It is process or method of banking by which customers performs financial transactions electronically through internet that’s why it is also called internet banking and online banking.
Origin of Electronic Banking
It is banking service that allows its customers to conduct their daily financial transactions online 24/7 as it is a ease of access for the customers. These transactions includes payroll and direct credit transactions. In 1980’s New York’s four major banks which includes Citibank, Chase Manhattan, Chemical Manufacturers Hanover were the first who introduced Electronic Banking and offering home banking services. While many financial institutions took steps to implement electronic banking in mid 1990s but customers were hesitant to get use of monetary transactions through websites. Therefore companies such as America Online, Amazon.com and Ebay widespread the idea of paying items through online. In 2000, 80 percent of the U.S banks offered e-banking but still it took 10 years to acquire 2 million e-banking customers. In 2001, Bank of America became the first bank to top 3 millions e-banking customers. In contrast larger institutions such as Citigroup claimed upto 2.2millions relationships online while J.P. Morgan Chase had more than 750,000 online banking consumers. However by October 2001 Bank of America executed a record 3.1 million electronic bill payments. Customers who use e-banking tend to be more loyal and profitable and willing to refer their banks to friends and family. Online customers have maintain higher balances and got lower attribution rates.
Scope of Electronic Banking in Pakistan