E - BANKING
Onkar Sule
Roll no: - 54
What is E - BANKING
Electronic banking, also known as
electronic funds transfer (EFT), it
is simply the use of electronic
means to transfer funds directly
from one account to another,
rather than by cheque or cash.
Technology Commencement in Banking


In 70’s, banks started to establish centralized data processing
centers.
Essentially the roles of these data processing centers are:
 Collect the handwritten documents from branches
 Compile the documents
 Manual data entry by the operators
 Generate reports for the bank staff and the central bank
 Execute some banking transactions
Branch Automation




In 80’s, banks started technology investments for the
branches.
The first step is offline branches.
Terminals connected to local branch computer
Second step is online branches connected centrally. Most of
the transactions started to be performed in the central
mainframe.
Uses of EFT
Have your
check deposited
directly into
your bank or
credit union
checking
account.
Withdrawal of
money at your
convenience
using your PIN
Online Bill
Payment
Buy goods using
plastic money
instead of cash
Various forms of E – Banking….
TELE
BANKING
ATM’s
Internet
Banking
Plastic
Money
ECheque
Process of all forms of E – Banking…
Internet
Banking
ATM’s
TELE
Banking
Plastic
Money
ECheque
Internet Banking
• More and more banks are coming to realize that internet is a part of banks'
alternative delivery channel strategies activities concentrated in the business-toconsumer segment, focused on retaining clients
• In Internet banking, security is a primary concern. Security concerns have been
addressed from every angle within the architecture of the Internet banking
application.
Sample Internet Banking Architecture
ATM.....

In the mid-1980s, that cash dispensers truly became a
worldwide phenomenon.

It took 16 years for the first 100,000 cash dispensers to be
installed, but only four years more for the next 100,000 and 3
months for the next 100,000.

Now, ATM became the electronic face of banking for most
customers.

Beside cash withdrawal, there exist various transaction options
from transfer to fund buying/selling.

Now there are 1217463 ATM installed in and around Mumbai
ATM and POS Application Architecture
Debit Card
Authorization
Switch System
Credit Card
Authorization
Point of Sale



New habits in shopping
Increased the use of plastic cards
Now there are 313140 POS installed in India (Ref:
www.moneylife.in)

Main components
 Switch
 IVR
 CTI(Computer Telephony Integration)
 Manage each call using the computer
 Pop up the user information while transferring the call
 Agent Desktop Application
 Win32,ActiveX, HTML
 Host Application
Telephone Banking Infrastructure
Telecom
IVR
CTI
HOST
IVR

Interactive Voice Response (IVR) is a software application that accepts a
combination of voice telephone input and touch-tone keypad selection and
provides appropriate responses in the form of voice

IVR has come into our life at the beginnings of 90’s.
First step in Telephone Banking
Peak transaction volume in salary payment days for balance inquiry
Integrated with ATM system



Plastic Cards



The plastic card usage grown enormously in last 2 decade.
Plastic card became the main media for bank customers.
Number of credit card in India:
Credit Card Type National Cards International Cards
Visa
12,00,704
70,43,834
MasterCard
4,88,881
48,20,965
Other
13,599
36,884
total
17,03,184
1,19,01,683
Total
82,44,538
53,09,846
50,483
1,36,04,867
Mobile Banking

Current Mobile Banking Applications:



SMS Banking
WAP Banking
STK (Sim Toolkit) Banking
SMS Banking


Basic banking inquiry transactions(balance inquiry, funds, exchange rate
inquiry…) are performed by the cooperation of bank and the GSM
operator
Security is the main problem
GSM
Network
GSM
Operator
Application
Server
GSM
Operator
SMS DB
Leased line
Bank SMS
Gateway
Bank
SMS
DB
Bank
Host
WAP Banking

Wireless application protocol (WAP) is an application
environment and set of communication protocols for wireless
devices designed to enable manufacturer-, vendor-, and
technology-independent access to the Internet and advanced
telephony services.

WAP is a global standard and is not controlled by any single
company

Various banking transactions offered in WAP environment by
banks.

Similar architecture with SMS banking
SIM Toolkit

SIM card enables to keep and load different applications.

SIM Application Toolkit has been agreed as a GSM standard

SIM Application Toolkit is independent of phone manufacturers and
designs.

SIM Application Toolkit allows the flexibility to update the SIM
to alter the services and download new services over the air

SIM Application Toolkit is designed as a client-server application. On
the server side, SimCard platform and the client side, phone that
supports the SIM Application Toolkit

In the near future, banks will start to offer banking transactions
in this platform.
Banking Application Architecture
Relationship Management
CIF
Product Factory
Portfolio
Management
POS
Deposit
(TD,DD)
FBS
Securities
Promissory
Notes
FX
Import / Export
Teletel
Loans&Credits
NBS
EFT
Cheques
Merchant
Telerom
Sales Support
System
CMS
Treasury
Payments
YKB HR
Teller (Branch)
I
N
F
O
C
E
N
T
E
R
Corporate Tables
DAL
Internet Banking
GL / Accounting
Settlement
Phone Banking
Reporting
Batch Operations
Internet Shopping
PCM
Campaign
Management
Credit Risk
Management
Management & Control
Productivity
Information Delivery
Delivery Services
ATM
Data Warehouse




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Electronic repositories of summarized historical data
The main idea behind data warehouse is get all company data
working together so users can see more,learn more, and make
the organization work better
Data Warehouse helps users to identify trends, find answers to
business questions and derive meaning from historical and
operational data.
Data access is easier and less costly
Decision support solutions run faster and are more accurate.
Data Warehouse Process
Life
Cycle
Partial
Solutions
Design
Transaction
Data
Extraction
Data
Mapping
Complete
Integrated
Solution
Transform
Extract
Data
Scrubbing and
Cleansing
Data
Replication
Load,
index and
Aggregate
Data Histories
and
Summaries
Integrated Data Warehouse Infrastructure
Deliver
Publish
and
Subscribe
Data
Access
Tools
Channel Costs
2
1.5
1
0.5
0
Web
ATM
Call Center
Branch
Channel Integration Evolution

Channel Integration evolution

Reuse

Efficiencies of Scale

Reduction of Redundancies
The Role of Banks in the New Economy


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Internet and mobile devices have brought new rules to
economy and shaped the way to do business
Banks has also evolved according to the new economy and
took their places in this new world to add value to their
customer
The new ways to do business are :
 e-commerce (B2C)
 m-commerce
 B2B
E-commerce - B2C

E-commerce is the buying and selling of goods and services on the Internet.

Main feature of e-commerce

24-hour availability

a global reach

the ability to interact

provide custom information and ordering

and multimedia prospects,

The Web is rapidly becoming a multibillion dollar source of revenue for the
world's businesses.

Banks provide secure payments infrastructure - virtual POS
M-commerce

Mobile commerce applications involve using a mobile phone to
carry out financial transactions- this usually means making a
payment for goods or transferring funds electronically.

As content delivery over wireless devices becomes faster,
more secure, and scalable, there is wide speculation that mcommerce will surpass wireline e-commerce as the method of
choice for digital commerce transactions.
B2B

A housands of companies that sell products to other companies have
discovered that the Web provides not only a 24-hour-a-day showcase for
their products but a quick way to reach the right people in a company for
more information.

In the B2B, the bank role is to provide a reliable payment infrastructure
that add value to corporate business
This infrastructure should cover:
 Bill presentment
 Bill payment
 Different payment types(credit card, deposit account, loan)
 Information after payment

E-Security

To improve the e-business, all the users should feel secure to perform the
transaction this environment

The main concepts in e-security are:

PKI (public key infrastructure) enables users of a basically unsecure public network such as
the Internet to securely and privately exchange data and money through the use of a
public and a private cryptographic key pair that is obtained and shared through a trusted
authority.

Public key is a value provided by some designated authority as a key that, combined with a
private key derived from the public key, can be used to effectively encryption messages and
digital signature.

Private or secret key is an encryption/decryption key known only to the party or parties
that exchange secret messages. Public key is used together with a private key
E-Security - continued

Digital certificate is an electronic "credit card" that establishes your credentials when
doing business or other transactions on the Web. It is issued by a certification authority
(CA).

CA (certificate authority) is an authority in a network that issues and manages security
credentials and public key for message encryption. As part of a public key infrastructure, a
CA checks with a registration authority to verify information provided by the requestor of
a digital certificate

An RA (registration authority) is an authority in a network that verifies user requests for a
digital certificate and tells the certificate authority to issue it.
Advantages of E-banking

Benefits for Banks

Benefits for Small to Medium Businesses

Benefits for Customers
Benefits for Banks

Larger customer coverage

Reducing the costs of operations

Promoting their services and products internationally

Increasing the customer satisfaction and providing a
personalized relationship with customers
Benefits for Small to Medium Businesses

To run its operations more effectively

Lower cost than traditional financial management
mechanisms
Benefits for Customers
Convenience
- 24 hours a day, seven days a week
-
Cost
Reducing transfer fees
-
Speed
Faster circulation of assets
Competitiveness
- Fostering competition in financial market
Benefits for Customers
Communication
- communicate easily
-
Environmental
Abolishing the uses of paper
Others
- Offering one-stop-shop solutions
Disadvantages OF E-banking
 A need
for customer skill to deal with computers and
browsers.
E.g. Elderly, Housewives → Inconvenient
 Site
change it will make the customer have some
confusion or delay.
 Security Risk
Security Risk

Increasing number of fraudulent bank websites

Fake emails purporting to be sent from banks

Use of Trojan Horse programs to capture user IDs and
passwords
Fraudulent Bank Websites



A suspicious bank website:
www.sbionline.com
Original bank website
www.onlinesbi.com
These website are believed to aim to trick persons into
disclosing their sensitive personal information
Fake e-mails
 Email send from
Fraudulent bank
 Verify the
personal information
 Guide customer
enter the fraud link
 Disclosing their
ATM card numbers
and their passwords
Viruses and Worms-Trojan Horse Program

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When we open
some suspicious
websites or email
Trojan Horse Program
will install our
computer secretly
Hidden in the computer
When you access
bank websites
Capture our
account and
the password
Case From Newspaper

Don’t use the
hyperlink to login to
the website of banks

Should deeply check
the postscript of the
website

Observe that is it have
the encryption and
compare the login
account of encryption
cert is equal to the
bank.
Precautionary Measures
For Bank:

Should provide specific guidance to their customers
For Customers :
 Should not disclose their customer IDs (e.g., account
numbers) or PIN to anyone else.
 Periodically change their PIN
 Should promptly log out from the service
 Should regularly check their account balances and
statements to identify unusual transactions.


Do not access Corporate Cyber banking through public
terminals.
To safeguard your computer from any other hacker
attack, install anti-virus and anti-spyware software on
your computer and update it regularly.
Alternative Delivery Channels
Anytime, anywhere banking
 Telephone Banking
 Internet Banking
 Mobile Banking
 Television banking
 Next ???
What is the Next channel
Microwave Banking
???
THANK YOU