Typical Service Combining

1. INTRODUCTION

As a specific case of E-Commerce, E-Banking is a typical service combining a communication and a distribution channel. E-Banking applications have had a continuous evolution over the time, from their apparition in the context of innovation in the banking sector to the relative standardisation and convergence of current state. E-Banking developed and evolved rapidly during the last ten years. IT innovations like web-commerce and secure information exchanges have been a trigging factor for EBanking appearance. These IT factors continue to bring pressure to e-banking development. E-Banking functionality is also evolving continuously driven by the necessity to cover new client's needs and to procure more integration between electronically available banking services. The evolution of demand in online services induces a continuous evolution of the underlying E-Banking applications. This evolution pressure raises a number of interesting questions to developers and maintainers, some of which can be easily extrapolated to other web-based e-commerce applications. E-Banking can be seen as an advanced Ecommerce activity. Some of the identified issues are valid for other close standing domains, some of them are specific for E-Banking applications evolution. There are some common scenarios for business model evolution in finance and banking domain. Awareness of the existence of the issues is extremely useful for practitioners and academic researchers. For the first ones, these issues may serve some guideline through the evolution process, for second ones the identified issues represent the field for the wide research. In fact, we identified the existing gap in scientific knowledge that must be completed. We believe that each of the identified issues deserves to be studied deeply. E-Banking applications, as a part of a bank information system, have complex composition and different dimensions: business, technological, and organisational. We plan to consolidate issues in a much more detailed manner and derive from it a model for understanding E-Commerce applications evolution. We plan as well to focus some efforts of our future research on the evolution of the E-Banking applications related to the evolution of clients needs.

1.1 UK BANKING SERVICES

Over the last few years European banks have spent billions of euros on new electronic channels. However, after some years of excitement it was clear that the banks' long-awaited skyrocketing profits from this area would not be netted. A few years ago no self-respecting financial consultant would travel without it: the bar chart showing that the marginal cost of Internet banking transactions was a tiny fraction of the cost of branch banking. It was the chart that launched dozens of standalone Internet banks. As a result, European banks have poured billions of euros into building direct channels like the Web, upgrading branches and call centers, and trying to integrate all these channels. Major financial futurists predicted bright prospects to electronic banking. But after some years of excitement it appeared that the banks' long-awaited sky-rocketing profits from this area would not be yielded. Around the world, Internet banks are faltering. This situation requires a profound analysis to be able to understand the real cost of e-banking, and e-bank transactions in particular.

1.2 E-BANKING-AN OVERVIEW

With cybercafes and kiosks springing up in different cities access to the Net is going to be easy. Internet banking (also referred as e banking) is the latest in this series of technological wonders in the recent past involving use of Internet for delivery of banking products & services. Even the Morgan Stanley Dean Witter Internet research emphasised that Web is more important for retail financial services than for many other industries. Internet banking is changing the banking industry and is having the major effects on banking relationships. Banking is now no longer confined to the branches were one has to approach the branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. In true Internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice to have" service. The net banking, thus, now is more of a norm rather than an exception in many developed countries due to the fact that it is the cheapest way of providing banking services. For many consumers, electronic banking means 24-hour access to cash through an automated teller machine (ATM) or Direct Deposit of paychecks into checking or savings accounts. But electronic banking now involves many different types of transactions.

1.3 E-BANKING AND VALUE ADDED SERVICES

The types of electronic banking technology are open to financial institutions in UK. It then proceeds to examine how various electronic products might be attractive to potential customers in terms of improved accessibility, affordability and ease of use. It also focuses on the functionality of electronic cards, pricing of electronic solutions, the segmentation of different electronic products for different client groups. This article describes how the evolution of the financial and retail sectors, the extent of financial literacy and the policy and regulatory environment should support these developments. Electronic banking can offer customers an enhanced range of services at a very low cost. ATMs are expensive to own but are a much cheaper way of processing withdrawals than over the counter. The distribution infrastructure for mobile phone banking is already in existence. Electronic Banking promises to extend low-cost virtual bank accounts to a large number of currently un-banked individuals worldwide. Change is being driven by falling costs of technology, by competition and by the ability of electronic banking solutions to offer customers an enhanced range of services at a very low cost.

Electronic Banking Technology

There are a number of options facing institutions thinking about investing in electronic banking for the mass market. This article attempts to provide a detailed comparison of the different technical options. The options include the following.

Personal Digital Assistants (PDAs)

An increasing number of financial institutions are introducing personal digital assistants (PDAs). PDAs are small hand-held computers that can run specialized programmes to manage MFI and client records.

Automated Teller Machines (ATMs)

ATMs can be fully functional teller machines that accept deposits, dispense cash and can be programmed with other functions. Or they can be cash dispensers only. ATMs are expensive to own and operate but offer the financial institution a much cheaper way of processing a large volume of withdrawals than through over-the-counter operations.

Magstripe Cards

Debit cards, often based around magnetic stripe technology, allow customers online access to their accounts through a network of POS (point-of-sale) devices and ATMs. The principle advantages quoted by proponents of magstripe cards are low price and the requirement that transactions are performed online.

Smart cards

Smart cards have a machine-readable chip embedded in the card. This chip is able to store detailed transaction records offline and perform transactions without a link to the customer's account. In order to do this, value is stored on the chip by the customer and is periodically reloaded, over the counter, through ATM machines or through POS devices. The principle advantages quoted by proponents of the smart card are security and offline functionality. Biometric security allows a cardholder's picture and fingerprints to be stored on the card and used to identify the user.

Euro card, MasterCard and Visa

They are currently introducing a new standard (called EMV) whereby all Visa, MasterCard and Euro card branded cards will be issued with a magstripe and a smart chip. Whilst this offers security advantages, it could significantly increase the cost of any mass market solution that relies upon the Visa or MasterCard distribution network.

Mobile phone banking

The phenomenal expansion of mobile phone networks in Africa and other parts of the world provides an opportunity to operate virtual bank accounts through mobile phones, either through menu-driven systems or through SMS (short message service, or text messaging) technology which is already being used by millions. This option has the significant advantage that the distribution infrastructure is already in existence - through millions of mobile phones.

The customer perspective - the value proposition

An electronic banking solution must provide sufficient value to persuade the customer to move away from cash. However, cash is an incredibly versatile medium of exchange. It is universally recognized as a store of value, it is accessible, portable and divisible. The Significant factors that are valued by the customer include features, accessibility of the service, affordability and ease of use.

Features of E-Banking

Many early electronic banking initiatives were designed to reduce the cost of transactions for the financial institution as much as to deliver value to the customer. However, an electronic banking solution can be designed as a low-cost bank account on a card or telephone, with a number of features valuable to customers, such as cash withdrawals and cash-back transactions, deposits, payments and transfers. Added-value services can be provided such as loyalty programmes, person-to-person transfers, airtime top up for mobile phones and government payments. Acceptability: Although there may be an age bias in the acceptability of e-banking solutions, practical experience has demonstrated that the bias towards paper-based record keeping in developing markets is far lower than might be expected. Accessibility: E-banking has the potential to provide accessible, convenient financial services because it no longer requires a 'bricks and mortar' infrastructure, operated by the permanent staff of a financial institution. E-banking uses an electronic infrastructure and in many cases relies upon third parties to originate transactions. However, partners in an e-banking initiative differ in nature, in location, in accessibility for the poor and in the functionality they are able to provide. These factors are explored in Table 1. Affordability: Customers on low incomes should find the transactions affordable. Charges need to be designed around a greater volume of low value transactions, probably charging customers a fee per transaction rather than a percentage per transaction, as is the case with Visa and MasterCard. For certain value-added transactions, like person-to-person money transfers, where alternatives are much more expensive. Ease of use: Systems should be simple to use, fast and user friendly. Service should be standardized so that wherever the solution is used the customer is familiar with the procedure followed. Customers should have ready sources of advice, whether this is through call centres, through publicity or through physical presence.

1.4 ELECTRONIC FUND TRANSFERS

Electronic banking, also known as electronic fund transfer (EFT), uses computer and electronic technology as a substitute for checks and other paper transactions. EFTs are initiated through devices like cards or codes that let, or those authorize, access the account. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Some use other forms of debit cards such as those that require, at the most, the signature or a scan. The federal Electronic Fund Transfer Act (EFT Act) covers some electronic consumer transactions.

EFT offers several services that consumers may find practical:

• Automated Teller Machines or 24-hour Tellers are electronic terminals that let the bank almost any time. To withdraw cash, make deposits, or transfer funds between accounts, generally insert an ATM card and enter the PIN. Some financial institutions and ATM owners charge a fee, particularly to consumers who don't have accounts with them or on transactions at remote locations. Generally, ATMs must tell they charge a fee and its amount on or at the terminal screen before complete the transaction. Check the rules of the institution and ATMs, use to find out when or whether a fee is charged.
• Direct Deposit lets authorize specific deposits, such as paychecks and Social Security checks, to the account on a regular basis. Customer also may pre-authorize direct withdrawals so that recurring bills, such as insurance premiums, mortgages, and utility bills, are paid automatically. Be cautious before pre-authorize direct withdrawals to pay sellers or companies with whom customers are unfamiliar; funds from the bank account could be withdrawn fraudulently.
• Pay-by-Phone Systems, call financial institution with instructions to pay certain bills or to transfer funds between accounts. Customers must have an agreement with the institution to make such transfers.
• Personal Computer Banking: Handle many banking transactions via the personal computer. For instance, customers may use their computer to view their account balance, request transfers between accounts, and pay bills electronically.
• Debit Card Purchase Transactions: Make purchases with a debit card, which also may be ATM card. This could occur at a store or business, on the Internet or online, or by phone. The process is similar to using a credit card, with some important exceptions. While the process is fast and easy, a debit card purchase transfers money — fairly quickly — from the bank account to the company's account. So it's important that customers have funds in the account to cover purchase. This means customers need to keep accurate records of the dates and amounts of the debit card purchases and ATM withdrawals in addition to any checks write. Also be sure customers know the store or business before customers provide the debit card information, to avoid the possible loss of funds through fraud. The liability for unauthorized use, and rights for error resolution, may differ with a debit card.
• Electronic Check Conversion converts a paper check into an electronic payment in a store or when a company receives check in the mail. In a store, when customers give check to a cashier, the check is run through an electronic system that captures customers banking information and the amount of the check. Customers asked to sign a receipt and customers get a copy for customers records. When customers check has been handed back to customers, it should be voided or marked by the merchant so that it can't be used again. The merchant electronically sends information from the check (but not the check itself) to bank or other financial institution, and the funds are transferred into the merchant's account. When customers mail-in a check for payment to a merchant or other company, they may electronically send information from check (but not the check itself) through the system, and the funds are transferred into their account. For a mailed check, customers should still receive advance notice from a company that expects to send check information through the system electronically. The merchant or other company might include the notice on monthly statement or under its terms and conditions. The notice also should state if the merchant or company will electronically collect from customers account a fee — like a "bounced check" fee — if customers have insufficient funds to cover the transaction.

Be especially careful in Internet and telephone transactions that may involve use of customers bank account information, rather than a check. A legitimate merchant that lets customers use customers bank account information to make a purchase or pay on an account should post information about the process on their website or explain the process over the telephone. The merchant also should ask for customers permission to electronically debit customers bank account for the item customers purchasing or paying on. However, because Internet and telephone electronic debits don't occur face-to-face, customers should be cautious with whom customers reveal customers bank account information. Don't give this information to sellers with whom customers have no prior experience or with whom customers have not initiated the call, or to companies that seem reluctant to provide information or discuss the process with customers. Not all electronic fund transfers are covered by the EFT Act. For example, some financial institutions and merchants issue cards with cash value stored electronically on the card itself. Examples include prepaid telephone cards, mass transit passes, and some gift cards. These "stored-value" cards, as well as transactions using them, may not be covered by the EFT Act. This means customers may not be covered for the loss or misuse of the card. Ask customers financial institution or merchant about any protections offered for these cards.

2. REVIEW OF LITERATURE

Claessens et al (2001) mention the leapfrogging opportunities e-finance provides to emerging countries. Despite weak financial systems and structures, these countries may benefit from their access to the latest technology when building up their financial intermediation infrastructure. "E-finance can allow countries to establish a financial system without first building a fully functioning financial infrastructure. Because e-finance is much cheaper, since it lowers processing costs for providers and search and switching costs for consumers, providers can market financial services involving smaller transactions to lower-income borrowers, even in remote areas. To further this, government's main role will be to enhance the enabling environment." It is stated that the most pressing policy issues will involve the enabling environment for e-finance; setting regulatory and other frameworks for contract enforcement, for information and privacy, and for telecommunications, security, and public infrastructure for electronic transactions. Claessens et al (2002) further contribute to leapfrogging advantage of emerging markets by suggesting that e-finance can benefit financial sector development of emerging countries by lowering costs, increasing the breadth and quality and widening access to financial services. According to a survey of KPMG (1999) the evolution of Internet-banking can be analyzed within a five-stage conceptual framework, where the extent of services provided through Internet start from a promotional stage and extend to transaction-enabled business innovation stage in which institutions redesign their value-chain and offer highly personalized products and services. Analyzing the consumer side, Birch and Young (1997) show that consumers seek convenience, transactional efficiency, a choice of core banking products and non-core products, and access to competitive returns and prices. On the other hand, Wright (2002) mentions that Internet-banking has lifted the branch network as an entry barrier to the retail banking while introducing price transparency as customers can now easily compare prices online. Price transparency also brings faster commoditization of basic services and products. Wright also suggests that traditional retail banks have to develop new strategies to compete with Internet-only banks. Internet-only banks are pure-plays with no physical "bricks and mortar" branches. However, they lack services like cash management services and accordingly they are unexpected to dominate the retail banking sector in the long term. Simpson (2002) suggests that e-banking is driven largely by the prospects of operating costs minimization and operating revenues maximization. A comparison of online banking in developed and emerging markets reveal that in developed markets lower costs and higher revenues are more noticeable. While Sullivan (2000) finds no systematic evidence of a benefit of internet banking in US click and mortar banks, Furst et al. (2002) find that federally chartered US banks had higher ROE by using the click-and-mortar business model. Furst et al (2002) also examine the determinants of internet banking adoption and observe that more profitable banks adopt internet banking after 1998 but yet they are not the first movers. Jayawardhena and Foley (2000) show that internet banking results in cost and efficiency gains for banks yet very few banks are using it and only a little more than half a million customers are online in U.K. DeYoung (2005) analyze the performance of Internet-only banks versus the brick and mortars in the US market and find strong evidence of general experience effects available to all startups. Yet there is little evidence that technology-based learning accelerates the financial performance of Internet-only startups. He finds that bank profitability is lower for pure-play (internet-only) banks in the US market. However in a later study DeYoung et al (2007) analyze the US community banks market to investigate the effect of internet banking on bank performance. They compare the brick and mortar banks performance to click and mortar banks which do have transactional websites over a three year period. Their findings suggest that internet banking improved bank profitability, via increase in revenues from deposit service charges. Movements of deposits from checking accounts to money market deposit accounts, increased use of brokered deposits, and higher average wage rates for bank employees were also observed for click and mortar banks. While no change in loan portfolio mix was found, their findings confirm Hernando and Nieto (2007) that internet banking is seen as a complementary channel. Centeno (2004) classify Internet banking adoption factors in two categories (1) access technology and infrastructure related factors and (2) sector specific retail banking factors. The first class include internet penetration rates, skill of consumers in using internet and related technologies, attitude towards technology, security and privacy concerns. The second class involves trust in banking institution, banking culture, e-banking culture and Internet banking push. Analyzing the Acceding and Candidate countries' (ACCs) adoption of Internet banking, Centeno (2004) shows that lack of PC and internet penetration is still an entry barrier for internet banking development both in EU15 and ACCs. The cost of access services is a main issue for the PC and Internet penetration especially in Central and Eastern Europe countries. On the other hand, there has been a lack of confidence in the banking sector in ACCs due to past turbulent periods. These concerns are further aggravated with privacy concerns. Degree of banking service usage and e-banking culture are also weaker in ACCs compared to EU-15. Gurau (2002) arrive similar conclusions to Centeno that successful implementation and development of online banking is upon many inter-related factors. Retail banks in Romania have moved towards a multi-channel distribution strategy and this process was motivated by entry of foreign banks. Online banking have been the major penetration tool for foreign banks as it decreases the branch network establishment cost, which had been a very high entry barrier. It was also observed that banks preferred a gradual strategy from electronic finance to Internet banking services. Romero-Avila (2007) shows that harmonisation of banking laws in the EU-15 in fact result in higher economic growth through greater efficiency in financial intermediation. His findings imply that real convergence between new member states and the EU-15 could be enhanced through adoption of EU-15 banking laws which aim for a Single European Banking Market. Goddard et al (2007) in their survey of European banking also emphasize the transition process the European Banking is in towards the Single European Banking Market. They mention the importance of technological change especially ATMs, EFTs and internet banking on the banks' performance and profitability. Altunbas et al (1999) and Casu et al (2004) also provide evidence respectively for cost reduction and productivity gains as a result of technological change for European Union banks. Polatoglu and Ekin (2001) show that Internet-banking lowers operational costs while increasing customer satisfaction and retention in the Turkish retail banking sector. Hernando and Nieto (2007) analyse the Spanish commercial banks over the period 1994-2002 to measure the effect of adoption of a transactional website on financial performance. Their findings suggest that with a lag of one and a half years the increase in banking profitability can be significantly observed via decreases in overhead expenses with respect to staff, marketing and IT. They also mention that internet banking is seen as a complementary delivery channel rather than a substitute to brick and mortar branches. The greater use of Internet in retail banking however brings additional risk components to overall risk profile of the banks. The Basel committee has recognized these related risks and has issued Risk Management Principles for Electronic Banking (July 2003). It aims to promote safety and soundness of e-banking activities while preserving the necessary flexibility in implementation due to speed of change in technology.

a. Literature on The European Union's Approach to Internet Banking

At the Lisbon summit on 23 -24 March 2000, the EU's heads of state adopted a strategy aiming to make the EU the most dynamic and competitive economy by 2010 and approved an initiative brought forward in a communication from the Commission: "An Information Society For All - eEurope. In this Communication, Internet banking is shown as one of the several key areas that the Europe has strengths and it is stated that the widespread use electronic transactions will significantly contribute to the emergence of an EU-wide electronic marketplace (Communication on a Commission Initiative for the Special European Council of Lisbon, 2000). In June 2000, the Feira European Council adopted the eEurope 2002 Action Plan, which contained chapters on cheaper Internet, e-research, e-security, e-education, e-working, e-accessibility, e-commerce, e-government, e-health, e-content and e-transport. In eEurope 2002 Action Plan banking is considered as one of the challenging areas of the information society where there is certain need of restructuring of the operations for the digital environment (eEurope 2002 Action Plan, 2000). In the eEurope 2005 Action Plan, launched at the Seville European Council in June 2002 and endorsed by the Council of Ministers in the eEurope Resolution of January 2003, the main focus is given to the objective of stimulating use and creating new services on the Internet. In this document no direct reference is made to Internet-banking, however the value of current and expected transactions carried out online are linked to the security (Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions, 2002). In 2005, the Commission adopted the initiative "i2010: European Information Society 2010" to foster growth and jobs in the information society which aims at increasing the use of e-services in every field including Internet-banking (Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions, 2005). In 2006, the percentage of Internet users who use online banking or brokerage services has reached to the European average of 25.36 % (Deutsche Bank Research, 2006). According the Deutsche Bank Research Report "Online banking: What we learn from the differences in Europe" (2006) online banking grows in Europe. Bank customers in Europe strongly increase their use of online banking whereas adoption rates decrease from north to south and rich to poor. Europeans with higher formal education are more likely to use the Internet and do financial transactions online. Today, there are five major online banking trends in Europe; security, customer retention, technological progress, mobile banking and online research. (Deutsche Bank Research, 2005). On the other hand, the Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market aims at creating the legal basis for online transactions and Article 3(4) to 6 are applicable to financial services. (Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions, 2003).

3. THE SERVICES OF E-BANKING

3.1. DEBIT CARD

Debit card are upgraded ATM cards branded with the VISA, Master Card or other familiar credit card company logo. They directly tap the checking account when person makes a purchase or a withdrawal. They are easier, more convenient and less burden some and offer greater access to the money than do cheques, ATMs or credit cards. Debit card is a kind of payment card that transfers funds directly from the customer's bank account to the merchant's account. Debit card can be used almost everywhere-retail stores, gasoline stations, restaurants etc. with or without a personal identification number (PIN) .When used without a PIN (called an off-line transaction), the procedure is simple. The merchant's terminal reads the card and identifies it as a debit card that creates a debit against bank account. Because the transaction is off-line, instead of debiting the account immediately, there is a two to three days wait before final processing. When a debit card is used with a PIN, it is called online transaction. The customer inserts the card in the machine, enters the PIN number and proceeds as he does when he uses his ATM card. Today's banks are pushing hard to replace the ATM card with a debit card without asking customers if they want the same. The reasons are that there are more merchants with credit card readers than PIN based readers. Banks also make more money though off-line debit card in percentage fees or discounts from the merchants. Both banks and merchants make more money and have lower risks than when a customer writes a cheque because there is no cheque clearing costs and no cheques to bounce.

Features of Debit Card:

Using a debit card frees from having to carry cash or a cheque book. Customers don't have to carry traveler's cheques, show identification or give out personal information at the time of the transaction.

• Debit card are more readily accepted by merchants than are cheques, especially in countries where cheque cashing and cheque processing are not widely used.
• It is generally easier to get a debit card than a credit card. Customer can get a debit card on opening a saving account.
• Returned debit card purchase is treated just like returns for items purchased by cash or cheque.
• The debit card is a quick pay now process. There is no grace period as there is for credit card payments.
• A major problem at this time is that using a debit card may mean less protection for items that are never delivered, for defective items, or for items that were misrepresented. With credit card purchase, customer can contest the charge and put a hold on payment within 60 days.

3.2. INTERNET BANKING

Internet banking is a web based banking that enables the bank-authorized customer to access their account information. It allows the customer to log onto the bank website with the help of bank issued identification and PIN number. The banking system verifies the user and provides access to the requested service. The range of products and services offered by each bank on the Internet differs widely in the content. Most banks offer Internet banking as a value added service. Internet banking has also led to the emergence of new banks, which operate only through the Internet and don't exist physically. Such banks are called 'Virtual' banks or 'Internet Only' banks.

Various products and services offered by banks on the Internet:-

Information : It includes providing information regarding various products and services offered by the bank to its customers and others in general. The bank's site receives and answers the queries of customers through e-mails. The services offered through internet banking can be put into three categories: Level-I The basic level service is the banks website which disseminates information on different products and services to customers. This is generally combined with e-mail to receive and answer the queries. Level-II In this level, simple transactional websites are used. In this type of internet banking, customer are allowed to submit their instructions or applications or queries on their bank balance or status of certain transactions etc. Level-III This is the highest level of internet banking services. In this banking services are offered through fully transactional websites which permits customers to operate their accounts through internet. They can transfer funds, pay bills, subscribe to other products and purchase or sale securities etc. through the medium of internet banking.

Advantages to customers:

• Ready accessibility of bank accounts at all times.
• Inconvenience of visiting and waiting at the banks is also eliminated.
• Quality of service is ensured in addition to security.
• The Internet add value by making efficient and automating order placement and billing.
• Consolidation of accounts for a customer across products within the same bank is taking place.
• Ideally suited for corporate clientele where business transactions are multi dimensional and gives satisfaction to customers.

3.3. PHONE BANKING

Another way through which the banks try to provide banking facilities to their customers is "Phone Banking". In today's busy world every person wants to get the facility of accessing the bank accounts while sitting at homes. So, the banks are providing their customers with the facility of getting their account information on the telephones. Now the bank account of a person is just a phone call away. The account holder is given a telephone identification number (TIN). Whenever a customer dials the phone banking number in order to know his account status, he needs along with the account number and the TIN number .The introduction of phone banking facility now there is no need for the customers to go to the bank for any non-cash transaction. Only for the transaction involving cash has to be done by physically visiting the bank. The customer can know his account balance, check his cheque status, stop any cheque payment etc. One can process any non-financial transactions through phone.

3.4. MOBILE BANKING

One more way to access an account is with the help of the SMS technology of mobile phones. Now one can access the bank account on the screen of his mobile phone. Anything one wants to know relating to his account can be done on the mobile phone screen. The e-age has made available a mobile bank to the customers.

3.5. CREDIT CARD

Credit card is a plastic card with a pre-arranged spending limit based on the credit cardholder's credit rating, employment record etc.When one uses credit card, he simply becomes liable for the value of the merchandise. Credit cards are accepted everywhere. Stores around the country swipe credit cards, enter codes, issue receipts and move merchandise quickly and efficiently with no actual cash changing hands. Credit cards are the most popular payment option on the web. To accept credit card payment on the web, one must open a merchant account with his bank. A merchant account allows accepting and processing credit card transaction. Credit card works around the global, regardless of the location or country of the issuing bank. They also handle multiple currencies and clear transactions through a series of clearing houses or consortiums. Processing of Credit Card: The processing of credit card is not as simple as someone think,

• • Most credit cards charge interest from the date of purchase when payment is made through credit card on customers behalf.
  • For the merchant, credit card transactions result in immediate credit to the merchant's bank account. They have the same effect as cash.
  • In case of the loss of the card, the cardholder must notify the issuing bank immediately upon discovering the loss of the card.

Despite their widespread use in e-commerce, credit cards leave a complete audit trail and continue to be an insecure form of payment. There is no signature to verify or face-to-face clues to interpret. A merchant can't tell whether the card is in the hand of the actual cardholder or a thief.

4. RESEARCH METHODOLOGY

Need of the study:

In UK competitive pressures are becoming more intensified in the banking environment and the markets are changing drastically with focus on being customer centric. As now customer services have becomes an important aspect in gaining competitive edge for survival with growth and profits of banks. Customer satisfaction is no longer only the name of the game for banks. The key to success in the changed environment will be the banks ability to reach the client at his door step, and meet his requirement of products and services in a customized manner leading to customer delight and customer ecstasy. So in this changing environment, it becomes relevant to study the e-banking services being offered by the banks. In this report an effort has been made to compare the e-banking services provided by Barclays Bank and Llyods TSB.

Objectives of the study:

• • • To study the awareness and understanding of E-Banking services.
    • To determine the sources and factors influencing the e-banking services of Barclays and Llyods TSB.
    • To make a comparative analysis of e-banking services provided by Barclays and Llyods TSB.
    • To know the order of preferences and satisfaction regarding the e-banking services of selected banks.
    • To study the weaknesses and benefits regarding the e-banking services of selected banks.
    • To give the suggestions regarding e-banking services.

Scope of the study:

The project is based on the study of E-Banking services of one public and one private sector banks. It includes the customer behaviour and prefrences towards the E-Banking services. The current study also covers the analysis of the dissatisfaction among the different customers from these services. So the scope of the study is limited to the UK Banks. The current Project also covers the study of the awareness level of the people about the E-Banking Channels. The study also emphasize on the market potential for the new ATMs in the city. For the purpose of the study, two banks have been selected i.e. Barclays and Llyods TSB of UK. For the study, 50 customers of each bank are taken and in total 100 customers are taken for the analysis.

Methodology:

In the study, the data collected is both primary data and secondary data. The data is related to various services of e-banking provided by respective banks i.e. Barclays and Llyods TSB. For the study, the secondary data has been collected from various sources such as IBA Bulletins, Brochures of the banks, bank's web sites, annual reports, journals and books. In addition to above , I have visited various branches of these respective banks and hold instructive discussions with staff of the banks that resulted in valuable information that is useful in making comparison among the banks. For the customer's satisfaction analysis, primary data is used. Questionnaires were used to get the response from the customers. Every respondent was contacted personally to get the questionnaires filled. The personal contact with the respondents facilitated for the collection for the collection of accurate data, as any misunderstanding on the part of the respondents was cleared by the researcher on the spot. The subsequent visits were made if questionnaires could not be filled during one visit due to busy schedule of the respondents. In some cases, the questions were translated in Punjabi and Hindi language.

Limitation of the study

While a plethora of information and data are available with the banks, most of the bankers even today are very conservative and are reluctant to part with the information treating it as confidential. Secondly, the bank employees have no time to listen any researcher. Thirdly, the respondents are not ready to reply all the questions. They reply only under some compulsion and many times, the information provided by respondents is not accurate and results are misleading.

5. BANK PROFILES AND THEIR E-BANKING SERVICES

5.1 INTRODUCTON OF BARCLAYS

Barclays plc is a British financial services firm operating worldwide. It is a holding company that is listed on the London and New York stock exchanges, and was listed on the Tokyo Stock Exchange until 2008. It is also a constituent of the FTSE 100 Index. Barclays PLC is ranked as the 25th largest company in the world by Forbes Global 2000 (2008 list). According to Datamonitor, by market share, Barclays is the largest financial services provider globally with $3.7 trillion of assets. It is the second largest bank in the United Kingdom and the world based on asset size. Its share price fell by 90% in the year to 23 January 2009, but has recovered substantially, leaving it higher as of 3 September 2009 than it had been a year before.

E-BANKING SERVICES PROVIDED BY BARCLAYS

BARCLAYS offers Corporate and Retail Internet Banking Products and Other Value Added Services

E-TICKETING

Customers can book their railway, air and bus tickets online through Online BARCLAYS. To book train ticket, just log on to irctc.co.in and create an ID thereat if customers do not have one. Submit travel plan and book the ticket(s)-either

• • • i-ticket (where the delivery of tickets will be made at customers address) or
    • e-tickets (wherein after successful payment transactions, an e-ticket is generated which can be printed any time. For an e-ticket, the details of photo identity card will required to be filled in)

BARCLAYSE-TAX

Customers can pay their taxes online through BARCLAYSE-Tax. This facility enables to pay TDS, Income tax, Indirect tax, Corporation tax, Wealth tax, Estate Duty and Fringe Benefits tax.

BILL PAYMENT

A simple and convenient service for viewing and paying bills online.

• • • No more late payments
    • No more queues
    • No more hassles of depositing cheques

Using the bill payment customers can 'view and Pay Various bills online, directly from the BARCLAYS account. Customers can pay telephone, electricity, insurance, credit cards and other bills from the comfort of house or office, 24 hours a day, 365 days a year.

E-PAYMENT

Customers can pay their insurance premium, mobile phone bills and also customers can purchase mutual fund units by coming from the biller's website and selecting Barclays in the payment option.

FUND TRANSFER

The Funds Transfer facility enables customers to transfer funds within accounts in the same branch or other branches.

THIRD PARTY TRANSFER

Customers can transfer funds to trusted third parties by adding them as third party accounts. The beneficiary account should be any branch BARCLAYS. Transfer is instant.

DEMAND DRAFT

The Internet Banking application enables customers to register demand drafts requests online. Customers can get a demand draft from any of Accounts (Savings Bank, Current Account, Cash Credit or OverDraft). Customers can set limits for demand drafts issued from accounts or use the bank specified limit for demand drafts. Customers can opt to collect the draft in person at branch, quoting a reference to the transaction. A printed advice can also be obtained from the site for record.

CHEQUE BOOK REQUEST

Customers can request for a cheque book online.

ACCOUNT OPENING REQUEST

Online BARCLAYS enables customers to open a new account online. Customers can apply for a new account only in branches where customers already have accounts. Customers should have an INB-enabled account with transaction right in the branch. Funds in an existing account are used to open the new account. Customers can open Savings, Current, Term Deposit and Recurring Deposit accounts of Residents, NRO and NRE types.

ACCOUNT STATEMENT

The Internet Banking application can generate an online, downloadable account statement for any of customer's accounts for any date range and for any account mapped to username. The statement includes the transaction details, opening, closing and accumulated balance in the account.

TRANSACTION ENQUIRY

Online BARCLAYS provides features to enquire status of online transactions. Customers can view and verify transaction details and the current status of transactions. Customers VISA transactions can also be viewed separately. Just log on to retail section of the Internet Banking site with their credentials and select the Status Enquiry link under the Enquiries tab.

5.2 INTRODUCTON OF LLYODS TSB

Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810. Lloyds TSB has an extensive network of branches and cash machines across England and Wales and offers 24-hour telephone and online banking services. Today it has 16 million personal customers and small business accounts. In Scotland, the bank operates as Lloyds TSB Scotland Plc. Following the acquisition of HBOS in 2008, the parent Lloyds TSB Group was renamed Lloyds Banking Group.

BUSINESS FOCUS (OBJECTIVES)

With its experience in the financial markets, a strong market reputation, large shareholder base unique consumer franchise, Llyods TSB was ideally positioned to promote a bank in the UK environment. Llyods TSB's mission is to be a World Class.

• • • The bank's aim is to build a sound customer franchise across distinct businesses.
    • To be the preferred provider of banking services in the niche segments that the bank operates in.
    • To achieve healthy growth in profitability, consistent with bank appetite.
    • To ensure the highest level of ethical standards, professional integrity and regulatory compliance.
    • To have a presence in all major industrial and commercial centers where its corporate customers are located.

Llyods TSB's business philosophy is based on four core values: Operational Excellence, Customer Focus, Product Leadership and People.

E-BANKING SERVICES OF LLYODS TSB

• • • Debit card
    • Net banking
    • Phone banking
    • Mobile banking
    • Credit card

I. DEBIT CARD

Llyods TSB presents outstanding facility for its customers that is the Debit Card. The existing customer can have the debit card by filling in the e-age banking form and the bank will courier it to his mailing address. New customer can apply for the Debit Card along with the opening of his account. The Debit Card lets user to shop and does much more than he could have done through his ATM card. It replaces cash, so while going for shopping there is no need for the customer to carry cash with him. This card can be used in UK and abroad at merchant locations such as shops and restaurants and to withdraw cash from a widespread network of ATMs. The value of the payment made or cash withdrawn is instantly debited from the concerned account. Also, while all the purchased and cash withdrawals are in the currency of the country where the person is, the account is debited in rupees. Again there is no danger of overspending as the usage can only be up to the amount of cash held in the person's account.

Working of the Debit Card

It works just like credit card at an electronic terminal.

• • • When one goes for shopping, all need to be done is to present the card to the merchant.
    • The merchant will swipe it through the electronic terminal.
    • He will then enter the amount of the purchases.
    • The person is then required to confirm the transaction by entering his PIN (Personal Identification Number)
    • The respective account will be debited with the amount of purchase online.

THE DEBIT CARD FACILITIES OFFERED BY LLYODS TSB:

1. EasyShop International Debit Card

Llyods TSB EasyShop International Debit Card brings a world of convenience.

Features and Benefits:

• • • Daily limit is Rs 15000 at ATMs for withdrawal and Rs 25000 at merchant establishments for shopping.
    • 0% petrol surcharge at petrol pumps.
    • Zero liability on fraudulent point of sale usage on lost or stolen cards.
    • Register for Insta Alerts to get an alert on mobile phone or email for every purchase transaction done using debit cards.

2. EasyShop International Gold Debit Card

EasyShop International Gold Debit Card not only replaces ATM Regular Debit Card, it also opens a world of privileges that match the cardholder status and life style.

3. EasyShop International Business Debit Card

LLYODS TSB Easy Shop International Business Debit Card combines business benefits with shopping delight.

II. NET BANKING

While many banks offer Online Banking or Internet Banking facilities, most of them do not offer up-to-the second account information. This means that if a cheque issued by the account holder has been debited from the account in the morning, the account status will not reflect this when he logs-in to the account in the afternoon. That's because, the account is updated at the end of each day and not instantaneously. Llyods TSB online is a pioneer with regards to online banking or internet banking services in UK and has contributed immensely to change the face of banking in UK. With net banking, online banking has become a pleasure. Transactions which can be done through Net Banking are:

A. Non-Financial Transactions

• • • Account balance / Account status inquiry: Customer can check his account balance, view the transaction for a specific period or request for an account statement absolutely free.
    • Free stop payment request: Customer can request for a stop payment on a cheque or series of cheques on the net by just entering the cheque numbers.
    • Cheque book request: Customer can request for a new cheque book on the net. The cheque book thus ordered will be couriered to the respective mailing address.
    • Cheque book inquiry: Customer can view the status of a specific cheque issued on any of his accounts.
    • FD inquiry: An inquiry about a FD can be easily made. Even a TDS inquiry can also be made.
    • Demat on the net: Now easy access to the demat account has also been facilitated through net banking. Customer can check the account holding, company-wise transactions.
    • Customer support: Customer can use this facility to communicate with bank for clarifications and feedback

B. Financial Transactions

• • • Free funds transfer: Customer can transfer funds between the accounts in different branches or cities. Also transfers can be made anytime, anywhere to another person having Llyods TSB account using the "Third Party Funds Transfer" option.
    • Demat Draft / Banker's cheque request: A demat draft or a banker's cheque can also be requested at a preferred rate without going to the bank and have it couriered to the mailing address.
    • New FD request: A fixed deposit can be easily opened on the Internet.
    • Bill Pay: The person who gets registered for bill pay can enjoy the ease and convenience of paying the LIC premium, electricity, telephone and mobile phone bills on the net.

Securing in Net Banking

With Net Banking, the customer can carry out all his banking and shopping transaction safely and with total confidentiality. The entire system is secured, using firewalls, 128-bit encryption (which is mandatory to log in) and Verisign certification. Automatic time outs add to the security and confidentiality.

Direct pay to shop online

Llyods TSB offers a direct pay online payment option exclusively for net banking users. The customer uses his bank account to make online purchase in a safe and secure environment. Direct payment for purchase can be used at popular sites like rediff.com, sify.com, fabmart.com, vsnl.com, myvalueshop.com, etc. Myvalueshop.com is a new shopping sites launched by eshakti.com, exclusively for LLYODS TSB net banking customers.

One View Facility

For first time in UK, One View facility brings together all the online bank account (including those of the family members) in one place with the highest level of security. A simple one-time registration of one view facility gives the customer a complete picture of the finance across multiple accounts. So One View facility of Llyods TSB has made tracking and managing the online accounts quicker and easier than ever before. It's yet another powerful value added feature that Llyods TSB provides for net banking customers.

Using of one View

It is quick, easy and convenient to use. But question is how we can use it? So first of all log on www.llyods TSBbank.com and click One View icon.

• • • If the user is a first time user, he needs to enter the Llyods TSB Net Banking Customer ID and Password for validation. Then he needs to create his own One View User Name and Password. If the user is an existing customer, he needs to enter his One View User Name and the password.
    • Next step is to select a bank from the drop down menu and then the relevant Login ID (Customer ID or Card Number) and Password.
    • Then the user has to click on the relevant links such as Account Balance Summary, Transaction History or Fixed Deposit Summary, to get the required information. After the usage it is necessary to sign out carefully.

III. PHONE BANKING

Llyods TSB offers Phone Banking facility. Now customer's bank account is just a phone call away. Customers can carry out all their transactions, from checking their account balance to ordering a new cheque book and stopping a cheque payment over the phone. The phone banking facility of Llyods TSB is the best among all the providers as the technology used by the bank is the most advanced and best technology. The technology used by the bank is the internationally used technology. It is the speedier technology and the accessing of the Llyods TSB account on phone takes least time as compared to the other banks. The Llyods TSB uses the same technology that is used by the HSBC that is the best in the world. Transaction done through phone banking are:

• • • Account balance enquiry.
    • Order new cheque book.
    • Ask for the account statement.
    • Status of the cheque deposited or drawn by customer.
    • Stop any cheque payment.
    • Request for demand drafts/ fund transfers.
    • Pay telephone bills.

All the people who open an account with Llyods TSB are provided the phone banking facility whether or not they demand for it.

Promotion of phone banking by the Llyods TSB

All the Llyods TSB employees have their individual targets fixed for the purpose of promoting phone banking in Llyods TSB. Each and every employee has to make at least 10 demo calls of phone banking in a day. Demo call means that when a customer comes to the bank to learn the usage of phone banking then instead of telling him orally, the bank employees have to give live demo of phone banking to customers. This is how the customer learns about the phone banking facility.

IV. MOBILE BANKING

As a leading private sector bank in UK, Llyods TSB presents the Mobile Banking service. Llyods TSB was the first bank in UK to provide this service and today it is the largest player with a presence in over 78 cities. Now one can access his bank account and conduct a host of banking transactions and inquiries through the Mobile Banking Service. The mobile banking service of Llyods TSB gives a true anywhere, anytime, anyhow, convenience at the mobile phones. This entire works through SMS technology (short messaging service). SMS banking brings the bank accounts to fine grips. With SMS one can perform a wide range of query based transactions from his mobile phones even without making a call. Finally Llyods TSB provides an account that travels with the customer.

Using Mobile banking facility customer can:

• • • Check the account balance.
    • Check on the last three transactions.
    • Request for a statement.
    • Request for a cheque book.
    • Enquire on a cheque status.
    • Instruct stop cheque payment.
    • View fixed deposit details.
    • Pay utility bills.

Working of Mobile Banking:

Mobile Banking works through a series of text messages:

• • • Once one has activated this service, all he needs to do is to type in the specified code for the service which one wants to avail.
    • The response will be received in the form of a text message on the mobile phone screen within a few seconds.

V. CREDIT CARDS

To help one to keep up with the changing times, Llyods TSB offers the finest payment solutions from debit card to credit card and all are internationally valid.

6. FEATURE, ADVANTAGES AND DISADVANTAGES

Traditional banks offer many services to their customers, including accepting customer money deposits, providing various banking services to customers, and making loans to individuals and companies. Compared with traditional channels of offering banking services through physical branches, e-banking uses the Internet to deliver traditional banking services to their customers, such as opening accounts, transferring funds, and electronic bill payment. E-banking can be offered in two main ways. First, an existing bank with physical offices can also establish an online site and offer e-banking services to its customers in addition to the regular channel. For example, Citibank is a leader in e-banking, offering walk-in, face-to-face banking at its branches throughout many parts of the world as well as e-banking services through the World Wide Web. Citibank customers can access their bank accounts through the Internet, and in addition to the core e-banking services such as account balance inquiry, funds transfer, and electronic bill payment, Citibank also provides premium services including financial calculators, online stock quotes, brokerage services, and insurance. E-banking from banks like Citibank complements those banks' physical presence. Generally, e-banking is provided without extra cost to customers. Customers are attracted by the convenience of e-banking through the Internet, and in turn, banks can operate more efficiently when customers perform transactions by themselves rather than going to a branch and dealing with a branch representative. E-banking services are delivered to customers through the Internet and the web using Hypertext Markup Language (HTML). In order to use e-banking services, customers need Internet access and web browser software. Multimedia information in HTML format from online banks can be displayed in web browsers. The heart of the e-banking application is the computer system, which includes web servers, database management systems, and web application programs that can generate dynamic HTML pages. One of the main concerns of e-banking is security. Without great confidence in security, customers are unwilling to use a public network, such as the Internet, to view their financial information online and conduct financial transactions. Some of the security threats include invasion of individuals' privacy and theft of confidential information. Banks with e-banking service offer several methods to ensure a high level of security: (1) identification and authentication, (2) encryption, and (3) firewalls. First, the identification of an online bank takes the form of a known Uniform Resource Locator (URL) or Internet address, while a customer is generally identified by his or her login ID and password to ensure only authenticated customers can access their accounts. Second, messages between customers and online banks are all encrypted so that a hacker cannot view the message even if the message is intercepted over the Internet. The particular encryption standard adopted by most browsers is called Secure Socket Layer (SSL). It is built in the web browser program and users do not have to take any extra steps to set up the program. Third, banks have built firewalls, which are software or hardware barriers between the corporate network and the external Internet, to protect the servers and bank databases from outside intruders. For example, Wells Fargo Bank connected to the Internet only after it had installed a firewall and made sure the firewall was sufficiently impenetrable.

6.1 FEATURES OF INTERNET BANKING

The features available from an on-line bank account are similar to those which are available via 'phone banking or visiting the local branch. On-line banking features do differ between the banks, but usually include:

• • • Transfer of funds between accounts;
    • It brings efficiency in CRM(Customer relationship management)
    • Make Payment of bills
    • Introduces new & innovative products &services.
    • View balance and statements;
    • Brings door to door services.
    • Create, view and maintain Standing Orders
    • Have evolutionary trend at a globle scenario.
    • Customer can View Direct Debits.

6.2 ADVANTAGES OF INTERNET BANKING

Refers to conducting banking transactions through internet. they are,

• • • Opening & closing of accountes
    • Make the payments of merchandise transaction through Debit & Credit cards.
    • It gives reliefs to their customer from carrying heavy cash.
    • Enables prompt & speedy operation to clients.
    • It saves lot of time to their customers &convenient to access.

6.3 DISADVANTAGES OF INTERNET BANKING

• • • Customer may have to face risky transaction & fraud.
    • Failure of power supply cause to break down of system.
    • Loss of heavy income at times of settlement of higher magnitude.
    • Cost involved in trainning staff may not be profitable specially in times of attrition.
    • Development of an attitude of lethargy.

7. CUSTOMER ANALYSIS OF BARCLAYS AND LLYODS TSB

A survey was conducted to have a clear and fair idea about the response of people towards e-banking services namely debit card, credit card, phone banking, mobile banking, internet banking, electronic fund transfer and electronic bill payment. The survey was conducted at the Barclays and Llyods TSB, Patiala. In a survey a sample size of 100 customers where 50 customers of Barclays and 50 customers of Llyods TSB were taken. Questionnaire was framed in simple, easy and understandable language. The questionnaire was filled by the customers who were aware about the e-banking services of their respective banks. The basic idea behind the survey was to find the level of satisfaction of the e-banking services provided by Barclays and Llyods TSB. The questionnaires were tabulated to make the information more useful and easy to understand. The tabulated data was analyzed to give a clear cut ideas of the customers expectations, preferences and satisfaction from e-banking services provided by Barclays and Llyods TSB.

8. FINDINGS

The answers given by the respondents have been tabulated and analyzed in various tables. The analysis of the data was undertaken with a view to record the clear cut opinion of the respondent regarding e-banking services provided by Llyods TSB and Barclays. After analyzing the data as presented in the subsequent chapters, following inferences can be drawn.

• • • The majority of respondents of Llyods TSB (44 per cent) and Barclays (42 per cent) fall in the age of 20-30 years. The percentage of youngsters is more in Llyods TSB. 42 per cent respondents of Llyods TSB and 32 per cent respondents of Barclays fall in the age of above 40 years. Between the age of 30-40 years, percentage of respondents is less as compared to the other categories.
    • The majority of respondents of Llyods TSB (56 per cent) and Barclays (52 per cent) have more than 2 lakhs yearly income. 20 per cent respondents of Llyods TSB and 22 per cent respondents of Barclays have less than Rs.1 lakhs yearly income. The remaining respondents have yearly income between Rs.1-2 lakhs.
    • The majority of respondents of Barclays (42 per cent) had an idea while opening up the account regarding e-banking and Llyods TSB (54 per cent) respondents were fully aware of e-banking services provided by the bank.
    • The majority of respondents of Barclays (38 per cent) got to know about e-banking by friends/relatives and Llyods TSB (36 per cent) got to know about e-banking by personal visit to the bank.
    • The majority of respondents of Barclays (50 per cent) of them know about the ATM and Llyods TSB (50 per cent) of them knows about the ATMS.
    • The majority of respondents of Barclays (43 per cent) can easily transfer their funds and Llyods TSB (45 per cent) of them find e-banking services inexpensive.
    • The majority of respondents of Barclays (43 per cent) say yes they avail the ATM facility and Llyods TSB (47 per cent) of them say yes they also avail the ATM facility.
    • The majority of respondents of Barclays (46 per cent) say they are satisfied with the ATM facility being used by the customers and Llyods TSB (42 per cent) say they are satisfied with the ATM facility being used by the customers.
    • The majority of respondents of Barclays (36 per cent) say ATM card is convenient to use and Llyods TSB (43 per cent) say ATM card is beneficial when cash needed.
    • The majority of respondents of Barclays (52 per cent) say they are satisfied with the e-banking services provided by their bank and Llyods TSB (50 per cent) say they are highly satisfied with the e-banking services provided by their bank
    • The majority of respondents of Barclays (74 per cent) say e-banking is secure and Llyods TSB (86 per cent) say e-banking is secure.
    • The majority of respondents of Barclays (46 per cent) the weakness of E-Banking are one way communication and Llyods TSB (54 per cent) the weakness of E-Banking are one way communication.

9. CONCLUSION

E-commerce is rapidly expanding its wings across the globe and UK is no exception to this phenomenon. Now, several banks have put their electronic banking facilities on the Internet and are providing many facilities like adopting ECS and EDI for knowing account-status , funds transfer between accounts , Billing payments, Web-shopping, Railway and air-ticket booking, etc to their customers at the click of a button. But since Web is a public space open to all , these internet based services also raise new threats for the banks. Financial institutions like banks and merchant websites like Rediff , Amazon , payment sites like PayPal etc,. by virtue of the value of information , their customers share with them are becoming the most lucrative target for the attackers. Attackers are formulating newer strategies for attack and one such attack is Phishing. With the presence of E-Banking, the scenario of the old Banking System has got the new outlook. Now there is no need to stand in long queues to deposit cash, to pay bills etc. because E-Banking has made the banking system more convenient and time saving. This ensures the speed, accuracy and safety. But many persons are unaware regarding the benefits and usage of E-Banking, so there is a need to aware them. Moreover, the customers use these E-Banking Channels for doing the basic transactions such as balance inquiry; statement inquiry, cash withdrawl and the rest of the transactions are done by very small percentage of customers. In this way, E-Banking Services are not fully utilized by the customers to its potential. Electronic banking has enabled banks to improve their customer service quality by speeding up most of the routine banking transactions. Now, home banking has cut off the entire branch and turned it into a 24x7 entity. New banking channels have opened up in the form of ATMs, although the conventional 'brick and mortar' is also available at branches. ATMs (Automatic Teller Machines) is also known as 'Any Time Money' because it allows customers to withdraw money by using debit cards at any time from the bank. The ATMs can be installed anywhere like petrol pumps, markets, railway stations etc., and can well be linked to the main computer. Hence, debit cards allow customers to transact with the bank any time-24 hours a day and 365 days a year. The real time nature of phone banking allows people to conduct almost all banking activities on the phone except withdraw cash. Though it is not as dynamic as net banking, still phone banking is the most popular self-banking channel today. Net-enabled mobile phones are substituting the computer for a whole lot of services. It presents a new way to pick up information and interact with the banks to carry out the relevant banking business. Bringing specially tailored banking services direct to the consumer via portable device is the true value of mobile banking. Freedom of choice, simplicity and convenience are the service watchwords. The electronic banking provide its user with a widely used electronic product known as credit cards. Credit Cards have found wide spread acceptance in the metros and big cities. Credit cards are gaining popularity for on line payments. A credit card is a very small card containing means of identification, such as signature and a small photo. It authorizes the holder to charge goods or service to his account on which he is billed. The bank receives the bills from the merchants and pays on behalf of the cardholder. These bills are paid to the bank by cardholder either totally or by installments. The bank charges the customers a small amount for this service. The cardholder need not carry money with him when he travels or goes for purchasing. The credit card helps the growth of commercial establishments, multipurpose departmental stores and super markets. Llyods TSB and Barclays are the most aggressive players in the consumer banking, emerging as a very strong competitor to the foreign banks in this area. Moreover, Llyods TSB and Barclays with their information technology based banking products such as debit cards, credit cards, on-line banking, phone banking etc. has made the existing commercial banks to think seriously on the lines of virtual banking. E-Banking is recognized as a virtual necessity to face the imminent challenge competition that is growingly felt in modern days owing to globalization and liberalization of the UKn economy. To access the views and perceptions of the customers (including salaried, professional and self employed income group) of Llyods TSB and Barclays, primary survey of 100 customers has been made. Questions were raised to the customers of both banks in Patiala city of Punjab. Questions like extent of the awareness of the respondents about e-banking services and respondents opinion regarding availing these services were raised to respondents. The questions were also asked about their opinion on increasing the ATM limit, place of using credit cards, preferred mode of making payment - cash vs. credit card and whether the respondents are satisfied with the services provided by their respective banks. Some of the questions were raised to record their opinion about benefits and weakness of the e-banking services. The questions were also asked to record the grievances of the respondents. It is concluded that the future of the E-Banking is bright, so as and when the customers are aware and educated about the trend of new system, it will give opportunities for upcoming generation to pursue in. In this way, the E-Banking will glorified the banking system as a whole. So, Internet Banking is the need of the hour and private banks are already providing efficient Internet Banking Services to their customers. Although Public sector banks are also providing Internet Banking Services but the number of their branches facilitating such services are less as compared to private banks. So, the Public sector banks should concentrate more on providing Internet Banking services. By taking the above measures Internet Banking will become more secure and will help the banks to become more competitive and profitable.

10. SUGGESTIONS

• • 1. Since customers are not aware about the E-Banking Services provided by the banks, so regular awareness programs about the new schemes, new services should be conducted.
    2. It was found that the customers are mainly using ATM as a major channel of E-Banking because of the convenience, time saving and anywhere anytime banking. Thus, the banks should take these into consideration and should install more ATM's at strategic points.
    3. As there is no regional language available in the ATM software of some banks, like LLYODS TSB, its tough for less educated persons to operate.
    4. A permanent employee should be appointed (by each bank) to clear the queries regarding E-Banking Services only.
    5. Banks should increase the per day cash withdrawl limit through ATM.
    6. Banks should use the pamphlets and brochures in Hindi and Punjabi also.
    7. Every customer should be given proper Knowledge about E-Banking Services at the time of opening an account.
    8. The E-Banking Channels like Internet banking, Mobile banking and Phone banking are very less popular among the customers. They use these services upto some extent. So, there is a need to educate the customers about the E-Banking Services and their benefits.
    9. The most effective media for the promotion of E-Banking Services is personal contacts and advertisements. So, print media like banners, posters, wall paintings can play a dominant role in the successful promotion of these services.
    10. The reasons for not using E-Banking Channels were found to be the lack of security and lack of knowledge. Regarding the lack of security, the customers should be taught about the security walls present or applicable so that they feel secured and use these channels. Moreover, steps should be taken to give proper education regarding usage of these channels.

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