Internet banking

Sudan Jha

Every day new develop ments are taking place in Information Technology throughout the world. Such developments are also taking place in the system of banking. A bank, in this age, will not be able to survive without providing internet as an alternate service to the customers. The application of the latest technology on a continuous basis is going to mark the difference between a successful bank and a failure.

Nepal undoubtedly lags far behind in e-banking with a computer, a micro-card, and an internet access but the IT revolution in the country has began to set in. The notable changes are slowly being visible in transactions in the capital. The internet users represent a mere 0.04 per cent of the total population of the country and the number of internet users is less than 8 per cent of the population of Kathmandu district. Only 38% of the bank branches are located in urban areas. The ratio of a fully computerised branch is still very low. This means that there is a lot of scope in Nepal for the automation of the banking industry. With the introduction of the internet changes in the field of banking has started with some banks hosting websites. Banking websites are developed by banks to provide details about the products being offered by the bank and other information about the bank such as the interest rate, board of directors and financial highlights. At present, websites in Nepal are used for promotional purposes rather than providing more flexible services to the customers. A newly opened commercial bank, Kumari Bank Limited, has set an example by launching internet based banking services that include electronic banking, home banking, internet banking, ATM and other services to its customers besides deposit, lending, foreign trade and remittance. On-line accesses provided by Kumari Bank to the customers are balance enquiry, summary and statement of all transactions, and location and filtration of transaction date within a selected account. However, Nepal still lacks the required sound infrastructure in the IT sector to take a wider step towards e-business.

Generally web-enabled services are those that do not require decision making by the bank, e.g., checking of account balance, ordering a chequebook, opening of an account, withdrawing cash and making transfers or where the decision can be made automatically on the basis of certain pre-defined parameters. However, as telephone banking has gained popularity in recent years in other parts of the world, banks realised that their websites could be used for things other than dissemination of information. Modern banks have been well equipped with modern technologies and innovative banking services such as boundary-less transactions by providing complete solutions for internet banking. Besides new facilities in the corporate sector, banks also intend to provide a range of facilities in the retail sector including tele-banking. Under corporate banking, the bank facilitates services like checking one’s account, which is a strong tool to give a much-needed flexibility in business. Modern technology is doing wonders in banking transactions making operations easy, quick and efficient.

The effect of all these changes is that transparency in banking transactions has increased tremendously. Often, the banks take such a long time in deciding on a particular loan application that the whole exercise becomes futile. These problems are eliminated when a potential borrower uses the internet. The process of collecting information and comparing the costs to arrive at the best rate offered becomes very simple and quick. It also becomes impossible for banks to overprice their services.

Electronic marketplaces and vertical portals can be a great tool to attract the customers, as well as the internet can also be used to create closed extranets to facilitate communication and cooperation between relatively stable business partners. Similarly, connecting the appropriate people in each of these organisations with these web portals would no doubt increase production and logistic efficiency. This provides the customers with web sites for querying inventory status, ordering, scheduling and tracking shipments which provides greater returns. The internet has geared up competition among banks. This factor has forced the banks to change the concept of banking and concentrate more on the operational cut cost side rather than the revenue increase side for improving their profits.

HEADLINE | SECOND-PAGE