E-banking – Today’s need - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

E-banking – Today’s need

Jul 5, 2000

After e-commerce (B2B and B2C) and e-trading the next revolution is expected to be in e-banking. Online banking is expected to become more transparent and fully secured in time to come. The Internet offers a potential attractive way to serve customers without the heavy costs associated with the traditional brick and mortar business model (banking at the branch). The incentives of e-banking are either the need to meet competitive challenges and customers demand or the need to cut down costs.

As per the international report on banking the banking transactions on a brick and mortar banking costs around $ 1.1. While through ATM it costs around $ 0.27 and just 1% of over the counter banking in case of Internet banking. This itself indicates the huge hidden potential of the e-banking.

However on the security front, Internet banking has distinct security needs as well as number of core operational requirements. On the other hand in the bricks and mortar world the business is supported by a trust model which has remained largely unchanged for thousands of years. Recently the cyber laws have also been passed by the government envisaging the security for Internet transactions. Banks are using encryption technology, firewall and passwords for security on the net transactions. Many private sector banks have taken a lead in providing e-banking services. Public sector banks on the other hand are sharply moving ahead to remain in line with private sector banks by adopting the latest technology. The leader will be the one, which can provide qualitative services in the minimum time period.

The five main advantages of Internet banking are

  • Internet banking removes the need for physical presence in the new territories since a web site has a global presence.
  • The biggest advantage for the banks is they will be able to grow organically without investing in new branches.
  • The banks will be able to market their new products and services through Internet, reducing the promotional costs. Marketing costs can be concentrated on creating an effective web site that can attract potential customers.
  • Also due to standardised technology, the time to market new products and services will be dramatically reduced.
  • Corporate banking will get a major boost since thousands of transactions can be conducted daily and multiple updates can be provided. Individual can work easily from different locations.

So the conclusion is those banks which have already started e-banking will have to continuously update their services to retain the potential customers since any customer is just a click away from a competitor elsewhere. And those which, have not yet started are ignoring the potential customers by remaining away from the latest technology.

Equitymaster requests your view! Post a comment on "E-banking – Today’s need". Click here!


More Views on News

Union Bank of India Swings to Profit as Asset Quality Improves (Views On News)

Jun 8, 2021

Union Bank's share price up 2% post March quarter earnings.

PNB Reports Profit in March Quarter After Three-Way Amalgamation (Views On News)

Jun 8, 2021

Shares of PNB fell over 2% yesterday despite healthy quarterly results.

Bank of Baroda Shares Plunge 5% After Reporting Huge Loss (Views On News)

May 31, 2021

The stock fell after the bank posted a loss due to higher tax expenses.

India's Largest Bank, SBI Posts Record Profit in Q4 (Views On News)

May 22, 2021

All you need to know about the bank's latest financial results.

How Did Canara Bank Perform in Q4FY21? (Views On News)

May 19, 2021

Key takeaways from Canara Bank Q4FY21 results.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Jun 18, 2021 (Close)