K Finish

CHAPTER-1
INTRODUCTION
ABSTRACT:
Online banking is an electronic payment system that enables customers of a

financial institution to conduct financial transactions on a website operated by
the institution, such as a retail bank, virtual bank, credit union or building
society. Online banking is also referred as Internet banking, e-banking, virtual
banking and by other terms. To access a financial institution's online banking
facility, a customer with Internet access would need to register with the
institution for the service, and set up some password (under various names)
for customer verification. The password for online banking is normally not the
same as for telephone banking. Financial institutions now routinely allocate
customers numbers (also under various names), whether or not customers
have indicated an intention to access their online banking facility. Customers'
numbers are normally not the same as account numbers, because a number
of customer accounts can be linked to the one customer number. The
customer can link to the customer number any account which the customer
controls, which may be cheque, savings, loan, credit card and other accounts.
Customer numbers will also not be the same as any debit or credit card issued
by the financial institution to the customer. To access online banking, a
customer would go to the financial institution's secured website, and enter the
online banking facility using the customer number and password previously
setup. Some financial institutions have set up additional security steps for
access to online banking, but there is no consistency to the approach adopted.
This manuscript underlines various aspects of e-banking and related aspects
in the global scenario.
Keywords - Internet Banking, E-Banking, Impact ofOnline Bank Services
1
INTRODUCTION
Banks have traditionally been in the forefront of harnessing technology to improve their
products, services and efficiency. They have, over a long time, been using electronic and
telecommunication networks for delivering a wide range of value added products and
services. The delivery channels include direct dial – up connections, private networks,
public networks etc and the devices include telephone, Personal Computers including
the Automated Teller Machines, etc. With the popularity of PCs, easy access to Internet
and World Wide Web (WWW), Internet is increasingly used by banks as a channel for
receiving instructions and delivering their products and services to their customers. This
form of banking is generally referred to as Internet Banking, although the range of
products and services offered by different banks vary widely both in their content and
sophistication.
Broadly, the levels of banking services offered through INTERNET can be categorized
in to three types: (i) The Basic Level Service is the banks’ websites which disseminate
information on different products and services offered to customers and members of
public in general. It may receive and reply to customers’ queries through e-mail, (ii) In
the next level are Simple Transactional Websites which allow customers to submit their
instructions, applications for different services, queries on their account balances, etc,
but do not permit any fund-based transactions on their accounts, (iii) The third level of
Internet banking services are offered by Fully Transactional Websites which allow the
customers to operate on their accounts for transfer of funds, payment of different bills,
subscribing to other products of the bank and to transact purchase and sale of securities,
etc. The above forms of Internet banking services are offered by traditional banks, as an
additional method of serving the customer or by new banks, who deliver banking
services primarily through Internet or other electronic delivery channels as the value
added services. Some of these banks are known as ‘virtual’ banks or ‘Internetonly’
banks and may not have any physical presence in a country despite offering different
banking services.
From the perspective of banking products and services being offered through Internet,
Internet banking is nothing more than traditional banking services delivered through an
electronic communication backbone, viz, Internet. But, in the process it has thrown open
issues which have ramifications beyond what a new delivery channel would normally
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envisage and, hence, has compelled regulators world over to take note of this emerging
channel. Some of the distinctive features of i-banking are:
1.It removes the traditional geographical barriers as it could reach out to customers of
different countries / legal jurisdiction. This has raised the question of jurisdiction of
law / supervisory system to which such transactions should be subjected,
2.It has added a new dimension to different kinds of risks traditionally associated with
banking, heightening some of them and throwing new risk control challenges,
Security of banking transactions, validity of electronic contract, customers’ privacy, etc.,
3.which have all along been concerns of both bankers and supervisors have assumed
different dimensions given that Internet is a public domain, not subject to control by any
single authority or group of users,
4.It poses a strategic risk of loss of business to those banks who do not respond in time,
to this new technology, being the efficient and cost effective delivery mechanism of
banking services,
5.A new form of competition has emerged both from the existing players and new
players of the market who are not strictly banks.
The Regulatory and Supervisory concerns in i-banking arise mainly out of the
distinctive features outlined above. These concerns can be broadly addressed under
three broad categories, viz, (i) Legal and regulatory issues, (ii) Security and technology
issues and (iii) Supervisory and operational issues. Legal issues cover those relating to
the jurisdiction of law, validity of electronic contract including the question of
repudiation, gaps in the legal / regulatory environment for electronic commerce. On the
question of jurisdiction the issue is whether to apply the law of the area where access to
Internet has been made or where the transaction has finally taken place. Allied to this is
the question where the income has been generated and who should tax such income.
There are still no definite answers to these issues.
Security of i-banking transactions is one of the most important areas of concerns to the
regulators. Security issues include questions of adopting internationally accepted
stateof-the art minimum technology standards for access control, encryption / decryption
( minimum key length etc), firewalls, verification of digital signature, Public Key
Infrastructure (PKI) etc. The regulator is equally concerned about the security policy for
the banking industry, security awareness and education.
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The supervisory and operational issues include risk control measures, advance warning
system, Information technology audit and re-engineering of operational procedures. The
regulator would also be concerned with whether the nature of products and services
offered are within the regulatory framework and whether the transactions do not
camouflage money-laundering operations.
The Central Bank may have its concern about the impact of Internet banking on its
monetary and credit policies. As long as Internet is used only as a medium for delivery of
banking services and facilitator of normal payment transactions, perhaps, it may not
impact monetary policy. However, when it assumes a stage where private sector initiative
produces electronic substitution of money like e-cheque, account based cards and digital
coins, its likely impact on monetary system can not be overlooked. Even countries where
i-banking has been quite developed, its impact on monetary policy has not been
significant. In India, such concern, for the present is not addressed as the Internet banking
is still in its formative stage.
The world over, central bankers and regulators have been addressing themselves to meet
the new challenges thrown open by this form of banking. Several studies have pointed to
the fact that the cost of delivery of banking service through Internet is several times less
than the traditional delivery methods. This alone is enough reason for banks to flock to
Internet and to deliver more and more of their services through Internet and as soon as
possible. Not adopting this new technology in time has the risk of banks getting edged
out of competition. In such a scenario, the thrust of regulatory thinking has been to
ensure that while the banks remain efficient and cost effective, they must be aware of
the risks involved and have proper built-in safeguards, machinery and systems to
manage the emerging risks. It is not enough for banks to have systems in place, but the
systems must be constantly upgraded to changing and well-tested technologies, which is
a much bigger challenge. The other aspect is to provide conducive regulatory
environment for orderly growth of such form of banking. Central Banks of many
countries have put in place broad regulatory framework for i-banking.
In India, too i-banking has taken roots. A number of banks have set up banking portals
allowing their customers to access facilities like obtaining information, querying on
their accounts, etc. Soon, still higher level of online services will be made available.
Other banks will sooner than later, take to Internet banking.
4
What Is Online Banking?
Online banking allows a user to conduct financial transactions via the Internet.
Online banking is also known as internet banking or web banking.
Online banking offers customers almost every service traditionally available

through a local branch including deposits, transfers, and online bill payments.
Virtually every banking institution has some form of online banking, available both
on desktop versions and through mobile apps.
Operation:
To access a financial institution's online banking facility, a customer with internet

access will need to register with the institution for the service, and set up a
password and other credentials for customer verification. The credentials for online
banking is normally not the same as for telephone or mobile banking. Financial
institutions now routinely allocate customers numbers, whether or not customers
have indicated an intention to access their online banking facility. Customer
numbers are normally not the same as account numbers, because a number of
customer accounts can be linked to the one customer number. Technically, the
customer number can be linked to any account with the financial institution that the
customer controls, though the financial institution may limit the range of accounts
that may be accessed to, say, cheque, savings, loan, credit card and similar
accounts.
The customer visits the financial institution's secure website, and enters the online
banking facility using the customer number and credentials previously set up.
Each financial institution can determine the types of financial transactions which a
customer may transact through online banking, but usually includes obtaining
account balances, a list of recent transactions, electronic bill payments, financing
loans and funds transfers between a customer's or another's accounts. Most
banks set limits on the amounts that may be transacted, and other restrictions.
Most banks also enable customers to download copies of bank statements, which
can be printed at the customer's premises (some banks charge a fee for mailing
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hard copies of bank statements). Some banks also enable customers to download
transactions directly into the customer's accounting software. The facility may also
enable the customer to order a cheque book, statements, report loss of credit
cards, stop payment on a cheque, advise change of address and other routine
actions.
Features:
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Online banking facilities typically have many features and capabilities in common,
but also have some that are application specific. The common features fall broadly
into several categories:
A bank customer can perform non-transactional tasks through online banking,

including: Viewing account balances
Viewing recent transactions
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Downloading bank statements, for example in PDF format
Viewing images of paid cheques
Ordering cheque books
Download periodic account statements
Downloading applications for M-banking, E-banking etc.
Bank customers can transact banking tasks through online banking, including:
Funds transfers between the customer's linked accounts
Paying third parties, including bill payments (see, e.g., BPAY) and third party fund
transfers (see, e.g., FAST)
Investment purchase or sale
Loan applications and transactions, such as repayments of enrollments
Credit card applications
Register utility billers and make bill payments
Financial institution administration
Management of multiple users having varying levels of authority
Transaction approval process
Some financial institutions offer special internet banking services, for example:
Personal financial management support, such as importing data into personal

accounting software. Some online banking platforms support account aggregation
to allow the customers to monitor a
ll of their accounts in one place whether they are with their main bank or with other
7
Security:
Five security token devices for online banking
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.[19] 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. Basically there are 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
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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).
More advanced TAN generators (chipTAN) also include the transaction data into
the TAN generation process after displaying it on their own screen to allow the
user to discover man-in-the-middle attacks carried out by Trojans trying to secretly
manipulate the transaction data in the background of the PC.Another way to
provide TANs to an online banking user is to send the TAN of the current bank
transaction to the user's (GSM) mobile phone via SMS. The SMS text usually
quotes the transaction amount and details, the TAN is only valid for a short period
of time. Especially in Germany, Austria and the Netherlands many banks have
adopted this "SMS TAN" service.[24] There is also "PhotoTAN" service, where the
bank generates and sends a QR code image to a smartphone device of the online
banking user.[25]Usually online banking with PIN/TAN is done via a web browser
using SSL secured connections, so that there is no additional encryption needed.
[26]Signature based online banking where all transactions are signed and
encrypted digitally. The Keys for the signature generation and encryption can be
stored on smartcards or any memory medium, depending on the concrete
implementation (see, e.g., the Spanish ID card DNI electrónico.
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Attacks:
Attacks on online banking used today are based on deceiving the user to steal
login data and valid TANs. Two well known examples for those attacks are
phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also
be used to steal login information.
A method to attack signature based online banking methods is to manipulate the

used software in a way, that correct transactions are shown on the screen and
faked transactions are signed in the background.
A 2008 U.S. Federal Deposit Insurance Corporation Technology Incident Report,

compiled from suspicious activity reports banks file quarterly, lists 536 cases of
computer intrusion, with an average loss per incident of $30,000. That adds up to
a nearly $16-million loss in the second quarter of 2007. Computer intrusions
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increased by 150 percent between the first quarter of 2007 and the second. In 80
percent of the cases, the source of the intrusion is unknown but it occurred during
online banking, the report states.
In the UK, losses from online banking fraud rose by 48% in 2014 compared with
2013.[29] According to a study by a group of Cambridge University cybersecurity
researchers in 2017, online banking fraud has doubled since 2011.
Another kind of attack is the so-called man-in-the-browser attack, a variation of the

man-in-the-middle attack where a Trojan horse permits a remote attacker to
secretly modify the destination account number and also the amount in the web
browser.
As a reaction to advanced security processes allowing the user to cross-check the

transaction data on a secure device there are also combined attacks using
malware and social engineering to persuade the user himself to transfer money to
the fraudsters on the ground of false claims (like the claim the bank would require
a "test transfer" or the claim a company had falsely transferred money to the user's
account and he should "send it back").[31][32] Users should therefore never
perform bank transfers they have not initiated themselves.
Countermeasures:
There exist several countermeasures which try to avoid attacks. Digital certificates
are used against phishing and pharming, in signature based online banking
variants (HBCI/FinTS) the use of "Secoder" card readers is a measurement to
uncover software side manipulations of the transaction data.
In 2001, the U.S. Federal Financial Institutions Examination Council issued

guidance for multifactor authentication (MFA) and then required to be in place by
the end of 2006.
In 2012, the European Union Agency for Network and Information Security advised
all banks to consider the PC systems of their users being infected by malware by
default and therefore use security processes where the user can cross-check the
transaction data against manipulations like for example (provided the security of
the mobile phone holds up) SMS TAN where the transaction data is sent along
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with the TAN number or standalone smartcard readers with an own screen
including the transaction data into the TAN generation process while displaying it
beforehand to the user (see chipTAN) to counter man-in-the-middle attacks.
PREAMBLE:
Online banking facilities offered by various financial institutions have many
features and capabilities in common, but also have some that are application
specific.
The common features fall broadly into several categories:
• A bank customer can perform nontransactional tasks through online

banking, including -
o viewing account balances o viewing recent transactions o
downloading bank statements, for example in PDF format
o viewing images of paid cheques o ordering cheque books
o download periodic account statements
o Downloading applications for Mbanking, E-banking etc.
• Bank customers can transact banking tasks through online banking,
including -
o Funds transfers between the customer's linked accounts
o Paying third parties, including bill payments (see, e.g., BPAY) and
third party fund transfers(see, e.g.,
FAST) o Investment purchase or sale o Loan applications and
transactions, such as repayments of enrollments
o Credit card applications o Register utility billers and make

bill payments
• Financial institution administration
• Management of multiple users having varying levels of authority

• Transaction approval process
• the process of banking has become much faster

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Some financial institutions offer unique Internet banking services, for example:
• Personal financial management support, such as importing data into

personal accounting software. Some online banking platforms support
account aggregation to allow the customers to monitor all of their accounts
in one place whether they are with their main bank or with other institutions.
HISTORICAL ASPECTS:
The precursor for the modern home online banking services were the distance
banking services over electronic media from the early 1980s. The term online
became popular in the late '80s and referred to the use of a terminal, keyboard and
TV (or monitor) to access the banking system using a phone line. 'Home banking'
can also refer to the use of a numeric keypad to send tones down a phone line
with instructions to the bank. Online services started in New York in 1981 when
four of the city's major banks (Citibank, Chase Manhattan, Chemical and
Manufacturers Hanover) offered home banking services. using the videotex
system. Because of the commercial failure of videotex these banking services
never became popular except in France where the use of videotex (Minitel) was
subsidised by the telecom provider and the UK, where the Prestel system was
used.
When the clicks-and-bricks euphoria hit in the late 1990s, many banks began to
view Web-based banking as a strategic imperative. The attraction of banks to
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online banking are fairly obvious: diminished transaction costs, easier integration
of services, interactive marketing capabilities, and other benefits that boost
customer lists and profit margins. Additionally, Web banking services allow
institutions to bundle more services into single packages, thereby luring customers
and minimizing overhead.
A mergers-and-acquisitions wave swept the financial industries in the mid-and late

1998s, greatly expanding banks' customer bases. Following this, banks looked to
the Web as a way of maintaining their customers and building loyalty. A number of
different factors are causing bankers to shift more of their business to the virtual
realm.
While financial institutions took steps to implement e-banking services in the mid-
1990s, many consumers were hesitant to conduct monetary transactions over the
web. It took widespread adoption of electronic commerce, based on trailblazing
companies such as America Online, Amazon.com and eBay, to make the idea of
paying for items online widespread. By 2000, 80 percent of U.S. banks offered e-
banking. Customer use grew slowly. At Bank of America, for example, it took 10
years to acquire 2 million e-banking customers. However, a significant cultural
change took place after the Y2K scare ended. In 2001, Bank of America became
the first bank to top 3 million online banking customers, more than 20 percent of its
customer base. In comparison, larger national institutions, such as Citigroup
claimed 2.2 million online relationships globally, while J.P. Morgan Chase
estimated it had more than 750,000 online banking customers. Wells Fargo had
2.5 million online banking customers, including small businesses. Online
customers proved more loyal and profitable than regular customers. In October
2001, Bank of America customers executed a record 3.1 million electronic bill
payments, totaling more than $1 billion. In 2009, a report by Gartner Group
estimated that 47 percent of U.S. adults and 30 percent in the United Kingdom
bank online.
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The UK's first home online banking services known as Homelink was set up by
Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983.
The system used was based on the UK's Prestel viewlink system and used a
computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to
the telephone system and television set. The system allowed on-line viewing of
statements, bank transfers and bill payments. In order to make bank transfers and
bill payments, a written instruction giving details of the intended recipient had to be
sent to the NBS who set the details up on the Homelink system. Typical recipients
were gas, electricity and telephone companies and accounts with other banks.
Details of payments to be made were input into the NBS system by the account
holder via Prestel. A cheque was then sent by NBS to the payee and an advice
giving details of the payment was sent to the account holder. BACS was later used
to transfer the payment directly.
Stanford Federal Credit Union was the first financial institution to offer online
internet banking services to all of its members in October 1994.
Today, many banks are internet only banks. Unlike their predecessors, these
internet only banks do not maintain brick and mortar bank branches. Instead, they
typically differentiate themselves by offering better interest rates and more
extensive online banking features.
According to "Banking and Finance on the Internet," edited by Mary J. Cronin,

online banking was first introduced in the early 1980s in New York. Four major
banks--Citibank, Chase Manhattan, Chemical and Manufacturers Hanover--offered
home banking services. Chemical introduced its Pronto services for individuals
and small businesses in 1983. It allowed individual and small-business clients to
maintain electronic checkbook registers, see account balances, and transfer funds
between checking and savings accounts. Pronto failed to attract enough
customers to break even and was abandoned in 1989. Other banks had a similar
experience.
15
Online banking in the U.K. Almost simultaneously with the United States, online
banking arrived in the United Kingdom. It was the Nottingham Building Society that
in 1983 introduced Britain's first electronic home banking service through a joint
venture with Prestel, a computerized information service owned by British
Telecom.
The UK's first home online banking services known as Homelink was set up by
Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983.
The system used was based on the UK's Prestel viewlink system and used a
computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to
the telephone system and television set. The system allowed on-line viewing of
statements, bank transfers and bill payments. In order to make bank transfers and
bill payments, a written instruction giving details of the intended recipient had to be
sent to the NBS who set the details up on the Homelink system. Typical recipients
were gas, electricity and telephone companies and accounts with other banks.
Details of payments to be made were input into the NBS system by the account
holder via Prestel. A cheque was then sent by NBS to the payee and an advice
giving details of the payment was sent to the account holder. BACS was later used
to transfer the payment directly.
Stanford Federal Credit Union was the first financial institution to offer online
internet banking services to all of its members in October 1994.
Today, many banks are internet only banks. Unlike their predecessors, these
internet only banks do not maintain brick and mortar bank branches. Instead, they
typically differentiate themselves by offering better interest rates and more
extensive online banking features.
In the 1990s, banks realized that the rising popularity of the World Wide Web gave
them an added opportunity to advertise their services. Initially, they used the Web
as another brochure, without interaction with the customer. Early sites featured
16
pictures of the bank's officers or buildings, and provided customers with maps of
branches and ATM locations, phone numbers to call for further information and
simple listings of products.
Interactive banking on the Web
Wells Fargo was the first U.S. bank to add account services to its website, in 1995.
Other banks quickly followed suit. That same year Presidential became the first
bank in the United States to open bank accounts over the Internet. According to
research by Online Banking Report, by the end of 1999, less than 0.4% of
households in the U.S. were using online banking. At the beginning of 2004, some
33 million U.S. households (31% of the market) were using one form or another of
online banking. Five years later, 47% of Americans were banking online, according
to a survey by Gartner Group.
Regulations
Since its inception, online banking in the US has been federally governed by the
Electronic Funds Transfer Act of 1978.
CHAPTER-2
REVIEW OF LITERATURE
17
Rangan, V. Kasturi and Lee, Katharine L., (2012), “Mobile Banking for the Unbanked “,
The case describes in detail the workings of two mobile banking operators in Africa WIZZIT
in South Africa and M-PESA in Kenya. It explores the dimensions of strategy that make for
success in the market for the unbanked. It raises questions regarding the portability of the
model to other countries and settings.
Raja, Joe A. (2012), “Global e-banking scenario and challenges in banking system”,
This paper is an attempt to explore the various levels of internet banking services
provided by banks using the secondary data. It also compares the traditional banking
systems with net banking. It lists out the various advantages of internet banking and the
successful security measures adopted by different banks for secured banking transactions.
It also analyzes how E-banking can be useful for banking industry during this global
financial melt down.
Van B., Paul, Veloso, Francisco M. and Oliveira, P., (2012), “ Innovation by Users in
Emerging Economies: Evidence from Mobile Banking Services”,
This paper examined the extent to which users in emerging economies innovate, and
whether these innovations are meaningful on a global stage. To study this issue, the
researcher conducted an empirical investigation into the origin and types of innovations
in financial services offered via mobile phones, a global, multi-billion dollar industry where
emerging economies play an important role. The researcher used the complete list of
mobile financial services, as reported by the GSM Association (GSMA), and collected
detailed histories of the development of the services and their innovation process.
Analysis of this study shows that 85% of the innovations in this field originated in
emerging markets. The researcher also conclude that at least 50% of all mobile financial
services were pioneered by users, approximately 45% by producers, and 5% jointly by
users and producers. Additionally, services developed by users diffused at more than
double the rate of producer-innovations. Finally, the researcher observed that
threequarters of the innovations that originated in emerging markets have already
18
diffused to OECD countries and that the (user) innovations are therefore globally
meaningful.
Nel J., Boshoff C., Raleting T., (2012), “Exploiting the technology cluster effect to enhance
the adoption of WIG mobile banking among low-income earners” This study investigated
the attitude formation of low-income, non-users of Wireless Internet Gateway (WIG)
mobile banking, by including use of the Short Message Services (SMS) as a moderator of
attitude formation. A non-probability sample of 465 South African non-users of mobile
banking was drawn and clustered into High users and Low users of the SMS, based on the
average number of text messages sent in a week. The moderating effect of "use of the
SMS" was investigated by means of a structural equation modelling multi-group analysis.
The findings revealed that the influence of Ease of use on Attitude and of Self-efficacy on
Ease of use were stronger for High users and significantly different from Low users, while
the opposite was true for the influence of Facilitating conditions on Usefulness.
Oliveira P., Eric V. H., (2011), “Users as service innovators: The case of banking services”
Fond that 55% of today's computerized commercial banking services were first developed
and implemented by non-bank firms for their own use, and 44% of today's computerized
retail banking services were first developed and implemented by individual service users
rather than by commercial financial service providers. Manual precursors to these
services – manual procedures that carried out functions similar to computerized services
in our sample – were almost always developed by users as self-services.
Mas I., Dan R., (2011), “Scaling Mobile Money”,

Retail payment systems require scale to get off the ground and struggle to grow
incrementally. This is due to three factors: (i) Network effects: when it comes to payment
systems, the value of joining a network is directly proportional to the number of people
already on it; (ii) Chicken-and-egg trap: in order to grow, these systems must aggressively
attract both customers and cash-in/cash-out merchants in tandem, otherwise, merchants
19
will stop offering the service due to low transaction revenue and customers will not join
the system because they cannot access a convenient outlet; (iii) Trust: customers have to
become comfortable going to non-bank retail outlets to meet their cash-in/out needs and
initiating transactions through their mobile phones. Until a deployment serves a large
number of customers, people will lack trust in the new system, because they know few
who can vouch for it. To overcome these barriers, mobile money deployments need to
reach a critical mass of customers as quickly as possible, lest they get stuck in the ‗sub-
scale trap. To do this, they need to get three things right. First, they must create enough
urgency in customers minds to learn about, try and use the service. Second, they must
invest heavily in above and below the line marketing to establish top of mind awareness
of (and trust in) the service among a large segment of the population. And, third, they
must incur considerable customer acquisition costs (beyond marketing and promotion) to
ensure that their cash-in/out merchants are adequately incentivized to promote the
service.
Traynor P., Amrutkar C., Rao V., Jaeger T., McDaniel P., Porta T. L., (2011), “From mobile
phones to responsible devices”
Mobile phones have evolved from simple voice terminals into highly-capable,
generalpurpose computing platforms. While people are becoming increasingly more
dependent on such devices to perform sensitive operations, protect secret data, and be
available for emergency use, it is clear that phone operating systems are not ready to
become missioncritical systems. Through a pair of vulnerabilities and a simulated attack
on a cellular network, we demonstrate that there are a myriad of unmanaged
mechanisms on mobile phones, and that control of these mechanisms is vital to achieving
reliable use. Through such vectors, mobile phones introduce a variety of new threats to
their own applications and the telecommunications infrastructure itself. In this paper, we
examine the requirements for providing effective mediation and access control for mobile
phones. We then discuss the convergence of cellular networks with the Internet and its
impact on effective resource management and quality of service. Based on these results,
we argue for user devices that enable predictable behavior in a network—where their
trusted computing bases can protect key applications and create predictable network
impact.
20
Ahmed S. M, Shah J. R., Md. A. I., Samina M., (2011), “Problems and prospects of mobile
banking in Bangladesh”
This study revealed that 61 % respondents think it saves time than traditional banking,
the highest number of respondents use mobile banking for â€˜Air-time top-upâ€™
service, that is 21%, out of 120 respondents 56% replied it is less costlier than traditional
banking, 100% respondents did agree that it is speedy, and 38% respondents are upper
class. Although this concept is new in Bangladesh but its potentiality is high. From this
research, other researchers and policy makers will get an insight about the problems and
prospects of mobile banking in Bangladesh.
Lin H. F. (2011), “An empirical investigation of mobile banking adoption: The effect of
innovation attributes and knowledge-based trust”,
This study developed a research model to examine the effect of innovation attributes
(perceived relative advantage, ease of use and compatibility) and knowledge-based trust
(perceived competence, benevolence and integrity) on attitude and behavioral intention
about adopting (or continuing to use) mobile banking across potential and repeat
customers. Based on a survey of 368 participants (177 for potential customers and 191 for
repeat customers), this study uses a structural equation modeling approach to investigate
the research model. The results indicate that perceived relative advantage, ease of use,
compatibility, competence and integrity significantly influence attitude, which in turn lead
to behavioral intention to adopt (or continue-to-use) mobile banking. Additionally, by
using multi-group analysis with t-statistics, the results found that the antecedents of
attitude toward mobile banking differ between potential and repeat customers.
Mas I., (2011), “Capturing the Potential of M-Payments for the „Unbanked”, This article
discusses the potential of using mobile phones to greatly increase access to financial
services in developing countries, and reviews the main success factors in a mobile banking
project.
Dube T., Kosmas N., Collins M., Lloyd C., (2011), “Adoption And Use of SMS/Mobile
Banking Services in Zimbabwe: An Exploratory Study”
21
The findings showed that although SMS banking was first launched in 2004, the service
was still in its infancy. Evidence showed that accessibility and affordability were the major
drivers to the adoption of SMS banking. The research confirmed the assertion that the
appeal is more about accessibility and affordability in developing countries. This has been
exacerbated by the lack of regulation for electronic banking in Zimbabwe. The study
recommended an increased awareness campaign by banks and development of policy and
regulation for electronic banking in Zimbabwe.
Sudhakar A. M., Suryanarayana, (2011), “Emerging mobile banking scenario and its
adoption in India: a study”,
With broadband communication technological developments and mobile phones
penetration(481 million by June 2009) into common man's life have triggered major
thrust in the Banking service sector of India. With Mobile Banking- a revolutionary
approach to banking transactions has created a strong connectivity between customers
and the banks as both will transact with minimum cost and in minimum time. It is a timely
and its cost effective services can deliver mobile money to non-banked poor people and
will induce economic growth of the country. This article discusses the status of Mobile
Banking in India and other countries with emphasis on data security and standards and its
implication on banking sector.
Murillo R. H., Llobet G., Fuentes R. (2010) “Strategic online banking adoption”, found
out that bank-specific characteristics are important determinants of banks‘ adoption
decisions, competition also plays a prominent role. The extent of competition is related to
the geographic overlap of banks in different markets and their relative market share in
terms of deposits. In particular, banks adopt online banking services earlier in markets
where their competitors have already adopted this technology. This paper is one of the
first to construct local banking markets using the geographic market definitions delimited
by the CASSIDI® Database compiled at the Federal Reserve Bank of St. Louis.
Alain Y. C., Keng B. O., Binshan L., Boon I. T., (2010) "Online banking adoption: an
empirical analysis" showed that perceived usefulness, trust and government support all
positively associated with the intention to use online banking in Vietnam. Contrary to the
22
technology acceptance model, perceived ease of use was found to be not significant in
this study.
Kenneth B. Y., David H. W., Claire L., Randall B, (2010) "Offline and online banking -
where to draw the line when building trust in e-banking?", found that Traditional service
quality builds customer trust in the e-banking service. The size and reputation of the bank
were found to provide structural assurance to the customer but not in the absence of
traditional service quality. Web site features that give customers confidence are
significant situation normality cues.
Agarwal R., Rastogi S., Mehrotra A., (2009), “Customers‟ perspectives regarding
ebanking in an emerging economy”
Determining factors affecting customer perception and attitude towards and satisfaction
with e-banking is an essential part of a bank's strategy formulation process in an emerging
economy like India. To gain this understanding in respect of Indian customers, the study
was conducted on respondents taken from the northern part of India. The major findings
depict that customers are influenced in their usage of e-banking services by the kind of
account they hold, their age and profession, attach highest degree of usefulness to
balance enquiry service among e-banking services, consider security & trust most
important in affecting their satisfaction level and find slow transaction speed the most
frequently faced problem while using e-banking.
Khan M. S., Mahapatra S. S., (2009), “Service quality evaluation in internet banking: an
empirical study in India”
Demographic analysis of data reveals that gender is hardly a bias for use and evaluation of
service quality of i-banking in most of the cases across various categories of customers. A
valid mathematical model is proposed to assess the overall service quality using
regression analysis. The results show that customers are satisfied with quality of service
on four dimensions such as reliability, accessibility, privacy/security, responsiveness and
fulfilment, but least satisfied with the 'user-friendliness' dimension. The empirical findings
not only prioritise different parameters but also provide guidelines to bankers to focus on
the parameters on which they need to improve.
23
The analysis showed that three variables (relative benefits, propensity to trust and
structural assurances) had a significant effect on initial trust in mobile banking. Also, the
perception of initial trust and relative benefits was vital in promoting personal intention
to make use of related services. However, contrary to our expectation, the reputation as a
firm characteristics variable failed to attract people to mobile banking.
Crabbe M., Standing C., Standing S., Karajaluoto, (2009), “An adoption model for mobile
banking in Ghana”
The impact of social and cultural factors on the adoption of technology still requires much
research. To investigate it more fully, we examine the reasons for the adoption and non-
adoption of mobile banking in Ghana. Through a survey of 271 people in Ghana, it has
been found that social and cultural factors in the form of perceived credibility, facilitating
conditions, perceived ulitisation and demographic factors do play a significant role in
adoption decisions. It has been found that ulitisation of technology and services can be a
positive influence for adopters whilst being a negative influence for nonadopters. In
addition, perceived credibility and facilitating conditions also influence attitudes towards
the technology. When these factors are added to a range of demographic factors, the
impact of the social and cultural features of the context of studies can be seen as
significant.
Yang A. S., (2009), “Exploring adoption difficulties in mobile banking services” Factors
associated with adopting and resisting mobile banking technologies were investigated
among university students in Taiwan. Adoption factors included the belief that mobile
banking helps fulfill personal banking needs, provides location-free conveniences, and is
cost effective. The primary factors associated with resistance included concerns over
system configuration security and basic fees for mobile banking web connections. The
theoretical and applied implications of these findings are discussed.
Shanker, D., Singh, H. and Wadud, M. (2008), “A comparative study of banking in China
and India, nonperforming loans and the level playing field”
24
It has become common in literature to compare India and China two remarkably growing
economies but these comparisons often do not take into account the institutional
differences between two countries. We have in this paper done a comparative analysis of
banking institutions in China and India taking into accounts the contentious issue of
nonperforming loans along with the issue of use of banks to provide countervailable
subsidies to exporting organizations. Our research shows that the efficiency differences
between banks in these two countries can be directly related to institutional difference
between two countries and any comparative study between two countries not taking into
consideration these institutional differences may lead to misleading results.
Petrus G., Nelson O. N., (2006) "Borneo online banking: evaluating customer
perceptions and behavioural intention",
The results indicate that perceived usefulness and perceived ease of use are strong
determinants of behavioural intention to adopt online banking. There is also an indirect
effect of computer self-efficacy and prior general computing experience on behavioural
intention through perceived usefulness and perceived ease of use.
Kari P., Tero P., Heikki K., Seppo P., (2006) "The measurement of end-user computing
satisfaction of online banking services: empirical evidence from Finland",
The survey results support three constructs (content, ease of use, accuracy) from the
original model, indicating that the modified EUCS model labelled EUCS2 can be utilized in
analyzing user satisfaction with online banking among private customers.
Sylvie L., Xiaoyan L., (2005) "Consumers‟ attitudes towards online and mobile banking
in China", The results showed Chinese online and mobile bank users were predominantly
males, not necessarily young and highly educated, in contrast with the electronic bank
users in the West. The issue of security was found to be the most important factor that
motivated Chinese consumer adoption of online banking. Main barriers to online banking
were the perception of risks, computer and technological skills and Chinese traditional
cash-carry banking culture. The barriers to mobile banking adoption were lack of
awareness and understanding of the benefits provided by mobile banking.
25
Walfried M. L., Chris M., Sharon S. L., (2005) "The relationship between consumer
innovativeness, personal characteristics, and online banking adoption", While results
confirm the positive relationship between internet related innovativeness and online
banking they also surprisingly show that general innovativeness is negatively related to
online banking.
Luarn P., Lin H. H. (2005), “Toward an understanding of the behavioral intention to use
mobile banking”,
Although millions of dollars have been spent on building mobile banking systems, reports
on mobile banking show that potential users may not be using the systems, despite their
availability. Thus, research is needed to identify the factors determining users' acceptance
of mobile banking. While there has been considerable research on the technology
acceptance model (TAM) that predicts whether individuals will accept and voluntarily use
information systems, limitations of the TAM include the omission of an important trust-
based construct in the context of electronic/mobile commerce, and the assumption that
there are no barriers preventing an individual from using an IS if he or she chooses to do
so. Based on literature relating to the theory of planned behavior (TPB) and the TAM, this
study extends the applicability of the TAM in a mobile banking context, by adding one
trust-based construct (―perceived credibility‖) and two resource-based constructs
(―perceived self-efficacy‖ and ―perceived financial cost‖) to the model, while paying
careful attention to the placing of these constructs in the TAM's existing nomological
structure. Data collected from 180 users in Taiwan were tested against the extended
TAM, using the structural equation modeling approach. The results strongly support the
extended TAM in predicting users' intentions to adopt mobile banking. Several
implications for IT/IS acceptance research and mobile banking management practices are
discussed.
Laukknen T., Lauronen J. (2005), “Consumer value creation in mobile banking services”
26
The paper presents findings of the study that explored consumer value creation in various
mobile banking services. New electronic channels are replacing the more traditional ones.
Mobile devices represent the recent development in electronic service distribution. An
exploratory study was conducted on experienced electronic banking customers by using a
qualitative in-depth interviewing method. The findings increase the understanding of
customer-perceived value and value creation on the basis of attributes of mobile services
and customer-perceived disadvantages of mobile phones in electronic banking context.
The findings allow practitioners to improve their services and marketing strategies and
pass on information to the academics about interesting future research areas.
Suoranta M., Mattila M. (2004), “Mobile banking and consumer behaviour: New insights
into the diffusion pattern”, provided an indication of the characteristics of potential
subsequent adopters of mobile banking, and of differences between user segments.
Consequently, the authors are able to comment on the influence of certain demographic
characteristics and the preferred communication mode of customers on the adoption and
future usage of mobile banking services. The quantitative survey that sheds more light on
this researched issue employed a traditional method of postal questionnaire. The data
were collected in Finland during May–July 2002 and include 1,253 survey responses.
Avinandan M., Prithwiraj N., (2003) "A model of trust in online relationship banking",
observed that shared value is most critical to developing trust as well as relationship
commitment. Communication has a moderate influence on trust, while opportunistic
behaviour has significant negative effect. Also finds higher perceived trust to enhance
significantly customers‘ commitment in online banking transaction. An important
contribution concerns how trust is developed and sustained over different levels of
customer relationship in online banking. The future commitment of the customers to
online banking depends on perceived trust.
Sarel D., Howard M. (2003), “Marketing online banking services: The voice of the
customer”, revealed significant differences in attitudes and opinions between early users
and those that banks hope will adopt next. Most importantly, future prospects could be
characterised as indifferent about online banking; many were not convinced about its
27
benefits and the value it provides. While the potential to expand the market for online
banking services exists, banks need to re-examine their marketing approach.
Heikki K., Minna M., Tapio P., (2002) "Factors underlying attitude formation towards
online banking in Finland",
The study explored the effect of different factors affecting attitude formation towards
Internet banking (online banking) in Finland. The purpose of this paper is to determine
those factors that influence the formation of attitude towards Internet banking on the
one hand, and their relation to the use of online banking services, on the other. To attain
these, a large survey (1,167 responses) was carried out during the summer of 2000 in
Finland. Attitude formation was studied by the use of a structural equation model. The
results are expected to provide both theoretical and practical contributions in the area of
electronic retail banking and understanding of consumer behaviour in the turbulent
financial services industry
Aladwani A. M. (2001), “Online banking: a field study of drivers, development

challenges, and expectations”, the results of a quantitative study of the perceptions of
banks‘ executive and IT managers and potential customers with regard to the drivers,
development challenges, and expectations of online banking. The findings will be useful
for both researchers and practitioners who seek to understand the issues relevant toon
line banking.
Chou D. C., Chou A. Y. (2000), “A Guide to the Internet Revolution in Banking”, shown
that Banking is an industry that is expected to undergo drastic change because of the E-
commerce revolution. This article maps out the direction of the Internet revolution in
banking by surveying the phenomenon's history, its technological development, and
associated managerial and technological issues.
Furst, K., Lang, William W. and Nolle, D. E., (2000) “Internet Banking: Developments and
Prospects” addresses significant gaps in existing knowledge about the Internet banking
landscape. Using information drawn from a survey of national bank examiners, we find
that while only 20 percent of national banks offered Internet banking in Q3 1999, these
transactional Internet banks accounted for almost 90 percent of national banking system
28
assets and 84 percent of the total number of small deposit accounts. All of the largest
national banks offered Internet banking, but only about 7 percent of the smallest banks
offered it. Among institutions offering Internet banking, large banks are more likely than
small banks to offer a broad range of services on the Internet. Matching call report data to
the examiner survey information, we also find that banks in all size categories offering
Internet banking tend to rely less on interest-yielding activities and deposits than do non-
Internet banks, and institutions with Internet banking outperformed non-Internet banks
in terms of profitability. Excepted from the superior performance of Internet banks versus
non-Internet banks are de novo Internet banks, which were less profitable and less
efficient than non-Internet de novos.
Projections based on banks‘ plans as of Q3 1999 indicate that 45 percent of all national
banks will be offering Internet banking by the beginning of 2001. While most of the
growth in new Internet banking will be due to small banks coming online, almost half of
all national banks had no plans to offer Internet banking. Large banks have more
aggressive plans to offer business Internet banking services in the future than small
institutions
Milind S., (1999) "Adoption of Internet banking by Australian consumers: an empirical

investigation", Shows that security concerns and lack of awareness about Internet
banking and its benefits stand out as being the obstacles to the adoption of Internet
banking in Australia. Suggested some of the ways to address these impediments. Further
suggests that delivery of financial services over the Internet should be a part of overall
customer service and distribution strategy. These measures could help in rapid migration
of customers to Internet banking, resulting in considerable savings in operating costs for
banks.
Madhukar G. Angur, R. N., John S. Jahera Jr, (1999) "Service quality in the banking
industry: an assessment in a developing economy", examines the applicability of
alternative measures of service quality in the developing economy of India and assesses
related issues in that context. Based on data gathered from customers of two major
banks, overall results support a multidimensional construct of service quality and suggest
that the SERVQUAL scale provides greater diagnostic information than the SERVPERF
29
scale. However, the five-factor conceptualization of SERVQUAL does not seem to be
totally applicable, and no significant difference was found in the predictive ability of the
two measures. Further, although SERVQUAL and SERVPERF have identical convergent
validity, SERVPERF appears to have higher discriminant validity than SERVQUAL.
Parkar P. M., Roller L. H., (1997), “Collusive Conduct in Duopolies: Multimarket Contact
and Cross-Ownership in the Mobile Telephone Industry”
With the deregulation of the telecommunications industry, a variety of industry structures
have been created in hopes of increasing competition. One example is the licensing of
cellular telephone services in the United States, where the FCC created duopolies in which
two firms were granted licenses to compete in strictly defined product and geographic
markets. Taking advantage of the unique regulatory environment, we test to what degree
duopolistic competition leads to competitive market outcomes. We find that cross-
ownership and multimarket contact are important factors in explaining noncompetitive
prices.
Michel D., (1997) "The Efficiency of French Banking Industry",
Major structural changes have affected the French banking industry during the second
half of the 1980s, what suggests that the French banks were operating with a significant
level of inefficiencies before this period. The purpose of this study is to present estimates
of X-Efficiencies and Scale-Efficiencies in French banks for the 1988–1992 period which
followed this wave of changes. The data are annual accounting data for corporate, mutual
and savings banks. The sample contains 375 depository banks. By using the ―distribution
free‖ method of efficiency estimation, our estimations show that average X-efficiencies of
the French banks are in the range of 70% to 90%. Our results confirm also the existence of
scale economies in French banking industry. Scale efficiency estimates show clearly that
French banks could reduce average costs by about 15% on average by increasing size in
order to reach the efficient size. Note that this result is also in conformity with the
hypothesis that some excess capacity could exist in French banking industry.
30
Binswanger H. P., Khandker S. R., (1995), “The impact of formal finance on the rural
economy of India”
India's supply‐led approach to agricultural credit paid off in non‐farm growth,
employment and rural wages. The impact of expanded credit on agricultural output has
been modest, and the benefits of agricultural income exceed the costs of the programme
only if optimistic assumptions are made about repayment rates on farm credit.
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35
CHAPTER-3
RESEARCH METHODOLOGY
Objective of the study:
 To study the innovative banking services and its current trend.
 To evaluate customer prospective to the innovative banking services.  To
examine customer service and satisfaction level.
 To examine the relation with the demographic variable (Age, Gender, Income,
Education, occupation, residential status and monthly income) and respondents
perception about internet banking.
 To review the growth and development of bank.
Universe of the study and Sample design:

The scope of the study is very wide. If the researcher focuses on the total area of the
study, then thousands of customers of all time banks would be the universe of time
study. So researcher has decided to take strategize sampling techniques for this,
1. The researcher has decided to make division of chennai state in four Zones.
South, North, East and West part of Chennai
2. From each zone one mega city have been selected
3. Here, from each city researcher has taken 50 respondents from Various banks
randomly.
For this study and meaningful research design, three parameters in relation to
customers‟ preferences is selected by the researcher like personal information,
internet banking habit of people and innovative banking services and customers
prospective of innovative banking services. The customers prospective of innovative
banking services again classified into five different parameters like Service level,
Trust level, Usefulness, Satisfaction level and Behaviour of employees of the bank.
36
Types of data:
The study is based mainly on primary data and supported by the secondary data.
The primary data is collected from the customers with the help of questionnaire to
evaluate the customers prospective. For this purpose a structured questionnaire is
prepared and used by the researcher regarding five parameters of the customers
prospective. Information regarding the respondents are classified into three major
categories.
Section-1 belong to personal information like name, gender, age, marital status etc.
section-2 is regarding internet banking habit of the customer and innovative banking
services provided by the respondents bank.
Section-3 is about customers prospective of innovative banking services any five

different criteria. The customer prospective section is again divided five parameters
like the service level, trust level, usefulness, satisfaction level and test the behavior
of the bank employee. In addition to this five point scale have been used as an when
it was required in the study
Research (methodology) tools: data formulation: SPSS:
The population of the study consists of all types of respondents who are using the
technology based services provided by their bank in four major cities of chennai
state. But as far as the number of customers is quitter more and the study is under
taken by the researcher individually, it is very difficult to contact all as the study is to
be conduct with the time limit and other many situational limitation regarding the
submission of the thesis. The collection of the data has been carried out by the
researcher through primary data collection method of “questionnaire”.
Moreover, it includes the broader objective of the study. Scope of the study,
significance of the study, review of the literature, frame work of the affected factors,
hypothesis and limitation of the study.
37
Data Analysis:
The collected data is duly edited, classified and Analyzed by using appropriate
statistical techniques. The most appropriate parametric and non-parametric tests are
used by the researcher. The data has been presented through unvaried and bi-
varied classification with the help
of percentage, average, standard deviation, mean, lower, ANOVA, t distribution, and

one-way variance of analysis. The data has been analyzed and hypothesis has been
tested.
Significance of the study:
The study is given a clear picture of customers prospective for innovative banking
services provided by their banks. It indicates whether, the customer is satisfied with
his or her bank or not. It is also pay an attention towards the problem faced by the
customers while using the internet banking services or innovative banking services
provided by the bank. It may help the bank to take necessary action against the
problem of their customers and to make the innovative banking service more and
more popular. The study gives an idea of Customers mind set, their habit of using
traditional banking services and the awareness regarding modern and latest internet
banking services.
Because of this study not only customer or bank got the idea for improvement about
innovative banking services or the customers awareness regarding the use of easy
e-banking services but also it will guide the society, a lay man, Government and
future researcher for the tremendous modern way of thinking for better innovative
services and the implementation of the appropriate steps against the difficulties of
internet banking services. Banks can come to know the challenges of the e-banking
services and by this study; banks can convert the challenges into future
opportunities.
This research will definitely meet the need of maximum satisfaction of the customers
and this satisfaction make the internet banking service easy, approachable, popular
and available for each and every customer who wants to use it.
38
CHAPTER 4
ANALYSIS AND INTERPRETATION
TABLE 4.1
AGE NO. OF PERCENTAGE

RESPONDENTS
BELOW 18 YEARS 24 48%
18-25 YEARS 18 32%
ABOVE 25 YEARS 10 20%
FIGURE 4.1
Source: primary data
Interpretation: In total number of respondents which shows 48% of below 18

year , 32% of 18-25 year , 20% of above 25 years.
39
TABLE 4.2
GENDER NO OF NO OF
RESPONDENT RESPONDENT IN %
MALE 23 46%
FEMALE 23 42%
OTHERS 06 12%
FIGURE 4.2
Interpretation: In total number of respondents in which 46% shows male,42% of

female ,12% of others.
TABLE 4.3
40
ARE YOU USING NO OF NO OF
INTERNET BANKING RESPONDENT RESPONDENT IN %
YES 38 72%
NO 14 28%
FIGURE 4.3
INTERPRETATION: In total number of respondents in which 72% shows yes

option and 28% shows no option.
TABLE 4.4
OPTIONS NO OF NO OF
41
VERY LIKELY 17 31.3%
SOMEWHAT LIKELY 21 43.8%
MAY BE 12 25%
FIGURE 4.4
INTERPRETATION: In total number of respondents in which 43.8% shows

the somewhat likely ,25% shows the maybe , 31.3% shows the
verylikely.
TABLE 4.5
OPTIONS NO OF NO OF
LOCATION 13 32.7%
LACK OF 10 24.5%
KNOWLEDGE
42
TECHNICAL ISSUES 16 38.8%
NETWORK 7 18.4%
INAVAILABILITY
FIGURE 4.5
INTERPRETATION: In total number of respondents which 32.7% show the

location , 24.5% shows the lack of knowledge ,38.8% shows technical isues , 18.4%
shows the network inavailability.
TABLE 4.6
OPTION NO OF NO OF
AGREE 27 54.2%
DISAGREE 23 45.8%
43
FIGURE 4.6
INTERPRETATION: In total number of respondents in which 54.2% shows the

agree option and 45.8% shows the disagree option.
44
TABLE 4.7
OPTION NO OF NO OF
EXTREMELY WELL 10 20.8%
VERY WELL 16 31.3%
NOT SO WELL 14 27.1%
NOT AT ALL WELL 10 20.8%
FIGURE 4.7

extremely well ,31.3% shows the very well, 27.1% shows the not so well ,20.8%
show the not at all well.
TABLE 4.8
45
OPTION NO OF NO OF
EXTREMELY 13 26.5%
SATISFIED
SATISFIED 18 34.7%
NEITHER SATISFIED 15 28.6%
NOR DISSATISFIED
DISSATISFIED 05 10.2%
FIGURE 4.8

extremely satsified , 34.7% shows the satisfied , 28.6% shows the neither satisfied
nor dissatisfied , 10.2% shows the dissatisfied.
TABLE 4.9
OPTION NO OF NO OF
46
GOOGLE PAY 13 22.4%
PHONE PE 18 36.7%
PAYTM 12 24.5%
BHIM UPI 08 16.3%
FIGURE 4.9

phone pe , 24.5% shows the paytm , 16.3% shows the bhim upi and 22.4% shows
the google pay.
TABLE 4.10
OPTION NO OF NO OF
47
BELOW 10000 16 29.2%
10000-50000 25 52.1%
ABOVE 50000 09 18.8%
FIGURE 4.10

10000-50000,18.8% shows above 50000,29.2% shows the below
10000.
TABLE 4.11
OPTION NO OF NO OF
YES 27 57.4%
48
NO 22 42.6%
FIGURE 4.11

the yes option , 42.6% shows no option .
TABLE 4.12
OPTION NO OF NO OF
BELOW 5 16 28.6%
BELOW 10 28 57.1%
49
BELOW 20 07 14.3%
FIGURE 4.12

the below 10 , 14.3% shows the below 20, 28.6% show the below 5.
50
TABLE 4.13
OPTION NO OF NO OF
ADSVERTISEMENT 11 22.4%
FRIENDS 17 32.7%
BANKING SECTOR 17 32.7%
OTHERS 06 12.2%
FIGURE 4.13
Source:
primary data

friends , 32.7% shows the banking sector ,12.2% shows the others and 22.4%
advertisement.
51
TABLE 4.14
OPTION NO OF NO OF
GOOD 23 46.9%
AVERAGE 21 38.8%
POOR 07 14.3%
FIGURE 4.14

average ,14.3% shows the poor and 46.9% shows the good option.
TABLE 4.15
52
OPTION NO OF NO OF
AGREE 28 59.6%
DISAGREE 21 46.2%
FIGURE 4.15

agree optioin and 46.2% shows the disagree option .
CHAPTER 5
FINDINGS, SUGGESTIONS AND CONCLUSION
53
 Majority of respondents are 48% below 18 years.
 Majority of respondents are 46% male
 Majority of respondents are 72%using internet banking.
 Majority of respondents are 43.8% somewhat likely to recommend internet
banking to others.
 Majority of respondents are 38.8% facing the problems while using the
internet banking.
 Majority of respondents are 54.2% the internet banking keeps the
information private and confidential.
 Majority of respondents are 31.3% the services of the internet banking meet
the needs of the customer.
 Majority of 34.7% customers were satisfied with internet banking services
 Majority of 36.7% of the people uses the mode of the transaction is phone
pay for internet banking.
 Majority of respondents are 52.1% the range of transaction is 10000-50000.
 Majority of respondents are 57.4% the people have contributed/relief fund
through internet banking.
 Majority of respondents are 57.1% of the people pays the monthly bills by
internet banking is below 10.
 Majority of respondents is32.7% of the people came to know about the
internet banking through their friends.
 According to the majority of the respondents 38.8% the status of the internet
banking in india isaverage.
 Majority of respondents are 58% the satisfaction level of the internet banking
in the following areas are agreed by the people .
SUGGESTIONS
• Commercial banks in chennai need to invest more in promoting internet banking

services. The study has revealed that many people are not aware of internet banking
54
as such patronage to the facility is very low. Internet usage penetration in Chennai is
very low but still there are customers who have access and use the internet but they
are not patronizing internet banking due to lack of awareness.
• It is evident from the study that internet banking services in Chennai are very cost
efficient, fast and convenient for the customers. However the banks have not been
able to achieve profitability, operational efficiency and customer growth as postulated
by literature because of poor patronage emanating from lack of promotion. Banks
should therefore maintain the speed of service and cost efficiency being accorded to
the customers through internet banking while The commercial banks can increase
the growth in internet banking by
i. Using offline marketing platforms to encourage customers to use internet

banking.
ii. Ensuring that internet banking services are ever efficient
iii. Ensuring that internet banking hiccups are resolved in term
Promoting internet banking will increase patronage and hence enabling the
commercial banks to enjoy all the efficiencies that internet banking brings as
discussed in the previous chapters. This in turn will increase the profitability of the
banks as operating costs will be reduced.
• The government through the Ministry of finance and the Central bank (The Reserve
Bank of india) should create an enabling environment for the effective operation of
internet banking. As the country is developing and as the financial sector is
embracing modern technologies for effective and efficient running of their banking
operations, there needs to be a good regulatory framework so that the exposure to
additional risks of the commercial banks and their clients should be minimized hence
allowing the banks to be even more profitable as they grow. Currently the country
has no laws that specifically implicate cyber criminals.
• Due to lack of patronage of internet banking, the implementation of internet banking

has seen profitability going down. There is not been much impact on performance in
the year of internet banking implementation but in the year following implementation.
The study shows that there is a negative trend in profitability of the banks. This is
due to increasing ICT costs arising from internet banking. This coupled with lack of
patronage by customers led to reduction in the profits
55
• Apart from intensive promotion of internet banking services, the banks need to
engage in actual civic education on how internet banking operates. This will enable
the banks to penetrate the rural areas. Low literacy levels in Chennai especially in
the rural areas are a challenge to the implementation of modern technologies like
internet banking. If the banks can take this responsibility to contribute to literacy, they
can in the long run create a good market for their services as technological
environment continues to be volatile and compels them to adjust and adapt to the
changes.
CONCLUSION
The advancement of technology and communication has affected the world of

business Very much.
56
As the banks are facing financial liberalization and international competitive
pressure, they need to improve their performance and competitiveness with much
urgency. Commercial banks therefore have adopted e-banking as one of the modern
applications for rendering banking services. However, previous studies on similar
topics show mixed results about the impact of Internet banking on banks'
performance. Thus, we cannot conclude that deciding to adopt internet banking
determines improved bank performance and growth in all banking environments. In
this study, focus was placed on the internet banking experiences undertaken by an
commercial banks. The researcher examined the impact of internet banking on the
performance of an commercial banks over the period 2007 to 2011.
The study has revealed that adoption of internet banking has currently a negative
impact on bank performance in Chennai. This is due to the increasing costs of ICT
over time while there has not been customer growth for the facility. This has made
the banks to fail to achieve operational efficiency and cost reduction due to poor
patronage of the facility. In the long run, as more and more customers continue to
embrace internet banking, its impact on performance will be an important factor to be
taken into account when deciding to implement it.
The significance and pace at which this may take place will be dependent on the
growth of usage of internet banking and how the banks are strategizing for the future
promotion of the facility and effectiveness of the services. The commercial banks
therefore, need to engage in intensive promotion of internet banking services and
develop marketing policies that motivate customers to increase its patronage so as
to enjoy the efficiencies that it brings about hence increasing profitability.
BIBLIOGRAPHY
REFERRED BOOKS:
• Matthew Mac Donald:” The Complete Reference ASP.NET “
57
• Kalen Delaney: “Inside MS SQL Server 2005/2008”
• James A. Sam : “Database Management System”
• Roger S. Pressman : "Software Engineering”
• James Hoffman: “Introduction to Structured Query Language”,4th Edition
• John Stubbe, Marvin Gore: “ Elements of System Analysis”
• Microsoft ASP.NET QuickStart Tutorial
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Appendix
1.Age
A. Below 18 year
B. 18 - 25 year
C. Above 25 year
2.Gender
61
A. Male
B. Female
C. Others
3.Are u using internet banking

A. Yes
B. No
4.How likely are you to recommend internet banking to others

A. Very likely
B. Somewhat likely
C. Maybe
5.What are the problems faced by you while using internet banking
A. Location
B. Lack of knowledge
C. Technical issues
D. Network inavailability
6.Does internet banking keeps your personal information private and confidential
A. Agree
B. Disagree
7.How well do the services of internet banking meet your needs

A. Extremely well
B. Very well
C. Not so well
D. Not at all well
8.Overall how satisfied were you with internet banking services

A. Extremely satisfied
B. Satisfied
C. Neither satisfied nor dissatisfied
D. Dissatisfied
9.The mode of transaction you use for internet banking

A. Google pay
B. Phone pe
62
C. Paytm
D. Bhim upi
10.Range of transaction ?
A. Below 10000
B. 10000-50000
C. Above 50000
11.Have you contributed / relief fund through internet banking

A. Yes
B. No
12.How many bills do you pay each month by internet banking

A. Below 5
B. Below 10
C. Below 20
13.How do you came to know about internet banking ?

A. Advertisement
B. Friends
C. Banking sector
D. Others
14.What is the status of internet banking in india

A. Good
B. Average
C. Poor
15.Please rate your satisfaction level of internet banking in the following areas
A. Agree
B. Disagree
63

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CHAPTER-1

Online banking is an electronic payment system that enables customers of a

Online banking offers customers almost every service traditionally available

To access a financial institution's online banking facility, a customer with internet

Find sources: "Online banking" – news · newspapers · books · scholar · JSTOR

A bank customer can perform non-transactional tasks through online banking,

Viewing recent transactions

Viewing images of paid cheques

Ordering cheque books

Download periodic account statements

Downloading applications for M-banking, E-banking etc.

Investment purchase or sale

Loan applications and transactions, such as repayments of enrollments

Credit card applications

Register utility billers and make bill payments

Financial institution administration

Management of multiple users having varying levels of authority

Transaction approval process

Personal financial management support, such as importing data into personal

Five security token devices for online banking

Security of a customer's financial information is very important, without which

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

A method to attack signature based online banking methods is to manipulate the

A 2008 U.S. Federal Deposit Insurance Corporation Technology Incident Report,

Another kind of attack is the so-called man-in-the-browser attack, a variation of the

As a reaction to advanced security processes allowing the user to cross-check the

In 2001, the U.S. Federal Financial Institutions Examination Council issued

• A bank customer can perform nontransactional tasks through online

o Credit card applications o Register utility billers and make

• Financial institution administration

• Management of multiple users having varying levels of authority

• the process of banking has become much faster

• Personal financial management support, such as importing data into

A mergers-and-acquisitions wave swept the financial industries in the mid-and late

According to "Banking and Finance on the Internet," edited by Mary J. Cronin,

Interactive banking on the Web

Mas I., Dan R., (2011), “Scaling Mobile Money”,

Aladwani A. M. (2001), “Online banking: a field study of drivers, development

Milind S., (1999) "Adoption of Internet banking by Australian consumers: an empirical

Michel D., (1997) "The Efficiency of French Banking Industry",

Amato-McCoy, D.M. (2005). Creating virtual value’, Bank Systems and

Broderick, A. and Vachirapornpuk, S. (2002). Service Quality in Internet

Calisir F. and Gumussoy, C. A., (2008). Internet banking versus other

Centeno, C. (2004). Adoption of Internet services in the Acceding and Candidate

Guerrero, M. M., Egea, J. M. O. and Gonzalez, M. V. R. (2007). Application

Kolodinsky, J.M. and Hogarth, J.M. (2004).The adoption of electronic

Herington, C. and Weaven, S. (2007). Can banks improve customer

Jenkins, H. (2007). Adopting internet banking services in a small island state:

Joseph, M. and Stone, George (2003). An Empirical Evaluation of US Bank

Murphy, P.A. (2007). Digital DIVIDE. Independent Banker, 57(11), 57.

Parasuraman, A., Zeithaml, V.A. and Malhotra, A. (2005). E-S-qual: a multiple-

Pikkarainen, T.; Pikkarainen, K.; Karjaluoto, H. and Pahnila, S. (2004).

Robinson, G. (2000), ‘Bank to the future’, Internet Magazine.

Rombel, A. (2006).Banks build on twin pillars of security and service. Global

Sannes, R. (2001). Self-service banking: value creation models and information

Sathye, M. (1999). Adoption of Internet banking by Australian consumers: an

Sohail, M.S. Shanmugham, B. (2003). E-banking and Customer Preference in

Universe of the study and Sample design: