Can E-Banking Services Be Profitable?

In: Business and Management

Submitted By costman1
Words 7435
Pages 30
CAN E-BANKING SERVICES BE PROFITABLE?

Olga Luštšik[1]

Abstract

For the last few years European banks have spent billions of euros into new electronic channels. But after some years of excitement banks long-waited sky-rocketing profits from this area didn’t occur. Estonian banks have also invested in expanding and improving the IT systems and a number of new e-banking services have been developed. Until recent time, most of the pricing decisions for e-bank services were made based on a gut feeling as current financial management information systems didn’t support such analysis. In the article author explores the implementation techniques of Activity Based Costing (ABC) in banking sector on example of an Estonian bank in order to analyze the cost structure for traditional and electronic channel transactions. The article shows how it is possible to implement ABC in banking sector and proofs empirically that electronic channels provide cost saving for banks and for bank clients.

JEL classification numbers: G21, L11, L86, M40, O31

Keywords: e-banking, profitability, activity based costing

1. INTRODUCTION

A few years ago no self-respecting financial consultant would travel without it: the bar chart showing that the marginal cost of Internet banking transactions was a tiny fraction of the cost of branch banking. It was the chart that launched dozens of stand-alone Internet banks. As a result, European banks have poured billions of euros into building direct channels like the Web, upgrading branches and call centers, and trying to integrate all these channels. Major financial futurists predicted to electronic banking a bright outlook. But after some years of excitement banks long-waited sky-rocketing profits from this area didn’t occur. Internet banks around the world are faltering. This situation requires a deep analysis for…...

Similar Documents

E-Banking

...DEFINITION OF E-BANKING Electronic banking, also known as electronic funds transfer (EFT), is simply the use of electronic means to transfer funds directly from one account to another, rather than by cheque or cash. You can use electronic funds transfer to: 0. Have your paycheck deposited directly into your bank or credit union checking account. 1. Withdraw money from your checking account from an ATM machine with a personal identification number (PIN), at your convenience, day or night. 2. Instruct your bank or credit union to automatically pay certain monthly bills from your account, such as your auto loan or your mortgage payment. 3. Have the bank or credit union transfer funds each month from your checking account to your mutual fund account. 4. Have your government social security benefits check or your tax refund deposited directly into your checking account. 5. Buy groceries, gasoline and other purchases at the point-of-sale, using a check card rather than cash, credit or a personal check. 6. Use a smart card with a prepaid amount of money embedded in it for use instead of cash at a pay phone, expressway road toll, or on college campuses at the library's photocopy machine or bookstores. 7. Use your computer and personal finance software to coordinate your total personal financial management process, integrating data and activities related to your income, spending, saving, investing, recordkeeping, bill-paying and taxes, along with......

Words: 12904 - Pages: 52

E Banking

...investigate on electronic banking system and current scenario of e-banking in United Arab Emirates (UAE). Nowadays all the companies are trying to advance their technology and increase their output. Similarly Banks are also moving rapidly to an era of technological change. Online versions of nearly all existing payment methods are appearing rapidly bringing about profound changes in the whole system of financial services and intermediation. While many banks especially in Europe and the U.S. have adopted internet banking, this research shows that the majority of banks in U.A.E. are still in the early stages of developing e-banking. Only very few have well-developed e-banking facilities, despite all banks having an internet banking website for the convenience of their customers. This project will focus on discussing what is e-banking? What are the advantage and risk in adopting this banking system? What are the rules or guidelines to implement the system? What services does e-banking provide in the UAE and how e banking has increased the profit and efficiency of banks? 4 TOPICS PAGES 1. What is e banking?.............................................................................................................6 1.1. Understanding the basic definition of E-Banking…………………………………………….6 1.2. Features of E-Banking……………………………………………………………………………………..7 1.3. Types of E-Banking………………………………………………………………………………………....8 2. Advantage of......

Words: 3896 - Pages: 16

E Banking Products in Bangladesh

...E-banking product available in Bangladesh E-banking product and services can include wholesale products for corporate customers as well as retail and fiduciary products for individual customers. Ultimately the product and services obtained through internet banking may mirror product and services offered through other bank delivery channels. A brief description of e-banking products are described below Automated teller machine: An automated teller machine (ATM) is a computerized telecommunication device that provides a financial institution’s customers with a method of financial transaction in a public space without a need for a human clerk or a bank teller. Debit card: A debit card is a plastic card which provides an alternative payment method to cash. While making purchases. The amount of a transaction is typically displayed on a card reader, after which the customer swipes the card and enters the pin number. There is usually a short delay while the EFTPOS (electronic fund transfer at point of sale) terminal contact the computer network (over a phone line and mobile connection) to verify the authorize the transaction. Credit card: A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the user’s account after every transaction. In the case of credit card the issuer lends money to the customer. It is also different from a charge card......

Words: 1146 - Pages: 5

Acceptance of E-Banking Among Customers

...ISSN:2249-1260/EISSN:2250-1819 ACCEPTANCE OF E-BANKING AMONG CUSTOMERS (An Empirical Investigation in India) K.T. Geetha1 & V.Malarvizhi2 Professor and Assistant Professor, Department of Economics, Avinashilingam Institute for home Science and Higher Education for Women Coimbatore -641043, TamilNadu, India 1 2 Abstract Financial liberalization and technology revolution have allowed the developments of new and more efficient delivery and processing channels as well as more innovative products and services in banking industry. Banking institutions are facing competition not only from each other but also from non-bank financial intermediaries as well as from alternative sources of financing. Another strategic challenge facing banking institutions today is the growing and changing needs and expectations of consumers in tandem with increased education levels and growing wealth. Consumers are becoming increasingly discerning and have become more involved in their financial decisions. This paper investigates the factors which are affecting the acceptance of ebanking services among the customers and also indicates level of concern regarding security and privacy issues in Indian context. Primary data was collected from 200 respondents through a structured questionnaire. Descriptive statistics was used to explain demographic profile of respondents and Factor and Regression analyses were used to know the factors affecting e-banking services among customer in India. The finding......

Words: 18353 - Pages: 74

Business Topics [E-Banking]

...A RESARCH REPORT On CUSTOMER SATISFACTION ON ATM SERVICES: A CASE STUDY OF DENA BANK At [pic] Submitted to (Jiwaji University, Gwalior) For the partial fulfillment of the award of Master of Business Administration (2007-2009) Submitted by (Shilpa Senger) [pic] Estd. 2002 Institute of Information Technology & MANAGEMNT DECLARATION This is to declare that the Research Report has been accomplished by me and being submitted in partial fulfillment of requirement for the award of the Degree of Master of Business Administration from institute of Information technology and management affiliated to Jiwaji University Gwalior This work has not been submitted by me anywhere else for the award of any degree or diploma. All sources of information are based on my on job training experience and lea Shilpa Senger MBA-4th Semester ACKNOWLEDGEMENT It is a great pleasure for me to put on records my appreciation and gratitude towards Mrs. Vandana Bharti (A.H.O.D. of M.B.A. Department) for his encouragement towards preparation of this report. I would like to express my deep sense of gratitude to prof. Preeti singh for giving me valuable suggestion and encouragement. I offer heart felt thank to my Parents, Brothers and all my friends for their moral support......

Words: 6403 - Pages: 26

E Banking

...Project of E-Banking DEFINITION OF E-BANKING Electronic banking, also known as electronic funds transfer (EFT), is simply the use of electronic means to transfer funds directly from one account to another, rather than by cheque or cash. You can use electronic funds transfer to: •Have your paycheck deposited directly into your bank or credit union checking account. •Withdraw money from your checking account from an ATM machine with a personal identification number (PIN), at your convenience, day or night. •Instruct your bank or credit union to automatically pay certain monthly bills from your account, such as your auto loan or your mortgage payment. •Have the bank or credit union transfer funds each month from your checking account to your mutual fund account. •Have your government social security benefits check or your tax refund deposited directly into your checking account. •Buy groceries, gasoline and other purchases at the point-of-sale, using a check card rather than cash, credit or a personal check. •Use a smart card with a prepaid amount of money embedded in it for use instead of cash at a pay phone, expressway road toll, or on college campuses at the library's photocopy machine or bookstores. •Use your computer and personal finance software to coordinate your total personal financial management process, integrating data and activities related to your income, spending, saving, investing, recordkeeping, bill-paying and taxes, along with basic...

Words: 12927 - Pages: 52

E-Banking

...| E – COMMERCE STRATEGY–CMH520 | GROUP WORK | JENNIFER KIUGUEVANS ODERO 1009983E-Banking"Discuss E-banking". | Table of Contents 1. INTRODUCTION 2 2. History of E-Banking 3 3. Forms of e-banking 4 i. Automated Teller Machines (ATM): 4 ii. Mobile/SMS Banking: 4 iii. Smart Card/Debit Card: 5 iv. Internet Banking/ Online Banking: 5 v. Self Service PC Banking: 6 4. Why the drive towards e-banking 7 REFERENCES 11 1. INTRODUCTION E-banking is defined as a fully automatic service for traditionally banking customer’s products based on information technology platforms. E-banking services provide customer access to accounts, the ability to move their money between different accounts or making payments via e-channels. The advantages generated by this services have determined an accelerate developing of this industry over the entire world. E-banking relies heavily on information and communication technology (ICT) to achieve its promise for 24 hours availability, low error rates and quicker delivery of financial services Initially, e-banking was limited to phone banking operations and remote banking, but the range of services has increased thanks to the technological advances, the spread of online banking has coincided with the spread of high-speed broad and connections and the increasing maturation of the internet user population. 'Electronic Banking is the use of a computer to retrieve and process banking data and to initiate transactions...

Words: 2243 - Pages: 9

Assignment on E Banking

...2 E-Banking Tools 2 ATM 2 Mobile banking 3 Credit Card 3 Objectives of the Study 3 Methodology of the study 3 Data Source: 3 Sampling Plan: 4 Research Hypotheses: 4 Limitations of the study and further agenda for research 4 Literature Review 5 Findings 6 Using e-banking tools are easy and convenient 6 Using e-banking tools are safe 8 Transaction of money is easy with E- banking tools. 10 Privacy protection provided E-banking tools 12 Regression (ATM) 14 Regression (Internet Banking) 17 Regression (Mobile Banking) 19 Problems in E-Banking in Bangladesh 22 Grievance Settlement in e-banking 22 Increased Customer Expectations in e-banking 22 Security Problems Solving 23 Capacity/Scalability related Problems 23 Commonly Used Procedures of Handling Grievance 23 Internal Machinery to Handle Customer Complaints 24 Recommendations 25 Conclusion 25 Part-A Introduction: This is an era of electronic banking. E-banking refers to systems that enable bank customers to access accounts and general information on bank products or services through a computer or other intelligent device. E-banking offers speedier, quicker and dependable services to the customers for which it may relatively satisfy better than manual banking system. The rationale of this report is to recognize the impact of variables of e-banking on customer pleasure in Bangladesh. Gradually electronic banking is gaining much importance in Bangladesh. Customers‟ liking is necessary for the banking......

Words: 6931 - Pages: 28

E-Service

...Service Marketing 2012 E-service: Woolworths supermarket in action As we know in the era of technology that networks are an essential part of business, education, government and home-communication. For instance, USQ (University of Southern Queensland) forums could perhaps be named as e-service in the education sector for students to access their current studies. Then, what exactly is the meaning of e-service?. According to Hoffman et. al (2010) stated that e-service is an electronic service platform which available on the internet to complete the tasks, solves problem, or conduct business transactions. Moreover, I took an example of Woolworths supermarket, which is now capable of offering e-service to its customers within Australia. In the past, people should go to the store to get the stuffs and badly in certain times the stores its packed which people have to stand in long queues to complete their tasks or transactions. Then, it comes the strategy to overcome this issue as Woolworth introduced the websites that people could conduct the online groceries by using their debit or credit cards and surprisingly there is an application on tap of Woolworth can be downloaded from both iOS and Android users to simply perform the transaction. Indeed, customers also are able to get the information of the products such as discount and new products available at Woolworth supermarket. As a result, this action is particularly an asset that would create new efficiencies and new......

Words: 297 - Pages: 2

E Banking

...PROJECT OF E-BANKING DEFINITION OF E-BANKING Electronic banking, also known as electronic funds transfer (EFT), is simply the use of electronic means to transfer funds directly from one account to another, rather than by cheque or cash. You can use electronic funds transfer to: •Have your paycheck deposited directly into your bank or credit union checking account. •Withdraw money from your checking account from an ATM machine with a personal identification number (PIN), at your convenience, day or night. •Instruct your bank or credit union to automatically pay certain monthly bills from your account, such as your auto loan or your mortgage payment. •Have the bank or credit union transfer funds each month from your checking account to your mutual fund account. •Have your government social security benefits check or your tax refund deposited directly into your checking account. •Buy groceries, gasoline and other purchases at the point-of-sale, using a check card rather than cash, credit or a personal check. •Use a smart card with a prepaid amount of money embedded in it for use instead of cash at a pay phone, expressway road toll, or on college campuses at the library's photocopy machine or bookstores. •Use your computer and personal finance software to coordinate your total personal financial management process, integrating data and activities related to your income, spending, saving, investing, recordkeeping, bill-paying and taxes, along with basic...

Words: 12900 - Pages: 52

The Reason of Using E-Banking

...The reason of using E-banking A well developed city with over 7 million citizens, Hong Kong, currently it has about 38 authorized institutions providing E-banking system among Hong Kong (Press release, 2004). Accordingly, this report is to examine the reason why people choose to use E-banking in Hong Kong rather than using traditional bank services and provide an overview on the advantage and disadvantage of using E-banking. After that, we will provide a recommendation on attracting more customers to use E-banking. Nowadays, more and more technology products are launched into the world, for example, smart devices such as iPhone, iPad, computer, and those technologies are designed to convince people in daily. At the same time, because of the fast development of smart devices, there are a lot of apps, software, internet page and etc., which are designed for those smart device users to use that aim to create a bridge to can allow people communication with the world all the time. X and Y generation are having a better education, therefore, they are easy to be received and accepted more information about new technology and use them. E-banking is an example that recorded the change in the world. E-banking provides 24 hours non-stop service on the Internet; users can manage their financial project all the time wherever they are. (Durisin, 2013) It also helps to reduce the operating cost of bank human resources (Mukherjee, 2013). However, there are people who still worry......

Words: 714 - Pages: 3

E-Banking

...Title: E-Commerce Course Code: 435 An assignment prepared as a part of BBA program by the students of 4th year 2nd Semester, under direct supervision of Mohammad Mizenur Rahman, Assistant Professor, Department of Business Administration, Shahjalal University of Science and Technology, Sylhet-3114. Assignment on: A Comparative Study on E-banking: A Study on Web information of Agrani Bank Ltd. & Mercantile Bank Ltd. Submitted to: Mohammad Mizenur Rahman Assistant Professor Department of Business Administration Shahjalal University of Science and Technology Sylhet-3114 Submitted By: Name Registration No. Subrata Ray 2007731005 Shams Md. Safwan Radi 2007731041 4th year 2nd Semester Department of Business Administration Shahjalal University of Science and Technology, Sylhet. Date of Submission: 1st January, 2012. A Comparative Study on E-banking: A Study on Web information of Agrani Bank Ltd. & Mercantile Bank Ltd. Electronic banking is an umbrella term for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution. In other words electronic banking does not mean only 24-hours access to cash through an Automated Teller Machine (ATM) or through internet or Direct Deposit of pay checks into checking or savings accounts as many consumers may think. Electronic banking (e-banking) involves many different types of transactions; it is a form of banking......

Words: 3884 - Pages: 16

E Banking

...Chapter 1: - E-Banking [pic] ➢ 1.1 Introduction of E-Banking ➢ 1.2 Meaning of E-Banking ➢ 1.3 Functions of E-Banking ➢ 1.4 Types of E-Banking ➢ 1.5 Advantages of E-Banking ➢ 1.6 Limitations of E-Banking 1. Introduction of E-Banking: - The acceleration in technology has produced an extraordinary effect upon our economy in general has had a particularly profound impact in expanding the scope and utility of financial products over the last ten years. Information technology has made possible the creation, valuation, and exchange of complex financial products on a global basis and even that just in recent years. Derivatives are obviously the most evident of the many products that technology has inspired, but the substantial increase in our calculation has permitted a variety of other products and, most beneficially, new ways to unbundled risk. What is really quite extraordinary is that there is no sign that this process of acceleration in financial technology is approaching an end. We are moving at an exceptionally rapid pace, fueled not only by the enhanced mathematical applications produced by our ever rising computing capabilities but also by our expanding telecommunications capabilities and the associated substantial broadening of our markets. All the new financial products that have been created in recent years......

Words: 10366 - Pages: 42

E- Banking

...without words” Example: A pounding first on a table means anger A forefinger and thumb touching to form a circle ‘means OK V=Victory sign In short we can say in non-verbal communication we convey message through body movements, paralanguage, facial expressions and by different symbols. Different Types of Non Verbal Communication We can express our feelings by our facial expression, eye movement, body movement or simply by touching others. So it can be observed that there are different types of non verbal communication. See all 3 photos 1.Facial Expression: Face is the index of mind. It tells us what is happening within a man. Facial expression especially movements of eyes have different meanings. Happiness, Sorrow, Fear and all types of emotion can be expressed through our face and eyes. See all 3 photos 2.Tone and volume of voice (Paralanguage): Different tone of voice can create different meanings of same word. In the world of Leisker and Pettit, “Paralanguage involves how we say something.” Thus our interest or boredom, happiness or sorrow or any other attitudes can be expressed through pattern of voice. 3.Body Language: One of the major types of non-verbal communication is body language or ‘Kinesics’. We can also communicate our inner feeling through body movements. Not only by face and eyes but can also convey message by moving our hands, by shaking our shoulders or by nodding our head. 4.Gestures: A gesture is also a body movement but is a......

Words: 2473 - Pages: 10

E-Banking in Bangladesh: an Exploratory Study on How the Banks Are Adopting with E-Banking

...E-banking in Bangladesh: An exploratory study on how the banks are adopting with e-banking E-banking in Bangladesh: An exploratory study on how the banks are adopting with e-banking Prepared for: Mr. Shubhankar Shil Assistant Professor School of Business Administration University of Liberal Arts Bangladesh Course Teacher Insurance and Leasing Prepared by: Muntasir Rashid Khan Student ID. 1268 BBA Program (1st Batch) Department of Finance & Banking JahangirnagarUniversity Savar, Dhaka-1342 March 08, 2012 Letter of Transmittal March 08, 2012 Mr. Shubhankar Shil Assistant Professor School of Business Administration University of Liberal Arts Bangladesh Subject: Submission of Term Paper Dear Sir: I have great pleasure to submit my required term paper on E-banking in Bangladesh: An exploratory study on how the banks are adopting with e-banking. I have provided my best effort to conduct this report. Now I am presenting my report for kind assessment and hope that it will fulfill your satisfaction. Any kind of suggestion or recommendation from your side will be highly appreciated. Thank you. Sincerely yours, |..................... | | | |Muntasir Rashid Khan | |Student ID. 1268 | BBA Program (1st Batch) Department......

Words: 6509 - Pages: 27