdraft
Accounts and in some cases Credit Cards. From here you can also search and view your
transactions (up to the last 90 days), view your last three credit card statements and
export your transactions into a selected range of personal financial management software
packages.
Transfer funds
'Transfer Funds feature lets you transfer money between your linked your accounts at
any time. You can use this facility to make a payment to your with that banks Credit
Card, make extra loan repayments, or transfer money between any of your linked bank
accounts to cover cheques or payments that need to be made. You have the choice of
three options: you can make a payment now, enter a date when you want your payment to
be made or set it up as a regularly recurring payment.
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International services
Different global online banking provides you the feature of international services.
International Services allows you to transfer funds overseas via telegraphic transfer and
to purchase international drafts (similar to a bank cheque but payable in foreign currency)
through Internet Banking.
Tax payments
Customers can make payments directly to the Revenue Department via their Internet
Banking. Banks set the maximum amount of tax payable in a single transaction. It's just
like paying a bill online.
Bank statements
Wire transfer
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Credit Card
In the advent of Information Technology and globalization, now shoppers need not worry
about money, all they need is willingness and a credit card to buy anything they want at
any places across the 'Global Village'. Worldwide access, acceptability and popularity as
well of credit cards have rose to such an extent that it is now posing a threat to theory of
old 'hard-cash' possession of currencies amid growing sense of insecurity worldwide. The
forward march of 'plastic money', the other name of the credit card, is so rapid that the
whole concept of monetary system needs immediate review as it has put a question mark
in the very existence of paper money.
The card facility was first introduced in the United States in the beginning of the 20th
century. Western Union, a US money transfer company, started issuing an embossed
metal plate to its preferred customers in 1914. The cardholder had to pay an annual
subscription to join the club. This was the beginning of the charge card.
In the 1920s, a shopper's plate - a "buy now, pay later" system - was introduced in the
USA. It could only be used in the shops, which issued it. In 1950, Diners Club and
American Express launched their charge cards in the USA, the first "plastic money". In
1951, Diners Club issued the first credit card to 200 customers who could use it at 27
restaurants in New York. But it was only until the establishment of standards for the
magnetic strip in 1970 that the credit card became part of the information age. 1958
American Express Bank, like Dinner Club, started card on travel and entertainment. By
1959 the system evolved in great magnitude. A cardholder was allowed to pay off the full
amount at the end of the month or to spread payment to suit his or her requirements. The
customer's monthly payment included a finance charge on the unpaid balance. In 1960
Bank of America introduced its own card, the Bank America card and offered license to
other banks in 1966 that brought this system into world arena. A good number of banks
across the world bought the license and marketed credit cards.
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On the other hand, in 1967 four California banks changed their name from the California
Bankcard Association to Western State Bankcard Association (WSBA). WSBA opened its
license to other financial institutions. Its bankcard product was known as Master Charge.
Numerous financial institutions became Master Charge members to compete with Bank
America card. In 1977 Bank America card was renamed as Visa USA/Visa International
and in 1979 master Charge changed its name to Master Card maintaining the lofty
standard to meet up the customers' expanded needs.
Physical Feature
The credit card is rectangular and looks like a phone card. It is a layered piece of hard
plastic with holograms and security features. It also carries a strip of magnetic tape on the
back, which is loaded with electronic data including the cardholder details. The strip is
read electronically by specialized machines called Point of Sale (POS) Terminals at
merchants or Automated Teller Machines (ATM).
By credit card one can purchase from stores called merchants, the price of which is
payable at the end of the month through the affiliated banks as per notification.
Importance of Credit Card
A credit card is a great financial tool. It can be more convenient to use and carry than
cash, and they offer valuable consumer protections. Paper money and coin are risky and
burdensome for carrying. One can avoid the toll of finger-counting changes in this
system. Dollars, Pounds or Taka can be plundered, lost or stolen. But there is no such fear
for card. The cardholder is given a code number called PIN (Personal Identification
Number) without which the card cannot be used at sales or services points where the PIN
is required. Only the owner of the card will be entitled to use it. In case the card is stolen
or lost the clients' bank will issue a fresh card.
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Criteria to be a cardholder
A person has to fulfill some criteria to be a cardholder. Every bank has its own array of
criteria by which the qualification of an applicant is accessed. The criteria may range over
such factors as income range, social status, place of living, education, designation etc. It's
quite natural that if the selection criteria for members were more flexible then their
clients would be more. On the other hand, if the selection criteria were more conditional
and harsh then its operation would be limited.
Debit card
Debit card is based on immediate payment system whereby one has to insert card into the
ATM (Automatic Teller Machine) located at the key spots in the city. And so it is often
called electronic purse. For debit card one has to have an account in a bank while credit
card does not necessitate any such provision.
Providing tutorial site for online banking customers
Some banks introduced new sites featuring the information on the valuable tools that give
customers the freedom to bank without boundaries, the control to manage their own
finances at the touch of a computer key or phone pad and the security to know that their
finances are protected. The online site features characters from the TV commercials who
lead visitors through interactive demonstrations of each online and mobile banking
product. Consumers will learn how they can access accounts, pay bills, transfer funds,
locate banking centers or ATMs and receive account alerts via text message on their
mobile phone. They will also see how to aggregate information and accounts for a
complete financial picture, all with multiple layers of security to help ensure that
customers' personal finance information stays personal.
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Mobile banking
With Mobile Banking, customers can check balances, pay bills, schedule payments in
advance, transfer funds, and even track payment history - anytime, anywhere. Users can
also stay organized and save paper by viewing checking, savings and credit card
statements through Online Banking, automatically receive electronic versions of current
and past statements and sign up for email notification when statements are read.
Phone Banking
Phone Banking is very common all over the world and very old e-banking feature in the
developed country. Any customer and applicant apply for loan or any account opening by
phone. They also can solve their any problem with the bank by phone, transaction money,
gat account information and many other features by phone. Costumers can enjoy the
convenience of banking anytime, anywhere simply by pressing a few buttons on your
phone. Customer can know account detail, balance inquiry, product Information, cheque
related services, remittance status and many more. Banks choose particular telecom
company in order to provide such services.
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the page like shop safe to create a unique, temporary credit card number, eliminating the
need to expose one's real credit card number.
FIN464, Assignment # 2
Online Banking
competitor bank's online banking site unless they open an account and sign up for online
banking, has caused some banks to move slowly in providing some of the intermediate
and advanced features available today.
However, banks must beware. As online banking becomes more mainstream, word-ofmouth is on the rise, and consumers both praise and complain about their banks' online
banking services. Meanwhile, the wide array of functionality that consumers experience
at the popular nonbank Web sites (like Amazon, Yahoo, and eBay) has raised their
expectations of online banking offerings. Many banks report receiving numerous
customer complaints regarding site performance and feature availability. Just as US
automakers were able to get away with shoddy products until the quality of Japanese
imports raised consumer expectations and forced drastic improvements, online banking
providers will be forced to improve as consumers begin to realize the capabilities of the
premier sites and demand more from their current providers.
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Be selective in choosing new features. The jury is still out on the efficacy of
several emerging online banking features, including account aggregation, bill
presentment, online chat, and others. As banks learned with bill payment, the
worth of a feature may not come from direct revenues, but from other sources. For
example, bill payment users may require more up-front costs, but they tend to
have deeper, longer lasting relationships with the bank, which leads to higher
profitability. Investment analysis for new online features may be complicated, but
must continue nonetheless.
Underlying technology must support future development. Many banks simply
cannot implement desired new features due to limitations of their current
platforms. While Internet technology is relatively new, it has been constantly
changing and evolving. Additionally, the tangled technology infrastructure typical
of retail banks adds to the complexity of implementing new online features.
Banks must constantly work toward simplifying their systems architecture to
support the needs of all delivery channels
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Fig: Flow Chart of e-banking/ online banking customer acquisition & satisfaction all
over the world
INTRODUCTION PHASE
OFFER
Presentation
Rejection
Acceptance
Good Opinion
Presentation
INSTALLATON
Bad Opinion
MAINTENANCE PHASE
PROSPECTIVE
CLIENTS
LOOSE
CLIENT
PROSPECTIVE
CLIENTS
No
USE
IRREGULAR/
NONUSER
Yes
Word of mouth (good)
SATISFACTION
REGULAR
USER
Word of
mouth (bad)
PROBLEM
Solved
DISSATISFACTION
Not Solved
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2) Ubiquity:
Business person travel frequently abroad even now a days, maximum people go
abroad for different purpose in different period of time. Some times it can happen that
people faces money problem, means they can have shortages of money. In that case
online banking is always on the side of the customer. If you're out of state or even out
of the country when a money problem arises, you can log on instantly to your online
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bank and take care of business, 24/7. Even you could not find the brunch in which you
have your account through Internet banking they will send money to another bank so
that you could not face any problem.
3) Transaction speed:
In our country the Internet system in not good as a result we face difficulties in terms of
using the Internet connection. But in that case Online bank sites generally execute and
confirm transactions at or quicker than ATM processing speeds. So it is another kind of
most important advantage in our country that we can transact within a vary short time.
4) Efficiency:
Efficiency means how well you can finish your work within the given period of time
or infrastructures. In online banking you can get all the benefit only from one secure
site that will provide you all the services, whatever the banks offer to the customer.
You can access and manage all of your bank accounts, including IRAs, CDs, even
securities, from one secure site. So we can easily say that if the online banking is not
efficient enough it is not possible to do so.
5) Effectiveness:
Many online banking sites now offer sophisticated tools, including account aggregation,
stock quotes, rate alerts and portfolio managing programs to help you manage all of
your assets more effectively. Most are also compatible with money managing programs
such as Quicken and Microsoft Money.
6) Instant and automatic application upgrades:
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Whenever you start your banking transaction through online banking you will get another
benefit, which is instant and automatic application upgrade. It means whenever you will
withdraw money or deposit money instantly it will be recorded into balance. So you dont
need to worry about the checkbooks or deposit books. Everything will be done through
the Internet banking. It is good because you dont need to maintain any separate books
for it.
7) Global access:
Using a standard web browser and dial-up/lease line or proxy server connection the
customer can easily access to the global world. For this online banking also giving those
facilities to the customers.
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An e-check is an electronic version of the check or the representation of the paper checks.
The e-checks payment instrument combines the security, I-Check or Internet Check is
designed for transactions where more complete verification and digital authentication is
required for a good business by the rules that govern ACH transactions. It is more
advantageous compared to e check.
11) Straight2Bank:
It gives different kind of benefits like
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The Port of Call for transacting, hedging and information- Through this fully
integrated electronic platform, Straight2Bank is committed to offering a full
range of services that is tailored to meet your needs.
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1) Lack of Knowledge:
In Bangladesh so many people are here who even dont know what Internet banking is.
They do not have any idea about this technology. They may feel that it is too difficult to
learn. Moreover they dont want to learn as well because they think that they cant handle
it. Young people are very much familiar to these things as a result they dont feel
anything bad about it. Problems arise when the older people come to know about is and
they dont want learn anything new at this stage. Privacy is another thing, which can be
affected by using Internet because there is record to hack the computer. Internet banking
will not be successful for them unless they come to know about the terms of it.
2) Infrastructure:
Infrastructure is the main thing to do the Internet banking all over the world. If there is
not any availability of this infrastructure then introducing this services online banking
will be unsuccessful. People have to have enough access to it and to get the access
people have to have the proper machine. In our country there is unavailability can be
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seen. However, you do need the basic modern computer equipment with modem. Most
banks now expect you to have a 128-bit encryption browser. You will also be better off if
you have a faster Internet connection than dial-up. But in our country every one cannot
buy a computer. Even they buy the computer the Internet connection is not good at all
means It is too slow.
3) Slow server:
Slow server is a common problem for web based banking side it requires powerful
computer and fast Internet connection, which is often not available for most, companies
that is why it is the most frequent complaint. Almost 70% of the clients complained of
this problem. Some clients even mentioned that the slowness of the product is big reason
why their usage of the product is so low. According to the clients it takes almost half an
hour to log on to the server which is an inconvenience when you need a data in one
minute and the whole purpose of having e-banking is just hat to have information at the
punch of a button.
But this is a problem, which is not necessarily banks fault since this is a problem, which
can only be solved by the customer himself or herself because the only solution is faster
computer and broadband connection.
4) Security:
The product requires passing through a lot of security measures and entering the
password many times before a client is allowed to log in. For client who dont make
transaction (around 50%) it is a hindrance because considering the fact that very few
people are there who have access to the product and no payment transaction takes place
so much security should be avoided to log-in. Sometimes extreme security can create
problem for many users of Internet banking because of the name and password, which is
given to the customer, is often critical and very tough to memorize. This can be an
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advantage because no one else would guess them. However, it can be a problem if the
right customer cannot memorize or forget them. The most worst part is the people who
can not memorize the names and passwords they will write it down on some papers
which will helps someone else to get in and steal money from their accounts.
6) Error of Lags:
There are another disadvantages that are called errors or lags, which occurs because of
the failure of the communications of banks. If any kinds of virus get into the bank's
computers, it could be a real problem. Clearing up the chaos might take awhile.
Fortunately, Internet banking companies take many precautions to prevent this, so it is
extremely unlikely to happen.
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While there are some problems with Internet banking, most of them can be overcome
with knowledge and caution. The other problems are challenges for the future of Internet
banking.
8)
Loss of L/C:
This is the crucial problem which prevalent in e banking. It causes a lot of problems
when an L/C does not reach its destination and there is no reason why it is happening. All
of the clients using e banking believe that this is a crucial problem. These problems as
they mentioned are the curse of modern technology that you have to live with.
9) No incoming facility:
This is another problem of E-BANKING, which keeps a person in the dark because when
an L/C is sent there is no direct way of knowing whether an L/C has been transferred.
Verification comes after someday if there is a reply. This might be few days too late. 70%
believe that this is a crucial problem.
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11) Passwords lock:
Password lock when wrong password is inserted more than twice corrupting the safe
word pin. So it is also a big problem or disadvantages of online banking.
13) Inability:
Inability to deal with L/C Guarantee, remittance etc. that is E-BANKING has very
limited amount of products- L/C Transaction, Amendment and transferring of
Reimbursement Authority and Free format messages only
usually
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16) Start-up may take time:
In order to register for your bank's online program, you will probably have to provide
ID and sign a form at a bank branch. If you and your spouse wish to view and manage
your assets together online, one of you may have to sign a durable power of attorney
before the bank will display all of your holdings together.
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20) Poor Automation:
Growth and penetration in the banking sector rapid in Bangladesh, if we look into banks'
head office level data. If we go to the branch level only 19 percent branches of NCBs, 38
percent branches of PCBs, and 97 percent branches of FCBs are computerized. Overall
computer density in the banking sector is only 1.64. For foreign banks the computer
density is 45. 34, where as for the NCBs this figure is only 0.41. On the other hand, the
PCBs' ratio is 4.94. As a whole 61.81 percent banks do not have any LAN. LAN
penetration ration for the overall banking sector [considering the branch level], only 0.07.
The ideal ratio should be 1. The PCBs' LAN penetration level is 0.22. The NCBs is the
unique market player with more than 50 percent market share, so, ICT penetration is most
crucial for this category of banks. Only 11 percent of banks have WAN. Although at the
head office level the use of banking software is 95.45 percent, the software does not
feature integrated banking. The non-banking financial institutions, insurance companies
automation status are not also very enthusiastic.
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1.4 Account Activity:
The customer can see transaction activity in a given account for a date range
supported by the host. Eastern Bank Ltd, Dutch Bangla Bank Ltd, Dhaka Bank,
Standard Chartered Bank, HSBC, Mutual Trust Bank, Arab Bangladesh Bank
provide this service to its customers.
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1.8 Statement download in ASCII format:
The user can download his account statement for his current accounts, savings
accounts and loans accounts. Eastern Bank provides this service.
4. Deposits:
4.1Maintain Deposits:
The user can view all the deposits maintained by the corporate. EBL INTERNET
BANKING APPLICATION will provide the user with all the details of the
deposits and allow to modifying certain parameters. This service is also provided
by Mutual Trust bank and Butch Bangla Bank.
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4.2 Request for rollover of deposits:
The user can request for a rollover of a deposit upon maturity. Eastern Bank Ltd,
Dutch Bangla Bank provide this service.
5. Loans:
5.1 Loan application requests:
The customer can request for loans in a format prescribed by the bank. . Eastern
Bank Ltd, Dutch Bangla Bank provide this service.
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6.
The customer can query on the interest rates offered on Savings & Term Deposit Products
offered by the Bank . Eastern Bank Ltd, Dutch Bangla Bank provide this service.
8.
The customer can send requests in the form of messages to the bank. This will help the
marketing team to provide a solution for any request-based transaction. The messages are
sent as free-format text and the user can compose new messages, save existing messages
(including draft messages), reply to any messages sent by the bank and delete the
messages. This facility can be used by the customer only to correspond with the banks
and not for corresponding with other customers. Eastern Bank provides this service to its
customers.
9.
Product Information
The Bank would be able to publish its promotional material using this function. Eastern
Bank provides this service.
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The customer can buy a refill number for his pre-paid mobile phone or ISP link. Dutch
Bangla Bank Ltd. provides this service.
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With BRAC Bank 24 hours Phone Banking, your accounts are just a call away. Enjoy the
convenience of banking anytime, anywhere simply by pressing a few buttons on your
phone. Customer can know account detail, balance inquiry, product Information, cheque
related services, remittance status and many more. Banks like HSBC Bangladesh,
Standard Chartered, IBBL, Brac Bank provides phone banking offer to its customers.
Banks choose particular telecom company in order to provide such services.
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10,000 and for a Gold Card a person is to have earning the payment due date. VANIK, a
Sri Lanka-Bangladesh joint venture financial institution, has been rendering credit card
services in Bangladesh since 1998.
As the only microprocessor chip based debit card available in Bangladesh for financial
payment, the Ready Cash card is very reliable and secure. It combines the most desirable
aspects of the credit card, together with the advantages of the Debit or ATM card. It is
the first step that most Bangladeshi citizens will take on the path to cash economy. Ready
Cash is a debit card as it allows the cardholder to spend no more money than he/she has
in his/her Bank account - unless a credit line has been extended. It increases the
consumption base and allows the cardholder to establish a credit history. For these and
many other reasons, the Ready Cash card is the fastest growing system in Bangladesh.
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benefited. They can also buy or sell stocks and other securities by using your bank
accounts.
Life has become easier compare to previous some years. People are more conscious about
using the product and at the same time suppliers also think about the convenience of the
customer. As a result most retailers prefer those customers who use Internet banking
options for any kind of transaction. Even computer manufacturers like Dell Computers,
offer many discounts to customers who order and purchase computers online using
Internet banking.
Internet banking has good prospects in Bangladesh because people are more conscious
about their status and saving time and money. It saves your time that you dont have to
wait in the long queue, which saves your time.
People can do all of their banking transactions online, with greater speed, convenience and
efficiency. But for that reason the bank have to have more infrastructure so that they can
easily and within a vary short time can communicate with the customers. If they can do
much better then that then banking sector will flourish in a very smooth way.
Another prospect in other way we can see it as advantage, which is the cost of using
Internet banking. Internet banking is less expensive even some bank is in Bangladesh they
are providing the facilities without any cost. Internet banks have no physical structure to
maintain, which results in fewer overheads having to be paid. So they can charge a very
few money, some times without taking any charge because of that. So we can say that
online banking have a vary good prospects because of that since we know that
Bangladeshi people are money conscious and if they sees that they will get the benefit
without paying money they will be getting more interested to it.
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FIN464, Assignment # 2
Online Banking
When you will use the internet then you will get to see the other banks products and
services and different kind of services available to the customer. So the customer can
easily compare the financial deals available currently compare to his or her own banks
facilities. So this is the advantage of Internet banking is that the ability to easily compare
services offered by different banks. You can buy financial products, insurance online
through Internet banking services. Naturally when the customer will see that he or she is
getting more facilities then they will be interested to use online banking.
Banks can have lot of advantages by introducing GIS in their daily activities. It can save
money, time and manpower, which are the target of any business organizations. It is very
important to manage the data, as there will be a vast amount of data they have to handle.
But by establishing a cell or by giving third party the duties to manage and share data, the
procedure can be a very profitable for banks or other business organizations.
The banking sector has to work extensively with location. They have to locate their
account holders or locate a plot or property if anyone wants to take loans. Again any
business organizations can use GIS tools to increase their business in different areas. They
can use this tool to take decisions about establishing their advertising boards or choose
their routes to supply goods. The GIS technology can also be used to identify future
growth of the city and establish new areas to business. In the following discussion,
prospects of using GIS technology in banking sector are highlighted. It is not a full study
report. There may be many other sides where GIS can be useful for Banks to increase
their performance and customer services like
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FIN464, Assignment # 2
Online Banking
So online banking has a lot of prospects in Bangladesh because it can make our life
easier. And demand for this online banking is increasing day by day. Customers are
getting conscious about it and they want that it should provide a better service all the
time.
Bank Asia
Bank Of Cyclone
IBBL
Citibank N A Bangladesh Ltd.
City Bank Ltd.
Trust Bank
Janata Bank,
Agrani Bank
Dhaka Bank
UCBL
VANIK
BASIC BANK
All the banks and financial institutions name mentioned above provide the facilities of
online banking. Most of them do not have internet or website banking but they are related
with very common e-banking features like ATM, Ready Cash, and many more.
Recommendation
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FIN464, Assignment # 2
Online Banking
The following recommendation is related with the infrastructure for e-
2.
Among other things, availability of telephone lines and reduction in service fee will
attract many professionals into internet. Therefore, the tariff of BTTBs DDN
should be rationalized in order to make it affordable for the mass market.
3.
4.
Voice over Internet Protocol (VoIP) and private international gateway for voice
and data should be allowed. The provision of obtaining permission from
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FIN464, Assignment # 2
Online Banking
MOPT, prior
to
leasing
5.
As we have no direct access to information super highway, the only option left for
Internet Service Providers (ISP's) in Bangladesh is to communicate through
satellite. Satellite communication is costlier than fiber optic.
On top of it,
6.
Government officials are to be oriented on the benefits of e-banking and ecommerce. For instance short course can be offered at training centers such
as the Public Administration Training Center (PATC). Posting of government
documents
and
publications
including
The
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FIN464, Assignment # 2
Online Banking
1.
Training:
Systems Design & Renovation staffs should be instrumental in developing the
engineering specifications for the current implementation of the all the banks
central web infrastructure, which provide online banking in Bangladesh. The IT
staffs should also develop and implement emerging technologies in distant
branches including the use of databases, streaming media, and the use of online
banking software packages (e.g., Staler, Hexagon, etc).
Therefore training should be provided to deal with the natty gritty technical
problems like password problem, safeword-pincard handling split L/C and L/C
wording problem could be solved. Many clients are also interested to know the
reasoning behind the command that they use for handling the e-banking product.
2.
Personnel:
If possible part time or full time additional personnel should be hired to cater to the
increasing number of client and equally increasing demand of clients for e-banking
product. The person should be technically adept at handling the product problems too
otherwise an inept employee can result in more dissatisfaction.
3.
4.
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FIN464, Assignment # 2
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If the client requires a human interface to explain things then the advantages of eproducts become negated.
The account could also be customized to the need of the clients so that the client gets
to see the account as is useful to him rather than having to go into a lot of
manipulation to get to the format they desire. Citibank is already trying to achieve
customization in the near future but the above mentioned factors should be
incorporated in their activities.
5.
Educate customers:
In Bangladesh most of the people are not familiar with internet, especially those
people lack of knowledge about the e-banking who are and would be the potential
customers for the banks. Not only that, those of who know about internet they do not
know about online banking in our country as it is very unfamiliar. Therefore, to
establish and enrich e-banking or online products and services providing in
Bangladesh, banks should go forward to all the ways to make their employees more
educated about e-banking, its uses and its all the advantages and a proper guideline
to use it. In that case, they can educate people through media coverage, leaflet,
newspapers or workshop program and etcetera.
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FIN464, Assignment # 2
Online Banking
e-banking, so that customer feel secure when they are using online for making any
transaction with or through banks website and software.
Implement a firewall
A firewall is a barrier that keeps hackers and viruses out of computer networks.
Firewalls intercept network traffic and allow only authorized data to pass
through.
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FIN464, Assignment # 2
Online Banking
Data theft
When entering any personal information on the Internet one should make sure
he /she is entering it on a secure page. Additional information about making sure
an Internet page is secure.
When purchasing something over the Internet unless one plan on buying
something from that same company again in the near future one should not store
credit card or personal information with that site.
One should make sure to have an active and up-to-date spyware protection
program and anti-virus protection program.
To keep data theft away from the system, the system needs methods of strong
authentication, as well as excellent operations security.
of
encryption
standards
and
international
agreements
on
FIN464, Assignment # 2
Online Banking
amendment to the existing ones should be done as deemed necessary, to ensure
security of data, freedom of information.
Virus Dissemination:
Computer viruses are defined as programs which attach themselves to, overwrite or
otherwise replace another program in order to reproduce itself without the knowledge of
the PC user. So it is a threat for the bank as well as the customer because it can overwrite
the software that are used for e-banking.
Following measures should be taken to prevent virus dissemination:
Have to prevent all infections and when that is not possible, then have to create an
outlet for notification and annotation of virus outbreaks for service providers and
end-users so that future breaches can be prevented.
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FIN464, Assignment # 2
Online Banking
Need to monitor anti-virus software levels and virus infections and initiate
defensive action when necessary.
All computers should run the most recent version of an anti-virus protection
subscription. Ideally a server should be configured to push virus updates out
periodically to all client systems. Employees should be educated about viruses
and discouraged from opening e-mail attachments or e-mail from unknown
senders.
Choose the specific alerts they want, and up to three emails and one wireless
address where they want to receive them.
Customer can add new alerts, turn off existing alerts, or change the email or
wireless preferences at any time.
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FIN464, Assignment # 2
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How to set it up
Sign up for banks online account.
Sign on and click on the Messages & Alerts tab to set up or view alerts.
My spending Report
Taking control of customers finances has just become easier by My Spending Report in
western world. Available only for online banking customers, this powerful online
budgeting tool collects and summarizes the spending from customers Check Card, credit
card, and Bill Pay into an easy-to-use report. It will be a free, convenient way to see
spending at a glance.
Features
1. Automatically tracks accounts in one place
2. Sorts card and Bill Pay purchases into familiar categories
3. Updates information automatically, every business day
4. Organizes spending view by month, up to three months
5. Download a year or more of spending history
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FIN464, Assignment # 2
Online Banking
Sign up for the account and it will be provided by the bank. It can be easily implement
able in Bangladesh if the bank provides its own credit card and thus will be easier to track
on it.
Example from an online banking provider bank from America
Get easy access to online brokerage statements, trade confirmations and tax
documents up to 7 years of information online.
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FIN464, Assignment # 2
Online Banking
Bank will provide powerful online screening tools to find stocks, mutual funds,
exchange-traded funds and bonds that meet customers criteria.
Access leading independent research various stock market report, stock price,
stock index and various other important information.
Talk to a live representative anytime day or night, every day of the year to
place trades, make a transfer, check balances, and more. So the bank will give a
24 hours service for trading in Dhaka Stock Exchange.
Cautious
Investors should carefully consider information contained in the prospectus, including
investment objectives, risks, charges, and expenses. Customer can request a prospectus
containing this and other information about the fund from customers financial
professional. Investors should carefully consider information contained in the prospectus,
including investment objectives, risks, charges, and expenses. Customer can request a
prospectus containing this and other information about the fund from your financial
professional.
System response and account access times may vary due to a variety of factors,
including trading volumes, market conditions, system performance, and other
factors. Trades executed during market hours only.
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FIN464, Assignment # 2
Online Banking
This will give the ease to customer to get a credit card seating at home. The customer will
just order for a credit card and the bank will provide one seeing the particular customers
eligibility of getting the card.
Technical Requirements for above products that can be offered through online
banking
Internet banking for these services will be full Internet based service which does not
require downloading any additional software. To meet security standards browser must
support 128-bit SSL encryption.
Netscape Navigatorv7.1
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FIN464, Assignment # 2
Online Banking
JavaScript must be enabled for Internet Banking to work correctly.
Secure Socket Layer (SSL) (preferable 2 and 3) must be enabled.
Phone Banking
More features that can be offered
Stop a cheque or enquire on a cheque's status
Hear recent transactions
Order an interim statement
Renew or change your Term Deposit instructions
Make loan repayments
Pay bills
Transfer money between own bank accounts
Receive faxed application and account forms
Check Foreign Exchange & Term Deposit rate
Conclusion
Now a day, Internet Banking is the most popular and fast growing banking system. It is
used in most of the countries in the world. Faster, easier, secured, flexible and
connectivity make the system famous so greatly. Internet Banking makes it easy to see
when and where user money goes. Users have complete control of his/her accounts and
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FIN464, Assignment # 2
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future. User can monitor account activity, get real-time account balancing, and transfer
funds whenever he/she need to - all from the convenience of his/her home or office.
As we have seen that the world wise features of Online Banking are way many then that
of we have in Bangladesh. But due to the limited resources, cost and lacking of
infrastructure and modern technology, it may not be feasible to provide all these services
to Bangladesh. Although most of the banks have started various online banking facilities
starting fund transfer to phone banking and so on. The main problem behind why it has
not yet been so popular in our country is lack of awareness among people. People has the
wrong assumption that they will be charged more through this but internet banking is for
the benefit of customers only where it minimizes customers transportation cost and also
makes efficient use of time. Based on the gap of services of online banking between
Bangladesh and world wide services we have some up with some recommendations.
Upon fulfillment of these such as incorporating steps to provide more security, offering
products like best brokerage deal, my spending report and alert, the banks can progress
more and thus become more competitive. As we came to know from the course that all
that a modern customer of bank need is modern and better services. So doing all these
will improve their competitiveness and thus efficiency to operate banking business in
Bangladesh successfully.
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