How does online banking affect the banking industry Dissertation

How does online banking affect the banking industry - Dissertation Example Introduction of ATMs, partially alleviated the problems, and ATMs proved successful in load reduction as well as cutting transaction cost. Advent of internet provided another window of opportunities for the banks to expand their customer reach by providing limited set of internet based banking capabilities to full-fledged virtual banks. This has been extended by further proliferation of PDAs and mobile phones, wherein mobile banking is gaining its foothold as a prominent channel. This paper analyses the progress of online banking since its inception, specifically on the aspects of service quality, security and risk factors from the online banking customer perspective. Based on our study of the decade of online banking, it can be logically concluded that online banking is becoming the number one choice for today’s banking customer in all demographics. ... Occasionally, a customer would phone a bank representative of choice, for financial information (balance in account, check clearance, status of money transfer etc.). Prior to internet/web, ATMs allowed the customer a flexibility of executing certain banking transactions (mainly balance checking, cash withdrawal). Subsequent to that, some banks introduced so called PC banking, where an application installed in customer’s PC established a secured connection with an application running in the bank to perform transactions. Early in 1981, when internet became prevalent at home, some of the banks in US with a large customer base, tried introducing a few facilities to its customers, wherein the customer could perform a few activities, by signing up to additional services from its bank. Some banks charged the customer for these transactions, and these mainly included value-added services to the customer at lesser cost. (E.g. Availability of Dow Jones Retrieval/News Service at a much l esser cost provided by CitiBank). Ubiquity of internet, and customers need for mobility, banks and financial institutions were forced to adopt current technology as a basis for providing its customer, online banking services, available at the reach of the customers’ personal computers, at home, at workplace, or anywhere a customer has access to his/her bank and account. The trend continued with advent and following rapid progress in online technology, from internet banking to mobile banking. Another reason for this shift in service offering on the part of the bank is also due to the fact that customer base for banks and volume of transactions saw