Online Banking Advantages and Disadvantages

Online swearing Advantages and Disadvantages pop to Advantages of Online margining Disadvantages of Online blasphemeing Types of Online Banking Findings elevate Analysis of Online Banking Banking auspices Systems Issues of Implementing Online Banking Goernment constituent in Online Banking recommendation ConclusionOVERVIEW On ONLINE affirmINGInformation technology has effect the platform of cussing as a social unit, especi tot whollyyy of online imprecateing. Though this is an entirely y come inhful condition for forbidden country, due to the in 10se competition its application is increasing rapidly. Now a day, it has become al well-nigh obligatory on the part of the banks to put on this. The online banking go that we be getting now ar limited to near issue in most cases. But it is expected that in near laterlife we be going to get the fullest receipts from online banking. We are in addition expecting that the cultivate of online banking will be g reatly upbeat for both the clients and attend providers. inventionE-Banking is defined as the automated delivery of new and conventional banking products and go directly to customers finished electronic and interactive communication channels.Online banking ( meshwork banking) is a term utilizationd for performing proceeding, payments and so on over the mesh by a banks secure website. This send packing be very theatrical roleful, specially for banking outside bank hours (which tend to be very short) and banking from bothwhere where internet nark is available. In most cases a web browser such(prenominal) as net profit Explorer or Mozilla Firefox is utilized and any normal internet connecter is suitable. It is an umbrella term for the process by which a customer whitethorn perform banking transactions electronically without visiting a brick-and-mortar institution. With the religious religious service of E-Banking customers foundation approaching their banks withou t having to be physically present at the bank branch.In Bangladesh the idea of online banking was conceived in 1996 but the commercial operation started in 2001. Banks occasion a variety of operate for Online Banking such as PC banking, theater Banking, Electronic Banking or net income Banking. These systems offer certain advantages over traditional banking modes.Advantages of Online BankingFor ConsumersThe privacy of customers.Online serve are available for consumers 24 hours daily during the whole week.Customers might save epoch and efforts of doing their finance transactions.It will be well-situated for them to view all provision they need producely and simply.Searching of any branch of a bank will be retrieveibly by online users.For Banks unmatchable way of runing to a great extent customers is to use their services.Increasing the banks reputation around the human beings is well known by many people.It doesnt need to employ rafts of suffer or bankers to deal with customers directly.Banks can deal simply with their branches all over the world with mavin network.Disadvantages of Online BankingFor consumersSome people feel uneasy to provide their passwords or any kind of information active their funds over the internet.Some websites might be difficult for consumers for the first time to stoppage their finance.It is possible for banks to update their websites, which of necessity from consumers to type in once again their selective information.It is necessary to keep back knowledge and skills on using the profits.For BanksBanks may conduct big amount of funds to establish a website with move inive features.They may lose their information if the network is damaged with other branches.Hacking and viruses will suck in in problems for online banking, which could brake and damage the information.Types of online bankingThe common assumption is that Internet banking is the nevertheless method of online banking. However, this is not stric tly the case, as several types of services are currently availablePC BankingThe fore imbibener to Internet banking has been around since the late eighties and is still widely used today. Individual banks provide figurer software which is tight on to an SMEs office computer. The SME can then access their bank aim via a modem and tele knell link to the bank. Access is not necessarily via the Internet.Internet Bankingvictimization a Web browser, a user can access their musical score, once the banks application server has validated the users identity.Digital TV BankingUsing the standard digital reception equipment (set top box and remote control) users can access their bank account. Abbey National and HSBC services are available via digital TV providers. One of its main selling points is that no account detail are transmitted via the World Wide Web. This service is absent in our country.Telephone ( supple) BankingIt includes the banking through using the Telephone operator whether public or private with wire or wireless. Its a form of e-banking that services the household who discombobulate no facility to access Internet and computer.Now phone and online banking in Bangladesh only offer services such as balance check and request for statement. But the nomadic banking bring home the bacons fund transfer, paving the way for silver transaction through cell phones across the countryText phone (SMS) BankingMany of the national and transnational banks clear introduced this service to allow customers with schoolbook phones to check their balance, pay bills and transfer gold.ONLINE BANKING Products Services ofDifferent banks in Bangladesh eastern Bank Limited conviction calling cardThe brand name of commendation card of EBL is Simple ac honorable mention vizor. The basic features of EBL credit cards are its free for its clients for all time, it can be used for balance transfer, mobile alert facilities, it has world wide acceptability, Immediate cash ad vance service, lay on the line assurance program, convenient payment option and global emergency aid service and so on calculate control boardEBL has introduced the account post horse for the savings Account holder who can use it to meet immediate engagement if he/she has enough balance to his/her bank account just later on going to their standard atmosphere booths available with its each branch and sacramental manduction with others.modus vivendi beleaguer and Cool CardThese card game are introduced only for the students for a soft condition but having a great exposure. send for BankingEBL Providing Phone Banking facilities to its clients as a part of online banking facilities.SMS BankingEBL uses the SMS Banking to provide services to the grass-root level customers. present a dogged SMS code is fixed for each specific service.capital of Bangladesh BANK LIMITEDPhone BankingThe DBL has brought a great change in Phone Banking. Now this facility is getting so popularity.I nternet Banking each its cash dispenser booths as well as branches are connected through Internet for which the any information among branches can be transferred within a moment.SMS BankingThe DBL is using the SMS Banking to provide services to the grass-root level customers. Here a fixed SMS code fixed for each specific service.International CardIts a card which is accepted World-wide for Purchase Cash Withdrawals. Its a great service for its customers. debit entry CardIt has been providing calculate Card facilities to its customers who can meet their money withdrawal fields at any ATM booths of its own operated or sharing with others to provide the security of its clients money. citation CardThe Dhaka Bank has been providing the consultation Card facilities to its customers liaison. Its named as Dhaka Bank indorse Credit Card. impudence BANK LIMITEDCredit CardThe Trust Bank uses the VISA Credit Card for Local, International and Dual Currencies. Its one of the banks personal banking services.debit CardThe Trust Bank uses the Trust VISA-Electron Debit Card for local, foreign and dual currencies. It is one of the banks automated services to the customers.Phone BankingIt has such services for its customers.Internet BankingIt deals all the foreign transactions through the Internet Banking.SMS BankingIt deals with the grass-root clients through providing the SMS Banking services.DUTCH-BANGLA BANK LIMITEDBangladesh Bank info shows that there are close 600 ATMs in the country. The quash was less than 300 a year ago. Currently, Dutch-Bangla Bank Limited has the largest network with 260 ATMs, with up to 12 new booths coming both month. Thirteen banks can use DBBL booths. Besides, the bank has an concord with Q-Cash, allowing ATM cardholders of moneymaking(a) Bank and Trust Bank to take cash from the said(prenominal) booths. Also, Dutch-Bangla Bank clients can use all Q-Cash outlets. The bank has a similar reconcilement with E Cash that runs 24 booths a cross the country. Now a day, they are providing truly Online Banking.Credit CardThe Dutch-Bangla Bank is only the bank which has more than ATM booths than any other banks operational their strain in Bangladesh. The DBBL-Nexus Credit Card is one of the medium which it permits to withdraw a certain limits of money from its booths.Debit CardIt is another(prenominal) product through which the Card holder is able to withdraw the money amount from his/her account. Its known as the DBBL-Nexus Debit Card.Phone BankingThey are very successful with the Phone banking (Telephone and Cell Phone).Internet BankingAbout 80% of their e-banking is based on the internet Banking.SMS BankingThey also cast SMS banking for the clients who are out of the Internet connection and they can have access to get the immediate service with just an SMS.ARAB BANGLADESH BANK LIMITEDDebit CardAB Bank uses the AB Bank Visa Debit Card.Credit CardThe name of AB Banks Credit Card is the AB Bank VISA EASICredit Card. Phone BankingIt uses phone banking as part of e-banking to run its online banking transactions.Internet BankingThe bank provides this service to its customers with a little limit.Western labor union money TransferIt is also the member of Western Union Money Transfer for which its able to transfer money from one country to another within a moment.BANK ASIACredit CardThe name of the Bank Asias Credit Card is Bank Asia Credit Card MasterCard.Debit CardThe name of the Debit Card of this bank is Bank Asia Debit Card. unstable BankingIt uses active banking as part of e-banking to run its online banking transactions.Internet BankingThe bank provides this service to its customers with a little limit.SMS BankingIt uses the SMS banking to deal with its grass-root clients.BRAC BANK LIMITEDMobile BankingIt uses Mobile banking as part of e-banking to run its online banking transactions.Internet BankingThe bank provides this service to its customers with a little limit.SMS BankingIt uses the SM S banking to deal with its grass-root clients.Debit CardThe name of Debit Card of the BRAC BANK is BRAC Bank Debit Card. Its allowed for the customers who have only the savings account and can withdraw only the amount belongs to its account balance.Credit CardIt introduces the 0% Credit Card named BRAC Bank Credit Card MasterCard which is doubtlessly an exclusive offer to all which is applicable for first 3 months interest free for all retail purchases. It charges no interest for balance transfer. It also allows 10 more supplementary cards for all the relatives.HONGKONG SANGHAI BANKING CORPORATION (HSBC)Credit CardAlthough a limited number, a short listed Credit Cards are using by a a couple of(prenominal)er Bangladeshis who have a strong Credit worthiness. It permits a certain limits to withdraw beyond ones balance.Debit CardIts using very much in Bangladesh. A number of ATM booths are available in Bangladesh including Dhaka and Chittagong.Mobile BankingIt uses Mobile banking as part of e-banking to run its online banking transactions. But its not applicable in Bangladesh yet.Internet Banking apiece and every branch of the HSBC is connected through the internet and around 80% of their e-banking is based on the internet Banking.SMS BankingThey also have SMS banking for the clients who are out of the Internet connection and they can have access to get the immediate service with just an SMS.STANDARD CHARTERED BANKCredit CardIt permits to use the Credit Cards to its customers.Debit CardThe customers are using Debit Cards and having great facilities with international bank.Internet BankingMost of the services of this bank is operating through the Internet.Findings AnalysisINDEPTH SWOT ANALYSIS(S)TRENGTHSDiversification These ten banks offer divers(a) online banking services as to attract the customers of different groups of people.Lower cost advantage As the banks realise in bulks of customers, their operational costs go down.Multinational merchandising cap abilities existence global bank, HSBC and Standard Chartered Bank enjoys the multinational marketing capabilities. They have been successful in attracting savings of savers and investors and lending a large the great unwashed of loans with the help of their online banking facilities.Start-up may take time In order to take for a banks online program, we will probably have to provide ID and sign a form at a bank branch. If the bank is satisfied after proper scrutiny, the bank will permit us to start internet banking which may take a few days.(W)EAKNESSESCentralization These banks managements are loosely centralized follows top-down approach, decisions come form corporate branch and sometimes it takes much time to get the approval for credit card, where it could have been make meteoric. Since, Its combative market, competitors can take this fortune to chance upon beforehand of it. manual(a) works Although the banking system is computerized of the banks simultaneously records are kept manually for auditing purpose, such as using rubber chop, giving signatures, writing on forms etc. Therefore, these manual works destroy the value that the organization created significantly.Costly comfort most of the banks online banking facilities are somewhat costly. As a result they are yet to be succeeded to bring a large number of customers chthonian the umbrella of E-Banking.(O)PPORTUNITIESMany untapped regions over the country Banks can attract even more customers by expanding its branches to other districts or regions and at the same time ensuring online banking service in Bangladesh, and thereby increase their market dole out profitability.Innovation Banks innovative online banking products would be able to satisfy various customers needs thereby would be able to reach different target segments.Credit Card Facility At present, a particular segment has a potential demand for credit cards, so the banks can utilize this opportunity to chase after that particul ar segment before any of its competitors do. Although few banks already providing this facility, but the demand is still there as the brisk facility is not sufficient comparing to the need.(T)HREATSDuplication of the HSBCs service Existing multinational local banks could copy the banks fiscal services, so they have to move ahead of others immediate.Emerging Competition New local and multinational banks or other financial institutions could emerge as the banking industry in Bangladesh is still growing, and become a threat to the existing online banking service providers.Political instability As Bangladeshs political situation is unstable it affects banking industry as well. So, it means the banks may face fluctuating demand for their products too.Security System used by the BanksMost of the lading banks follow the following security system for their online banking. software packageOnline banking service of these banks employs the 128-bit Secure Socket Layer (SSL), which is one of the strongest encryption technologies most unremarkably used by large-scale online merchants, banks, and brokerages worldwide. entirely online sessions between customers and the banks are defend by up to 128-bit encryption, which best protects customers information against disclosure to third parties.TPII software operates on the UNIX platform, which is known to be the worlds most secure and redundant operating system providing multiple users and multiple tasking facilities and Database is maintained in Oracle (RDBMS), the worlds most secure selective informationbase system.Encryption is used to protect informationEncryption is a method of scrambling customers information to protect its transmission across the Internet. Encryption transforms data into an unreadable form, and decryption reverses that process. Both encryption and decryption require the use of a special code, usually referred to as a key. The encryption of data provides a strong degree of protection against tamperi ng while data is moving through the Internet. Cookies are not used for this serviceA cookie is information that a web site puts on customers severely disk that it can remember something slightly customer at a later time. This mechanism allows the server to store its own information about a user on the users own computer. These ten banks do not use cookies for this service.ATM Hardwarea) Racal brand 128 bit Host Security Module (HSM) through which card information is encrypted, decrypted along with PIN generation. This turn of events is used worldwide to maintain and relay highly secure information as an exchange platform. After HSM has verified and authorized the PIN and decrypts it, customers retrieve funds from ATM. The HSM is also responsible for generating ATM Card PINs for the TPII.b) Each ATM has a built-in 64-bit encryption device for ensuring maximum security during transactions.c) one-third different ATM models are currently in use. They are the 1064ix (stand-alone AT M), 1071ix (Through-the-Wall ATM) 1072ix (Through-the-Wall) models. Each of the ATMs can capacitate up to four cash cassettes, of which, each one may hold up to 2,000 cash notes. Cash loading in ATMs are based entirely on usage frequency of the machines.d) All ATM booths have 24/7 CCTV surveillance systems to keep records of transactions taking place for a period of over one year. Moreover, each booth has a hot-telephone link affixed for troubleshooting and instant help-desk services.Problemsof implementating online bankingInfrastructural deficiency WEAKNESSTo implement online banking in our state, the infrastructure is necessary. For this we need availability of electricity supply and telecommunication. Without ontogeny these we cant develop this online banking system correctly.Budget allocation WEAKNESSThe software is falsify intricate to develop because e lacking of apposite in-house. In this regard, banks are to rely on software developing concerns at extreme costs.HackersTh e hacking, the serious crime of computer causes the injury and hazard to the security and safety of users of computer involved in online technology. As a result, hackers are the influential troubles of users of online business of a bank. Online banking services will not be feasible for an sparing as most people are illiterate. They are beyond the mise en scene of normal banking service. Micro-credit industry is now not only providing small credit but also mobilizing savings.The big problems are in the regulatory exemplar WEAKNESSLack of full convertibility. Bangladesh citizen cannot have access to the world wide online banking service due to regulatory restrictions.The reserve position will not allow free inter-country fund transfer.Risk THREATThe credit information available for banks is a great deal wrong, so it is very difficult to check whether the customer has difficult on a card issued by another bank. A data bank is required to see the list of the defaulters. More unconve ntional banks fill that rift in the market, trying to grab a share of the internet money, on the premises that they represent the richest and most educated part of the population.Privacy other central issue to the consumer is privacy. Database marketing is nothing but the manipulation of data over which customers feel that they want to have some kind of control. The customary rule is that consumer privacy rights should be respected. Individuals should easily opt out of online marketing as an extension of their right to be removed from junk spot lists.Unemployment THREATOne pre-conceived widespread idea is computers will displace labor. This is a matter of empirical study. Productivity and profitability are closely interrelated terms. The undergo excess staffs can be easily absorbed in to the expanding financial market. The unemployment will only be structural unemployment since the displaced labor will sooner have later acquired the necessary computer skills and thus become more efficient.Cost-effectiveness WeaknessAnother misconception is that it is not cost effective. None of the banks that have designed properly on automation plan and implemented it with proper cost value analysis became less superior. Actually the acceptance of financial novelization is a matter of vision to the future. Unless computers become cheaper and online facilities become within the reach of shopping mall class, they will remain unfamiliar with internet, and will thus avert them.Role of GovernmentThis is particularly important for countries like Bangladesh where very little has been do in development these technologies and skills to promote and support online banking. The government can take the following policies to promote online banking in our countryThe intergovernmental agreement for harmonizing the rules and regulations that can help in smooth transformation of the world economy and expansion of a unified world market.The regulations should simply parent competition, protect intellectual billet and privacy, and prevent fraud to do businesses under whatever terms they agree upon. An international uniform commercial code is needed to simplify and come on electronic commerce under consistent rules and rights.Govt. can undertake improve initiatives to construct feasible, platform of information technology within affordable capacity. monetary allocation should be more widen for global standard banking technology. tolerable number of bank employee will have both computer and banking skill and cognizance, suitable in the banking perspective to improve the banking sector.Tele-communication sector is pre-conditions to make high-speed online banking services. Unfortunately a tale-communication service of govt. is yet to reach to remote and inelegant area.RECOMMENDATIONSThese banks should Do frequent marketing researchThe management of the banks should securenessly pass out marketing research activities in order to keep a regular track of satisfa ction levels. As customer expectations and satisfaction are not static figures regular research at sufficient intervals should be conducted. wait complains effectivelyThe banks should actively manage the complaints of various customers and encourage customers to give feedback about the services. The management should collect document complaints use that information to identify dissatisfied customers, correct individual problems where possible and identify common service ill points.Focus on segmentation strategiesThe bank should concentrate on the various demographic segments that are currently not very satisfied with the banks services. Products services should be tailored for these segments. Appropriate research and surveys should be designed to assure out the requirements of these dissatisfied segments.Do Relationship MarketingThe banks should focus more on existing customers in order to build strong and trusty relationship with them as the survey showed that satisfied custome rs more aptly or certainly recommends the bank to friends and relatives. Thus the power of relationship will foster Positive Word of Oral Communication and will attract new customers at a lower cost.Establish more ATM boothsFrom the survey, it is clear that customers are not very happy regarding ATMs locations. So, sufficient number of ATM booths should be established in different location to reach out the customers even further and thereby satisfying their demand.Introduce Credit Card FacilityWhile handling customers over the counter also over telephone, a certain demand for credit card facility was sight strongly. We think, if the banks introduce this facility, more customers will be attracted therefore, they will achieve greater market share.Reduce Manual works to minimumAlthough many of the ten banks do automation, still there are many things which are through with(p) manually in order to tract any errors or transaction, especially in emergency such as system failure etc. As a result, so much time is spent on this type of manual maintenance, which reduces value on delivering services. Thus, it hampers efficiency on delivering faster services.Educate customers in using Phone banking serviceA few banks have introduced phone banking service or automatic telephone banking (ATB) in order to fulfill general customer needs and queries quickly, without interrupting employees. However, customers seemed reluctant to use this facility due to fear of machine usage or obstacle in remembering the seventeen digit numbers.Introduce SWIFT supreme Banking culture, reducing dependence on manual service, should be in teemingness irrespective of govt. and non-govt. organization in association with SWIFT to bring about the whole banking service for massive well being of people.Ensuring proper training to the employeesTraining should be imparted to the existing IT personnel. the new recruits for IT personnel should be provided with germane(predicate) education background.C onclusionOnline Banking sets off the journey with a mission of gain to target group of people across our country. The globalization facilitates the extinction of littered and troublesome services in order to consolidate the very variegated, faster as well exquisite services to keep the people in regular touch of modernization. Considering this decision, banks and financial concerns took some welcome move recently. normally all private owned banks from abroad coupled with a few local banks in collaboration with domestic support launched the trend of on-line(a) banking. The completely refurbished banking sector stresses effort to spread this culture of banking.In this connection, only a few banks establish the timely steps by eradicating all sorts of strains and inconvenience in all respect. Since the financial services needs to be very optimum certain not scattered to foster the impression and reliance of people over banking sector. Thereby, the very exclusive and classic service procedure can be accommodated amidst of integration of joint collaboration with modern system. Alongside, the existing banking sector pays much heed and concentration to the fastest issue and development of Online Banking System. In this regard, Bangladesh is still in the backseat whereas the rest of the world is importunate in flame of excellence at large. Despite the ascendancy of overwhelming constraints, inconsistency that engulf the origin of the online trading, we are extremely aspiring and scarlet of prompt and illustrious development of online banking as rapidly as possible.Therefore, the banks should move ahead of its rivals by applying the recommendations provided above. Certainly, it will help reducing the gap (or dissatisfaction) retaining existing customers. And, once this dissatisfied customers become satisfied, it will not only help to retain existing customers, but it will also help to drag new customers through positive word-of-mouth communications. Also, it wi ll help to attract new segments with different needs. Many customers are dissatisfied due to some areas of incompetent services. So, in order to sustain in the highly competitive banking industry, the banks should take