E-Banking in Bangladesh: The Future of Banking
E-banking is the waves of the future. It provides enormous benefits to consumers in terms of case and cost of transactions, either through internet, telephone or other electronic delivery channels. For many consumers, electronic banking means 24-hours access to cash through an Automated Teller Machine (ATM) or Direct Deposit of paychecks into checking or savings accounts. But electronic banking now involves many different types of transactions. E-banking is a form of banking where funds are transferred through an exchange of electronic signals between financial institution, rather than exchange of cash, cheeks 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 economy, proper software, infrastructure, cyber low and skilled manpower are important for the implementation of e-banking in the country. This paper overview the issues associated with e-banking and try to explore the future challenges and prospect in Bangladesh.
Key Words: ATM, SMS banking, EFT, SWIFT channel, POS, Call center, DES, RSA, MAC.
Introduction: In a constantly changing world of today, where past is replaced by dynamic present and the dynamic present is being replaced by more challenging future, the old ways of doing things is no longer valid. Change is permanent and a reality. Those who are not able to keep pace with the changes are destined to loose the race. Science and technology is changing the way financial institutions perform their transactions. Today’s banks are shaking by these technological changes. Life has never been so easy, comfortable, and luxurious. Science and technology have brought our life to this stage. But a new technology brings with it not only the potential for success but also a never-ending series of questions regarding its design, its value to its users, ultimate use and acceptability.
*Assistant Professor, School of Business Studies, State University of Bangladesh
E-banking is a form of banking where funds are transferred through an exchange of electronic signal between financial institutions, rather than exchange of cash, checks, or other negotiable instruments. For many consumers, electronic banking means 24 hours access to cash through an ATM or direct deposit of paychecks in to checking and savings accounts. Literature Review With the extensive technology innovation and telecommunication, we have seen new financial distribution channels increasing rapidly both in the numbers and form, from ATMs, telephone banking, PC banking to internet banking. (Earring Wood and Story, 1996). Developing alternative distribution channels is not only important in terms of reducing costs and improving competitiveness, but also in terms of financial institution’s ability to retain the existing customer case. (Kimball and Gregor, 1995) as well as to attract new customers. Sathye (1999) proposed a model for Internet Banking in Australia is significantly influenced by variables of system insecurity, case of use awareness of service and its benefits, reasonable price, availability of infrastructure and resistance to change. The transformation from traditional brick-and-mortar banking to E-Banking has been Automatic Teller Machine (ATM) and thus the retail banking industry witnessed significant and extensive change. Formally, E-banking comprises various formats or technologies, including telephone (both land line and cell phone banking, direct bill payment (EFT), and PC or internet banking (Power, 2000). Weitzman, (2000), Lassar, Manolits and Lassar, (2005), Ehou and Chou (2000) identified five basic services associated with online banking: view account balances, and transaction histories, paying bills, transferring funds between accounts, requesting credit card advance, and ordering checks. Majority of banks of banks is...
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