Seminar report On Internet banking Submitted to: Submitted by: Dr. Sakshi Sharma Nitin Bedi B.com Regular 2nd sem Roll no. 20302162 POST GRADUATE DEPARTMENT OF COMMERCE AND BUSINESS ADMINISTRATION KHALSA COLLEGE AMRITSAR ACKNOWLEDGMENT I am very thankful to my guide Dr. Sakshi Sharma who helped me in completion of this project Internet banking . It make my concepts more clear and enhanced my knowledge and helped me in realizing the importance of it. Secondly I would also like to thank my parents and friends who have helped me with their valuable suggestions and guidance has been very thankful in various phrases of the completion of the project. Nitin Bedi SR. No. Topic 1. Introduction 2. Definition 3. History of Internet Banking 4. Types 5. Features of Internet Banking 6. Advantages 7. Disadvantages 8. Role of Internet banking in today's era 9. Security 10. Preventions 11. Comparison between traditional banking and Internet Banking 12. Conclusion Page INTRODUCTION Internet banking, also known as online banking or e-banking or Net Banking is a facility offered by banks and financial institutions that allow customers to use banking services over the internet. Customers need not visit their bank’s branch office to avail each and every small service. Not all account holders get access to internet banking. If you would like to use internet banking services, you must register for the facility while opening the account or later. You have to use the registered customer ID and password to log into your internet banking account. In a broad sense, it is the use of electronic means to transfer the funds directly from one account to another, rather than by cheque or cash. Definition Internet banking, also known as online banking, web banking or home banking, is an electronic payment system that allows customers of bank or another financial institutions to conduct a range of financial transactions through the financial institutions website. A system of banking in which customers can view their account details, pay bills and transfer money by means of internet. The remote delivery of new and traditional banking products and services through electronic delivery channels. History of Internet Banking Online services started in New York in 1981 when four of the city's major banks: • • • • Citibank Chase Manhattan Chemical Manufacturers Hanover Offered home banking services using the videotext system. Types • • • Informational Internet Banking Communicative Online Banking Transactional Internet Banking 1. Informational Internet Banking: This fundamental level of banking does not allow patrons to view or maintain accounts, nor does it allow for communication between the financial institution and customers. Informational Internet banking simply means the bank provides basic information about its products and services, much like a brochure. This is meant for marketing purposes only, and there is no connection to the bank's main computer systems. 2. Communicative Online Banking: Communicative online banking allows for some communication between the patron and bank. However, this is typically limited to fundamental interactions such as account inquiries, new account updates, loan or mortgage applications, contact information updates and balances. Communicative online banking may connect with the bank's main computer systems. 3. Transactional Internet Banking: The most popular online banking type, transactional Internet banking offers all of the benefits of a traditional brick-and-mortar institution. This includes full control over your accounts—deposits, withdrawals, transfers, updates and online payments. Increased security measures now make Internet banking safe, secure and convenient, especially in the case of mobile online banking. Features of Internet Banking • • • • • • • • Check the account statement online. Open a fixed deposit account. Pay utility bills such as water bill and electricity bill. Make merchant payments. Transfer funds. Order for a cheque book. Buy general insurance. Recharge prepaid mobile/DTH. Advantages of Internet Banking The advantages of internet banking are as follows: • • • • • Availability: You can avail the banking services round the clock throughout the year. Most of the services offered are not time-restricted; you can check your account balance at any time and transfer funds without having to wait for the bank to open. Easy to Operate: Using the services offered by online banking is simple and easy. Many find transacting online a lot easier than visiting the branch for the same. Convenience: You need not leave your chores behind and go stand in a queue at the bank branch. You can complete your transactions from wherever you are. Pay utility bills, recurring deposit account instalments, and others using online banking. Time Efficient: You can complete any transaction in a matter of a few minutes via internet banking. Funds can be transferred to any account within the country or open a fixed deposit account within no time on net banking. Activity Tracking: When you make a transaction at the bank branch, you will receive an acknowledgement receipt. There are possibilities of you losing it. In contrast, all the transactions you perform on a bank’s internet banking portal will be recorded. You can show this as proof of the transaction if need be. Details such as the payee’s name, bank account number, the amount paid, the date and time of payment, and remarks if any will be recorded as well. Disadvantages of Internet Banking The disadvantages of internet banking are as follows: • • • • Internet Requirement: An uninterrupted internet connection is a foremost requirement to use internet banking services. If you do not have access to the internet, you cannot make use of any facilities offered online. Similarly, if the bank servers are down due to any technical issues on their part, you cannot access net banking services. Transaction Security: No matter how much precautions banks take to provide a secure network, online banking transactions are still susceptible to hackers. Irrespective of the advanced encryption methods used to keep user data safe, there have been cases where the transaction data is compromised. This may cause a major threat such as using the data illegally for the hacker’s benefit. Difficult for Beginners: There are people in India who have been living lives far away from the web of the internet. It might seem a whole new deal for them to understand how internet banking works. Worse still, if there is nobody who can explain them on how internet banking works and the process flow of how to go about it. It will be very difficult for inexperienced beginners to figure it out for themselves. Securing Password: Every internet banking account requires the password to be entered in order to access the services. Therefore, the password plays a key role in maintaining integrity. If the password is revealed to others, they may utilise the information to devise some fraud. Also, the chosen password must comply with the rules stated by the banks. Individuals must change the password frequently to avoid password theft which can be a hassle to remember by the account holder himself. Role of Internet in today’s era The Internet usage has increased in the current generation due to the change in the astounding rates with the advancements in the technology. The studies carrying out ion the impact of the technological advancements have revealed that the technology has been impinged in all aspects of the common people’s life. The electronically handling capability for all the complicated works are increased in this situation. The Internet is treated as the global trend which can reduce the time and distance to perform the important transactions. The change emerged to the internet banking from the conventional banking is termed to be leap transformation. The banking sector in the current days is able to provide with the novel services to the consumers through effective exploitation of the internet. This has given the advantages in two folds that are for bank as well as for the customers. The banks have emerged in to hi – tech service providers and to develop the services to eliminate the banking concerns with better focus on the needs and requirements of clients. The current banking sector is implementing novel technologies and expertise to make the complication and concerns of original banking plan to much easier and easily accessible by the consumers. The commencement of the electronic banking initiated with the ATMs. And at present the trend has emerged to carry out the transactions through mobile phone, through internet, direct bill payment, electronic fund transfer and the I – banking. The augmentation in the E – commerce and the utilization of the internet banking has been supporting the transactions in the banking with better security options with confidentiality in transaction has led to the importance of Internet banking in the current day. Thus the current project is aimed carry out a thorough study on the concept of Internet and the applicability of the same in the highly service oriented sector like banking. Thus the project is able to reveal the benefits that will improve the customer loyalty which is very much necessary in the banking sector further the project will explain the extent of applicability of internet in banking sector. Security Security of a customer's financial information is very important, without which online banking could not operate. Similarly the reputational risks to banks themselves are important. Financial institutions have set up various security processes to reduce the risk of unauthorized online access to a customer's records, but there is no consistency to the various approaches adopted. The use of a secure website has been almost universally embraced. Though single password authentication is still in use, it by itself is not considered secure enough for online banking in some countries. There are essentially two different security methods in use for online banking: • The PIN/TAN system where the PIN represents a password, used for the login and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. Another way of using TANs is to generate them by need using a security token. These token generated TANs depend on the time and a unique secret, stored in the security token (two-factor authentication or 2FA). Precautions taken while Internet Banking • Change your password regularly For the first time you login to your internet banking account, you will need to use the password provided by the bank. However, you need to change this password in order to keep your account safe. In addition, keep changing your password at regular intervals. More importantly, keep the password confidential at all times. • Do not use public computers to login Avoid logging in to your bank account at common computers in cyber cafes or libraries. These are crowded places, and there are more chances of your password being traced or seen by others. If you have to login from such places, make sure you clear the cache and browsing history, and delete all the temporary files from the computer. Also, never allow the browser to remember your ID and password. • Do not share your details with anyone Your bank will never ask for your confidential information via phone or email. So whether you get an apparent phone call from the bank or an email requesting your details, do not give out your login information. Use your login ID and password only on the official login page of the bank, which should be a secure website. Look for 'https://' in the URL when logging in; it means that the website is secure. • Keep checking your savings account regularly Check your account after making any transaction online. Verify whether the right amount has been deducted from your account. If you see any discrepancies in the amount, inform the bank immediately. • Always use licenced anti-virus software To protect your computer from new viruses, ensure that you always use licenced anti-virus software. Pirated versions of anti-virus softwares may be available for free, but they may fail to protect your computer from new viruses prevalent in the online world. In addition, you will get notifications for updates in the software periodically. Make sure that you keep your anti-virus updated, so that your confidential information is always protected. • Disconnect the internet connection when not in use Most broadband users do not disconnect the internet connection on their computer when they are not using it. Malicious hackers can access your computer via an internet connection and steal your confidential banking information. To keep your data protected, ensure that you disconnect from the internet when you do not require it. • Type your internet banking URL It is a safer to type your bank URL in the address bar of the browser than clicking on links given in an email. There are instances of fraudsters sending emails with fraudulent websites links that are designed exactly like the bank’s original website. Once you enter your login details on such a website, they may be used to access your account and steal your money. While logging on, check for 'https://' in the URL and ensure that it is your bank’s authentic website. • DIFFERENCE BETWEEN TRADITIONAL BANKING AND E-BANKING PRACTICES,BANKING AWARENESS Basis Traditional Banking E- Banking Practices Global Coverage Traditional Practice provides limited coverage. E-Banking Practices involve global coverage while sitting at home/office. Marketing Tool Traditional Practice does not provide proper marketing tools. E-Banking provides the facility of marketing of products/ schemes online easily. Prompt Services Traditional Practices involves process which requires more time. E-Banking same lot of line as there is no need to stand in long queues. Reduction of errors/ Frauds Traditional banking practices do not provide a complete check on banking transactions. With the system of reconciliation of interbranch transactions, frauds and errors could be reduced. Paperwork Bank executives have to perform a lot of paperwork which increases both time and cost. Cost and time could be reduced or everything is to be through some interval and no need for huge paperwork. Risk of carrying cash In the case of traditional business, a person has to carry cash at each point of time. E-banking provides banking without carrying cash as plastic money (ATMs, Credit cards are available) Conclusion The mobile and wireless market has been one of the fastest growing markets in the world. The arrival of technology and the escalating use of mobile and smart phone devices, has given the banking industry a new platform. Connecting a customer anytime and anywhere to their money and needs is a must have service that has become an unstoppable necessity. This worldwide communication is leading a new generation of strong banking relationships. The banking world can achieve superior interactions with their public base if they accommodate all their customer needs. They have a unique challenge to keep their customer alliances and keeping up with the new technologies, and competitive strategies that other banks also have to offer the public. Conveniences of services plus outside locations like ATMS are crucial to every banks success. Meeting all challenges including safety and security are perfect examples of good banking strategies. In order for the financial institutions to effectively grow they must embrace the new technologies and customize them to suit their economic success and the public’s success. Online banking is certainly here to stay. Online banking is a necessity for the bank's that we studied and others in order for them to stay in business. While its existence doesn't necessary give them a competitive edge because it is so common place, it is truly a cost of doing business. As a tool of modern living and as a lifestyle aid, it is absolutely indispensable. The fact is that many services that are now being offered with online banking are almost impossible to do conveniently with regular banking. As we venture into the future, the internet will undoubtedly continue to change the banking industry.
