Impacts of E-Banking

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  • Topic: Bank, Online banking, Credit union
  • Pages : 13 (3236 words )
  • Download(s) : 236
  • Published : December 6, 2012
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Abstract

Online banking is one of the newest internet technologies where multiple benefits are available for both financial institutions and customers. It has enhanced efficiency in the banking sector which has positively impacted on profitability. It reduces some operational cost and enhances the transaction between financial institution and its customers. Online banking or internet banking is much better and faster than previous technology such as ATMs or Electronic fund transfer at the point of sales (EFTPoS). It has some positive impacts and also has some negative impacts. The rate of growth of the internet globally increases day by day. Now less develop or developing countries also introduced online banking for customers like Bangladesh. For example-Dutch Bangla Bank ltd, Eastern Bank ltd. Bangladesh. And as a result increasing profitability is partially dependable by the introduction of online banking technology.

Table of Contents

1. Introduction……………………………………………………………………………………………………………..4 1. Background of the company…………………………………………………………………………5 2. Discussion and Analysis…………………………………………………………………………………………….6 1. Profitability ratio analysis…………………………………………………………………………………………7 2.1.1 Return on assets…………………………………………………………………………………........7 2.1.2 Return on ordinary shareholders’ fund………………………………………………………7 2.1.3 Return on average tangible common equity………………………………………………8 2.1.4 Trading cost-to-income ratio………………………………………………………………........8 2. Performance Analysis……………………………………………………………………………………………….9 3. positive impacts of e-banking…………………………………………………………………………………10 1. Convenience……………………………………………………………………………………………….10 2. Build strong relationship………………………………….………………………………………….10 3. Operation speed…………………………………………………………………………………………10 4. Straightforward………………………………………………………………………………………….11 5. Effectiveness………………………………………………………………………………………………11 4. Negative impacts of e-banking………………………………………………………………………………12 1. Security concern…………………………………………………………………………………………12 2. Customer service………………………………………………………………………………………13 3. Bank site changes and Upgrades………………………………………………………………..13 4. Technical problems…………………………………………………………………………………….14 5. Learning difficulties…………………………………………………………………………………….14 5. Conclusion and Recommendation…………………………………………………………………………15

6.0 List of References…………………………………………………………………………………………………17 7.0 Bibliography…………………………………………………………………………………………………………19

1.0 Introduction

The association between online banking and technological developments has always been interactive and dynamic. The emergence of the Internet and the increasing popularity of personal computers are presented as an opportunity and a challenge for the banking industry. (web1)

This year, financial institutions have used powerful computer networks to automate millions of daily transactions, today often receive only a paper record of the customer sales. Now, when clients are connected to the Internet using personal computers, banks provide similar economic advantages by adapting those same internal electronic processes in the home. (web1)

Internet banking is another flourishing alternate channel of the bank through which customer can do balance inquiry, fund transfer within his own accounts and to third party , open term deposit, inquiry of cheques status, bill payment etc. Also customer can purchase anything from home by the help of Internet Banking. These transactions can be done instantly from any part of the world at any point of time.

It presents a dynamic distribution channel for the delivery of financial services on a superior level. Innovation of this technology has enhanced efficiency in the banking sector because it reduces cost and achieves a better customer satisfaction (Bradley and Stewart, 2002).This online technology is quicker and effective than previous technology such as ATMs.

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