Online Banking - FIN464

FIN464, Assignment # 2
Online Banking
Online Banking
FIN 464
SEC- 2
PREPARED FOR:
PREPARED BY:
SUBMISSION DATE
9th December, 2007
December 09, 2007

North South University
School of Business
Banani, Dhaka-1213
2
Online Banking
Subject: Submission of the project on the problems and prospect of online banking in
Bangladesh
Dear Sir,
We, four group members were assigned the project on The problems and prospect of
online banking in Bangladesh for the course Bank Management (FIN 464).
This project is very much relevant to what we are learning in this course. Since this is a
new course for us, the project has helped us a lot in understanding the practical aspects of
online banking in our country. During group work we found it quite absorbing and
enjoyable. As a result of which the group participation was maximum and the outcome
was quite productive.
Despite the time constraints and other problems, we have tried our best to make the
project as logical as we could. All the group members worked hard to bring out the best
and present you an absorbing and enthralling case.
Therefore, we would be obliged if you could please accept this report. If any further
assistance are needed please contact us at ifrash@yahoo.com.
Sincerely yours,
Online Banking
ACKNOWLEDGEMENT
We are grateful to, faculty, BBA program of North South University for providing us
such an opportunity to do this assignment and hence learn about the features of online
banking, advantages and disadvantages of online banking, prospects of online banking.
We also thank Mr. Mohammad Monirul Hasan, Officer Collection, Consumer Banking
Division, Standard Chartered Bank, for providing us information during this assignment.
We are deeply indebted to them for their valid suggestion, trend setting guidelines and
sensible advice.
Finally, we thank to our parents and friends who gave us their moral support and help for
preparing this assignment.
Online Banking
EXECUTIVE SUMMERY
For doing the second group assignment on problem and prospects of online banking in
Bangladesh and a comparative and gap analysis of online banking between Bangladesh
and global perspective we have done a research on the all the products, services and
facilities that the banks provide to their customers in other countries, especially in the
developed countries. Then we analyzed what the banks are providing to their customers
regarding e-banking in Bangladesh and what are the current prospectus of them.
According to the analysis and research weve found out that in Bangladesh, banks are not
providing enough online banking facilities services to their customers because of poor
hardware and software infrastructure, political legislation, poor security management and
also because of not having proper bank management and employees to manage it
efficiently. However, as day by day Bangladeshs economy is going towards development
and banking sectors are doing well gradually, so to gain competitive advantage they need
to go for huge diversification of product portfolio and attract customers by proving new
product and services and for that the e-banking could be one of the best solution for them
and for that, the number of products, services and facilities that are fall under e-banking
should be enhanced and it is already growing.
Online Banking
Introduction
07
Objective & Scope of the Study
07
Methodology
08
Limitations
08
Online Banking
Online Banking from global perspective
09
Advantage of Online Banking

Disadvantage of Online Banking
Features of Online Banking available in Bangladesh
Prospectus of Online Banking in Bangladesh
21
26
33
41
Recommendation
45
Conclusion
58
Introduction
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Online Banking
This report is prepared for to get an overall idea of online banking. At primary level we
got the idea of online banking or e-banking from our Bank Management class. Then by
preparing this report we got an overall of idea of online banking features, advantages and
disadvantages of online banking system etc. Though online banking is very important for
a bank and it takes the bank one step ahead, so to learn about it is very important.
Objectives of the Study
To know what is online banking.
To find different features of online banking.
To find out the features of online banking available in Bangladesh.
To determine the problem regarding online banking.
To determine the prospects of online banking.
Scope of the Study
We worked on online banking. Online banking is a recent concept in our country as we
have got the topic Problem and prospects of online banking. Online banking is very
popular in the entire world. But it is new in our country. A wide range of online banking
features is available in developed countries. Most of those online banking features are not
available in our country. Only few banks are offering online banking facilities. And
features of online banking in our country are very limited. There are many problems of
online banking in our country. It is possible to make online banking concept successful in
our country by overcoming all the problems. By establishing of online banking system
we can make our countrys banking sector successful. To do this first we have to figure
out the problem and look into the prospects of online banking in Bangladesh. We also
need to introduce all the features, which are available in other developed countries.
Methodology of the Study
Online Banking
To prepare the report qualitative research are done. We gathered the necessary
information regarding the issues. In this purpose we did different analysis to identify
problems and prospects of online banking. Secondary sources were used to complete this
report.
Primary sources:
We did observational study of the online banking and its features. We took interview of
some executives who are dealing with online banking system of their banks.
Secondary sources:
For the purpose of the research we did secondary study. Published surveys and different
web sites related to online banking are the secondary sources, which were used to prepare
the report with extensive information. We also use different books to collect information.
Limitations of the Study
To prepare the report we faced different difficulties. These are given bellow:
Availability of data: Though online banking is a recent issue in our country
so to collect the data we faced difficulties because they were not available.
Lack of time: Time allocation to complete the whole study is too short.
Online Banking
Online banking from Global Perspective

Global Features of Online Banking
Online banking solutions have many features and capabilities in common, but
traditionally also have some that are application specific.
Key features at a glance
balance and transaction history search

transaction history export
order new statements
transfers
pay bills
receive bills online
Pay Anyone payments
Multi Payments
Daily Limits Packages
SMS banking services
extra online security with the BOQ Security Token
Investment service
Trade information
Direct Debit
Currency exchange information
Business features
payments file upload
direct debit payments and payment templates
related account access
multi user transaction authorization and privilege delegation
The common features fall broadly into several categories
Online Banking
Transactional (e.g., performing a financial transaction such as an account to

account transfer, paying a bill, wire transfer... and applications... apply for a
loan, new account, etc.)
o
Electronic bill presentment and payment - EBPP
Funds transfer between a customer's own checking and savings accounts,

or to another customer's account
Investment purchase or sale
Loan applications and transactions, such as repayments
Electronic billing is the electronic delivery and presentation of financial statements,

bills, invoices, and related information sent by a company to its customers. Electronic
billing is also referred to as the following:
e-billing
EBPP electronic bill presentment and payment
EIPP electronic invoice presentment and payment
Certain electronic billing applications also provide the ability to electronically settle
payment for goods or services. Customers of banks and billing companies can use the
internet or the phone to conveniently remit payments as well as access their billing
information. The service is also supported by customer service representatives (CSRs)
contacted directly by the consumer to facilitate payments or receive general assistance
and answer questions.
EBPP provides billing companies the ability to demonstrate to their customers that they
are technologically-advanced companies with a primary concern for customer
convenience and satisfaction. In addition, EPBB can produce substantial savings to
traditional print & mail billing and payment remittance. An added benefit is a significant
reduction in the use of paper. Electronic bill payment is a now-common feature of online
banking, similar in effect to a giro, allowing a depositor to send money from his demand
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Online Banking
account to a creditor or vendor such as a public utility or a department store to be credited
against a specific account. The payment is optimally executed electronically in real time,
though some financial institutions or payment services will wait until the next business
day to send out the payment. The bank can usually also generate and mail a paper cheque
or banker's draft to a creditor who is not set up to receive electronic payments.
Most large banks also offer various convenience features with their electronic bill
payment systems, such as the ability to schedule payments in advance to be made on a
specified date, the ability to manage payments from any computer with a web browser,
and various options for searching one's recent payment history: when did I last pay
Company X? To whom did I make my most recent payment? In many cases one can also
integrate the electronic payment data with accounting or personal finance software.
Balances and transactions
In most of global internet banking, balances and transactions shows the current balance of
all customers linked accounts including Savings Accounts, Loans, Business Overdraft
Accounts and in some cases Credit Cards. From here you can also search and view your
transactions (up to the last 90 days), view your last three credit card statements and
export your transactions into a selected range of personal financial management software
packages.
Transfer funds
'Transfer Funds feature lets you transfer money between your linked your accounts at
any time. You can use this facility to make a payment to your with that banks Credit
Card, make extra loan repayments, or transfer money between any of your linked bank
accounts to cover cheques or payments that need to be made. You have the choice of
three options: you can make a payment now, enter a date when you want your payment to
be made or set it up as a regularly recurring payment.
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Online Banking
International services
Different global online banking provides you the feature of international services.
International Services allows you to transfer funds overseas via telegraphic transfer and
to purchase international drafts (similar to a bank cheque but payable in foreign currency)
through Internet Banking.
Tax payments
Customers can make payments directly to the Revenue Department via their Internet
Banking. Banks set the maximum amount of tax payable in a single transaction. It's just
like paying a bill online.
Non-transactional (e.g., online statements, check links, cobrowsing, chat)

o
Bank statements
Financial Institution Administration - features allowing the financial institution to

manage the online experience of their end users
ASP/Hosting Administration - features allowing the hosting company to

administer the solution across financial institutions
Features commonly unique to business banking include
Support of multiple users having varying levels of authority
Transaction approval process
Wire transfer
Features commonly unique to internet banking include
Personal financial management support, such as importing data into a personal

finance program such as Quicken, Microsoft Money or TurboTax. Some online
banking platforms support account aggregation to allow the customers to monitor
all of their accounts in one place whether they are with their main bank or with
other institutions
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Online Banking
Credit Card
In the advent of Information Technology and globalization, now shoppers need not worry
about money, all they need is willingness and a credit card to buy anything they want at
any places across the 'Global Village'. Worldwide access, acceptability and popularity as
well of credit cards have rose to such an extent that it is now posing a threat to theory of
old 'hard-cash' possession of currencies amid growing sense of insecurity worldwide. The
forward march of 'plastic money', the other name of the credit card, is so rapid that the
whole concept of monetary system needs immediate review as it has put a question mark
in the very existence of paper money.
The card facility was first introduced in the United States in the beginning of the 20th
century. Western Union, a US money transfer company, started issuing an embossed
metal plate to its preferred customers in 1914. The cardholder had to pay an annual
subscription to join the club. This was the beginning of the charge card.
In the 1920s, a shopper's plate - a "buy now, pay later" system - was introduced in the
USA. It could only be used in the shops, which issued it. In 1950, Diners Club and
American Express launched their charge cards in the USA, the first "plastic money". In
1951, Diners Club issued the first credit card to 200 customers who could use it at 27
restaurants in New York. But it was only until the establishment of standards for the
magnetic strip in 1970 that the credit card became part of the information age. 1958
American Express Bank, like Dinner Club, started card on travel and entertainment. By
1959 the system evolved in great magnitude. A cardholder was allowed to pay off the full
amount at the end of the month or to spread payment to suit his or her requirements. The
customer's monthly payment included a finance charge on the unpaid balance. In 1960
Bank of America introduced its own card, the Bank America card and offered license to
other banks in 1966 that brought this system into world arena. A good number of banks
across the world bought the license and marketed credit cards.
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Online Banking
On the other hand, in 1967 four California banks changed their name from the California
Bankcard Association to Western State Bankcard Association (WSBA). WSBA opened its
license to other financial institutions. Its bankcard product was known as Master Charge.
Numerous financial institutions became Master Charge members to compete with Bank
America card. In 1977 Bank America card was renamed as Visa USA/Visa International
and in 1979 master Charge changed its name to Master Card maintaining the lofty
standard to meet up the customers' expanded needs.
Physical Feature
The credit card is rectangular and looks like a phone card. It is a layered piece of hard
plastic with holograms and security features. It also carries a strip of magnetic tape on the
back, which is loaded with electronic data including the cardholder details. The strip is
read electronically by specialized machines called Point of Sale (POS) Terminals at
merchants or Automated Teller Machines (ATM).
By credit card one can purchase from stores called merchants, the price of which is
payable at the end of the month through the affiliated banks as per notification.
Importance of Credit Card
A credit card is a great financial tool. It can be more convenient to use and carry than
cash, and they offer valuable consumer protections. Paper money and coin are risky and
burdensome for carrying. One can avoid the toll of finger-counting changes in this
system. Dollars, Pounds or Taka can be plundered, lost or stolen. But there is no such fear
for card. The cardholder is given a code number called PIN (Personal Identification
Number) without which the card cannot be used at sales or services points where the PIN
is required. Only the owner of the card will be entitled to use it. In case the card is stolen
or lost the clients' bank will issue a fresh card.
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Criteria to be a cardholder
A person has to fulfill some criteria to be a cardholder. Every bank has its own array of
criteria by which the qualification of an applicant is accessed. The criteria may range over
such factors as income range, social status, place of living, education, designation etc. It's
quite natural that if the selection criteria for members were more flexible then their
clients would be more. On the other hand, if the selection criteria were more conditional
and harsh then its operation would be limited.
Debit card
Debit card is based on immediate payment system whereby one has to insert card into the
ATM (Automatic Teller Machine) located at the key spots in the city. And so it is often
called electronic purse. For debit card one has to have an account in a bank while credit
card does not necessitate any such provision.
Providing tutorial site for online banking customers
Some banks introduced new sites featuring the information on the valuable tools that give
customers the freedom to bank without boundaries, the control to manage their own
finances at the touch of a computer key or phone pad and the security to know that their
finances are protected. The online site features characters from the TV commercials who
lead visitors through interactive demonstrations of each online and mobile banking
product. Consumers will learn how they can access accounts, pay bills, transfer funds,
locate banking centers or ATMs and receive account alerts via text message on their
mobile phone. They will also see how to aggregate information and accounts for a
complete financial picture, all with multiple layers of security to help ensure that
customers' personal finance information stays personal.
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Mobile banking
With Mobile Banking, customers can check balances, pay bills, schedule payments in
advance, transfer funds, and even track payment history - anytime, anywhere. Users can
also stay organized and save paper by viewing checking, savings and credit card
statements through Online Banking, automatically receive electronic versions of current
and past statements and sign up for email notification when statements are read.
Phone Banking
Phone Banking is very common all over the world and very old e-banking feature in the
developed country. Any customer and applicant apply for loan or any account opening by
phone. They also can solve their any problem with the bank by phone, transaction money,
gat account information and many other features by phone. Costumers can enjoy the
convenience of banking anytime, anywhere simply by pressing a few buttons on your
phone. Customer can know account detail, balance inquiry, product Information, cheque
related services, remittance status and many more. Banks choose particular telecom
company in order to provide such services.
Online security sign-in feature

Online security sign-in feature helps customers deter fraud by giving them an added layer
of security when logging on to Online Banking. Customers accessing Online Banking
from their cell phone or smartphone are protected with the bank's different security
services.
With one type of features, customers making sensitive transactions can receive a text
message to their mobile phone with a 6-digit, one-time-use code that expires as soon as it
is used, providing additional protection. When shopping online, customers can log into
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the page like shop safe to create a unique, temporary credit card number, eliminating the
need to expose one's real credit card number.
The range and quality of online banking

The range and quality of online banking offerings by these large, consumer-focused
institutions is actually quite surprising given the relative maturity of Internet banking and
the wealth of features provided by the leading consumer Internet banking vendors. The
institutions reviewed provide only a fraction of the capabilities offered by the leading
vendors of Internet banking applications. This, of course, frustrates the vendors that
invested significant time and capital developing these capabilities in response to claims of
the institutions and industry analysts that these features were essential to capture and
retain business with online banking users.
While most online providers constantly strive to improve their sites, some seem to
believe that offering the bare basics is good enough. Many banks feel misled by the socalled Internet prophets who convinced the institutions to spend millions of dollars
developing throwaway capabilities during the boom years. After introducing a plethora of
haphazardly planned, underutilized online banking capabilities during the Internet boom,
banks turned their attention to rationalizing their Internet banking infrastructure and
reducing support costs. The pendulum of US banks' IT investment in their online banking
sites, which swung from overly zealous in the mid-'90s to overly conservative in the
early-'00s, is now swinging back to the middle. Banks are cautiously implementing
Internet banking features that have a very high likelihood of increasing direct revenues,
reducing costs, or improving customer profitability.
Of course, institutions realize that consumers are unlikely to switch banks merely because
certain capabilities are lacking in the bank's Internet banking site. Consumers use
multiple channels and evaluate a bank in its totality, not based on the lack of a feature or
two in one specific channel. This fact, coupled with the fact that consumers cannot see a
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competitor bank's online banking site unless they open an account and sign up for online
banking, has caused some banks to move slowly in providing some of the intermediate
and advanced features available today.
However, banks must beware. As online banking becomes more mainstream, word-ofmouth is on the rise, and consumers both praise and complain about their banks' online
banking services. Meanwhile, the wide array of functionality that consumers experience
at the popular nonbank Web sites (like Amazon, Yahoo, and eBay) has raised their
expectations of online banking offerings. Many banks report receiving numerous
customer complaints regarding site performance and feature availability. Just as US
automakers were able to get away with shoddy products until the quality of Japanese
imports raised consumer expectations and forced drastic improvements, online banking
providers will be forced to improve as consumers begin to realize the capabilities of the
premier sites and demand more from their current providers.
Principles for Improving Online Banking

The battle over functionality continues. Banks must continue to implement online
features, simplify their Web sites, and focus on customer needs. TowerGroup
recommends the following guiding principles for financial institutions to use when
selecting online banking projects going forward over the next 12 months.
Enhancements need not be expensive. Simple changes to the site's layout and
navigation greatly improve ease of use, and hence, customer satisfaction.
Ensuring that needed information is available on each page so the user can
complete tasks in fewer keystrokes requires more creativity and insight than
investment dollars. The leading Internet banking sites provide many of the same
features as their competitors, but they do it more elegantly.
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Be selective in choosing new features. The jury is still out on the efficacy of
several emerging online banking features, including account aggregation, bill
presentment, online chat, and others. As banks learned with bill payment, the
worth of a feature may not come from direct revenues, but from other sources. For
example, bill payment users may require more up-front costs, but they tend to
have deeper, longer lasting relationships with the bank, which leads to higher
profitability. Investment analysis for new online features may be complicated, but
must continue nonetheless.
Underlying technology must support future development. Many banks simply
cannot implement desired new features due to limitations of their current
platforms. While Internet technology is relatively new, it has been constantly
changing and evolving. Additionally, the tangled technology infrastructure typical
of retail banks adds to the complexity of implementing new online features.
Banks must constantly work toward simplifying their systems architecture to
support the needs of all delivery channels
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Fig: Flow Chart of e-banking/ online banking customer acquisition & satisfaction all
over the world
INTRODUCTION PHASE
OFFER
Presentation
Rejection
Acceptance
Good Opinion
Presentation
INSTALLATON
Bad Opinion
MAINTENANCE PHASE
PROSPECTIVE
CLIENTS
LOOSE
CLIENT
PROSPECTIVE
CLIENTS
No
USE
IRREGULAR/
NONUSER
Yes
Word of mouth (good)
SATISFACTION
REGULAR
USER
Word of
mouth (bad)
PROBLEM
Solved
DISSATISFACTION
Not Solved
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Advantages of Online Banking

Now a days every person is busy because time is very short to do something better in a
life. Everyone try to do their work on time so that they can do the work more
efficiently. Its very time consuming to go and check all the documents like visiting a
branch or ATM, paying bills by paper check (and mailing them) and balancing a
checkbook, by going there physically. So Internet bring the facilities to those customer
who does not have enough time to go there to check it whether it is in right way or not.
By using Internet banking they can do all the banking works according to their
convenience.
1) Convenience:
Convenience means whenever you want to do your banking you can do it according
to your convenience. Usually the normal banking activities close down after 5 p.m,
which is traditional office hour in our country. Unlike your corner bank, online
banking sites never close; they're available 24 hours a day, seven days a week, and
they're only a mouse click away. As a result the customer becomes the beneficiary
because if suddenly any one needs any banks help then they can get the help by using
online banking.
2) Ubiquity:
Business person travel frequently abroad even now a days, maximum people go
abroad for different purpose in different period of time. Some times it can happen that
people faces money problem, means they can have shortages of money. In that case
online banking is always on the side of the customer. If you're out of state or even out
of the country when a money problem arises, you can log on instantly to your online
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bank and take care of business, 24/7. Even you could not find the brunch in which you
have your account through Internet banking they will send money to another bank so
that you could not face any problem.
3) Transaction speed:
In our country the Internet system in not good as a result we face difficulties in terms of
using the Internet connection. But in that case Online bank sites generally execute and
confirm transactions at or quicker than ATM processing speeds. So it is another kind of
most important advantage in our country that we can transact within a vary short time.
4) Efficiency:
Efficiency means how well you can finish your work within the given period of time
or infrastructures. In online banking you can get all the benefit only from one secure
site that will provide you all the services, whatever the banks offer to the customer.
You can access and manage all of your bank accounts, including IRAs, CDs, even
securities, from one secure site. So we can easily say that if the online banking is not
efficient enough it is not possible to do so.
5) Effectiveness:
Many online banking sites now offer sophisticated tools, including account aggregation,
stock quotes, rate alerts and portfolio managing programs to help you manage all of
your assets more effectively. Most are also compatible with money managing programs
such as Quicken and Microsoft Money.
6) Instant and automatic application upgrades:
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Whenever you start your banking transaction through online banking you will get another
benefit, which is instant and automatic application upgrade. It means whenever you will
withdraw money or deposit money instantly it will be recorded into balance. So you dont
need to worry about the checkbooks or deposit books. Everything will be done through
the Internet banking. It is good because you dont need to maintain any separate books
for it.
7) Global access:
Using a standard web browser and dial-up/lease line or proxy server connection the
customer can easily access to the global world. For this online banking also giving those
facilities to the customers.
8) Electronic fund transfer (EFT):

An electronic funds transfer (also known as EFT) is a system for transferring money from
one bank to another without using paper money. Its use has become widespread with the
arrival of personal computers, cheap networks, improved cryptography and the Internet.
Since it is affected by financial fraud, the electronic funds transfer act was
implemented. This federal law protects the consumer in case a problem arises at the
moment of the transaction.
9) E-checks & Internet Checks:
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An e-check is an electronic version of the check or the representation of the paper checks.
The e-checks payment instrument combines the security, I-Check or Internet Check is
designed for transactions where more complete verification and digital authentication is
required for a good business by the rules that govern ACH transactions. It is more
advantageous compared to e check.
10) Payments Online:

An online payment is a method used by companies and banks for receiving money from
the customers who have acquired their products or services. This process has speeded up
commercial transactions in such a way that nowadays electronic commerce represents.
Through the Internet banking we can give money to the sellers whenever we buy
something or any kind of bill payment.
11) Straight2Bank:
It gives different kind of benefits like
Fully Integrated Electronic Platform across Global Markets and Transaction

Banking- Straight2Bank provides you with a fully integrated end-to-end
electronic platform across Cash, Trade, Foreign Exchange and Securities
Services. This gives you a single point of access for your transaction,
hedging and information needs, allowing you to streamline your workflow
processes. It is also able to scale according to your need for product
simplicity or sophistication, and can be adapted for a corporation or financial
institution.
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The Port of Call for transacting, hedging and information- Through this fully
integrated electronic platform, Straight2Bank is committed to offering a full
range of services that is tailored to meet your needs.
Choice of Connection Routes- Straight2Bank is Wholesale Banks suite of

electronic channels that provides you complete flexibility to choose the right
banking connection you need Straight2Bank Web via Internet,
Straight2Bank Link via dedicated computer connection to the Bank,
Straight2Bank Access via back-end system integration. In addition,
Straight2Bank offers seamless interoperability across the delivery channels
for example, you can use Straight2Bank Access for high volume transactions
and Straight2Bank Web for approvals and tailored reporting.
Expanded Product and Services Range- Straight2Bank has an expanded and

increasingly sophisticated range of products and services, including global
market, transaction banking, and information.
Enhanced Control and Security- Straight2Bank provides an accurate and

robust information structure that gives you the ability to maintain full control
and compliance for your business. This, together with comprehensive
security across all channels, a more flexible authorization matrix, stronger
reporting for risk management and MIS, puts you firmly in control.
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Disadvantages of Online Banking

Internet banking is totally a new trend, which is exercised by the most people who have
accounts with traditional banks because of the advantages that will be provided by the
bank. But when something gives you benefit there is opposite side for which you will get
disadvantages from that particular services or products. If we talk about the
disadvantages of the Internet banking then it is very obvious that people are still unaware
of it. They dont have any clear idea about it that how it works, what benefits it can
provide to us, what can be the cons of using this Internet banking.
1) Lack of Knowledge:
In Bangladesh so many people are here who even dont know what Internet banking is.
They do not have any idea about this technology. They may feel that it is too difficult to
learn. Moreover they dont want to learn as well because they think that they cant handle
it. Young people are very much familiar to these things as a result they dont feel
anything bad about it. Problems arise when the older people come to know about is and
they dont want learn anything new at this stage. Privacy is another thing, which can be
affected by using Internet because there is record to hack the computer. Internet banking
will not be successful for them unless they come to know about the terms of it.
2) Infrastructure:
Infrastructure is the main thing to do the Internet banking all over the world. If there is
not any availability of this infrastructure then introducing this services online banking
will be unsuccessful. People have to have enough access to it and to get the access
people have to have the proper machine. In our country there is unavailability can be
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seen. However, you do need the basic modern computer equipment with modem. Most
banks now expect you to have a 128-bit encryption browser. You will also be better off if
you have a faster Internet connection than dial-up. But in our country every one cannot
buy a computer. Even they buy the computer the Internet connection is not good at all
means It is too slow.
3) Slow server:
Slow server is a common problem for web based banking side it requires powerful
computer and fast Internet connection, which is often not available for most, companies
that is why it is the most frequent complaint. Almost 70% of the clients complained of
this problem. Some clients even mentioned that the slowness of the product is big reason
why their usage of the product is so low. According to the clients it takes almost half an
hour to log on to the server which is an inconvenience when you need a data in one
minute and the whole purpose of having e-banking is just hat to have information at the
punch of a button.
But this is a problem, which is not necessarily banks fault since this is a problem, which
can only be solved by the customer himself or herself because the only solution is faster
computer and broadband connection.
4) Security:
The product requires passing through a lot of security measures and entering the
password many times before a client is allowed to log in. For client who dont make
transaction (around 50%) it is a hindrance because considering the fact that very few
people are there who have access to the product and no payment transaction takes place
so much security should be avoided to log-in. Sometimes extreme security can create
problem for many users of Internet banking because of the name and password, which is
given to the customer, is often critical and very tough to memorize. This can be an
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advantage because no one else would guess them. However, it can be a problem if the
right customer cannot memorize or forget them. The most worst part is the people who
can not memorize the names and passwords they will write it down on some papers
which will helps someone else to get in and steal money from their accounts.
5) Extremely High Volume:

If the volume is too large then there is a possibility that customer transaction may not be
made in time-to-time basis. In that case the balance would be different from the actual
one. Then conflict can arise. Phishing scams is a program in which attackers use spoof emails and Web sites for users entering personal financial information (such as credit card
numbers, bank account information, and passwords).
6) Error of Lags:
There are another disadvantages that are called errors or lags, which occurs because of
the failure of the communications of banks. If any kinds of virus get into the bank's
computers, it could be a real problem. Clearing up the chaos might take awhile.
Fortunately, Internet banking companies take many precautions to prevent this, so it is
extremely unlikely to happen.
7) Managing Cash Money:

When consumers do Internet banking through a virtual bank, they might find problems in
managing cash money. Depositing a paper check that someone gives them might not be
as fast as it would be for a traditional bank. Virtual banks usually will not let them deposit
through an ATM, so often your only choice is to mail it to them.
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Online Banking
While there are some problems with Internet banking, most of them can be overcome
with knowledge and caution. The other problems are challenges for the future of Internet
banking.
8)
Loss of L/C:
This is the crucial problem which prevalent in e banking. It causes a lot of problems
when an L/C does not reach its destination and there is no reason why it is happening. All
of the clients using e banking believe that this is a crucial problem. These problems as
they mentioned are the curse of modern technology that you have to live with.
9) No incoming facility:
This is another problem of E-BANKING, which keeps a person in the dark because when
an L/C is sent there is no direct way of knowing whether an L/C has been transferred.
Verification comes after someday if there is a reply. This might be few days too late. 70%
believe that this is a crucial problem.
10) Hard to persuade customers:

Customers of the Banks clients often do not want to believe in technology to such an
extent in our country because of the problems that might occur. Not only that it cost Tk
2500 more for a Banks client to send an L/C through e-banking over Telex. About 70%
believe that this is quite crucial why their transaction is so much lower than what it
should have been.
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Online Banking
11) Passwords lock:
Password lock when wrong password is inserted more than twice corrupting the safe
word pin. So it is also a big problem or disadvantages of online banking.
12) Fixed format:

Fixed format of presentation that is there is no customization that will help the client
get the desired data only.
13) Inability:
Inability to deal with L/C Guarantee, remittance etc. that is E-BANKING has very
limited amount of products- L/C Transaction, Amendment and transferring of
Reimbursement Authority and Free format messages only
14) Lack of action:

Sometimes lack of action by other foreign branches of Bank is a problem. This
usually
occurs when the L/C gets displaced.
15) Right code:

Multiple codes are not available making all sorts of transaction hard without the right
code as is available with SWIFT.
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Online Banking
16) Start-up may take time:
In order to register for your bank's online program, you will probably have to provide
ID and sign a form at a bank branch. If you and your spouse wish to view and manage
your assets together online, one of you may have to sign a durable power of attorney
before the bank will display all of your holdings together.
17) Learning curve:

Banking sites can be difficult to navigate at first. Plan to invest some time and/or read
the tutorials in order to become comfortable in your virtual lobby.
18) Bank site changes:

Even the largest banks periodically upgrade their online programs, adding new features
in unfamiliar places. In some cases, you may have to re-enter account information.
19) The trust thing:

For many people, the biggest hurdle to online banking is learning to trust it. Did my
transaction go through? Did I push the transfer button once or twice? Best bet: always
print the transaction receipt and keep it with your bank records until it shows up on your
personal site and/or your bank statement.
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Online Banking
20) Poor Automation:
Growth and penetration in the banking sector rapid in Bangladesh, if we look into banks'
head office level data. If we go to the branch level only 19 percent branches of NCBs, 38
percent branches of PCBs, and 97 percent branches of FCBs are computerized. Overall
computer density in the banking sector is only 1.64. For foreign banks the computer
density is 45. 34, where as for the NCBs this figure is only 0.41. On the other hand, the
PCBs' ratio is 4.94. As a whole 61.81 percent banks do not have any LAN. LAN
penetration ration for the overall banking sector [considering the branch level], only 0.07.
The ideal ratio should be 1. The PCBs' LAN penetration level is 0.22. The NCBs is the
unique market player with more than 50 percent market share, so, ICT penetration is most
crucial for this category of banks. Only 11 percent of banks have WAN. Although at the
head office level the use of banking software is 95.45 percent, the software does not
feature integrated banking. The non-banking financial institutions, insurance companies
automation status are not also very enthusiastic.
21) Misconceived Investment:

In majority of cases the investment for ICT penetration in the financial institutions is
misconceived. The banks generally purchase at first hardware, then software comes as a
free gift from the vendor. In most of the times, the software is not purchased on basis of
requirement of business process reengineering the banks. This sort of investment practice
creates frustration and squeezes scope for quantum shift. Banks are very myopic in
spending for purchasing international standard software and in development of
appropriate human resources.
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Online Banking
Features of Online Banking Available in Bangladesh

Very few banks in Bangladesh offer online banking recently. The features of online
banking that are offered in Bangladesh is given bellow.
1. Account Operations and Inquiries:

1.1 Account Summary:
The customer will be able to view the list of Current, Savings, Term Deposit and
loan accounts held and the Current Balances in each account in the account
currency and the customers preferred currency. Eastern Bank Ltd, Dutch Bangla
Bank Ltd, Dhaka Bank, Standard Chartered Bank, HSBC provide this service to
its customers.
1.2 Account Details:

The customer can choose a particular account (Savings, Current account, Term
Deposit or Loan account) and see the account details depending on the type of the
account. The details show different balances (collected, uncollected, available etc)
and information relating to interest and charges. Eastern Bank Ltd, Dutch Bangla
Bank Ltd, Dhaka Bank, Standard Chartered Bank, HSBC provide this service to
its customers.
1.3 Float Inquiry:

The customer can view the details of uncollected balances, with day-wise breakup. Eastern Bank Ltd. provide this kind of service.
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Online Banking
1.4 Account Activity:
The customer can see transaction activity in a given account for a date range
supported by the host. Eastern Bank Ltd, Dutch Bangla Bank Ltd, Dhaka Bank,
Standard Chartered Bank, HSBC, Mutual Trust Bank, Arab Bangladesh Bank
provide this service to its customers.
1.5 Cheque Book Request:

The customer can make a request for a cheque book for an account choosing the
number of leaves desired from the set that the Bank offers. Eastern Bank Ltd,
Dutch Bangla Bank Ltd, Dhaka Bank, Standard Chartered Bank, HSBC provides
this service to its customers.
1.6 Stop Cheque Request

The customer can choose an Account and enter the cheque number/range of
cheque numbers for which the cheque encashment should be stopped. He can also
specify the reason for stopping the encashment. This is an online transaction only.
Eastern Bank Ltd, Dutch Bangla Bank Ltd, Dhaka Bank provide this service to its
customers.
1.7 Cheque Status Inquiry:

The customer can choose an Account and enter the cheque number for which the
status should be viewed. In case the cheque is returned or stopped the reason for
rejection will also be shown. Eastern Bank Ltd, Dutch Bangla Bank Ltd, Dhaka
Bank, Standard Chartered Bank, HSBC provides this service to its customers.
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Online Banking
1.8 Statement download in ASCII format:
The user can download his account statement for his current accounts, savings
accounts and loans accounts. Eastern Bank provides this service.
2. Fund Transfers and Payments:

The customer can choose to transfer funds by selecting different mode of transfers. Funds
can be transferred between accounts of the corporate, to a third party account or to other
banks using prevalent payment systems. The user will be allowed to select source and
destination accounts depending upon his rights on the accounts for that corporate. Incase
of external transfers, the user will be allowed to select the source account and specify the
beneficiary details plus any additional payment details. Eastern Bank Ltd, Dutch Bangla
Bank Ltd, Standard Chartered Bank, HSBC provides this service to its customers.
3. Utility Bill Payment:

The customer can make Utility Bill Payments to utility companies as set up by the Bank
by transferring funds from his/her Savings or checking accounts. Eastern Bank Ltd,
Dutch Bangla Bank Ltd, Dhaka Bank provides this service to its customers.
4. Deposits:
4.1Maintain Deposits:
The user can view all the deposits maintained by the corporate. EBL INTERNET
BANKING APPLICATION will provide the user with all the details of the
deposits and allow to modifying certain parameters. This service is also provided
by Mutual Trust bank and Butch Bangla Bank.
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Online Banking
4.2 Request for rollover of deposits:
The user can request for a rollover of a deposit upon maturity. Eastern Bank Ltd,
Dutch Bangla Bank provide this service.
4.3 Request for premature closure of deposits:

The customers can redeem/encash a deposit prior to maturity. Eastern Bank Ltd,
Dutch Bangla Bank provide this service.
5. Loans:
5.1 Loan application requests:
The customer can request for loans in a format prescribed by the bank. . Eastern
Bank Ltd, Dutch Bangla Bank provide this service.
5.2 Initiate part or full payment of Loan:

Users can initiate a payment for a loan, in either part or full through the system. A
list of all the loan contracts that are active at the time of payment will be displayed.
The user will have to select the contract for which the payment is to be made. .
Eastern Bank Ltd, Dutch Bangla Bank provide this service to their customers.
5.3 View schedules of loan payments:

The customer can view the schedules of all the payments for any loan contract. All
the schedules for the contract will be shown, this will include the schedules that are
already paid and the schedules that are yet to be paid. . Eastern Bank Ltd, Dutch
Bangla Bank provide this service.
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Online Banking
6.
Interest Rates Inquiry
The customer can query on the interest rates offered on Savings & Term Deposit Products
offered by the Bank . Eastern Bank Ltd, Dutch Bangla Bank provide this service.
7. Foreign Exchange Rates Inquiry

The customer can to view on-line Forex quotes (spot and forward), forward cover rates,
view existing Forex contracts and initiate foreign exchange contracts. . Eastern Bank Ltd,
Dutch Bangla Bank provide this service to their customers.
8.
Messages & Bulletins
The customer can send requests in the form of messages to the bank. This will help the
marketing team to provide a solution for any request-based transaction. The messages are
sent as free-format text and the user can compose new messages, save existing messages
(including draft messages), reply to any messages sent by the bank and delete the
messages. This facility can be used by the customer only to correspond with the banks
and not for corresponding with other customers. Eastern Bank provides this service to its
customers.
9.
Product Information
The Bank would be able to publish its promotional material using this function. Eastern
Bank provides this service.
10. Change Password

The customer can voluntarily change the Internet password using this function. In
addition the user is forced to change the password by the system as per the password
policy defined by the bank. Eastern Bank Ltd, Dutch Bangla Bank Ltd, Dhaka Bank,
Standard Chartered Bank, HSBC provide this service to its customers.
11. Refill Pre-Paid Card:
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Online Banking
The customer can buy a refill number for his pre-paid mobile phone or ISP link. Dutch
Bangla Bank Ltd. provides this service.
12. Standing Instructions:

The customer can setup, modify or delete standing instructions for transferring fund from
one of his account to another account (his account or 3 rd party). Dutch Bangla Bank Ltd.
Provides this service.
13. Card services

With iBanking you can view your complete Credit Card details. You can view your
Credit Card statement, determine the minimum amount due, request for a credit limit
increase and even make an online card payment. Standard Chartered Bank provides this
kind of service to its customers.
14. Session Summary:

The customer will be able to view a log of the transactions performed in a session.
Eastern Bank provides its customers this service.
15. SMS Banking

Recently Brac Bank has started SMS banking where it provides Instant Account Balance
& Mini Statement, Fixed Deposit Maturity Alarm, and High Value Transaction Alert.
With SMS Banking, you do have to send your statement through mail or call up our
branches. Once you become a member of SMS Banking, you will have 24-hours access
to the key financial information of your account. Through BRAC Bank SMS Banking,
you will be able to access your account's current information like balance, last few
transaction and a range of other financial information by typing a pre-defined key letter
( Like 'A' for Account Balance and 'T' for last few Transactions).
16. Phone Banking

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With BRAC Bank 24 hours Phone Banking, your accounts are just a call away. Enjoy the
convenience of banking anytime, anywhere simply by pressing a few buttons on your
phone. Customer can know account detail, balance inquiry, product Information, cheque
related services, remittance status and many more. Banks like HSBC Bangladesh,
Standard Chartered, IBBL, Brac Bank provides phone banking offer to its customers.
Banks choose particular telecom company in order to provide such services.
17. Credit Card

Some Banks offering credit card services
The bank has Visa Silver, Master card Silver and Master card Gold card. MasterCard
Gold is targeted to high-end customer base that has a higher income. Silver cards have
lower credit limits. The minimum income requirement for Silver is Tk. 10,000 per month
and for Gold is Tk. 55,000 per month. The income of the applicant along with other
financial data is the preliminary consideration in deciding the limit of credit. Standard
Chartered Bank offers air travel accidental insurance to its cardholders and this is
maximum of Tk. 1,00,000 for Silver and a maximum of Tk. 5,00,000 for Gold. The bank
has ATM machines in Dhaka, Chittagong and Khulna. Several more new machines will
be installed in phases. Standard Chartered Grind lays Bank has initiated for the
cardholders' benefit that a cardholder can withdraw maximum 50% of his card's limit in
cash on 30% interest. Earlier a cardholder could withdraw only 20% of his card limit on
the same interest.
Former ANZ Grind lays Bank; now Standard Chartered Bank took a pioneering role in
introducing credit card in Bangladesh. It started acquiring Visa and Master card nearly 10
years back. In the first few years, its operational area was very limited and concentrated
only on the large hotels and restaurants. Prime Bank opened its business of credit card in
November 1999. The bank has Gold International and Gold Local, and Silver
International and Silver Local. For a Silver Card one must have income range over Taka
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Online Banking
10,000 and for a Gold Card a person is to have earning the payment due date. VANIK, a
Sri Lanka-Bangladesh joint venture financial institution, has been rendering credit card
services in Bangladesh since 1998.
18. Debit Card

The Ready Cash Card (debit card) was introduced in Bangladesh by Janata Bank in
October 1999. Its operation has not expanded well yet. The Ready Cash cards will be
used as an alternate to cash transaction. The bills of telephone, electricity, WASA will be
brought under the card payment system. People can pay the gas bill by Ready Cash Card.
The water and sewerage bills in the capital and Narayanganj can now be paid by 'Ready
Cash' card through one stop service from July 1, 2001. An agreement to this effect was
signed between WASA and American International (Bangladesh) Limited on May 16,
2001. The cardholders will be able to pay the bills, including the utility bills easily and
without any risk. Arrangements will be made soon for payment of telephone and
electricity bills by using the Ready Cash cards. The Mercantile Bank and Dhaka Bank
have introduced Ready Cash Card in limited scope.
As the only microprocessor chip based debit card available in Bangladesh for financial
payment, the Ready Cash card is very reliable and secure. It combines the most desirable
aspects of the credit card, together with the advantages of the Debit or ATM card. It is
the first step that most Bangladeshi citizens will take on the path to cash economy. Ready
Cash is a debit card as it allows the cardholder to spend no more money than he/she has
in his/her Bank account - unless a credit line has been extended. It increases the
consumption base and allows the cardholder to establish a credit history. For these and
many other reasons, the Ready Cash card is the fastest growing system in Bangladesh.
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Online Banking
Prospects of Online Banking

In Bangladesh though the online banking system is totally a new concept for the
Bangladeshi people there is a possibility within a very few days it is going to be a most
popular thing in a banking sector. Online Banking system is a blessing to the customer
which can help people in so many ways and it makes people life so easier and banking
much faster and more pleasant, for customers as well as bankers that they can check their
account at home. And nowadays, Internet banking is no longer a luxury. It is a necessary
way to transact and do business. So the prospects of online banking are huge in
Bangladesh. The revolution in this sector is going to happen in a very few short period of
time.
First of all the privileges that online banking is giving to us is we dont need to be present
in the bank physically to do any kind of banking. One of the biggest advantages of
Internet banking is that people dont have to go to the bank for a financial statement.
Customer can download the papers from their online bank account, which is available in
the Internet, and it shows them up-to-the-minute updated figures.
Whenever anyone needs money while the customer is sitting thousands of miles away
Customers can reschedule their future payments from their bank account through their
online banking. Customers can electronically transfer money from their bank accounts or
receive money in their bank accounts within seconds even he she is not in the country
where they have the account with the bank.
Day by day the demand for loan is getting increased for many reasons. Now a days
people become more demanding regarding the standard of life style. They want to
improve it by any chance. But we know that people are very busy now days as a result
they dont have enough time to go and ask for the loan. People can apply for a loan
without visiting the local bank branch and get one easily. Even the information is needed
for giving the loan that will be also done by the bank officer and the customer will be
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benefited. They can also buy or sell stocks and other securities by using your bank
accounts.
Life has become easier compare to previous some years. People are more conscious about
using the product and at the same time suppliers also think about the convenience of the
customer. As a result most retailers prefer those customers who use Internet banking
options for any kind of transaction. Even computer manufacturers like Dell Computers,
offer many discounts to customers who order and purchase computers online using
Internet banking.
Internet banking has good prospects in Bangladesh because people are more conscious
about their status and saving time and money. It saves your time that you dont have to
wait in the long queue, which saves your time.
People can do all of their banking transactions online, with greater speed, convenience and
efficiency. But for that reason the bank have to have more infrastructure so that they can
easily and within a vary short time can communicate with the customers. If they can do
much better then that then banking sector will flourish in a very smooth way.
Another prospect in other way we can see it as advantage, which is the cost of using
Internet banking. Internet banking is less expensive even some bank is in Bangladesh they
are providing the facilities without any cost. Internet banks have no physical structure to
maintain, which results in fewer overheads having to be paid. So they can charge a very
few money, some times without taking any charge because of that. So we can say that
online banking have a vary good prospects because of that since we know that
Bangladeshi people are money conscious and if they sees that they will get the benefit
without paying money they will be getting more interested to it.
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Online Banking
When you will use the internet then you will get to see the other banks products and
services and different kind of services available to the customer. So the customer can
easily compare the financial deals available currently compare to his or her own banks
facilities. So this is the advantage of Internet banking is that the ability to easily compare
services offered by different banks. You can buy financial products, insurance online
through Internet banking services. Naturally when the customer will see that he or she is
getting more facilities then they will be interested to use online banking.
Banks can have lot of advantages by introducing GIS in their daily activities. It can save
money, time and manpower, which are the target of any business organizations. It is very
important to manage the data, as there will be a vast amount of data they have to handle.
But by establishing a cell or by giving third party the duties to manage and share data, the
procedure can be a very profitable for banks or other business organizations.
The banking sector has to work extensively with location. They have to locate their
account holders or locate a plot or property if anyone wants to take loans. Again any
business organizations can use GIS tools to increase their business in different areas. They
can use this tool to take decisions about establishing their advertising boards or choose
their routes to supply goods. The GIS technology can also be used to identify future
growth of the city and establish new areas to business. In the following discussion,
prospects of using GIS technology in banking sector are highlighted. It is not a full study
report. There may be many other sides where GIS can be useful for Banks to increase
their performance and customer services like
Decision regarding sanction of loan- spatial analysis of the plot.
Decision regarding establishment of ATM booth.
Location of the loan takers.
Decision regarding establishment of new branches.
Best route of the van to deliver money to the ATM booth/branches.
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Online Banking
So online banking has a lot of prospects in Bangladesh because it can make our life
easier. And demand for this online banking is increasing day by day. Customers are
getting conscious about it and they want that it should provide a better service all the
time.
List of Banks that provide online banking facilities:

Arab Bangladesh Bank Ltd.
Duch Bangla Bank Ltd.
Brac Bank
Eastern Bank Ltd.
HSBC
SCB
Premier Bank Ltd.
Shahjalal Islami Bank
National
Credit
and
Commerce Bank
Faysal Bank
National Bank
Bank Asia
Bank Of Cyclone
IBBL
Citibank N A Bangladesh Ltd.
City Bank Ltd.
Trust Bank
Janata Bank,
Agrani Bank
First Security Bank

Saudi Pak Bank Limited
Metropolitan Bank Limited
Habib Bank
IFIC bank
Grameen Bank
South East Bank
AMEX
Dhaka Bank
Mutual Trust Bank
UCBL
VANIK
BASIC BANK
All the banks and financial institutions name mentioned above provide the facilities of
online banking. Most of them do not have internet or website banking but they are related
with very common e-banking features like ATM, Ready Cash, and many more.
Recommendation
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Online Banking
The following recommendation is related with the infrastructure for e-
banking or the feasibility of providing e-banking service and facilities

to customers.
1.
BTTBs monopoly in the nationwide long distance services should be ended. On

the other hand, Bangladesh Telecommunications Regulatory Commission (BTRC)
should be established independent of the government control. Basic telephony in
private sector should be allowed for nationwide operations. The number of
telephone lines should be increased to encourage private providers to come
into this sector.
2.
Among other things, availability of telephone lines and reduction in service fee will
attract many professionals into internet. Therefore, the tariff of BTTBs DDN
should be rationalized in order to make it affordable for the mass market.
3.
Bangladesh has a nationwide fiber-optic network established by Bangladesh railway.

Hardly 8 per cent of this fiber-optic capacity was ever used during the years of its
existence. This facility can provide excellent backbone for nationwide voice and data
communication. To avoid satellite communication and its high cost, we can establish
the missing link to the information super highway if the nation-wide fiber-optic
network is allowed to link up with the high speed fiber-optic backbone in India.
Therefore, the connectivity through submarine cable should immediately be
established
4.
Voice over Internet Protocol (VoIP) and private international gateway for voice
and data should be allowed. The provision of obtaining permission from
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Online Banking
MOPT, prior
to
leasing
the capacity from Grameen Phones optical fiber
network should be abolished.
5.
As we have no direct access to information super highway, the only option left for
Internet Service Providers (ISP's) in Bangladesh is to communicate through
satellite. Satellite communication is costlier than fiber optic.
On top of it,
Bangladesh government makes it extra expensive by charging more for the

VSATs. VSAT operating licenses should not limit the bandwidth. Greater
competition among the Internet Service Providers (ISPs) should be promoted
and new ISPs should be encouraged to come into business
6.
Government officials are to be oriented on the benefits of e-banking and ecommerce. For instance short course can be offered at training centers such
as the Public Administration Training Center (PATC). Posting of government
documents
and
publications
including
budgetary information on the Web
should be instructed. Laws that allow encryption should be developed, thereby

paving the way for authenticating transactions electronically
The
following recommendations should be applied by bank
management to gain customer satisfaction and to maintain excellent

customer relationship.
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Online Banking
1.
Training:
Systems Design & Renovation staffs should be instrumental in developing the
engineering specifications for the current implementation of the all the banks
central web infrastructure, which provide online banking in Bangladesh. The IT
staffs should also develop and implement emerging technologies in distant
branches including the use of databases, streaming media, and the use of online
banking software packages (e.g., Staler, Hexagon, etc).
Therefore training should be provided to deal with the natty gritty technical
problems like password problem, safeword-pincard handling split L/C and L/C
wording problem could be solved. Many clients are also interested to know the
reasoning behind the command that they use for handling the e-banking product.
2.
Personnel:
If possible part time or full time additional personnel should be hired to cater to the
increasing number of client and equally increasing demand of clients for e-banking
product. The person should be technically adept at handling the product problems too
otherwise an inept employee can result in more dissatisfaction.
3.
SWIFT code Library:

Software handling all sorts of code is extremely important for different transaction.
The lack of enough code number options can hamper customer performance and eproduct is losing out to SWIFT in a major way.
4.
Clear & Customized Statement of Accounts:

More proper breakdown of Accounts Statement and clear explanation should be used
so that no human interface is necessary to make the clients understand the statement.
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If the client requires a human interface to explain things then the advantages of eproducts become negated.
The account could also be customized to the need of the clients so that the client gets
to see the account as is useful to him rather than having to go into a lot of
manipulation to get to the format they desire. Citibank is already trying to achieve
customization in the near future but the above mentioned factors should be
incorporated in their activities.
5.
Educate customers:
In Bangladesh most of the people are not familiar with internet, especially those
people lack of knowledge about the e-banking who are and would be the potential
customers for the banks. Not only that, those of who know about internet they do not
know about online banking in our country as it is very unfamiliar. Therefore, to
establish and enrich e-banking or online products and services providing in
Bangladesh, banks should go forward to all the ways to make their employees more
educated about e-banking, its uses and its all the advantages and a proper guideline
to use it. In that case, they can educate people through media coverage, leaflet,
newspapers or workshop program and etcetera.
The following recommendations are given and should be implemented for

controlling the data-theft, hacking, or any kind of violation of customers and
banks intellectual property or secrecy or smooth transaction during the process of
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e-banking, so that customer feel secure when they are using online for making any
transaction with or through banks website and software.
Hacking with computer system
Implement a firewall
A firewall is a barrier that keeps hackers and viruses out of computer networks.
Firewalls intercept network traffic and allow only authorized data to pass
through.
Develop a corporate security policy

Establish a corporate security policy that details practices to secure the network.
The policy should direct employees to choose unique passwords that are a
combination of letters and numbers. The corporate policy should outline
consequences for network tampering and unauthorized entry.
Stop running unnecessary network services

When installing systems, any non-essential features should be disabled. If a
feature is installed but not actively used, it is less likely to be updated regularly,
presenting a larger security threat.
Conduct a vulnerability test

Conducting a vulnerability test is a cost-effective way to evaluate the current
security program. This test highlights flaws and limitations in the program, and
experts can offer suggestions for improvement. The best method for conducting a
vulnerability test is to contact a computer consulting company and provide access
to system for a day or two. This will provide ample time for network appraisal
and follow-up discussion and planning.
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Punishment for hacking

Whoever commits hacking shall be punished with imprisonment of either
description for a term which may extend to three years, or with fine which may
extend to Taka two lakhs, or with both. The Bangladeshi government should make
a law to check computer hacking in the country with punishment of 10 years
prison term or fine of 1 million taka or both to the hackers. The law named
Ministry of Information and Communication Technology Act 2006 has to be
implemented for cyber- tribunal adding those doing harm in the computer and
internet system
Data theft
When entering any personal information on the Internet one should make sure
he /she is entering it on a secure page. Additional information about making sure
an Internet page is secure.
When purchasing something over the Internet unless one plan on buying
something from that same company again in the near future one should not store
credit card or personal information with that site.
One should make sure to have an active and up-to-date spyware protection
program and anti-virus protection program.
To keep data theft away from the system, the system needs methods of strong
authentication, as well as excellent operations security.
Data security and interoperability should be ensured through actions such as

setting
of
encryption
standards
and
international
agreements
on
interoperability. With the increase in the use of Internet and Information

Technology in every sphere of human activities, formulation of new laws or
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Online Banking
amendment to the existing ones should be done as deemed necessary, to ensure
security of data, freedom of information.
Punishment for tampering with computer source

documents
Whoever intentionally or knowingly conceals, destroys or alters or intentionally or
knowingly causes any other person to conceal, destroy or alter any computer source code
used for a computer, computer program, computer system or computer network, when the
computer source code is required to be kept or maintained by any law for the time being
in force, shall be punishable with imprisonment of either description for a term which
may extend to three years, or with fine which may extend to Taka two lakhs, or with both.
Virus Dissemination:
Computer viruses are defined as programs which attach themselves to, overwrite or
otherwise replace another program in order to reproduce itself without the knowledge of
the PC user. So it is a threat for the bank as well as the customer because it can overwrite
the software that are used for e-banking.
Following measures should be taken to prevent virus dissemination:
Have to prevent all infections and when that is not possible, then have to create an
outlet for notification and annotation of virus outbreaks for service providers and
end-users so that future breaches can be prevented.
Have to prevent the loss of information/data and software on computers and

minimize the cost of computing maintenance and network downtime by virus
outbreaks.
51
Online Banking
Need to monitor anti-virus software levels and virus infections and initiate
defensive action when necessary.
All computers should run the most recent version of an anti-virus protection
subscription. Ideally a server should be configured to push virus updates out
periodically to all client systems. Employees should be educated about viruses
and discouraged from opening e-mail attachments or e-mail from unknown
senders.
The following recommendation is related with the new products or
services that can be offered in Bangladesh.

Alerts
Thorough this customer will be able to receive free, timely alerts about account
transactions, sent right to email or wireless device.
Customers will be notified when
Balance is above or below an amount customer specify
A withdrawal, deposit or check posts to the account
Credit card payment is due
Credit card purchases exceed a limit you choose
A brokerage trade goes through
Customer will be able to
Choose the specific alerts they want, and up to three emails and one wireless
address where they want to receive them.
Customer can add new alerts, turn off existing alerts, or change the email or
wireless preferences at any time.
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Online Banking
How to set it up
Sign up for banks online account.
Sign on and click on the Messages & Alerts tab to set up or view alerts.
My spending Report
Taking control of customers finances has just become easier by My Spending Report in
western world. Available only for online banking customers, this powerful online
budgeting tool collects and summarizes the spending from customers Check Card, credit
card, and Bill Pay into an easy-to-use report. It will be a free, convenient way to see
spending at a glance.
Features
1. Automatically tracks accounts in one place
2. Sorts card and Bill Pay purchases into familiar categories
3. Updates information automatically, every business day
4. Organizes spending view by month, up to three months
5. Download a year or more of spending history
6. The report is customizable so customer can view their spending patterns in

whatever way is most helpful. And because it's accessed through a secure online
banking and protected by password, customer can be assured that all their
personal information will remain confidential.
How customers will get their report
Once a customer have a checking account with a Check Card or any credit card:
53
Online Banking
Sign up for the account and it will be provided by the bank. It can be easily implement
able in Bangladesh if the bank provides its own credit card and thus will be easier to track
on it.
Example from an online banking provider bank from America
Best online brokerage deal

Bank can offer such service through online where customers will be able to invest
independently online with the robust tools and resources available through the banks
online banking facility. Through this the bank will manage the investment and also
monitor it.
Features
View account balances, monitor positions and place trades2 24 hours a day,
seven days a week.
Get easy access to online brokerage statements, trade confirmations and tax
documents up to 7 years of information online.
Transfer funds between customers bank and brokerage accounts.
54
Online Banking
Customize access to customers brokerage accounts for selected individuals:

Authorize full/limited trading ability or provide view-only online access.
Customers selected individuals create their own username and passwords to
access the account(s) theyve chosen.
Bank will provide powerful online screening tools to find stocks, mutual funds,
exchange-traded funds and bonds that meet customers criteria.
Access leading independent research various stock market report, stock price,
stock index and various other important information.
Track gains and losses with state-of-the-art portfolio monitoring tools.
Talk to a live representative anytime day or night, every day of the year to
place trades, make a transfer, check balances, and more. So the bank will give a
24 hours service for trading in Dhaka Stock Exchange.
Cautious
Investors should carefully consider information contained in the prospectus, including
investment objectives, risks, charges, and expenses. Customer can request a prospectus
containing this and other information about the fund from customers financial
professional. Investors should carefully consider information contained in the prospectus,
including investment objectives, risks, charges, and expenses. Customer can request a
prospectus containing this and other information about the fund from your financial
professional.
System response and account access times may vary due to a variety of factors,
including trading volumes, market conditions, system performance, and other
factors. Trades executed during market hours only.
Apply for a credit card from bank account
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Online Banking
This will give the ease to customer to get a credit card seating at home. The customer will
just order for a credit card and the bank will provide one seeing the particular customers
eligibility of getting the card.
Technical Requirements for above products that can be offered through online
banking
Internet banking for these services will be full Internet based service which does not
require downloading any additional software. To meet security standards browser must
support 128-bit SSL encryption.
Recommended minimum computer hardware

Internet access via modem - 33.6kbps modem connection
Windows PC - Pentium or equivalent processor, 32 MB RAM
Screen Resolution - 800 x 600 or greater is preferred
Recommended operating systems

Windows 98 SE, ME, 2000, XP or Vista
Mac OS X
Recommended browsers and settings

The following browsers are supported:
For Windows PCs
Internet Explorer v6.0
Internet Explorer v5.5
Netscape Navigatorv7.1
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Online Banking
JavaScript must be enabled for Internet Banking to work correctly.
Secure Socket Layer (SSL) (preferable 2 and 3) must be enabled.
Phone Banking
More features that can be offered
Stop a cheque or enquire on a cheque's status
Hear recent transactions
Order an interim statement
Renew or change your Term Deposit instructions
Make loan repayments
Pay bills
Transfer money between own bank accounts
Receive faxed application and account forms
Check Foreign Exchange & Term Deposit rate
Conclusion
Now a day, Internet Banking is the most popular and fast growing banking system. It is
used in most of the countries in the world. Faster, easier, secured, flexible and
connectivity make the system famous so greatly. Internet Banking makes it easy to see
when and where user money goes. Users have complete control of his/her accounts and
57
Online Banking
future. User can monitor account activity, get real-time account balancing, and transfer
funds whenever he/she need to - all from the convenience of his/her home or office.
As we have seen that the world wise features of Online Banking are way many then that
of we have in Bangladesh. But due to the limited resources, cost and lacking of
infrastructure and modern technology, it may not be feasible to provide all these services
to Bangladesh. Although most of the banks have started various online banking facilities
starting fund transfer to phone banking and so on. The main problem behind why it has
not yet been so popular in our country is lack of awareness among people. People has the
wrong assumption that they will be charged more through this but internet banking is for
the benefit of customers only where it minimizes customers transportation cost and also
makes efficient use of time. Based on the gap of services of online banking between
Bangladesh and world wide services we have some up with some recommendations.
Upon fulfillment of these such as incorporating steps to provide more security, offering
products like best brokerage deal, my spending report and alert, the banks can progress
more and thus become more competitive. As we came to know from the course that all
that a modern customer of bank need is modern and better services. So doing all these
will improve their competitiveness and thus efficiency to operate banking business in
Bangladesh successfully.
58

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Online Banking - FIN464

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FIN464, Assignment # 2

December 09, 2007

Objective & Scope of the Study

Advantage of Online Banking

Methodology of the Study

Online banking from Global Perspective

balance and transaction history search

payments file upload

direct debit payments and payment templates

related account access

multi user transaction authorization and privilege delegation

The common features fall broadly into several categories

Transactional (e.g., performing a financial transaction such as an account to

Electronic bill presentment and payment - EBPP

Funds transfer between a customer's own checking and savings accounts,

Investment purchase or sale

Loan applications and transactions, such as repayments

Electronic billing is the electronic delivery and presentation of financial statements,

EBPP electronic bill presentment and payment

EIPP electronic invoice presentment and payment

Non-transactional (e.g., online statements, check links, cobrowsing, chat)

Financial Institution Administration - features allowing the financial institution to

ASP/Hosting Administration - features allowing the hosting company to

Features commonly unique to business banking include

Support of multiple users having varying levels of authority

Transaction approval process

Features commonly unique to internet banking include

Personal financial management support, such as importing data into a personal

Online security sign-in feature

The range and quality of online banking

Principles for Improving Online Banking

Advantages of Online Banking

8) Electronic fund transfer (EFT):

9) E-checks & Internet Checks:

10) Payments Online:

Fully Integrated Electronic Platform across Global Markets and Transaction

Choice of Connection Routes- Straight2Bank is Wholesale Banks suite of

Expanded Product and Services Range- Straight2Bank has an expanded and

Enhanced Control and Security- Straight2Bank provides an accurate and

Disadvantages of Online Banking

5) Extremely High Volume:

7) Managing Cash Money:

10) Hard to persuade customers:

12) Fixed format:

14) Lack of action:

occurs when the L/C gets displaced.

15) Right code:

17) Learning curve:

18) Bank site changes:

19) The trust thing:

21) Misconceived Investment:

Features of Online Banking Available in Bangladesh

1. Account Operations and Inquiries:

1.2 Account Details:

1.3 Float Inquiry:

1.5 Cheque Book Request:

1.6 Stop Cheque Request

1.7 Cheque Status Inquiry:

2. Fund Transfers and Payments:

3. Utility Bill Payment:

4.3 Request for premature closure of deposits:

5.2 Initiate part or full payment of Loan:

5.3 View schedules of loan payments: