E-Banking Modernization on the Technological Term Paper

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EDI is considered fundamental to the activities like Just-in-time processing by manufacturing companies and also has deep pedigree in electronic commerce and electronic trade. (XIII Payment and Settlement Systems)

Besides E-Banking services raises the tempo of cash cycle and enhances the productivity of business processes in India. The entire gamut of banking deals can be completed right from the convenience of home or from a location a customer so desires. The medium sends its responses very swiftly, and thus customers can really wait up to the final minute before finishing a money transfer. Customers in India have the facility of downloading the record of various accounts and perform a "what-if" analysis on their own PC prior to carrying out or impacting any transaction on the Internet. Due to this, there will be an enhanced management of funds. (E-Banking in Estonia: Reasons and Benefits of the Rapid Growth) Each of these will result in profits for financial institutions. As per a survey by Boo, Allen and Hamilton, an anticipated expenses of offering the daily business of a branch giving all the services in USA is $1.07 per dealing, as against 54 cents in case of telephone banking, 27 cents for banking through the ATM -- Automatic Teller Machine and 1.5 cents in case of Net banking. In Nordea Bank, Finland, a single Transaction through the Net costs the Bank an average of merely 11 cents, as against $1 in case of a transaction performed in the physical branch. (E-Banking in Estonia: Reasons and Benefits of the Rapid Growth)Buy full Download Microsoft Word File paper
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Term Paper on E-Banking Modernization on the Technological Assignment

HDFC in India has 1 million customers catered by 350 ATMs. Profits jumped Rs. 200 million to Rs. 1.2 billion in 1996. HDFC made aggressive proliferation to 123 branches covering 43 cities/towns. Every branch is manned by 4-8 personnel with computers that are networked with each other and ATMs. ICICI Bank increased its profits from Rs. 170 million to Rs. 1.07 billion during the same period i.e. 1996. Its 86 branches cover 50 cities / towns. (Security and Trust in Internet Banking: The South Asian Banking scene) Therefore the scope for financial institutions in India in the Internet sphere are varied as they have the potential to be technology providers by creaming out technology resources and to launch new business routes, assume content providers for information relating to products, indices etc. And facilitators by providing core support systems to back several payment system options. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues) Besides, the Indian financial institutions exploring the cost and upkeep of traditional physical services witness tremendous profitability in a global Internet presence whose cost of globalization appear to a very little relatively. Therefore, E-Banking will present an evident setting to contrast the cost and quality of services presented by a host of financial institutions in India. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues)

Case study of a Financial Institution (ICICI) successfully implementing E-banking services:

The ICICI is considered to be one of the prominent private sector banks in India, that integrates the financial strength with a status for innovation and a general culture that incorporates variation. On March 31, 2002 ICICI officially integrated with the ICICI bank and appeared as the first Universal Bank of India. The retail distribution network of ICICI banks persists to extend and it presently is having 409 branches and extension counters and 1,066 ATMs all over in 240 places. The approach of the ICICI Bank after the integration with the ICICI Ltd. is that of creating a varied portfolio. The integrated concept will persist to be into project finance and the concentration will be to exploit the potential in retail financing. The ICICI bank extends a wide range of domestic and international banking services to make easier the trade, investment, international commerce, treasury and foreign exchange services. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues)

ICICI Bank has been fast to acknowledge that E-banking has varied from a somewhat experimental delivery vehicle into an enhanced mainstream one for delivery of broad spectrum of banking products and services. The fundamental E-banking services are quickly varying from competitive distinction to competitive necessity. The association has geared up a number of alliances to emerge as its various offering. In respect of its Internet banking offerings the ICICI bank applies Infinity from Infosys, for its credit card business its uses Vision Plus from Pay Sys, USA, for WAP services the alliance with cellular service providers. Orange and Airtel assists in accessing out to such users, while the WAP technology is being applied by the in-house ICICI Infotech service. To gear up the Net for its marketing initiatives ICICI bank and Satyam Info way have collaboratively set up a 'COM' company to extend banking products on the net. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues)

The bank has also entered into agreements with the leading corporate like BPL, Rediff.Com, Usha Martin and Tata Communications for B. To C. solutions in an effort to reinforce further its Internet banking products presentation and services. Even ICICI has integrated with a consortium under the leadership of Compaq to retain the lead in offering a solution to the Indian e-commerce community. This consortium facilitates a B2B and B2C e-commerce payment gateway within India. The Bank has been extending phone banking free of cost and was pioneer in introducing an Internet Banking Service in the country designated as Infinity. Infinity presently provides a plethora of online banking solutions to retail as well as corporate customers.

The persistent effort of ICICI in entailing more worth to the clients has a consequence in Infinity being the pioneer amongst online banking offerings in the country. Further taking into consideration the customers necessity for enhanced security, Corporate Infinity presently generates multiple levels of authentication in addition to user ID / Password and incorporates security tokens, ICICI also strives to be a center for leading research on financial architect in India, more specifically in the area of valuation of securities, risk management and derivatives. By gearing up the resources of the association the ICICI entails custom modified solutions that is compatible even the most complex business strategy. ICICI is presently moving all its operations into the era of 'virtual integration'. By e-Banking, ICICI has enhanced its services to customers that enabled it to severely decline the costs and enhance profits as well. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues)

Challenges facing financial institutions for implementing E-banking in India and Solutions provided:

Irrespective of the profits made there are several challenges which are prevalent for the financial institutions in India. One of the significant confrontations for a financial institution in Inida is associated with the transitions towards expansion of the basket of financial products being offered by Financial Service Providers. In advanced countries, Financial Service Providers are applying the Internet as a media for expansions of the new products. However, in India, archaic regulations do not entail the companies to extend products which are offered by another category of service providers. In this manner the companies like ICICI are compelled to maintain their Banking arms isolated from the primary company. They are also deterred from presenting products which come under the jurisdiction of Banks. This is regarded as the severe breakthrough for innovation in the financial service sector. Besides, it avoids the Indian Financial Service Providers from taking advantage of the strength of Internet. Thus taking into consideration such confrontations, only Financial Service providers that transits quickly and attempts to exploit the initial mover benefits can think of efficacy in this sector. (E-Finance: Quo Vadis)

Solutions:

In spite of the challenges associated with implementing e-banking the financial institutions in India are discovering that a wide-ranging online banking policy is indispensable for the achievement in the more and more cutthroat financial services market. Competition and modifications in technology and lifestyles have transformed the characteristics of financial institutions in India in the existing setting are looking for other means to offer and create a point of differentiation in their service offering. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues) The manner in which the financial institutions perform in designing, bettering, marketing and offer services will tremendously influence the espousal patterns in India. (Interesting ... Log on to Bank) In order to facilitate either access of information or business transaction, it is exigent on the part of Indian financial institutions to hoist a web site of their own. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues)

Further the crucial success factor will be the value that the online operations of the Banks will be offering to the customer. This is what distinguishes between similar offerings from many providers of financial products and services. Initialization presently will entail the organization an advantage in terms of the networking it will be able to attain. This assists it in confronting the challenge. The Financial Service providers in India are required to be prepared to introduce their… [END OF PREVIEW] . . . READ MORE

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