e - banking
TRANSCRIPT
E - BANKING
Onkar Sule
Roll no: - 54
What is E - BANKING
Electronic banking, also known as electronic funds transfer (EFT), it is simply the use of electronic means to transfer funds directly from one account to another, rather than by cheque or cash.
Technology Commencement in Banking In 70’s, banks started to establish centralized data
processing centers. Essentially the roles of these data processing
centers are: Collect the handwritten documents from
branches Compile the documents Manual data entry by the operators Generate reports for the bank staff and the
central bank Execute some banking transactions
Branch Automation
In 80’s, banks started technology investments for the branches.
The first step is offline branches. Terminals connected to local branch computer Second step is online branches connected
centrally. Most of the transactions started to be performed in the central mainframe.
Uses of EFT
Have your check
deposited directly into your bank or credit
union checking account.
Withdrawal of money at your
convenience using your PIN
Online Bill Payment
Buy goods using plastic money
instead of cash
Various forms of E – Banking….
Internet Banking
ATM’s
TELE BANKING
Plastic Money
E - Cheque
Process of all forms of E – Banking…
Internet
Banking AT
M’sTELE Banki
ngPlastic Mone
yE -
Cheque
Internet Banking
Sample Internet Banking Architecture
• More and more banks are coming to realize that internet is a part of banks' alternative delivery channel strategies activities concentrated in the business-to-consumer segment, focused on retaining clients
• In Internet banking, security is a primary concern. Security concerns have been addressed from every angle within the architecture of the Internet banking application.
ATM.....
In the mid-1980s, that cash dispensers truly became a worldwide phenomenon.
It took 16 years for the first 100,000 cash dispensers to be installed, but only four years more for the next 100,000 and 3 months for the next 100,000.
Now, ATM became the electronic face of banking for most customers.
Beside cash withdrawal, there exist various transaction options from transfer to fund buying/selling.
Now there are 1217463 ATM installed in and around Mumbai
ATM and POS Application Architecture
Credit Card Authorization
Debit Card Authorization
Switch System
Point of Sale
New habits in shopping Increased the use of plastic cards Now there are 313140 POS installed in
India (Ref: www.moneylife.in)
Main components Switch IVR CTI(Computer Telephony Integration)
Manage each call using the computer Pop up the user information while transferring the call
Agent Desktop Application Win32,ActiveX, HTML
Host Application
Telephone Banking Infrastructure
Telecom
IVR CTI HOST
Telecom
Interactive Voice Response (IVR) is a software application that accepts a combination of voice telephone input and touch-tone keypad selection and provides appropriate responses in the form of voice
IVR has come into our life at the beginnings of 90’s. First step in Telephone Banking Peak transaction volume in salary payment days for balance
inquiry Integrated with ATM system
IVR
Plastic Cards
The plastic card usage grown enormously in last 2 decade.
Plastic card became the main media for bank customers.
Number of credit card in India:Credit Card Type National Cards International Cards TotalVisa 12,00,704 70,43,834 82,44,538
MasterCard 4,88,881 48,20,965 53,09,846Other 13,599 36,884 50,483total 17,03,184 1,19,01,683 1,36,04,867
Mobile Banking
Current Mobile Banking Applications: SMS Banking WAP Banking STK (Sim Toolkit) Banking
SMS Banking Basic banking inquiry transactions(balance inquiry, funds,
exchange rate inquiry…) are performed by the cooperation of bank and the GSM operator
Security is the main problem
Bank SMS
Gateway
Bank
SMS DB
Leased line
GSM Operator
Application Server
GSM Operator SMS
DB
GSM Network
Bank Host
WAP Banking Wireless application protocol (WAP) is an
application environment and set of communication protocols for wireless devices designed to enable manufacturer-, vendor-, and technology-independent access to the Internet and advanced telephony services.
WAP is a global standard and is not controlled by any single company
Various banking transactions offered in WAP environment by banks.
Similar architecture with SMS banking
SIM Toolkit SIM card enables to keep and load different
applications. SIM Application Toolkit has been agreed as a GSM
standard SIM Application Toolkit is independent of phone
manufacturers and designs. SIM Application Toolkit allows the flexibility to update the SIM
to alter the services and download new services over the air
SIM Application Toolkit is designed as a client-server application. On the server side, SimCard platform and the client side, phone that supports the SIM Application Toolkit
In the near future, banks will start to offer banking transactions in this platform.
Banking Application Architecture
Loans&Credits
FX Import / Export
Deposit (TD,DD)
FBS Securities PromissoryNotes
MerchantChequesNBS EFT
DAL
Batch Operations
ATM
POS
Teletel
Telerom
Teller (Branch)
Internet Banking
Phone Banking
Internet Shopping
PCMCampaign
ManagementCredit Risk
ManagementProductivity
CIF Product Factory PortfolioManagement
INFO
CENTER
Sales SupportSystem YKB HRPaymentsCMS Treasury
Relationship Management
De
liv
ery
Se
rvic
es
Management & Control
Reporting
Info
rma
tio
n D
eli
ve
ry
Settlement
GL / Accounting
Corporate Tables
Data Warehouse Electronic repositories of summarized historical
data The main idea behind data warehouse is get all
company data working together so users can see more,learn more, and make the organization work better
Data Warehouse helps users to identify trends, find answers to business questions and derive meaning from historical and operational data.
Data access is easier and less costly Decision support solutions run faster and are more
accurate.
Data Warehouse Process
Design Transform Extract Deliver
Transaction Data Extraction
Data Scrubbing and Cleansing
Load, index and Aggregate
Publish and Subscribe
Data Mapping
Data Replication
Data Histories and Summaries
Data Access Tools
Integrated Data Warehouse Infrastructure
Partial Solutions
Life Cycle
Complete Integrated Solution
Channel Costs
0
0.5
1
1.5
2
Web ATM Call Center Branch
Channel Integration Evolution
Channel Integration evolution Reuse Efficiencies of Scale
Reduction of Redundancies
The Role of Banks in the New Economy Internet and mobile devices have brought new
rules to economy and shaped the way to do business
Banks has also evolved according to the new economy and took their places in this new world to add value to their customer
The new ways to do business are : e-commerce (B2C) m-commerce B2B
E-commerce - B2C E-commerce is the buying and selling of goods and services
on the Internet.
Main feature of e-commerce
24-hour availability
a global reach
the ability to interact
provide custom information and ordering
and multimedia prospects,
The Web is rapidly becoming a multibillion dollar source of
revenue for the world's businesses. Banks provide secure payments infrastructure - virtual POS
M-commerce Mobile commerce applications involve using a
mobile phone to carry out financial transactions- this usually means making a payment for goods or transferring funds electronically.
As content delivery over wireless devices becomes faster, more secure, and scalable, there is wide speculation that m-commerce will surpass wireline e-commerce as the method of choice for digital commerce transactions.
B2B A housands of companies that sell products to other
companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information.
In the B2B, the bank role is to provide a reliable payment infrastructure that add value to corporate business
This infrastructure should cover: Bill presentment Bill payment Different payment types(credit card, deposit account,
loan) Information after payment
E-Security To improve the e-business, all the users should feel secure to
perform the transaction this environment The main concepts in e-security are:
PKI (public key infrastructure) enables users of a basically unsecure public network such as the Internet to securely and privately exchange data and money through the use of a public and a private cryptographic key pair that is obtained and shared through a trusted authority.
Public key is a value provided by some designated authority as a key that, combined with a private key derived from the public key, can be used to effectively encryption messages and digital signature.
Private or secret key is an encryption/decryption key known only to the party or parties that exchange secret messages. Public key is used together with a private key
E-Security - continued Digital certificate is an electronic "credit card" that establishes your
credentials when doing business or other transactions on the Web. It is issued by a certification authority (CA).
CA (certificate authority) is an authority in a network that issues and manages security credentials and public key for message encryption. As part of a public key infrastructure, a CA checks with a registration authority to verify information provided by the requestor of a digital certificate
An RA (registration authority) is an authority in a network that verifies user requests for a digital certificate and tells the certificate authority to issue it.
Advantages of E-banking Benefits for Banks
Benefits for Small to Medium Businesses
Benefits for Customers
Benefits for Banks Larger customer coverage
Reducing the costs of operations
Promoting their services and products internationally
Increasing the customer satisfaction and providing a personalized relationship with customers
Benefits for Small to Medium Businesses
To run its operations more effectively
Lower cost than traditional financial management mechanisms
Benefits for Customers
Convenience- 24 hours a day, seven days a week
Cost- Reducing transfer fees
Speed- Faster circulation of assets
Competitiveness- Fostering competition in financial market
Benefits for CustomersCommunication- communicate easily
Environmental- Abolishing the uses of paper
Others
- Offering one-stop-shop solutions
Disadvantages OF E-banking A need for customer skill to deal with computers and
browsers.
E.g. Elderly, Housewives → Inconvenient
Site change it will make the customer have some confusion or delay.
Security Risk
Security Risk Increasing number of fraudulent bank websites
Fake emails purporting to be sent from banks
Use of Trojan Horse programs to capture user IDs and passwords
Fraudulent Bank Websites A suspicious bank website:
www.sbionline.com Original bank website
www.onlinesbi.com These website are believed to aim to trick persons into
disclosing their sensitive personal information
Fake e-mails Email send from
Fraudulent bank Verify the
personal information Guide customer
enter the fraud link Disclosing their
ATM card numbers and their passwords
Viruses and Worms-Trojan Horse Program
When we open some suspiciouswebsites or email
Trojan Horse Programwill install our computer secretly
Hidden in the computer When you access
bank websites Capture our
account andthe password
Case From Newspaper Don’t use the hyperlink
to login to the website of banks
Should deeply check the postscript of the website
Observe that is it have the encryption and compare the login account of encryption cert is equal to the bank.
Precautionary MeasuresFor Bank:
Should provide specific guidance to their customers
For Customers : Should not disclose their customer IDs (e.g., account
numbers) or PIN to anyone else. Periodically change their PIN Should promptly log out from the service Should regularly check their account balances and
statements to identify unusual transactions.
Do not access Corporate Cyber banking through public terminals.
To safeguard your computer from any other hacker attack, install anti-virus and anti-spyware software on your computer and update it regularly.
Alternative Delivery Channels
Anytime, anywhere bankingTelephone Banking Internet BankingMobile BankingTelevision bankingNext ???
What is the Next channel
Microwave Banking???
THANK YOU