Promoting eBanking in Bangladesh

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Technology solution for promoting e-banking in bangladesh

E-business has been continuously growing as a new industry during the last decade(Van Hoeck, 2001). The banking industry has been leading this trend in recent years,and now all banking transactions completing through internet applications is sometimes called e-banking. Some key issues addressed in the recent literature about the e-bankinginclude: customer acceptance and satisfaction, privacy concerns, profitability, operational risks, and competition from nonbanking institutions.E-banking has revolutionised the way business istransacted by globalising the business enterprise.

E-banking technologies have proliferated in recent years, and the availability of a wide range of products has led to increasing adoption among consumers. These technologies include direct deposit, computer banking, stored value cards, and debit cards.Consumers are attracted to these technologies because of convenience, increasing ease of use, and in some instances cost savings.E-banking, in particular, has grown at impressive rates. Between 1995 and 2003, e-banking increased eightfold.Between late 2002 and early 2005, use of online banking increased 47%, a clear evidence that e-banking is associated with better household financial management.

All businesses, including small and medium scale industries, no matter their geographical locations, are all beneficiaries of e-banking. It encompasses all kinds of commercial transaction that is conducted on an electronic medium, mostly through the internet. E-banking links business to customers no matter their geographical location. It allows companies to make new business contacts from different global business alliances, test new products and services, and make market research and other enquiries all at a minimal cost both financial and otherwise.

Smaller community banks, among others, are more interested in the application of e-banking to gain certain competitive edges over their larger counterparts.In addition to previous e-banking delivery systems, Automated Teller Machines (ATMs) and telephone transaction processing centres, online banking provides banks a new and more efficient electronic delivery tool.While ATMs were first introduced in early 1980s and initially an attempt to reduce operating costs, telephone call centres were developed in the 1990s to handle simple transactions and provide added customer services from a remote location. E-banking has been viewed as an upgrading from previous electronic delivery systems to open new business opportunities for the banking induetry.

Electronic banking does not mean only 24- hours access to cash through an Automated Teller Machine (ATM) or Direct Deposit of pay checks into checking or savings accounts as many consumers may think. Electronic banking (e-banking) involves many different types of transactions; it is a form of banking where funds are transferred through an exchange of electronic signals between financial institution, rather than exchange of cash, cheques or other negotiable instruments. With the expansion of global Information and Communication Technology (ICT) infrastructure and the internet, e-banking is set to play a pivotal role in the national economic development of any country. But appropriate software, technology, infrastructure, skilled manpower and cyber law are crucial for the implementation of e-banking in the country. This paper reviewed the issues associated with various forms of e-banking accompanied by a field survey and explored the challenges and prospect of e-banking in Bangladesh.

Chapter 1


The primary objective of the report is to find out a technology solution for the banking system of Bangladesh using a nation-wide network. Implementing a nation-wide electronic banking system requires huge investment especially for the establishment of a backbone network. It really matters for a country...
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