Discussion
What is online banking? Is it advantageous or it has also disadvantages? What benefits does the consumers and also the bank owners will get to this kind of technology? Do we have to support this kind of technology to apply in not just in our business but also to our daily lives?
Online banking isn’t out to change your money habits. It simply uses today’s technology to give you the option of bypassing the time-consuming, paper-based aspects of traditional banking in order to manage your finances more quickly and efficiently. Online banking (or Internet banking) is a term used for performing transactions, payments etc. over the internet trough a bank, credit union or building society’s secure website. This allows customers to do their banking outside of bank hours and from anywhere where Internet access is available. In most cases a web browser is utilized and normal internet connection is suitable. No special software or hardware is usually needed. That is why the number of online banking customers increased to nearly 40 million in the fourth quarter of 2005, according to comScore Networks, which measures and analyzes consumer behavior. That was a 27 percent increase over the previous year; online bill paying increased 36 percent during that time.
Online banking is widely used worldwide right? But, how this kind of technology evolved? 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 network to automate millions of daily transactions: today, often the only paper record is the customer’s receipt at the point of sale. Now that its customers are connected to the Internet via personal computers, banks envision similar economic advantages by adapting those same internal electronic processes to home use. While helping to eliminate costly paper handling and teller interactions in an increasingly competitive banking environment the bank view online banking as a powerful “value added” tool to attract and also retain new customers.
Today, most large national banks, many regional banks and even smaller banks and credit unions offer some form of online banking, variously known as PC banking, electronic banking or Internet banking. Those that do are sometimes referred to as “bricks-to-click” banks, both to distinguish them from brick-and banks that have yet to offer online banking, as well as from online or “virtual” banks that have no physical branches or tellers whatsoever. The challenge for the banking industry has been to design this new service channel in such a way that its customers will readily learn to use and trust it. After all, banks have spent generations earning our trust; they aren’t about to risk that on a Web site that is frustrating, confusing or less than secure. Most of the large banks now offer fully secure, fully functional online banking for free or for a small fee. Some smaller banks offer limited access or functionality; for instance, you may be able to view your account balance and history but not initiate transactions online. As more banks succeed online and more customers use their sites, fully functional online banking likely will become as commonplace as automated teller machines.
In allowing this kind of high technology in our life there should definitely has its advantages not just in business transactions but also in the life of every individual whose using this kind of technology. The first advantage this method have us its convenience, unlike the corner bank, online banking sites never close; they’re available 24 hours a day, seven days a week, and they’re only a mouse click away. The next advantage is its ubiquity, wherein even if someone is out of the state or even out of the country when a money problem arises, you can log on instantly to your online bank and take care of business, 24/7. Another advantage is the speed of transaction whereas online bank sites generally execute and confirm transactions at or quicker that ATM processing speeds. Efficiency is also one of its advantage where an access and manages all of your bank accounts, including IRAs, CDs, even securities, from one secure site. And lastly is its effectiveness whereas it can 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.
For every positive aspect coming to our life it is always varies negatives or what we common known as the disadvantages. Just like in online banking after discussing the positive aspects, there are now its disadvantages. The first disadvantage is that its take time to start-up because 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. The learning curve is also one of its disadvantages wherein banking sites can be difficult to navigate at first. Plan to invest some time and/or read the tutorials in order to become comfortable in your virtual lobby. Changes of the bank site is also one of the disadvantages in having an online banking because even the largest banks periodically upgrade their programs, adding new features in unfamiliar places. In some cases, you may have to re-enter account information. And finally, I think the most important thing is the trust thing, simply because for many people, the biggest hurdle to online banking is learning to trust it. Because printed transaction receipt should be kept in the bank records until it shows up in site or bank statement. By these statements it is up to the consumers or the depositors whether they want this new and high technology method or not. And to end up this curiosity, this research study may help to determined which may vary best in banking transaction in the perception of the 80 respondents. This had done to determine the possibility to increase customer base through internet banking. It is purely quantitative as Canara Bank (Indian Bank) is going to implement this internet banking facility in London. So distributing questionnaire to Canara banks customers in London is of no use, that is why the researcher decided to go to Canary Wharf which is a place where people normally use it and distributed to 60 people. On the other hand London is a place where international students comes so their use is also important to consider fro which he distributed questionnaires to 20 students of London Metropolitan University in a total of 80 respondents wherein 48 of which are men and 32 are female. The less number of females does not mean UK, a high masculine culture and is a conservative country. It describe female as more conscious, than men in controlling money. They don’t want to take risk. Some female respondent in the questionnaire suggest it as uncontrollable technique, some are interested to use other techniques rather going for Internet banking, some take it as insecure technology. In the mean time it can be assumed, men as quite risk takers.
This research aims to an Indian Nationalized Bank, which is operating its branches all over the world. In order to get market share and to give a thrust to foreign exchange Canara Bank have established an International branch in London too. The bank is ISO9001 quality certifier with fully computerized branches and offers many services including foreign exchange transactions. Although the bank has good number of account holders a third are current account holders. The bank is interested in increasing the traffic flow of account holders and wants to know what attributes of a banking service add value to customer satisfaction.
During this research questionnaire was been distributed to every age group in order to reduce data error. The questionnaire consist of 5 age groups, 20-30; 30-40; 40-50; 50-60; 60+. The largest groups of respondents in this research are 20-30 and 30-40. The 30-40 age groups constitute 41.25% and 20-30 constituted about 40%. This shows that Canara Bank have to give more focus on these age groups. From this study we can also know that these two age groups understand and believe in internet technology. This doesn’t mean that Canara bank have to ignore other 3 age groups.
In this questionnaire some respondents above 60 were using internet banking facility as they found as a technology. They use this as; it is easy in managing their accounts. Out of three, 2 customers over 60 years were those who were using internet banking for last 6 to 7 years. So this means they are loyal to internet banking. So Canara bank has to focus these age groups by giving some special reward schemes. This data signifies that majority of the respondents are using the online banking and had experienced the benefits they are getting in using this method of banking transaction.
The questionnaire was been distributed to in Canary Warf and in Holloway Road to get an in-depth idea about the perception of people on internet banking. The customers were chosen random bases and the time chosen for distributing questionnaire was lunch time in order to get error free data. As London is a multi culture, it is vital to understand the perceptions of other community. In terms of Nationality most constitute to British nation which covers 36.25% where 29 of them are in this nation followed by Indian and Bangladeshi community. And lastly are the Australian, Chilean, Chinese, Egyptian, European, Irish, and Jamaican etc.
As far as Internet banking users is concerned, figures showed a positive response from respondents. Out of 80 respondents (n=80), 63 respondents were internet banking users. On other hand only 17 (n=80), were non internet banking users, as they think it as an insecure, uncontrollable technology. The percentages of internet banking users constitute about 78.75% on other hand non users are only 21.25%. This shows that, trust among people about internet is increasing, so it is easy for Canara bank to attract customers towards it.
In order to compare age groups, researcher distributed first 60 questionnaires in Canary Warf, and rest in Holloway. The main aim of distributing questionnaire in Canary Warf is to understand perception of high class people, as we all know that most dramatic changes happens in Canary Warf. On other hand, researcher distributed rest in Holloway road, as thousands of overseas students come to London Metropolitan university to study. We should not forget that UK is second largest immigrant country in the world for student immigration. So understanding students’ perceptions becomes vital. The increased of the internet banking users may be uncontrollable because they had seen some of its benefits as letting you connect to your bank through the Internet and do things such as view your accounts, transfer money between accounts, view images of canceled checks, print copies of those checks and pay bills online. Aside from that, many banks make it easier to manage the checking account by allowing setting up e-mail alerts so it can notify when checks clear or when your balance slips below a certain level. There is also a detailed listing of your canceled checks. And also it helps to eliminate paper checks from life, and also find that a growing number of companies allow to make automatic payments through the online banking account.
After analyzing the perception of the internet banking users and their reason why they are continuing using this online method. The non-internet banking users also should be heard their sides in order for the Canara Bank to get the other side and have answer to the question of what went wrong to their policy and service so that new innovative technology to be adapted so that error can be reduced. This will attract those customers who are non-users. In this questionnaire we have one customer who already face some problem with internet banking and feel it as insecure and difficult. But majority of respondents, 8 out of 17 which constitute about 47.05% take it as Insecure. Rest takes it as rubbish, fraud, uncontrollable, difficult technology, one respondent suggest it as difficult as she don’t have internet facility. When we compared the reasons for not using internet banking from respondents of Holloway and Canary Warf, researcher studied that Canary Warf respondents are keen to use the internet banking technology, if bank improve the issues related to security and fastness of the service. One respondent from Canary Warf suggest for some reward systems like better interest rate etc. On other hand respondent from Holloway road even don’t have suggestion, in liking internet banking. Aside from the reasons written above on the issue regarding the non-internet banking users’ reasons, the additional are also their opinion why they are not supporting the said technology. Probably the main reason is that online banking is too vulnerable to fraud. The security measures employed by most banks can never be completely safe, but in practice the number of fraud victims due to online banking is very small. This is probably due to the fact that a relatively small number of people use internet banking compared with the total number of banking customers’ world wide. Indeed, conventional banking practice may be more prone to abuse by fraudsters than online banking. Credit card fraud, signature forgery and identity theft are far more widespread “offline” crimes than malicious hacking. Bank transaction is generally traceable and criminal penalties for bank fraud are high. Online banking becomes less secure if users are careless, gullible or computer illiterate. An increasingly popular criminal practice to gain access to a user’s finances is phishing, whereby the user is in some way persuaded to hand over their password(s) to a fraudster.
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