Internet Banking Channel, A Case For Comprehensive Usage – A Retail / Consumer Banking View

Internet Banking Channel, A Case For Comprehensive Usage – A Retail / Consumer Banking View

In our journey of 21st Century, World Wide Web has complemented us in multiple ways in which we communicate, perform transactions, and socialize with the world and so on. Banking habits of people are substantially changing every day with a host of self-service gadgets enhanced by the improvement in infrastructure, bandwidth, and processing capabilities. Internet Banking (can be equivocally described as Online Banking) has been transformed from being a mere static Web site to a self-reliant channel competent enough to derive independent revenue, process operations over complete lifecycle and service customer holistically while complementing other channels, efficiently supporting the blend of offline and online proposition.

This paper discusses a “case for comprehensive utilization” in line with the global trends of adopting a completely-evolved Internet Banking channel. In addition, this paper gives a glimpse on how some of the leading banks and financial institutions across the globe make effective use of the Internet Banking channel to garner impressive results. In fact, our observation leads us to the conclusion that most of banks across the globe predominantly use Internet Banking channel for cost reduction or revenue growth; whereas very few banks seem to adopt this channel comprehensively, and that is true even for some of the banks with direct platform.

Introduction

From a traditional high street branch to a new generation RFID enabled branch, banking has come a long way. Conceptually, banking transactions have been in existence since the era when trade and commerce transactions were initiated. However industrialization era of the 19th and 20th century has brought a profound transformation encompassing multiple dimensions in which, businesses and individuals would bank. But nothing has been as revolutionary as e-commerce with induction of the web. Within less than two decades since the introduction of the web for commercial operations, Internet Banking channel has come a long way.

In its early stages, banks used Internet for unidirectional communication such as for publishing the offerings and corporate data of the bank. Also, at this stage, Internet Banking was merely an additional channel of information source for general public and customer. This was followed by providing basic transactions on internet such as “View current account balance, pay utility bills online, transfer funds” amongst others. While Internet Banking was undergoing a transformation on the contents, parallel developments in telecommunication, infrastructure, and requisite software helped to enhance the capabilities of this channel extensively.

From a status of being complementary channel of conducting basic transactions, Internet Banking has come a long way and now it is being recognized as “a self-reliant channel capable of conducting banking independently and posing as a strong complementary channel in a multi-channel integration era” . Bankers and technocrats of the world are pushing the Internet Banking channel to be more flexible, customized according to customer needs, addressing the customer needs in line with their goals, enhancing captive revenues, and improving designs and contents to radically improve customer experience. Multiple technologies such Web 2.0, STP , Imaging or Truncation are helping the banks to service customers as well as innovate the “Web Real Estate” .

With every such enhancement, banks are aggressively improving customer experience in terms of depth, breadth, technology innovations, customization, front-office and back office integration. However, security threat is a deterrent in the minds of customer as well as the banks. It would need an industry-wide initiative to counter the threat. Multi-factor authentications and relentless efforts of establishing creative secured deployments are being tested rigorously across the globe. Needless to say, no amount of precaution and innovations for security aspects is enough for restricting evils by anti-social elements. Security is always a challenging task for a banking and technology community.

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