The Evolution And Implementation Of Internet Banking Information Technology Essay

The Evolution And Implementation Of net Banking Information Technology undertakeIn a world moving at an overwhelming pace, engineering science has become the congenital key driver in each(prenominal) aspects of our life. profits is the catalysis without which, this would have never been possible. Now that Information Technology has been warmly accepted at home as well as at work, handling activities electronic eachy evoke be envisaged (Tero et al 2004).Bill provide (2008) once said, Banking is essential, deposes ar not. By this, he meant that traditional savings curseing volition piecemeal disappear and electronic banking, which attracts more and more new users, will supplant it. According to Alter (2002), the evolution of electronic banking started with Automatic teller machines (ATMs) and has passed by tele peal banking, direct bill defrayment, electronic fund conveyance and the revolutionist online banking, which has been selected to be the future of pecuniary e lectronic transactions.Internet Banking function were introduced in the early 80s by the Nottingham Building Society and the Bank of Scotland (Tait and Davis, 1989). Unfortunately these go were discontinued as the bank clients were wary and not fully establish to accept meshwork banking. With the rapid growth of IT in the 90s, banks launched net profit banking over again (Daniel, 1998) and this time, it met such(prenominal) an astonishing success that these electronic proceedss ended up becoming industry standards.Internet banking is the newest delivery line that enables bank customers, by means of safe and appropriate systems, to gain rag to general bank training on products and services offered and their taradiddles. Pikkarainen, Pikkarainen, Karjaluoto and Pahnila (2004, p.224) defines meshing banking to be the internet portal done which customers stand use incompatible kinds of banking services ranging from bill passment to do practicement. This happens throu gh the banks netsite without any intervention or inconvenience of sending faxes, letters, pilot light signatures and telephone confirmations (Thulani et al, 2009 Henry, 2000). Through the banks website, the bank customers female genital organ carry out activities such as balance reporting, inter-account transfers, bill payment via a telecommunication lucre without having to leave their work or home (Aladwani, 2001 Daniel, 1999 Mols, 1998 Sathye, 1999). With just a naive click of the mouse, Internet banking gives customers access to almost all types of bank transactions, obscure from ultimate transaction, that is, the withdrawal of cash (De Young, 2001). Using Internet as an substitute(a) channel for the distribution of pecuniary services has become a indispensableness in order to achieve competitive advantage with the arrival of globalisation and more hostile competition (Flavian et al, 2004 Gan et al, 2006).THE MAURITIAN INTERNET BANKING SECTORInternet Banking is a relati vely novel phenomenon in the countrified and one can assure that it has started to operate locally since 1997. Due to its diversification skills ranging from agriculture, selective tuition engine room and financial services, Mauritius has experienced a rapid economic growth, thusly connection the league of banks that use the internet as a distribution channel for banking services. The banking sector plays an important role in the economy, both in the step-down of unemployment and in the flow of foreign currency to the economy. The two largest local banks ar the Mauritius Commercial Bank Ltd and the State Bank of Mauritius Ltd.Some of the banks offering the internet banking services ar the Mauritius Commercial Bank Ltd (MCB), the State Bank of Mauritius Ltd (SBM) and the Hong Kong kidnap Bank (HSBC). The service offered encloses mainly inter account fund transfer, transfer of fund to honorable mention throwaway account, payment to other account, SWIFT payment orders, rech arging mobile phones, foreign transfers, cheque and credit card transactions, current narrative of account issue, standing order transactions, diligence for various accounts, loan and credit cards, bill payments.Given the cross border implications of Internet Banking which almost eradicates all geographically boundaries, it is very important to have clear supervisory rules specifying which country supervisors have control over the internet banking activities as well as the elaboration of the applicable legal regime. To keep pace with the development in this line of business, a guideline on Internet Banking was issued to all banks in February 2001. The guideline sets out a regulatory framework for providing Internet banking services in Mauritius and establishes the minimum standards that should be followed by banks providing Internet Banking services. It further describes the requirements and processes to look at in order to obtain the approval of the Bank by financial substructu res who want to offer Internet Banking services. According to this guideline which came into effect the 2 April 2001, Internet Banking refers to banking products and services offered by institutions on the internet through access devices, including personal computers and other intelligent devices.Types of Internet Banking in that respect argon different forms of online banking which are web-based banking where customers can access their accounts when they use the internet (Aladwani, 2001). A s form of online banking is where the bank customer, through a modem, dials-up to the banks server to access his bank account. This is k importlyn to be dial-up banking. A type of dial-up banking, called Extranet, is a private mesh between a bank and its corporate customers.Currently there are three kinds of internet banking which are employed in the market crop (Thulani et al, 2009 Yibin, 2003 Diniz, 1998) and these are Informational, Communicative and Transactional.An Informational web site is the first level of Internet Banking. Marketing information about the banks products and services are found on a standalone server. There are typically no path between the banks internal network and the server.A Communicative/simple transactional website allows a limited amount of fundamental interaction between the customer and the banks system. The interaction is restricted to e-mail, account inquiry, loan application or static file updates (name and address). Fund transfers are not allowed.An good website allows bank customers to make queries about their accounts, electronic transfer funds to and from their accounts, pay bills, update their account information and conduct other banking transactions online. and then a bank who is planning to offer internet banking services, is expected to relieve oneself an informational website first, then introduce a communicative website and finally an advanced transactional website where customers can put to death the basic transacti ons.Advantages of Internet BankingBoth the provider and the consumer benefit from internet banking. Online banking is considered to be the most important flair to decrease cost and recruit or maintain services for consumers (Hua, 2009). From the banks perspective, it is the cheapest banking products delivery channel (Pikkarainen et al, 2004). Together with speech time and money, this service minimizes the possibility of bank tellers committing mistakes ( Jayawardhena Foley, 2000). Less staff is unavoidable since the customers serve themselves in cyberspace. Karjaluoto et al (2002, p.261) argued that time and location were no thirster limiting featureors in banking as all over the world, customers can now easily access their accounts 24/7.Internet makes the transactions efficiently and expertly at an unmatched speed. Internet banking offers the possibility to wish several bank accounts on one site and these sites are compatible with software such as Microsoft money.With incre asing competitive pressures from existing firms and new blood on the market, competition is an important logic to be considered. Using internet banking as an alternate channel has allowed banks to target various demographic segments more efficiently, thus retaining existing customers and attracting new ones. While supplying internet banking services, banks establish and discommode their customer alliance (Robinson, 2000).The concept of online banking is an uprising in the field of banking and finance as the account holder does not have to visit the bank and queue to perform the basic transactions like balance inquiry, recent transactions record, transfer fund to employees accounts in the form of salary, bill payments and phone account top up. On top of this, the interest rates are higher for online banking than with traditional banking (3.4% to 4%).Many persons like internet banking as there is no credit check. If someone has a bad banking score of financial problems, at a tradit ional bank, their application to open a bank account would be turned down. This is not the case with internet banking. Some banks offer the facility of online loaning where an instant loan is provided by only filling a form. Internet banking web-sites are highly acting systems, easy to understand and navigate, with simple instructions designed to answer all queries about banking. Customers also have a wide range of opportunities to invest such as stock quotations and news updates (Lee, 2009).Qureshi et al (2008) stated that it is essential to extend internet banking to customers in order to maximize the advantages for both the service providers and the customers. The navigability if the site is a very vital part of internet banking as it can become one of the biggest competitive advantage of a financial body (Ortega et al, 2007). The banking sector performance increases everyday due to the rise in technology usage. Online banking is time saving (Qureshi et al, 2008).E-banking is no w less vulnerable to safety device and security related issues. Secure Socket Layer (SSL), Password Based encoding (PBE) and electronic signatures has increased the level of security. If any inconsistency occurs in an account, it can be traced easily, making internet banking more effronteryworthy. Avinandan Prithwiraj, 2003 Urban, Sultan and Qualls, 2000 have identify trust to be an important factor for the financial online services. Furthermore an empirical study has shown that consumers make online decisions based only on trust. In ontogeny countries, trust plays a crucial role for customers to accept and use online banking (Benamati and Serva, 2007). Belanger, Hiller and smith (2002) defined privacy as being the ability to control and manage information about oneself.Some banks offer real time customer assistance to customers who have trouble finding their way through the web site or the proceedings of the internet banking registration through instant messaging, email or ev en the telephone.Disadvantages of Internet BankingIndisputably since the emergence of internet banking, it has been vie an important role for both the service providers and the consumers. Nevertheless, this phenomenon is observed differently among customers who every accept it heartily or reject it. Those who accept it, as proposed by Clark and Mills (1993), prefer impersonal relationship, that is, exchange oriented customers. They like the 24 hour availability of services, the simplicity of the transactions, the no-queuing factor and no fixed branch-operating hours (Al-Somali et al,2009) duration those who reject it look for the human touch and social benefits of traditional banking. These are known as the communally oriented customers (Clark and Mills, 1993).Those who reject internet banking are wary of the take a chance of exposures involved in it. Featherman and Pavlou (2003) defined perceived risk as the potential for difference in the pursuit of a desired return of using an e-service. The risks perceived areFinancial riskit is the constant misgiving of transactions faults causing a monetary loss suffered by customers who perform online transactions. Clearly internet banking lacks the assurance provided in traditional banking (Lee et al., 2009, p.2) and this is due to the fact that online banking is considered as an innovation which is incompatible with consumers habits (Kuisma et al., 2007, p.77).Performance riskThis risk is unconditional from the consumers fright of losses incurred by failures of online banking websites. Customers are often troubled that a disconnection from the Internet might occur while performing electronic transactions which might lead to huge unexpected losses (Kuisma et al., 2007). This was substantiate by Sathye (1999) who claimed that Internet access is a decisive variable on which the adoption of online banking depends and by Almogbil (2005) who succeeded in showing that a significant relationship exists between the sp eed of Internet access and the acceptance of electronic banking. neighborly riskIt stems from the fear of being seen in a negative way by others (Kuisma et al., 2007, p.77) or causing the disapproval of ones friends/family/work group by adopting online banking (Agarwal et al., 2009, p.4). Venkatesh and Morris (2000) approve that social influence plays a central role in determining the approval of new information technologies. Nonetheless, it is commendable to note that others opinions are particularly informative in the early stages of experience (Hartwick and Barki, 1994) when potential information technologies adopters are not sufficiently informed.Privacy riskIt refers to the possible loss due to fraud or a hacker, putting at risk the security of an online customer (Lee et al., 2009, p.2). This risk is emphasized since the appearance of phishers whose hobby consists on attempting to deceptively collect personal information, such as usernames, passwords and credit card details. Th ey not only lead to users monetary loss, but also impair users privacy (Entrust, 2008). Suh and Han (2002) point out that, unlike in offline banking, that is traditional banking, trust is a pressing need in internet banking.Time riskIt is the times loss and the lateness in receiving the payment or the difficulty of seafaring (Lee et al., 2009, p.2). This can be due to a disorganized Web site, to slow-downloadable pages, to the massive time needed to be a PC-literate.Apart from this, the credulity of an institution must(prenominal) be verified before opening an account in an internet bank and entrusting the life-savings of an individual. The institution must be legitimate and must be checked against the listing of the FDIC.A major disadvantage would be that when several failed attempts have been done to login the account, after having given the wrong password, the account becomes inactive. The customer will have to go through a lengthened procedure to get it reactivated again. Wee ldreyer (2002) claims that internet banking is not living up to the hype. other problem would be the down time of internet, where no customer will be able to access hi/her bank account because there is no internet connection for hours probably. The connection could also be mentally ill during bad climatic conditions such as heavy rain.