Development In

Electronic Banking In
Pakistan

Presented By:
M.Omair Iqbal(2005-1-5-5195)
Naeem Noorali(2005-1-5-5622)
 Table Of Content
Executive Summary

Introduction

Objectives
Literature view
Electronic Banking and Technological Developments 2007

Methodology
Hypothesis( Internet data based + Survey Based
On Regression Model).
Conclusion
EXECUTIVE SUMMARY
“Internet banking” refers to systems
that enable bank customers to access
accounts and general information on
bank products and services through a
personal computer (PC) or other
intelligent device.
Numerous factors — including
competitive cost, customer service,
and demographic considerations —
are motivating banks to evaluate
their technology and assess their
electronic commerce and Internet
banking strategies
 INTRODUCTION
• Studies show that competitive pressure is
the chief driving force behind increasing
use of Internet banking technology,
ranking ahead of cost reduction and
revenue enhancement, in second and third
place respectively.

• Wealthier households go online to find

product information more often than lower
income households.
 OBJECTIVE
• How E-banking has established itself as a firm
favorite amongst leading industrialist and
businessperson of Pakistan. And in order to
emphasize our point of the growth of E-
banking in Pakistan we have also carried out
a hypothesis which supports the argument in
favor of e-banking.

• Finally we have rounded our presentation

with a conclusion on the hypothesis tested
and the scope of E-banking in near future.
 LITERATURE REVIEW
• Newspaper

• Internet Websites

• Articles
File under folder Quarter 06-07.pdf
File under folder Quarter 06-07.pdf
Growth in E-banking –overview

www.sbp.org\psd\reports\yearlyreport 03-04 & 04-05

File under folder Quarter 06-07.pdf
File under folder Quarter 06-07.pdf
 METHODOLOGY

The method that we adopted to conduct is

explorative under which we selected the
sample size of 25 person, namely from
students, graduates and professionals and
the replied we got from the respondents
through the survey via questionnaire and
the result revealed are analyze in the
report.
 HYPOTHESIS
H0= Banking Transactions has increased due to e-banking
services from 06 to 07
H1= Banking Transactions has NOT increased due to e-banking
from 2006 to 07

STATISTICS (in %) Quarterly:

2006 2006 2006 2007 2007 2007

PB 83 80.1 80.3 78.6 76.8 75.8
EB 17 19.9 19.7 21.4 23.2 24.2

PB=Paper base= Percentage of composition of Paper base in total transaction

EB=Electronic base= Percentage of composition of Electronic base in total transaction

Coefficientsa

Standardi
zed
Unstandardized Coefficien
Coefficients ts
Model B Std. Error Beta t Sig.
1 (Constant) 83.860 .609 137.691 .000
Yearly transaction
-1.360 .156 -.975 -8.696 .001
based on Quaters.
a. Dependent Variable: composition of Paper base in %.
Years = 83.860 -1.360
 Coefficientsa

Standardi
zed
Unstandardized Coefficien
Coefficients ts
Model B Std. Error Beta t Sig.
1 (Constant) 16.140 .609 26.501 .000
Yearly transaction
1.360 .156 .975 8.696 .001
based on Quaters.
a. Dependent Variable: composition of Electronic base in %.

Years = 16.140 + 1.360

Which means that, if the one unit (quarter) increases the Electronic based
transaction is increase by 1.360.

CONCLUSION
We can conclude from above hypothesis as the years increases the
electronic transaction increases but electronic base is not only the factor
which increases the overall banking transaction but instead we can say
now people are starting to switch on electronic banking. and it can be
say in few years electronic banking become very popular and common.
 HYPOTHESIS (Based on the survey )

H0 = Customer are satisfied with E-banking Transaction/Product and

want E-banking to grow.
H1 = Customer are not satisfied with E-banking Transaction/Product
don’t want E-banking to grow.
Question No 1
Which is the better option for customer?
1. Conventional Banking (standard)
2. Electronic banking. 40

3. Pc banking
30
N o f c u s to m e r in g r o u p

20

10

0
conventional banking electronic banking pc banking

Better option for customers

Explanation Of Question No: 1
The survey conducted through a questionnaire reveals the
popularity and growth of Internet Banking among the
peoples. The results shows a surprising response of
students who are under graduates by preferring 100% vote
to internet banking (Pc + Electronic) while, professionals
out of 20 prefers “10” e-banking, “6” Conventional
Banking, “4” PC Banking and bankers also show the same
responses as well by voting “6” votes to e-Banking out of
10 and others which includes Doctors, lawyers, Employers
of Private organization and teachers as well also prefers e-
Banking as better option for customers. The graph also
justifies e-Banking popularity among thee individuals.
Question No#2
50
N o f c u s t o m e r in g r o u p
40

30

20

10

0
ATM bill presentment
Cash managment None the above

which electronic medium use frequently?

customer in group * which electronic medium use frequently? Crosstabulation

Count
which electronic medium use frequently?
Cash bill None the
ATM managment presentment above Total
customer students 9 1 10
in group professionals 16 2 2 20
bankers 8 1 1 10
teachers 3 1 4
executive & others 5 1 6
Total 41 3 1 5 50
Explanation Of Question No: 2
The survey conducted through a questionnaire reveals the
popularity among the selected people which electronic medium
they used frequently. The result shows a massive response on
ATM which is used frequently among people. Response of students
who are under graduates by preferring 90% vote to ATM as the
mostly used e-Banking device, while, professionals out of 20 used
“16” Automated Teller Machines, “2” used non of the above option
and "2" used cash management. Even Bankers also used ATM as a
most frequent device of transfer of money. Out of 10 banker 8
respond ATM While others include professionals; teachers and
lawyer respond ATM as well. The graph also justifies also the
following result.
QUESTION NO 3
40

N o f c u s t o m e r in g r o u p

30

20

10
Internet banking Traditional Banking

Safest option to transact for customer

customer in group * Safest option to transact for customer

Crosstabulation

Count
Safest option to transact
for customer
Internet Traditional
banking Banking Total
customer students 2 8 10
in group professionals 14 6 20
bankers 8 2 10
teachers 3 1 4
executive & others 5 1 6
Total 32 18 50
Explanation Of Question No: 3
The survey conducted through a questionnaire disclose the
tough competition between Internet Banking and
Traditional Banking, for safest option for customer, as
students who are under graduates like the services of
preferring 100% vote to ATM as the mostly used e-Banking
device, while, professionals out of 20 used “16” Automated
Teller Machines, “6” used non of the above option. While
out of 4 teacher majority preferred Internet banking and
executive class also opt for internet banking.
Question 4
20

N o f c u s t o m e r in g r o u p

10

0
Mis sing disclos ing of pers on others (spec ify)
Credit ris k hac king

threats which are stoping customers.

customer in group * threats which are stoping customers. Crosstabulation

Count
threats which are stoping customers.
disclosing of
personal others
Credit risk information hacking (specify) Total
customer students 1 2 6 1 10
in group professionals 8 3 4 15
bankers 3 3 3 9
teachers 1 1 2
executive & others 4 1 1 6
Total 17 9 14 2 42
Explanation Of Question No: 4
The result above shows through a questionnaire reveals the
hazards and problem from which people hesitate from
transacting through e-banking, the people which
considered s threats are Hacking, as most students tick
hacking as threats and hurdle in growth of E-banking, 4
professionals think hacking, 3 persons think disclosure of
information as a threat and 8 tick for credit risk and others
which include some major persons of society includes 5
vote for credit risk.
QUESTION NO 5
50

N o f c u s t o m e r in g r o u p
40

30

20

10

0
local banks foriegn bank s

which bank provide secure services.

customer in group * which bank provide secure services. Crosstabulation

Count
which bank provide secure
services.
local banks foriegn banks Total
customer students 1 9 10
in group professionals 1 19 20
bankers 1 9 10
teachers 4 4
executive & others 1 5 6
Total 4 46 50
Explanation Of Question No: 5
The result above shows through a questionnaire reveals the
better services in terms of efficiency is provided by Foreign
Bank or Local Bank. The result proof a massive preference
of Foreign Bank by each individual as only 1 student among
20 students preferred the services while 19 others vote for
Foreign Bank. As the same trend shows by professionals,
Bankers and others as they all like the services of Foreign
Bank. The graph also reveals the preference of individuals
to transact through and like the services of Foreign Bank.
QUESTION NO 6

30

20
N of customer in group

10

Major factor of decline in tradional banking

Explanation Of Question No: 6
The result above shows which is conducted through a
questionnaire discloses the major factors which results in a
decline of Traditional Banking. Long delay in handling of
transaction and Long wait at the counters seems to be the
actual factors which results in customer dissatisfaction.
Delay in handling of transaction and long wait at counters.
But the actual conclusion can be made by the Bankers itself
as they know what are the problems they think the
customer faces, as they voted for long wait at counters.
Others also voted as same.
QUESTION NO 7

40

N o f c u s t o m e r in g r o u p 30

20

10

0
convential approach lack of awarenes s
lack of finance for others.

why internet banking is not popular

customer in group * why internet banking is not popular Crosstabulation

Count
why internet banking is not popular
convential lack of finance lack of
approach for the banks awareness others. Total
customer students 1 2 6 1 10
in group professionals 6 1 13 20
bankers 3 1 6 10
teachers 1 2 1 4
executive & others 1 5 6
Total 11 5 32 2 50
Explanation Of Question No: 7
The result above shows through a questionnaire reveals the
factors which act as a hurdle in the growth of e-banking as
most people consider Lack of awareness as the main factor.
Three Students out of 20 thinks the same way 1 vote for
traditional approach and 2 think for lack of finance as the
hurdle in growth of e-banking in Pakistan. Professional
think lack of awareness as well as 6 votes in favor while 6
think conventional Banking as decline growth of e-banking.
The bankers decisions here holds important value as they
think lack of awareness among the people also the major
factor which results in low growth of e-Banking and Others
vote as same.
QUESTION NO 8
40

N o f c u s t o m e r in g r o u p
30

20

10

0
convenience wider range of produ
better knowledge of

Important benifit for the customers of internet bankin

customer in group * Important benifit for the customers of internet bankin Crosstabulation

Count
Important benifit for the customers of internet
bankin
better wider range
knowledge of products
of state of and service
convenience accouts available Total
customer students 6 4 10
in group professionals 14 3 3 20
bankers 9 1 10
teachers 1 1 2 4
executive & others 5 1 6
Total 35 10 5 50
QUESTION NO 9

N o f c u s t o m e r in g r o u p 40

30

20

10
yes no

Can electronic banking replace standard banking?

customer in group * Can electronic banking replace standard

banking? Crosstabulation

Count
Can electronic banking
replace standard
banking?
yes no Total
customer students 7 3 10
in group professionals 13 7 20
bankers 6 4 10
teachers 2 2 4
executive & others 5 1 6
Total 33 17 50
Explanation Of Question No: 8 & 9
Question No: 8
The above question was about the important features of
internet banking, where most of persons opt for
convenience option and few go with the option of better
knowledge and wider range of product.

Question No: 9

The last question was asked that the internet banking can
replace the traditional banking, majority says yes to it. We
can cross check with the help of cross table
 ANOVA

Sum of
Questions Groups Squares df Mean Square F Sig.
Better option for Between Groups 1.280 4 .320 .917 .462
customers Within Groups 15.700 45 .349
Total 16.980 49
which electronic medium Between Groups 1.830 4 .458 .170 .953
use frequently? Within Groups 121.050 45 2.690
Total 122.880 49
Safest option to transact Between Groups 2.537 4 .634 3.177 .022
for customer Within Groups 8.983 45 .200
Total
11.520 49

threats which are Between Groups 7.943 4 1.986 2.368 .070

stoping customers. Within Groups 31.033 37 .839
Total 38.976 41
which bank provide Between Groups 9.667E-02 4 2.417E-02 .303 .874
secure services. Within Groups 3.583 45 7.963E-02
Total 3.680 49
Major factor of decline in Between Groups 3.747 4 .937 .329 .857
tradional banking Within Groups 128.033 45 2.845
Total 131.780 49
why internet banking is Between Groups 2.167 4 .542 .671 .616
not popular Within Groups 36.333 45 .807
Total 38.500 49
Important benifit for the Between Groups 4.167 4 1.042 2.629 .047
customers of internet Within Groups 17.833 45 .396
bankin Total 22.000 49
Can electronic banking Between Groups .337 4 8.417E-02 .348 .844
replace standard Within Groups 10.883 45 .242
banking? Total 11.220 49
 CONCLUSION
H0 = Customer are satisfied with E-banking Transaction/Product and
want E-banking to grow.
H1 = Customer are not satisfied with E-banking Transaction/Product
don’t want E-banking to grow.

Based on the hypothesis and the sample

test we can conclude that the survey has
the significant impact and we don’t refuse
H0 that the Customer is satisfied with E-
banking Transaction/Product and want E-
banking to grow. We can see the ANOVA
table and the significance of the entire
test.
 Recommendation

• INNOVATIVE PRODUCT

• E-BANKING DEVELOPMENT PROGRAM

• SECURE AND ROBUST ENVIORNMENT

• OVERCOME THE RESISTANCE TO CHANGE

ATTITUDE

• LOCAL BANK START GIVING COMPETITION TO

FOREIGN BANKS
The End