INTERNET BANKING SERVICES IN BANKS-BOON TO CUSTOMERS

The contemporary trends in Banking operations and services with the help of computers are quite cheering for customer. As we find information technology invading the banking sector, only banks, which used the right technology, could come out with success.  Banks are required to ‘restructure', re-invent and reengineer themselves go meet the necessary performance improvement and get the competitive edge due to the introduction of information technology (Internet Baking) being an imperative one

Application of Information Technology

Phone banking:

1.                Bank on phone, provides easy access for customers to have large businesses through   telephones. Data are exchanged   over the phone regarding any queries, to issue instructions on balance transfer, statement of account, cheque- book, stop payments, new schemes, interest rates etc. at any convenient time and place. Tele banking has gone a long way in providing maximum customer satisfaction within the limited infrastructure.

Automatic Teller Machines:  (ATM)

1. Now, the banks provide this facility in a more sophisticated way that a customer of one bank and branch can withdraw from any other banks, at any other branch, nation wide. In developed countries, this service is provided to their blue chip client globally. This is possible only through worldwide networking and communication system.

Credit cards:

               These plastic cards enable customers to spend whenever he/she wants within the prescribed limits and pay later. Debit card is a prepaid card with stored value, whereas credit card is post paid with fixed limits. It is seen that spending is higher through debit cards than with credit cards currently CITY Bank and time bank have started with Debit cards and now other banks are also following these to launch their own cards.

Electronic Funds Transfer: (EFT)

           Electronic funds transfer is a system of processing and communication of payment through electronic methods. EFT assumes greater significance in the banking system as the RBI also encourages the commercial banks to adopt this technique. Normally, payments are made through cash, cheques, drafts and credit cards. The latest in this process are the debit card system, charge, digital cash, and electronic purse and so on.

SPNS- (Shared payment network system):

                  SPNS installed by the IBA in the city of Mumbai, enables electronic banking service like cash transactions, extended hours of banking, utility payments, cheques, point of sale facilities by the SPNS can go to any ATM linked to SPNS.

Electronic Clearing Services [ECS]:

                   Electronic clearing of funds from one centre to another for handling bulk transactions like salary, interest, dividend, commission etc., has dispensed the cheques. A part of electronic clearing service is computerized clearing of cheques at metropolitan centers and linking with international communication system of SWIFT. These services have contributed in a great way towards improving the customer's services globally. ECS was introduced in India in 1996. It has made it possible for customers to get the funds next day itself.

Point of sale [POS] terminal:

                     Payment card at a retail location for electronic transfer of fund is called POS.  The client enters his personal identification number [PIN] and confirms the amount due. Customer's account is automatically debited with the amount of purchases and it credits the retailers account POS installed at petrol stations and large retail houses are linked to banks network.

 D-Mat Accounts:

 Transacting shares business through electronic media is called D-Mat.  Investor opens an account called Demat Accounts with DPS.  They get shares in electronic form.. Then they send the actual shares to the investor.  Investor pays for the opening, maintenance and collection of shares.  This has reduced the paper work, bad deliveries; loss of shares and less transaction cost.  However delays in demating, higher cost charged by the investors has not given a good start for the growth and scope of Demat in India.  Depository participant sometimes make illegal money at the cost of investors.  SEBI should find ways to over come this to give a good scope for Demat in India.

 Electronic Data Interchange-EDI:

EDI refers to the electronic exchange of structure information using telecommunication like payment orders, debits credits, statement of account etc.  As part of EDI, satellite communication network is also entering the banks.  EDI will very soon do away with branch banking and the customers will be identified as ban customer and not branch customer

 E-cheques:

Digital cheque used by the payer to the payee through internet is called e-cheques.  Electronic versions of cheques are issued, received and processed.  Most of the banks use e-cheques.  A secure means of operation is provided for collecting, payments, and transferring cash flows through this method.  The payer issues a digital cheque to the payee and the entire transactions are done through internet

  Benefits of Internet Banking Services

     1.It reduces cost of   both in services and administration

     2. Overcoming the geographical barriers

     3.  Cost minimized for customers

     4. It helps to maintain customer loyalty

     5. Web site enables banks to develop advertisement

     6. Information technology enables banks to deliver products and services

     7. Multimedia capabilities offer homogenous branding     

     8. Online banking encourages promotion of various schemes of the bank

     9. Individualized and customized services with the help of integrated customer data       

   10. Minimizing fraud and misappropriation by inter-branch reconciliation      Convenience to customers – like card free banking, cash free banking provides a domain of access to banking services.

 From the discussions on the internet banking services, it is felt that, this will enable the domestic banks to challenge the competition from their foreign rivals. Further, there will be a reduction in the staff strength to a considerable extent due to the adoption of information technology and ultimately banks can provide timely services to customers to their fullest satisfaction.

.