NET BANKING A BOON?

Traditional banks offer many services to their customers, including accepting customer money deposits, providing various banking services to customers, and making loans to individuals and companies. Compared with the traditional channels offering banking services through physical services, Net banking use the internet to deliver traditional banking services to their customers, such as opening accounts, transferring funds, and electronic bill payment.

Net banking can be offered in two main ways, first, an existing bank with physical offices can also establish an online site and offer net banking services to its customers in addition to the regular channel, Net banking is provided without extra cost to customers. Customers are attracted by the convenience of Net banking through the internet and in turn, banks can operate more efficiently when customers perform transactions by themselves rather than going to the bank branch and dealing with a branch representative.

Net banking services are delivered to customers through the internet and web using Hypertext Markup Language (HTML). One of the main and important concerns of Net banking is security, without great confidence in security customers are unwilling to use a public network such as the internet to view their financial information and conduct financial transactions. Some of the security threads include invasion of an individual’s privacy and theft of confidential information. Banks with E-banking service offer several methods to ensure a high level of security :

1. Identification and authentication
2. Encryption
3. Firewalls

The range of e-banking services is likely to increase in the future. Some banks plan to introduce electronic money and electronic cheques. Electronic money can be stored in computers or smart cards and consumers can use electronic money to purchase goods of small value over the internet. Electronic cheques will look similar to paper cheques, but they can be sent from the buyer to sellers over the internet, electronically endorsed by the seller, and forwarded tot eh seller’s bank for electronic collection from the buyer’s bank. Further bank seeks to offer its customers more products and services like insurance, mortgage, financial planning, and brokerage. This will not only deliver more values to the customers but also help banks to grow business and revenues.

ADVANTAGES/BENEFITS OF NET BANKING

1. Advantages from the customers’ point of view:

1. Net banking provides 24 hours, 365 days a year of services to the customers of the bank.
2. Customers can make some of the permitted transactions from office, home, or while traveling via mobile phones.
3. It inculcates a sense of financial discipline by recording every transaction.
4. There is greater customer satisfaction by offering unlimited access to the bank.
5. There is greater security to the customers as they can avoid traveling with cash.

2. Advantages from the bank’s point of view:

1. Net banking provides a competitive advantage to the bank.
2. Net banking provides an unlimited network to the bank and is not limited to the number of branches.
3. Load on branches can be considerably reduced by establishing centralized data and by taking over some of the accounting functions.