May 05 2020

Internet Banking - The Financial Technology:

The system of banking, since its very inception, has passed through numerous stages and has witnessed various developments in diverse aspects. The banking services has also evolved with gradual development of trade and commerce and will also be so in the near future. With time, the competition among banks in the banking sector has become fierce resulting in merger and acquisition for both horizontal and vertical expansion of their services. With the development of information technology, there was also need for technological development in the field of banking and finance. The lives of the people in general have drastically changed resulting in changed and varied demands from the customers.

Internet and World Wide Web has transformed the facets of banking businesses and customer services. It would not be wrong to say that the very concept of commerce (buying and selling of goods and services) has changed. Today, the need of the hour is digitization of every possible aspect that touches human life. To stand to the test of time, banks embraced internet into its system and made it centralized. Electronic banking services have given banks a chance to inspire clients and urge them to continue banking with them and banks embraced it. Today, it is difficult to find a bank in any nation that does not offer one type of electronic banking service or the other, even banks in the most remote parts of the world does so. Thus, the concept of banking gradually started to change and has brought ease to customers as they no longer needed to stand in the long queue for making deposit or withdrawal of money as ATM has come handy into the banking scenario. With this find that electronic banking has made its mark in the business of banking. By this time, smart phones have got infused into our life and we find that sub-consciously we started to be dependent on it to meet our day to day needs. Not to our surprise e-banking or mobile banking has become an indispensible part of our life. From utility bills to online purchases everything was just a click away. Life of consumers have abruptly changed and with momentum. Most of our banking needs are now made available online resulting in increased banking services and financial activity of the bank and customer satisfaction.

Electronic banking definitely have great advantages, which boosts business transactions and provides competitive edge to banks, but e-banking risks are also ranked parallel, which needs great attention of the IT based system designers and strategic policy makers, to overcoming these risks and make the electronic banking more safe, risks free and reliable.

Merits of Internet Banking:
  1. No more long queue.
  2. Banking service has become available 24 hours.
  3. Latest data or bank statement can be send to clients about their account in no time.
  4. Fund transfer has become instant.
  5. The incidence of errors have reduces significantly.
  6. The unit cost of banking has come down.
  7. For the banks the over head cost has come down.
  8. Increased all round banking transactions significantly.
  9. It provides security and privacy to customers with the use of encryption and security technologies.
  10. Low fee, less paper work and less human errors are involved in the processing of electronic banking transactions.
  11. Demerits of Internet Banking:

    Despite of its numerous advantages, the banks are facing with different levels of risks and expectations arising from E-banking as compared to traditional banking services.

  12. Technology issue as server based on internet connection availability.
  13. Security issue as the risk of hacking account always prevails.
  14. Very less or no personal relationship with banker.
  15. Difficult for making complex transactions.
  16. Not handy for all everybody.
  17. At times very annoying with email updates and call from marketing guys.
  18. Increased fraudulent activities of all sorts.
  19. The risk of losing debit or credit cards always prevails and associated risks with it.
  20. The very dynamics of internet banking is dynamic in nature and needs to be constantly reviewed and updated so as to avoid related risks.
  21. As it said that the scope of improvement always prevails, so does the scope of treats and theft. No system encryption or system technology should be considered state of the art or the best. This demands constant vigilance and development.

But despite of all the pros and cons, the fact cannot be denied that world wide web and internet banking has brought us all under one umbrella and has made us very much dependent on it. It has become a life blood for both business firms and individuals. We hardly realised when and how we embraced it or so to say how we fell trap to it, how it got infused into our life and how it changed the whole idea of banking transactions. One thing is for sure, the whole idea of e-banking was to make human life easier and banking transaction and it has successfully done it. Nobody can the credit from it. But it has also successfully reduced the value of money, in the sense that, now, being handy, we the people tend to spend more, more than required or so to say it has increased customer requirements or demands. Economically it increased the GDP of the nation as a whole.

But having said that, it is also a fact and needs to be acknowledged that it all depends on how we the consumers use it. How rational we are at our approach. It is our constant search for convenience that today sitting at home, in personal comfort; it is possible for us to make all our required banking transactions at any time of the day.

Internet Banking - The Technological Convergence