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Introduction
The advent of the Internet has provided some major breakthroughs. VoIP and visio-conferences eliminate the limitations businesses encounter due to geographical boundaries largely. These provide opportunities for various business houses to advertise, share information with their collaborators, receive feedbacks on their products, equipping them with the cutting edge technologies needed to grow. Thus, to be successful in this highly competitive global business environment, enterprises increasingly adopt flexible, distributed working practices. When the first computer took its shape, nobody could imagine that it might take the form of today. And the most influenced part is the banking sector once there was the introduction of internet in banking. Thus, this study would evaluate the influence of internet on the banking industry.
Background
There was a time when people had to stand in long queue for hours to accomplish any banking function. Again those long hours of waiting, chances of human errors etc were there. Everything is now computerized, error free and lightning fast. Withdrawing money is so simple because of ATMs; depositing money is also is an affair of minutes. The most advanced form of banking is e banking. There is no need of visiting your bank at all. With only a click of mouse you can deal in loans, insurance, mutual funds etc. Trading is nothing harder than a click of mouse now. It was in 1980s that changed the banking outlook and that was introducing technology as compulsory usage as a precondition for renewing or getting a new license. Secondly, opening an institute solely dedicated to researching and developing technology in the banking field. This brought in technology-savvy banks and they would offer innovative products to its customers from credit/Debit/Smart cards, Tele-Banking and Internet Banking, Anytime and Anywhere Banking and ATMs and PC-Banking were some of the few. According to Lee (2009), Online banking has recently come to be considered as one of the most effective banking transaction methods because it possesses many advantages which offline banking channels can not offer. Thus, online banking managers aim to utilize these advantages to increase the online banking adoption rate (Lee 132).
Case study
An economy based on digital factors is digital economy (or internet or new economy). Digital computer networks, internet, intranets, VAN, computers, software are very important in this business. For example, Thaigem is a gem company based in Thailand, who very effectively used the EC to grow their business.Web-based business enhances competitiveness and create strategic advantages for a company and this is really helpful for any company, how large or small it may be. The E-Commerce is doing wonders for all the parties from supplying goods that has be the ordered and transportation involved. Now one can go shopping and will not have to wait in the long queue to pay the bill rather present a blank cheque where the amount will automatically be debited. Moreover one can shop hop in internet where he will have thousands of stores and choices to choose from and the product will be shipped in his doorstep. These improvements have made business thousand times simpler, also affordable and hassle free for the customers (Turban, Leidner, McLean and Wetherbe 56). However, interconnectivity, the most significant aspect of the modern digital economy, is a significant drawback and it has the potential to start a domino effect once a part of it is affected. Nevertheless, baring this fact, it is obvious that, as seen in the case, internet banking enhances a business manifold and thus is the evident banking form in the future.
Discussion
One of the most important aspects of modern banking is digital economy with the help of internet. Information Technology has thoroughly revolutionized the business process. Many multinational giants are changing their business tactics, like Siemens. Fierce global competitions have forced the companies to reduce costs and increase productivity and e-business is a good solution of this problem. E-commerce mainly happens with the help of internet and other electronic networks. The basic infrastructure of E-commerce requires a network of interconnected computers, which helps users to access and share information from a number of sources and collect and collaborate with others (Turban, Leidner, McLean and Wetherbe 38).
There are fundamentally five major advantages of internet banking that became so influential in the recent times. According to Lassar, Manolis and Lassar (2005) they are viewing of account and transaction history, paying bills, transferring funds between accounts, requesting credit card advances and ordering checks (Lassar, Manolis and Lassar 177).
It is now a know fact that internet and Information Technology is the facilitating factor in driving business toady and especially in the banking sector from transactions and analytical processing to end user interface. Customer service has come a long way and is getting better. They give a hand in the CBS (core banking system) which revolutionized the face of Indian banks. The latest trend which shook the market was Technology in the mobile banking, ATM (automated teller machine) and the locally shared services between banks.
Internet enables banks to service it customer 10 times faster than a few years ago and brought down its operation cost to one third. We now have immediate transfer, access to multiple service providers dealing in communication. (IBM) International Business Machine Corporation, Microsoft, Patni are one of the companies on the forefront in providing Technology that would run the banking industries. Projects like multi Application smart cards have proved to perform well and have been included into the financial sectors and open its uses throughout the country and the world. There will never be a stop to the advancement of internet technology in the world of banking and business banking will have the biggest change. Creating deposits is what banks were in their traditional form and the surplus money was let out in the form of lending. But in this present time they now offer wide range of services to financial needs to its customers in the form of business , personal , travel and celebrations loans to name a few. The services are to its entire customers who can prove their stability in repaying the loan.
Factors of growth
There were several factors in looking at the banking growth and it was the changing face of banking services. Before the internet and computerization, manually deposit and withdrawals were all banks did and the service standards were far below standards but after the internet and computerization the banking sectors have become a consumer oriented market. Information technology is creating a revolutionizing effect and rippling through all sectors including the capital market and after the introduction of internet it has brought its relationships with banking closer and the internet is become an important support for banks financial services.
There are a lot of services which have become customized and Retail banking is maturing after each passing year and one clear example is the housing loan sectors by bringing down their operations cost, the banks are able to pass it benefits to the customers. One of the most innovating banking products that technology has brought in is Plastic money with the new age of people spending more then they use to before many years ago carrying large sums of money was getting trouble some and Plastic money was introduced which came in many forms. Credit card is a system of payments after a Plastic is introduced to the user who can use it multiple times as cash transactions. Then we have the debit card and can be use in ATM and purchase goods, the only difference is that its on the user cash and is not credit given by the bank. The banks over time and over the years have changed and evolved into international standards and are showing innovative approach in creating value for their customers.
The banks are hugely influenced by internet and computerization with basic introduction of Internet, ATM has minimized bank offering its core delivery services and with alternative now available due to new development of technology which has not creating duplication of network and need to work on a backup plan. However, Banks need to focus more on technology concerning (WAN) and VSAT, (WAN) which is a wide area satellite based network and VSAT (Very Small Aperture Terminals) to push ahead of the foreign competitors. However, there is one more aspect where banks could benefit greatly and take the load of their manual operations is introducing better payments system in the rural areas.one of those applications is called NDS (Negotiated Dealing System) and the (Centralized Funds Management System) but this in not introduced to all banks in the rural areas of many underdeveloped or developing countries and still see medieval operation on the banking sectors. The Negotiated dealing system (NDS) which is a platform for trading and RTGS (Real Time Gross Settlement system) is used for transferring real time funds from one bank to another. The age of internet benefits have only been tapped in the urban areas and rural area have not even smelt its benefits and its only when banks that have their branches in rural area releasing its benefits can the common man reap its benefits, where issues of money transfer can be tapped throughout the world. There is a huge resentment among customers in the rural areas is customers service and banks are facing costs on providing these services. The issue lies is trying to cut operations cost and having to deal with their competition. Here is where internet could play its role and meeting the banks objectives.
Disadvantages
One of the most disturbing aspects of internet banking is the issue of privacy. Simpson (2002) noted that The difficulty is that online banks have been counting on the ability to use detailed customer information for targeted marketing offers while the evolution of e-commerce depends on intra-industry alliances and the sharing of data. Privacy concerns may slow the evolution of e-banking (Simpson 317).
Similarly, Identity theft is not at all a new crime. It has merely mutated itself by including new technologies like ATMs and online banking. Nowadays it is even easier for the identity thieves to use stolen information due to the advent of the Internet since transactions can be made online eliminating personal interactions. Due to the computerization of the banking and other financial dealings and credit cards it has become much easier for the pretenders to pilfer others personal details and thus can camouflage as the victim. Credit cards are often used for verifying peoples identities and thus, an impersonator can pretend to be someone else by using their credit card. This also enables them to steal money. Thus, all the impersonator really has to do is obtain a succession of appropriate numbers for completing the crime. The victim of identity theft can suffer serious consequences if held responsible in place of the imposter. The various activities that are undertaken by the impersonators may even cause the victims to loose their jobs. Medical identity thefts can even cause us to loose our lives or the lives of our near and dear ones. Many nations have precise and explicit laws in opposition to using others personal uniqueness and details for ones private gains.
In order to avoid identity theft we regularly verify our credit scores with the credit bureaus, destroy any unwanted credit applications, confirm with our creditors if our bills are not on time and protect ourselves by not broadcasting our personal information in unknown e-mails. Identity theft can also be used for smooth progress of offenses like counter nation surveillance, unlawful migration, and blackmail and terror campaigns.
Future
The 21st century business empires had realized that IT is no longer a support function but become the main driving force to better operations in terms of cost cutting and customer service. Internet and computerization will be the deciding factor in banking and financial sectors in making or breaking a company. The banking sector must realize that the should focus on three areas to survive customers expectations it is this core value that will sustain them from losing their customers to competitors , the second is cost cutting to operate efficiently with minimum cost and finally handle their never ending competition. To do this they must look for new products and cutting edge service technology. They say a process or a business can only be successful if it runs on an auto pilot mode and that include over all operations. It can be done by having their total data base and day to day operations through a centralized network, using new banking applications. This way banks can service their customers 24x7x365 with less man power and cut cost.
Some of the areas where expects still feel more needs to me done are on IT is
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Connecting all branches through a secured network
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Having a message system which is secured on funds transfer products
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The Integrated Treasury Management
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Looking into technology initiatives on liquidity Management and the Core Banking Solution
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Management on Customer relationship
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Re-engineering Business Process
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Retraining IT skills
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Restructuring/ reorganization
There is a feeling among the IT professional that banks need to be part of a network and it shows by having technological employment by the banking sectors, with ATM machines been put on a huge scale and is forcing other banks to start with the same. The age of IT technology is future but in their eagerness to achieve its objective they should not forget the personal touch that every banks has towards their customer and must have it always, they must remember that not every one is tech savvy, and human interactions must be there always for future banking.
Conclusion
The internet and Information Technology has given banks their core objective and that is services towards their customers and at the moment it is bringing forth more valued added products. Some of the product like mobile banking is working well in the emerging market and most banks introduced mobile banking which helps customer in getting updates like SMS services and it more beneficial for people who travelling frequently and would like to keep updated on their accounts. This is a huge influence on the banking sector and it continues to grow for a more effective future of digital economy based on internet.
Works cited
Lassar, Walfried., Manolis, Chris., & Sharon S Lassar. The relationship between consumer innovativeness, personal characteristics . The International Journal of Bank Marketing, 23.2-3, (2005): 176-199.
Lee, Ming-Chi. Factors influencing the adoption of internet banking: An integration of TAM and TPB with perceived risk and perceived benefit . Electronic Commerce Research and Applications 8.5, (2009): 130141.
Simpson, John. The impact of the Internet in banking: observations and evidence from developed and emerging markets . Telematics and Informatics 19.7, (2002): 315330.
Turban, Efraim., Dorothy Leidner, Ephraim McLean, and James Wetherbe. Information Technology For Management: Transforming Organizations In The Digital Economy. 4Th Ed. Delhi: Wiley-India, 2007.
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