FUTURE, HURDLES & PROSPECTS
1.0 E-BANKING - INITIAL INTRODUCTION
E-banking is defined as the automated delivery of banking products and services directly to customers through electronic, interactive communication channels. Customers access ebanking services using an intelligent electronic device, such as a Personal Computer (PC), Personal Digital Assistant (PDA), Automated Teller Machine (ATM), Kiosk, or Touch Tone Telephone. E-banking refers to the PC Banking, Internet Banking, Virtual Banking, Online Banking, Home Banking, Remote Electronic Banking, and Phone Banking. E-banking includes the systems that enable Bank customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet. The following chart exhibits the definition of E-banking.
E-banking ATM Services Any Branch Banking Internet Banking Virtual Banking SMS Banking
Other Online Financial Services and Products
Wireless Application Protocols Telephone Banking Electronic Fund Transfer (EFT) 1
SWIFT Channel Other electronic delivery channels
2.0 THE BANKING INDUSTRY AND THE APPLICATIONS OF E-BANKING
Banking has never been more important to our society than it is today. The way Bill Gates (2008) announced that « Banking is essential, Banks are not ». This quotation means that the traditional bank branch is going to vanish in order to be surrogated by Electronic Banking which continues to attract new users. The Banking industry believes that by adopting new technology, the Banks will be able to improve customer service level and tie their customers closer to the Bank. Meanwhile, the Banking industry has been also looking for new methods to expand its customer base and to counteract the aggressive marketing effort of those nontraditional banking entities. Larger Banks that maintain expensive branch networks tend to have the greatest incentive to adopt e-banking services. In comparison, smaller banks have higher start up costs and tend to have a high initial technological cost in developing ebanking services.
The application of e-banking has been proven as an effective way to reduce the costs of operation for the financial institutions. For instance, e-banking services will allow Banks to reduce expenditures on physical structures. It is believed that the e-banking will help Banks to cut costs, increase revenue, and become more convenient for customers. Another important benefit from e-banking is a more effective information collection and management. A combination of a low percentage of customers using e-banking services on a consistent basis and a relatively low start-up cost in developing e-banking services in the banking industry– will make the impact of e-banking (positive or negative) quite limited on financial institution. Finally, the development of e-banking service has encouraged the adoption of a decentralized approach to give Banks more needed flexibility to distribute Internet access to a much larger number of employees and potential customers.
3.0 PRESENT STATUS OF E-BANKING IN BANGLADESH
At present the Banks in Bangladesh are using the limited Electronic Banking services. It is expected that Bank can attain more profit and offer better services to its customers by introducing Online Banking facilities. The Foreign Commercial Banks operating in 2
Bangladesh like Standard Chartered Bank, Citi Corp. N.A. and the HSBC are the pioneers to introduce the Electronic Banking facilities. They provide ATM, Debit Card, Credit Card, Home Banking, Internet Banking, Phone Banking, Online Banking etc. Among the indigenous Banks, the Private Banks are ahead of the Public Banks. Prime Bank Ltd., Dhaka Bank Ltd., BRAC Bank Ltd., Dutch-Bangla Bank Ltd., Eastern and Mercantile Bank Ltd., are already stepped on towards Electronic Banking facilities. Apart from...