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Project Abstract Online banking also called Internet banking can be defined as
performing financial transactions over the Internet through a bank’s website.
Online banking provides many advantages to consumers. Consumers can access
data any time, anywhere irrespective of location and hours of operation of the
bank. Customers are not the only beneficiary of this new service. Making use of
online banking, commercial banks may greatly increase the market coverage
and better track customers. Though it sounds like a win-win situation for both the
parties still online banking is not that prevalent, in spite of the wide spread of
personal computers and internet service.
The objective of this paper is to find out what are the factors affecting adoption
of internet banking among consumers. We would find out why some people start
using this facility while others do not. What are the concerns of people who do
not use it? We would also delve into traits of adopters of internet banking.
Features
Online banking solutions have many features and capabilities in common, but traditionally
also have some that are application specific.
The common features fall broadly into several categories
• Transactional (e.g., performing a financial transaction such as an account to account
transfer, paying a bill, wire transfer, apply for a loan, new account, etc.)
○ Payments to third parties, including bill payments and telegraphic/wire
transfers
○ Funds transfers between a customer's own transactional account and savings
accounts
○ Investment purchase or sale
○ Loan applications and transactions, such as repayments of enrollments
• Non-transactional (e.g., online statements, cheque links, cobrowsing, chat)
○ Viewing recent transactions
○ Downloading bank statements, for example in PDF format
○ Viewing images of paid cheques
• Financial Institution Administration
• Management of multiple users having varying levels of authority
• Transaction approval process
Features commonly unique to Internet banking include
• 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.
[edit] History
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[1] 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.
The UK's first home online banking services[2] was set up by Bank of Scotland for customers
of the Nottingham Building Society (NBS) in 1983.[3] The system used was based on the
UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata
Td1400) connected to the telephone system and television set. The system (known as
'Homelink') 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.[citation needed]
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 online banking features.
[edit] Security
Security token devices
Protection through single password authentication, as is the case in most secure Internet
shopping sites, is not considered secure enough for personal online banking applications in
some countries. Basically there exist two different security methods for online banking.
• The PIN/TAN system where the PIN represents a password, used for the login and
TANs representing one-time passwords to authenticate transactions. TANs can be
distributed in different ways, the most popular one is to send a list of TANs to the
online banking user by postal letter. The most secure 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 (this is called two-factor
authentication or 2FA). Usually online banking with PIN/TAN is done via a web
browser using SSL secured connections, so that there is no additional encryption
needed.
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 and Austria, many banks have adapted this "SMS TAN" service as it
is considered as very secure.
• 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.
Attacks
Most of the 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 recent FDIC 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 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.[4]
The most recent kind of attack is the so-called Man in the Browser attack, where a Trojan
horses permits a remote attacker to modify the destination account number and also the
amount.
Countermeasures
There exist several countermeasures which try to avoid attacks. Digital certificates are used
against phishing and pharming, the use of class-3 card readers is a measure to avoid
manipulation of transactions by the software in signature based online banking variants. To
protect their systems against Trojan horses, users should use virus scanners and be careful
with downloaded software or e-mail attachments.
In 2001 the FFIEC issued guidance for multifactor authentication (MFA) and then required to
be in place by the end of 2006.[5]
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DISSERTATION REPORT
ON
OF
BUSINESS MANAGEMENT
(EQUIVALENT TO MBA)
ACCADEMIC SESSION
(2007-2009)
Submitted To:
Submitted By: -
SIDDHARTH AGARWAL
BM 07149
GHAZIABAD-201009
1 |P ag e
ACKNOWLEDGEMENT.
A Project report is an assessment of one’s great skill and aptitude. One needs to
devote in immense patience, time and brains for the compilation of one such
rewarding outcome of true efforts.
Never the last I would take the opportunity to thank the concerned bank officials
for providing me with the necessary and relevant information. A word of thanks
to the customers for giving in their invaluable time and being a part of the
survey.
SIDDHARTH AGARWAL
2 |P ag e
TO WHOMSOEVER IT MAY CONCERN
MDS)”
During his project he was found to be very sincere and attentive to small
3 |P ag e
PREFACE.
From a bank’s perspective, using the Internet is more efficient than using other
distribution mediums because banks are looking for an increased customer base.
Using multiple distribution channels increases effective market coverage by
enabling different products to be targeted at different demographic segments.
Also Banks cannot risk loosing customers to competitors within the aggressive
competition in the banking industry around the world. Moreover Internet delivery
offers customized service to suit the needs and the likes of each user. Mass
customisation happens effectively through Online Banking. It reduces cost and
replaces time spent on routine errands with spending
4 |P ag e
time on business errands. Online Banking means less staff members, smaller
infrastructure demands, compared with other banking channels. From the
customers’ perspective, Online Banking provides a convenient and effective way
to manage finances that is easily accessible 24 hours a day, seven days a week.
In addition information is up to date. Nevertheless Online Banking has
disadvantages for banks like how to work the technology, set-up cost, legal
issues, and lack of personal contact with customers. And for customers there are
security and privacy issues
5 |P ag e
TABLE OF CONTENT
PREFACE…………………………………………………………………….4
1.1INTRODUCTION………………………………....9
1.2OBJECTIVE OF THE STUDY…………………….11
1.3LITERATURE SURVEY…………………………..12
1.4RESEARCH METHODOLOGY…………………...15
CHAPTER5: ANNEXURE………………………………………..326 |P ag e
LIST OF TABLES AND FIGURES
TABLES
PAGE NO.
TABLE1……………………………………………………..17
TABLE2……………………………………………………..18
TABLE3……………………………………………………..19
TABLE4……………………………………………………..20
TABLE5…………………………………………………….. 21
TABLE6…………………………………………………….. 27
TABLE7……………………………………………………...27
FIGURE
FIGURE1…………………………………………………….17
FIGURE2…………………………………………………….18
FIGURE3…………………………………………………….19
FIGURE4…………………………………………………….20
FIGURE5…………………………………………………….21
FIGURE6…………………………………………………….22
FIGURE7…………………………………………………….23
FIGURE8…………………………………………………….26
7 |P ag e
EXECUTIVE SUMMARY
cube, the number of active Internet user (i.e. ones who logon to Internet atleast
once a
month) is now 32 million and numbers who have used Internet atleast once
stands at 46 million. Maximum of the person who are going on for internet
banking lies in the age bracket of 26-35. but the rise in the age the level of users
become low.
Approximately 17% of female use internet banking. This a matter of concern for
a banks
Although many major banks have started offering i-banking services, the slow
pace will continue until the critical mass is achieved for PC, internet connections
and telephones. However, the upsurge of IT professionals with growing demands
is pressuring the government and bureaucracy in the country to support and
develop new initiatives for a faster spread of i-banking. But then to there is a fear
in mind of customer using internet as a medium for the banking transaction.
Private and foreign banks are trying to turn more and more customer towards
the usage if internet for the banking transaction. This study is basically to know
the relation of various independent variables on the customer usage of internet
for banking.
8 |P ag e
INTRODUCTION
What is bank?
Need for internet banking: One has to approach the branch in person, to
withdraw cash
India’s banking sector is growing at a fast pace. India has become one of the
most
preferred banking destinations in the world. The reasons are numerous: the
economy is
9 |P ag e
growing at a rate of 8%, Bank credit is growing at 30% per annum and there is
an ever- expanding middle class of between 250 and 300 million people (larger
than the population of the US) in need of financial services. All this enables
double-digit returns on most asset classes which is not so in a majority of other
countries. Foreign banks in India achieving a return on assets (ROA) of 3%, their
keen interest in expanding their businesses is understandable – even more so
when compared with the measly 1% average ROA for the Top 1000 banks in the
world.
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 envisage and, hence, has compelled
regulators world over to take note of this emerging channel. Some of the
distinctive features of i-banking are:
banking, heightening some of them and throwing new risk control challenges,
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
customers using Internet Banking and those not using Internet Banking was done
and it
10 |P ag e
showed that risk perceptions in terms of financial, psychological and safety risks
among customer not using the internet was more meaningful than those using
internet banking. Customers not preferring to use internet banking thought that
they would be swindled when using this service, and therefore, are particularly
careful about high risk expectation during money transfers from and between
accounts. Only 37% of Indian Internet users come from Top 10 cities i.e. Mumbai,
Bangalore, Delhi, Calcutta, Chennai, Pune, Hyderabad, Ahmedabad, Surat and
Nagpur. Another day and another number. As per
IAMAI and I-cube, the number of active Internet user (i.e. ones who logon to
Internet
atleast once a month) is now 32 million and numbers who have used Internet
atleast once stands at 46 million. Maximum of the person who are going on for
internet banking lies in the age bracket of 26-35. but the rise in the age the level
of users become low.
Approximately 17% of female use internet banking. This a matter of concern for
a banks
Although many major banks have started offering i-banking services, the slow
pace will continue until the critical mass is achieved for PC, internet connections
and telephones. However, the upsurge of IT professionals with growing demands
is pressuring the government and bureaucracy in the country to support and
develop new initiatives for a faster spread of i-banking. But then to there is a fear
in mind of customer using internet as a medium for the banking transaction.
Private and foreign banks are trying to turn more and more customer towards
the usage if internet for the banking transaction. This study is basically to know
the relation of various independent variables on the customer usage of internet
for banking.
To know the cause why customers are not using internet banking
11 |P a g e
LITERATURE REVIEW
In India still there is lack of users for internet as a medium for banking purpose,
but the banking system are upgrading and bringing many electronic banking
medium for customers so that banking can be made more convenient.
[1] Joseph et al. (1999) investigated the influence of internet on the delivery of
From the provider perspective, there are target quality and delivered quality. The
focus of process- or supply-led quality definition is rather internal than external,
and it is defined as conformance to requirements. It lays emphasis on the
importance of the management and the supply-side quality, and there is an
important role of the process in determining the quality of outcome (Ghobadian,
1994). Achieving the quality of conformance between the planned (target)
quality level and the real quality delivered to customers depends on the service
quality management system in an organization.
[2] IAMAI report on online banking 2006. 43% of online banking user haven’t
started online financial transaction because of security reasons, 39% haven’t
started because they prefer face to face, 22% haven’t started because they
don’t know how to
12 |P ag e
use, for 10% sites are not user friendly and for 2% banks are not providing the
facility of internet banking. According to research 68% of the customers can not
say that when they will be starting the financial transactions through internet.
Maximum numbers of online banking users are male and maximum of them are
in age the group of 25-35. Numbers of female users are very less i.e. 17% only.
More than 60% of the people who are having account with have accounts in 3-4
banks.
Only 37% of Indian Internet users come from Top 10 cities i.e. Mumbai,
Bangalore, Delhi, Calcutta, Chennai, Pune, Hyderabad, Ahmedabad, Surat and
Nagpur. Another day and another number. As per IAMAI and I-cube, the number
of active Internet user (i.e. ones who logon to Internet atleast once a month) is
now 32 million and numbers who have used Internet atleast once stands at 46
million.
[3] The Indian Internet Banking Journey In 2001, a Reserve Bank of India survey
revealed that of 46 major banks operating in India, around 50% were either
offering Internet banking services at various levels or planned to in the near
future. According to a research report,( India Research, Kotak Securities, May
2000.) while in 2001, India's Internet user base was an estimated 9 lakh; it was
expected to reach 90 lakh by 2003. Also, while only 1% of these Internet users
utilized the Internet banking services in 1998, the Internet banking user base
increased to 16.7% by mid- 2000.
13 |P ag e
based on relatively standardized outcomes determined by online systems,
customer
14 |P ag e
RESEARCH METHODOLOGY
RESEARCH TYPE
procedure
Collection of information
Analysis of information
DATA COLLECTION
Primary Data: Structured Questionnaire
15 |P ag e
SAMPLING
Sample Area:NCR
Sample Size:150
TOOLSStatistical :SPSS
16 |P ag e
DATA ANALYSIS AND INTERPRETATION
Q1)
age
own a internet
18-25
27
26-35
51
36-45
20
46-60
61-+
Table 1
Figure1
From the above interpretation we can say that age group between 18-25 own a
internet of 27%while % who don’t own an internet is 3%, similarly % between 26-
35 own an internet of 51% while 1 %don’t own internet, 36-45 own an internet of
20% while 2%don’t own, 46-60 own 8%internet while 4% don’t own, 61and
above own 1 %internet, 3%don’t own. Finally we can see that age group 26-35
own maximum % of internet.
17 |P ag e
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Customer Perception Towards Internet Banking
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guys this is a ok project and its questioner is a good 1 a lot more research could
have been done on this but bcoz of lack of time i was unable to ... (More) guys
this is a ok project and its questioner is a good 1 a lot more research could have
been done on this but bcoz of lack of time i was unable to complete my research
(Less)
Theses
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service delivery
information
problem
hdfc internet
quality questionaire
cost
(more tags)
Theses
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