A Study on Effectiveness of Electronic Banking System

Abstract

NTRODUCTION The major challenge faced by the banks is to protect the falling margins due to the impact of competition. To avoid falling in profit requires increase in the volume of transaction which could be increased only by exploiting the advantages of technology and by providing sound customer based services. So, technology up gradation is required Not only in improving the functionalities of the bank but to have sound customer base. It has changed the method of marketing, advertising, distribution, pricing, financing and cost saving through electronic channels and products. These changes call for a dynamic, aggressive, adaptable and changing workforce to meet the demands of customers' relationship, product differentiation, values, reputation and regulatory prescriptions. Further, the changes staring at the face of bankers are undergoing a rapid transformation in response to the forces of competition, efficiency in operations, reduced operating margins, better asset/ liability management, risk management, anytime and anywhere banking, etc Banking has come a long way from the time of ledger cards and other manual filing systems. Most of the banks today have electronic systems to handle their daily voluminous tasks of information retrieval, storage and Processing. Irrespective of whether they are automated or not, banks by their nature are continually involved in all forms of information management on a continuous basis. The computer is, of course, an established tool for achieving a competitive edge and optimal resource allocation. Competition and the constant changes in technology and lifestyles have changed the face of banking. Nowadays, banks are seeking alternative ways to provide and differentiate amongst their varied services E-banking refers to the effective deployment of IT by the banks. It is about using the infrastructure of the digital age to create opportunities-both local and global. It enables the dramatic lowering of transaction costs and the creation of new types of banking opportunities that address the barriers of time and distance. Banking opportunities are local, global and immediate in e-banking. The current web based variant of banking is the latest of several generations of systems: ATM was the first well-known machines to provide electronic access to customers of retail banks. With advent of ATM, banks are able to serve customers outside the banking hall. Next came phone banking where users call their