Role of It in Commerce(E-Banking)

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ROLE OF INFORMATION TECHNOLOGY IN BANKING SECTOR
Information Technology (IT) concerns with technology that treats information. Through a microelectronics-based combination of computing and telecommunication, IT acquires, processes, stores and disseminates vocal, pictorial, textual and numerical information. Remarkable innovations in the field of information technology has been deciding and changing the way we live and the nature of economy. E-Commerce refers to exchange of goods and services within or among countries. E-commerce refers to the same, but it is mediated and regulated through the internet.

E-banking evolved in the mid-1990s when the internet and the World Wide Web began to catch on. It is a web based service that enables the bank’s authorized customer to access their account information. It allows the customers to log on to the bank’s website with the help of bank-issued Personal Identification Number (PIN), technologies. A security analyzer constantly monitors login attempts and unauthorized attempts to log in are prevented.

In a typical e-banking transaction, customers’ requests for online banking information are passed on from web server to the bank’s e-banking server through the www interface. These requests pass through a firewall before they reach the e-banking server. The customer information database is stored on a bank’s server. When customer requests reach the e-banking server, it passes the requests to the bank server holding customer database. The database provides the required information to the e-banking server, which is in turn passed on to the web server, through the firewall, from where the customer is able to access it.

The sort of architecture, known as the ‘three-tiered architecture’ creates a controlled environment, which allows quick incorporation of internet security. Electronic Funds Transfer (EFT):
EFT scheme enables an account holder of a bank to transfer funds to another person having an account with any of the participating commercial banks, without any physical movement of instruments from one centre to another centre. This scheme is meant for small value funds transfer and it uses RBI Net as its carrier. E-banking and digital signatures:

With modern instruments like scanner and plotter, it is possible to forge signature perfectly. A digital signature system with some technical warnings has a higher degree of security. Digital signature performs three functions: (a) Data Integrity, (b) Data Authentication, (c) Non-repudiation. A digital signature is a personalized thumb print. It is the encryption of an electronic document by keys. Internet banking portals:

The Internet is making the market more transparent. It is a tool that offers greater operational latitude to business leaders by firstly offering them instant access to information and answers, transparent markets and wider choices, and secondly supporting their ability to diversify business partners while maintaining an overall, controlled vision of these multiple interactions.

Banks are transforming their websites into full-fledged finance portals. Finance portals offer strategic and operative benefits giving an opportunity for banks to provide personalized services to their customers on one-to-one basis. By establishing effective finance portals, banks can build long-lasting customer relationships, larger customer base, and higher customer loyalty.

The building up of a finance portal starts with the definition and choice of strategy and identifying the target groups of the portal. Most finance portals differentiate three levels of users: visitors, members and bank customers. Visitors can access general information like stock quotes; members can use additional services like chat rooms or newsletters; and bank customers have access to all services, including online banking and real-time-quotes. Building a finance portal is a complex project, involving a variety of activities from web design to...
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