impact of it banking

7/30/2019 Impact of It Banking

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INTRODUCTION


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INTRODUCTION

IMPACT OF TECHNOLOGY

The major impact of technological revolution in banking can be stated in terms of:

Paradigm shift from traditional banking to customized banking as the services can be

delivered via computer and Convenient banking i.e. "Anytime, Anywhere banking". A

customer can check balance by logging into banks website through a user name and

password. In this way he can enquire balance, status of cheques, perform funds transfers,

order drafts, request issue of cheque books etc.

It has been observed that customers who adopt online banking are typically more

profitable to the bank, stay with the bank longer and use more products strengthening the

bank customer relationship8. Information Technology and Internet banking has bridged

the information gap, which was interestingly because of human involvement. Banks can

make the information of products and services available on their site, which is, an

advantageous proposition. Prospective customer can gather all the information from the

website and thus if he comes to the branch with queries it will be very specific and will

take less time of employee. Customer can visit these websites and can compare the

services offered by a bank with that of another. Customer can get all the information, by

saving money and time. The trend thus emerging out is that of virtual corporate system

where the human role is minimized to maximum effect.

The overall banking size and structure has increased considerably. It can also be

accredited to the current market characteristics. More private players and multinational

banks are establishing their base in India. Earlier nationalized bank dominated the

scenario. Now after deregulation private banks have emerged as a powerful force. For

example with over a million customer accounts, 600 branches and a network of 2,000

ATMs across country YES bank leads the way10 in private bank category. As a result,

there is a fierce competition among these players for capturing the savings of individuals

and current accounts of organisations. This has been spearheaded by the liberalization in

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the insurance industry. Insurance industry is giving fierce competition through their

offerings on various policies. This sudden surge has necessitated the use of technology in

offering better services competitively. Most of the banks have coupled IT with their

offering to add value.

Several banks have been positioning themselves as a one-stop shop financial service

provider with a fairly exhaustive range of products, including deposit products, loans,

credit cards, debit cards, depository (custody services), investment advice, bill payments

and various transactional services. These apart, banks have also been entering into the

business of selling third-party products such as mutual funds and insurance to the retail

customers. To provide their customers greater flexibility and convenience as well as to

reduce servicing costs, banks have been investing to computerize their branches and in

new delivery channels such as ATMs, phone banking, internet banking and mobile

banking.

INTERNET BANKING FEATURES & BENEFITS

COMPLETE CONTROL OVER ACCOUNTS

View your bank account / credit card balances and transactions at your

convenience

Transfer funds online to accounts with YES and other banks in India

Create and manage Fixed Deposits

Get cashier's orders and demand drafts free

Charges at Branches

Charges

Online

Cashier's OrderMinimum Rs. 50 for amount upto Rs. 100,000 or

0.1% of value for higher amountsFREE

Demand Drafts 0.3% of draft value FREE

Request for E-Statements for your bank account and credit card

Manage your investments - buy, redeem and switch between mutual funds online

You can also stop cheques, order new cheque books, redeem bonus reward points

and more using HSBC's internet banking service

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Register for E-Statements on your bank accounts and credit card and view your

statements online. You can create an archive of your E-Statements and access them when

you like. You can also store these E-Statements for your records.

FEATURES & BENEFITS

With instant access, view your latest accounts and credit card transactions anytime

at your convenience

No more worries about lost or delayed statements; Stay updated on your card dues

and payment dates

Participate in environmental change; reduce paper consumption when you opt for

e-statements

This service is available to you absolutely FREE

The main purpose that banks have been serving since their inception is keeping our

money safe for us. While keeping our money safe, they also let us earn a certain amount

of interest on the money deposited with them. Traditional banks have been doing this, and

internet banks continue the same function. The only difference is in the way the

transactions are made.

Online banking has been around for quite a few years. In fact, it was introduced in the

1980s and has come a long way since then. The last decade has seen a profuse growth in

internet banking transactions. Several pieces of legislation have also been introduced in

this area.

Though it began in the 1980s, it was only in the mid nineties that internet banking really

caught on. What attracts customers to internet banking is the round the clock availability

and ease of transactions. Studies estimate that internet banking still has a long way to go.

There are several banks that have customers who prefer banking in the traditional ways.

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Statistics released by the YES bank show that only 40% of the banks in the India offer

internet banking facilities worth mentioning. All the others may have an online presence

but do not have enough online transactions to justify their presence on the internet.

Some customers have been known to turn to internet banking due to dissatisfaction with

standard procedures and practices. The total absence of human interaction appeals to

some people. Some customers turn to internet banking facilities for security reasons. This

is mainly because of customers being assured of banks' ability to keep transactions safe

and secured.

Most online transactions are made using the Internet Explorer interface. The InternetExplorer has been around for more than ten years now.

Security Tips

The following is a summary of checks you can make to ensure your data remains secure,

as detailed in this Security FAQ.

Check your browser connects using 128 bit encryption.

Verify the fingerprint of the Sign In page you connect to.

Never disclose your password to anyone. Do not write it down or store it on your

computer.

Select a password that is difficult to guess and change it regularly.

Check your transactions carefully.

Always Sign Out when you have finished your banking.

CUSTOMER SATISFACTION:

THE FORCE DRIVING INCREASED SHARE OF WALLET,

PROFITABILITY, RETENTION AND ACQUISITION

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Customer satisfaction is a key metric for banks to assess how effectively the web

furthers their objectives of customer acquisition, retention and increased share of

wallet. To assess the role of the online channel in meeting the needs and

exceeding the expectations of customers, For See Results teamed with Forbes.com

to conduct a customer satisfaction survey focused on online banking and bill

payment. The goal of this survey, the second of its kind, was to use the framework

of customer satisfaction to understand and quantify the role of online banking in a

banks success. As banks have aggressively pursued multi-channel strategies, the

online channel is growing in importance and adoption. According to Forrester

Research, the number of Indian households

Banking online has more than doubled since 2000, totaling 69.3 million

households in 2004.

While the channel is still in a growth mode, banks have a window of opportunity

to figure out how to maximize the impact of their websites to increase loyalty and

share of wallet among existing customers while reaching out to new ones. Since

our first survey in Summer 2003, the overall customer satisfaction of online

banking customers has increased by 5.5%, as reflected by the data collected for

this survey in the fourth quarter of 2004. This upswing in satisfaction is significant

because satisfaction is highly correlated to the purchase of additional goods and

services. The survey also found that customers who pay bills online are more

satisfied than those who dont, providing banks an opportunity to increase

satisfaction and loyalty by converting online bankers to online bill payers.

According to our survey, banks have been effective in increasing Indiage of online

bill payment, which is up 26% among our survey respondents since the summer of

2003. This year, we delved deeper into the variances and similarities in customer

satisfaction among online customers of three types of financial institutions: large

banks, community banks and credit unions. While scores for all three are strong,

credit unions outperform both types of banks in terms of satisfaction and Indiage

of most online banking features.

KEY FINDINGS

Key findings from our measurement of customer satisfaction with the online

banking experience include:

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Online banking satisfaction has surpassed satisfaction with the overall

banking experience.

The satisfaction score for people who bank online has increased 5.5% to 77,

compared to the aggregate Yes Bank banking score of 75. This indicates online

banking is beginning to fulfill its promise as a convenient and cost-effective

channel to serve customers while increasing customer satisfaction, loyalty and

share of wallet. The increase in satisfaction corresponds with increases in

customer behaviors tied to loyalty.

Highly satisfied online bankers are nearly 39% more likely to purchase

additional products and services from their bank than are very dissatisfied

online banking customers.

Prospects for online banking cite the convenience (79%) and ability to pay

bills online (38%) as key motivators to sign up for online banking services.

Yet concerns about privacy continue to hold them back, as 34% cited privacy as a

key issue.

Use of more online features drives satisfaction. Online bankers who use six or

more online features are 15% more satisfied and 23% more likely to purchase

other products and services from the bank that those who use only one or two

online features.

Converting online bankers to online bill payers is a huge opportunity for

banks, as customers who pay bills online cite higher levels of satisfaction and

loyalty. Online bill pay customers are 17% more likely to purchase more products

and services, increasing share of wallet, and 34% more likely to recommend their

banks website, which fosters greater online banking and bill payment adoption.

Credit unions outperform large banks and community banks when it comes

to satisfying online bankers. In addition, credit unions have higher levels of

adoption of their institutions online services, except online bill payment. As

financial institutions battle for greater share of wallet, credit unions find

themselves well positioned to capitalize on higher levels of satisfaction to increase

adoption of online bill payment.

Offline bank channels are the leading source of information about online

banking.

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To reach online customers and prospects outside of bank channels, online

news sites are

the preferred source of business news and information.

THE YES BANK: POWERFUL, PRECISE AND PREDICTIVE

MEASUREMENT OF CUSTOMER SATISFACTION

Data was gathered from Forbes.com newsletter subscribers, both those who are

online banking customers, and those who are not. The data was analyzed using the

methodology of the Indian Customer Satisfaction Index (YES BANK), the most

precise method of measuring customer satisfaction and quantifying its impact on

customer behavior. The YES BANK has been a leading indicator of customer

satisfaction with goods and services in the Indian economy for more than a

decade. For See Results applies the YES BANK methodology to the web to assess

overall customer satisfaction, determine key drivers of satisfaction with the online

experience and quantify the link between satisfaction and customers future

behaviors tied to loyalty, such as referrals and purchases of other products and

services.

ONLINE BANKING CUSTOMERS MORE SATISFIED THAN

BANKING CUSTOMERS IN GENERAL

In the latest measurement, customer satisfaction with online banking rose 5.5% to

a score of 77, compared to 73 in 2003. This aggregate satisfaction score includes

includes all online bankersboth those who pay bills online and those who use

the website for other reasons, such as to monitor account balances. In this years

survey, customer satisfaction with online banking exceeded satisfaction with

banking in general, which had an YES BANK score of 75. Satisfaction with the

online channel is driven by the convenience of utilizing the web for banking tasks

and the consistent quality of service provided. In the past, the online banking

satisfaction scores trailed the offline banking sector, a strong indicator that online

banking was not fulfilling its promise. Now the online banking channel is starting

to live up to its expectations of providing a channel that meets the needs and

exceeds the expectations of its customers better than traditional banking channels.

The rise in both satisfaction and Indiage may also reflect the effectiveness of

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financial institutions at promoting the web channel as a convenient, effective and

safe alternative to in-person or telephone transactions and service assistance.

SATISFACTION WITH ONLINE BANKING DRIVES LOYALTY

AND INCREASES SHARE OF WALLET

Analysis of customer satisfaction provides insights into the future behaviors of

online banking customers, such as ongoing loyalty and increasing share of wallet.

The cause-and effect methodology of the YES BANK enables us to not only

measure current levels of customer satisfaction, but to use this information to

project the impact of satisfaction increases on how customers are likely to behave

in the future. We looked at satisfaction with several specific behaviors tied to

loyalty: likelihood to recommend the banking website to others and likelihood to

purchase more products and services. For both of these key measures of loyalty,

satisfaction increased from 2003. The likelihood of current online bankers to

recommend the banking website to others increased 3%, from 73 to 75. At the

same time, the likelihood of online bankers to purchase additional products and

services via other channels an indicator of the financial institutions success at

garnering additional share of walletrose from 59 to 60, a 2% increase. However,

this score is still relatively low and indicates that banks could do a better job at

using the web to promote products and service available via other channels.

Another measure of loyalty is the number of online bankers surveyed who

switched banks during the past 12 months. This percentage fell from 15% in the

last survey to 8% this time, partially due to higher satisfaction with the overall

banking experience, including use of the website. Satisfaction yields considerable

dividends in terms of cross-selling as well. Very satisfied online bankers are

nearly 40% more likely to purchase additional products and services than those

who are highly dissatisfied. Additionally, online bankers who are very satisfied

are 21% more likely to purchase additional products and services than moderately

satisfied customers. There is clearly a quantifiable reward for banks to strive for

high levels of satisfaction among online banking customers.

NAVIGATION AND TASKS & TRANSACTIONS ARE KEY

DRIVERS OF CUSTOMER SATISFACTION WITH ONLINE

BANKING

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Overall customer satisfaction with online banking is derived via measurement of a

series of interrelated elements that are key drivers of the online experience. As

part of our analysis of the data using the YES BANK methodology, we looked at

specific elements, or drivers of satisfaction, with the online banking experience.

Elements include general website features and functions such as navigation,

tasks/transactions and content, as well as banking-specific satisfaction drivers

such as bill payment and bill payee set-up.

The list of elements measured is as follows:

Bill Payee Set- Up

Bill Payment

Content

Functionality

Look and Feel

Navigation

Privacy

Retail Satisfaction

Site Performance

Tasks & Transactions

USE OF MORE ONLINE FEATURES DRIVES SATISFACTION

The most popular online banking feature, as in last years survey, was view

online statement/check, which is used by 92% of survey respondents. This was

followed by check deposit balances with 88% Indiage. The third most popular

online banking feature, online bill payment, saw a 26% increase in Indiage from

last year: from 58% to 73%. Another online feature that gained in popularity from

last year was self-service (e.g., reordering checks), which climbed 15%from

Indiage of 33% in summer 2003 to 38% in fourth quarter 2004. Increases in

Indiage are important because both satisfaction and the likelihood to purchase

additional products and services are tied to the number of online features that a

person uses

As shown above, satisfaction for people using three or more online banking

features is 15% higher than those who only use one to two. Further, the likelihood

to purchase additional services is 11% higher for purchase of three to five services

as compared to one or two, and 23% higher when the number of services increases

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to six or more. Despite the growing adoption of online banking, customers are still

using multiple channels to conduct their banking business. Seventy-two percent of

online bankers in our survey also visited a bank branch in the past 90 days, while

35% contacted their bank via phone in the same time period. While use of offline

channels didnt necessarily decrease, the benefit to banks that encourage online

bankers to perform more functions online is a more satisfied, more loyal customer

who will reward the bank with a greater share of wallet and recommend the

banks website to others, which will increase adoption These numbers show that

banking truly is a multi-channel experience. Customers use multiple channels to

connect with the bank, but may develop a preferred channel for particular

transactions. The challenge is for the bank to meet the product needs and service

expectations of its customers across channels while encouraging customers to

utilize the most cost-effective online channel where it makes sense to do so. Smart

banks will also take advantage of opportunities to promote products and services

across channels for greater visibility and brand reinforcement.

ONLINE BILL PAYMENT IS CLOSELY TIED TO HIGHER

LEVELS OF

Further proof of the importance of online bill payment is the increase in

satisfaction realized as the number of bills paid online rises: Interestingly, 75% of

people who pay bills online also pay bills through other providers. Since number

of bills paid correlates positively with increasing satisfaction scores, banks have a

tremendous opportunity to increase satisfaction and loyalty by promoting the bank

as the central source for all online bill payment. Even non-customers see the value

of online bill payment: 38% of prospective online bankers cite online bill payment

as one of the reasons theyd consider online banking. However, banks need to

overcome the common misperception held by non-users that the online bill

payment process is difficult and address privacy concerns. Of customers who

dont use their banks online bill payment feature but do pay bills online

elsewhere, 60% do so through the service provider (e.g., utility company), 24%

with a third-party payment service and 16% with another financial institution. To

encourage these people to pay all of their bills online through the bank, banks

should assess the need for improvements to navigation, tasks & transactions and

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the site performance among their own online customers, which will influence their

likelihood to recommend the online channel to others. As 16% of people who

dont pay bills online with their bank have incomes of $175,000 or more, it is in

their banks best interest to convert as many people as possible to online bill

payers.

People who pay bills online also represent a prime audience for marketing.

Eighty-seven percent of customers who pay bills online visit the site at least once

a week (compared to 79% for non-online bill payers) and 41% visit their banks

website daily. Their frequent visits to the site provide ample opportunity to

reinforce the banking relationship and market new products and services through

the web medium.

Significant variations in overall satisfaction by type of financial institution used

for online banking services. In addition to looking at overall satisfaction for online

banking customers (both those who pay bills online and those who dont) by

institution, we analyzed satisfaction with various elements for large banks,

community banks and credit unions. We also looked at how using different online

banking features, e.g., checking deposit balances, budget management, etc., varied

by type of financial institution. Customers of all three types of institutions are

most satisfied with functionality and rated it the highest scoring element.

Regardless of where they do their online banking, customers rate their satisfaction

with bill payee set-up as the lowest of any of the measured elements. This is

significant, considering the large gains in satisfaction and loyalty to be realized by

encouraging people to use online bill payment, which they will be more likely to

do if they are happy with the process for setting it up. The most and least popular

online banking features were consistent across financial institution type, perhaps

reflective of industry trends in making specific features available and promoting

their use. Viewing online statements/checks was the most heavily used feature,

with Indiage of 97% by online credit union customers, 92% by online customers

of large banks and 89% of online community bankers. Checking deposit balances

is a close second, with Indiage of 94% at credit unions, 89% at large banks and

84% at community banks.

Credit Unions: Highly Satisfied and Avid Users of Online Banking

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Credit union members report the highest level of satisfaction with the online

banking experience with a score of 80. This isnt surprising, considering that

credit unions, unlike banks, are actually membership organizations and may

therefore have more of a members first mentality. Still, while we might have

expected that large banks had more resources and expertise to offer online

banking customers, we found that credit unions did a better job satisfying online

banking customers, with a 2.6% advantage over large banks satisfaction score

and a 5.3% advantage over community banks.

Satisfaction with most of the specific elements of the online banking experience

were higher for credit unions than for large and community banks. One exception

was bill payee set-up, where credit unions (73) scored higher than community

banks (72), and scored lower than large banks (75). Satisfaction among credit

union online bankers with content and functionality was especially high; these two

elements garnered high scores of 87 and 86, respectively. While credit unions are

doing a good job of meeting the needs of their members, they could experience

gains in satisfaction through conversion of more members to online bill payers.

Credit union members who pay bills online are 9.2% more satisfied than members

who dont, with a score of 83 compared to 76. Opportunities to increase online bill

payment are significant as 13% of people who currently dont use online banking

to pay bills came from credit unions. In almost all cases, credit union members

included in our survey have been the most eager adopters of online banking

features. Indiage by credit union members exceeded that of customers of both

large and community banks in all areas, except for the critical area of online bill

payment, where credit union Indiage (65%) lagged Indiage by large bank

customers (75%). In all features included in our survey, Indiage by large bank

customers seconded use by credit union members. Even the lesser-used features

were more popular among credit union members. Customers of all financial

institutions named online loan application as one of the least used online features.

However, nearly a quarter of respondents from credit unions say they apply for

loans online, compared to 9% of large bank and 5% of community bank

customers, which illustrates credit unions relative success at leveraging the web

channel to grow share of wallet and overcome the limits of the branch reach of

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credit unions. Budget management was an infrequently-used feature, perhaps due

to the popularity of

Quicken and other software-based budget management tools. Again, credit union

customers are significantly more likely to manage their budgets online. Twenty-

seven percent of surveyed credit union members use this web-based feature,

compared to 14% of large bank customers and only 9% of community bank

customers.

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COMPANY PROFILE

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COMPANY PROFILE


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Country India

Industry Banking

NSE/BSE Listing NSE Code -532648

Regd.& corporate office Nehru centre,9th

floor, Discovery of India,Dr.A.B.Road, worli, Mumbai 400018 Tel:-

+91(22) 6669 9000

Northern Regional Corporate Office 48,Nyaya Marg, Chanakyapuri, New Delhi

110021 Tel:-+91(11)6656 9000

Website www.yesbank.in

Bank Name: YES Bank Ltd

Branch Name: MORADABAD,UTTAR PRADESH

Address:

GRND AND FIRST FLOOROF KHASRA NO 267,GRAM

MAJOLA,DELHI MORADABAD

HIGHWAYMORADABAD

City: MORADABAD,UTTAR PRADESH

District: MORADABAD

State: Uttar Pradesh

Phone: +912266699000

Fax: +91 (22) 2490 0314

Email: [email protected]

MICR Code 244532002IFSC Code: YESB0000044

Yes Bank, Indias new age private sector Bank is the outcome of the professional

commitment of its founder Mr. Rana Kapoor supported by his highly competent top

management team to establish a high quality, customer centric, service driven, private

Indian Bank catering to the Future Industries of India.

Yes Bank has adopted international best practices, the highest standards of service quality

and operational excellence, and offers comprehensive banking and financial solutions to

all its valued customers. A key strength and differentiating feature of Yes Bank is its

knowledge driven approach to banking and an unprecedented customer experience for its

retail and wealth management clients.

Yes Bank is steadily building corporate and institutional banking, financial markets,

investment banking, corporate finance, business (Small &Medium Enterprises) and

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transaction banking, international banking, retail banking and wealth management

business lines across the country. The Banks constant endeavour is to provide a

delightful banking experience expressed with simplicity, empathy, and totality.

Yes Bank understands the financial needs of the Government of India, in its progress and

development role of a Growing India through Yes Banks Knowledge Banking

approach and the objective of being the Bank for an Emerging India. Yes Bank remains

committed to serving this specialized segment. Yes Banks knowledge Bankers deliver

innovative, structured and comprehensive solutions through a Money Doctor approach

focusing on diagnostic and prescriptive attention to detail. This is facilitated through Yes

Banks Technology leadership delivering proven, easy-to-use solutions for Government

Undertakings and agencies. Yes Bank has provided financial and advisory services to

Ministries of the Union Government, State Governments, Central and State Public Sector

Undertakings (PSUs) and Agencies.

In a short span of over three and a half years the Government Relationship Management

(GRM) team has developed robust relationships with over 100 entities. The GRM team is

committed to the core values of client orientation, innovation and superior service

experience that exemplify all Businesses at Yes Bank. GRM team is providing the

Knowledge Advisory, Liquidity Management and Investment Products, Transaction

Banking, trade finances, cash management services, Treasury services, Forex

Remittances, debt capital markets, investment managements, corporate salary accounts,

Advisory structured transactions, term loans, and cash credit limits to various government

operations like IFFCO, SAIL, Airport Authority of India, IOCL, NDPL, HPCL, Bridge &

Roof co.(India) ltd and many more.

Business Strategy

Knowledge Banking: - One of the strengths and differentiating features of Yes Bank is

its knowledge banking approach that is the essence of all offerings to its customers.

Knowledge has been institutionalized as a key ingredient in all internal and external

processes and utilized to create customized solutions for the clients specificrequirements.

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Technology and Operations: - As a new generation Bank, Yes Bank has the advantage

of accessing the latest available technology. The Bank has taken a calibrated decision to

invest in the best IT system and practices in order to make its technology platform a

strategic business tool for building a competitive advantage.

Responsible Banking: -Yes Bank has a vision to champion Responsible Banking in

India, where the concepts of Corporate Social Responsibility (CSR) and sustainability

are integrated in its Business focus.

Business Lines: -Yes Bank has four distinct business segments to effectively service the

differentiated needs of its targeted customers.

Corporate and Institutional Banking (C&IB): -To cater to the needs of large corporate

& institutional clients, MNCs, government companies and PSUs. Bank targets C&IB

customers through its multifunctional branches in the key metropolitican cities.

Emerging Corporate Banking (ECB): -It is dedicated to partner with growth-focused,

fast-paced enterprises, which are emerging as a leader in their respective business areas.

Business Banking: -To cater to the needs of the small and medium enterprises (SME),Yes Bank has set up a dedicated business unit to focus on delivering superior banking

solutions specially designed to meet the varying and dynamic needs of its SME clients.

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Retail Banking and Wealth Management: -The Bank intends to develop Retail

Banking into a key value driver. Yes Bank offers its customers choice & convenience,

reflected in its branch layout & design, product feature /design, options of distribution

channels and superior technology enabled service quality. Yes Bank predominantly offers

value added retail liability and third party wealth management products as well as retail

asset offerings through its sales and service network linked to its branches.

Private Banking: - Yes Bank is focusing on personalized relationship banking for its top

end High Net worth customers, supported by structured financial solutions tailor-made to

suit the needs of such customers.

Product lines: - Yes Bank offers a wide range of fee-based products to corporate and

business banking customers to ensure a high degree of cross-sell to clients.

Financial Markets: -Yes Bank financial markets was ranked second in the Best for

currency strategy and best for technical analysis categories at the Asia Money 2005foreign exchange poll for India.

Transaction Banking: -Yes Bank Transaction banking group has adopted a consultative

approach and focus on knowledge and relationship banking to enable customers to

address strategic financial and operating needs in the domain of:

Working capital and liquidity management

Asset management

Treasury integration

Exposure and risk management

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Yes Bank proposes to apply industry knowledge and superior technology for offering

innovative structured solutions integral to a companys financial supply chain.

Yes International Banking: - It offers a complete suite of international banking products

and services, driven by state-of-the art technology, which includes Debt, Trade finance,

corporate finance, Investment banking and business advisory services, treasury and global

Indian banking. The Bank also plans to leverage its international presence, for its capital

raising activities. These services will initially be through partnerships with international

banks and financial institutions followed by the establishments of branches and

representative offices, as per regulatory approvals.

Brand Creation: - The Bank believes that its differentiation begins with its service and

trust mark YES. YES represents the bank true spirit of being service-oriented. The

YES brand creation effort is supported by Triton Communications, the principal

advertising agency and Ad factors PR, the Banks public relation consultant.

Key Members of Yes Bank Management Team

NAME DESIGNATION

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Mr. Rana Kapoor Managing Director & CEO

Mr. Sunil Gulati Group President - C&IB, Transaction

Banking

Mr. Deepak Gaddhyan Group President GRM Team.Mr. Sumit Gupta Country Head Emerging Corporate

Banking

Mr. Alok Gupta Country Head life sciences & technology

Mr. Rajnish Datta Country Head Small business banking

group

Mr. Subir Bisht Chief Risk Officer

Mr. Sanjay Aggarwal Country Head Credit Risk, Business

Banking

Mr. Varun Tuli President Business Banking

Key Highlights & Milestones of Yes Bank.

Nov 2003 Incorporation of Yes Bank Limited

May 2004 RBI License to commence banking business

Dec 2006 Ranked No.3 in the Business World Survey of Indias Best listed

Banks

Mar 2007 Ranked No.2 among New Private Sector Banks in the Financial

Express survey

Dec 2007 Won Best CSR practice award 2007

Dec 2007 Won IT people award 2007

Jan 2008 60 operational branches across India

Mar 2008 Ranked No.3 among New Private Sector Banks in the Financial

Express-E&Y survey & overall #1 on credit quality & #2 on Growth

Apr 2008 67 operational branches across India

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OBJECTIVE OF THE

STUDY


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OBJECTIVE OF THE STUDY

The purpose of this study is to describe the current state of Internet banking and to

discuss its implications for the banking industry and regulatory policy.

The study provide information on Internet banking market developments.

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SCOPE AND RATIONALE OF THE STUDY

Though modern age banking in India has its roots in the British legacy, its journey so far

has been charted by sheer Indian prudence. Post independence, India saw new age

nationalized banks emerging with an aim to reach out to the largely un-banked

population. Though slow and steady, the Indian banking industry did emerge from the

doldrums of debt and instability to drive the country's financial revolution.

With the IT revolution, the Indian banking and financial sector became the undisputed

leader in adopting cutting edge technologies.

So, while technology uptake was gradually taking place, the Internet also came to be used

by banks. After private and foreign banks had adopted this technology, the public sector

banks also began to latch on to the bandwagon. With the core banking system (CBS)

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being adopted by all nationalized banks over the last 4 years, the transition to alternative

banking channels such as the Internet, and now mobile has proved to be rather convenient

and cost effective.

The number of customers who choose online banking as their preferred method of dealing

with their finances is growing rapidly. The future looks bright with more people using the

Internet on a daily basis for electronic banking amongst various other things.

25LITERATURE REVIEW


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LITERATURE REVEW

Dos et al. [1993] studied statistical correlation between IT spending and performance

measures such as profitability or stocks value. It is found that there is an insignificant

correlation between IT spending and profitability measures, implying thereby that IT

spending is unproductive.

Brynjolfsson and Hitt [1996], however, cautioned that these findings do not account for

the economic theory of equilibrium which implies that increased IT spending does not

imply increased profitability. More recent firm level studies, however, point a more

positive picture of IT contributions towards productivity. These findings raise several

questions about mis-measurement of output by not accounting for improved variety and

quality and about whether IT benefits are seen at the firm level or at the industry level.

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Such issues have been discussed in detail by Brynjolfsson [1993]and to a lesser extent by

Brynjolfsson and Hitt [1996].

The study conducted by Gotlieb, and Denny [1993], is one of the studies that deals with

the impact of IT on banking productivity per se. Computerisation is one of the factors

which improves the efficiency of the banking transactions. They concluded that higher

performance levels have been achieved without corresponding increase in the number of

employees. Also, it has been possible for Public Sector Banks and Old Private Banks to

improve their productivity and efficiency by using IT

The success of electronic banking, as agued by many researchers, depends

probably on bank service quality, customer preferences and satisfaction. Recent studies

found that consumer behaviour is changing partly because of more spare time.

The way of use of financial services is characterised by individuality, mobility,

independence of place and time, and flexibility (Seitz and Stickel, 2004)

The concept of internet has been defined in many ways (e.g. Daniel, 1999). According to

Karjaluoto (2002) electronic banking is a construct that consists of several distribution

channels. Daniel (1999) defines electronic banking as the delivery of banks' information

and services by banks to customers via different delivery platforms that can be used withdifferent terminal devices such as a personal computer and a mobile phone with browser

or desktop software, telephone or digital television. The different forms of electronic

banking are summarized in Table 1.

Table 1. Different forms of banking in electronic banking (Daniel 1999)

Form of

banking

Description

PC banking The customer installs banking software on his or her personal

computer. The customer has access to his or her account with that

specific software.

Internet banking Customer can access his or her bank account via the Internet using a

PC or mobile phone and web-browser.

TV-based

banking

The use of satellite or cable to deliver account information to the TV

screens of customers.

Telephone-based

banking

Customers can access their bank and account via SMS and as well as

by ordinary phone using services of interactive voice responses (IVR).

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It should be noted that electronic banking is a larger concept than banking via the

Internet (Karjaluoto, 2002). The Internet is a main delivery channel for electronic banking

and its value to customers and banks is continuously increasing (Karjaluoto, 2002;

Mattila, 2001).

DIFFERENT BANKING CHANNELS FOR CUSTOMERS

Hadden & Whalley (2002) observe that customers often simultaneously used many

banking channels. Hadden & Whalley (2002) point out that a challenge for banks is how

to connect with customers and provide financial services to them through the right

channels, at the right time and in the right way.

The HCI-related challenges in Internet banking are related to business interaction

between the bank and customer. Hadden & Whalley (2002) stress that it is crucial that the

banking interaction is suited the customer's life situation. From this perspective it is

important to give customers freedom to choose the most appropriate channel that best

suits their preferences. In addition, the type of business affects customers choice of

channel. According to Hiltunen, Laukka, & Luomala (2002), customers channel

preferences vary between countries because of cultural differences, use-habits and

legislation.

The business interaction between the bank and the customer takes place through different

channels (Hiltunen et al., 2002). According to Hiltunen et al. (2002) the interaction can be

described as a continuum, which is described in Figure

Figure Different banking channels

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Figure 1 shows the different banking channels presented as a continuum where left side

channels are limited by time and place and channels on the right side are more free from

these constraints (Hiltunen, et al 2002).

The physical interaction between the bank and customer takes place in branch offices,

which are limited in both time and location. By contrast Internet banking and mobile

banking are the most flexible banking channels that are more free from constraints such

as time and place (Hiltunen et al., 2002). It has been proposed that a branch office is the

primary channel for purchasing many financial products because it offers the customer a

secure physical location for the transaction of complex financial business with real people

(Hadden et al., 2002)

However, The Finnish Banker's Association (2004b) concludes that Finnish retail banking

differs in many ways from typical retail banking in Europe. In Finland, the current trend

is the movement from traditional branch banking to electronic banking, which provides

many benefits, challenges, and opportunities for the whole banking sector (Karjaluoto,

2002)

From the customer's point of view, Internet banking offers new value to customer because

it makes available a full range of services that are not offered in branch offices

(Karjaluoto, 2002). Modern Internet technology makes it possible to create customized

banking services for every individual customer (Mattila, 2001). According to Daniel

(1999), customers' value features in Internet banking such as convenience, increased

choice of access to the bank, improved control over their banking activities and finances,

ease of use, speed and security.

From the banks perspective the main benefits of electronic banking are cost savings,

reaching new segments of the population, efficiency, cross selling, third-party integration,

and customer satisfaction (Hiltunen et al., 2004; Joseph, 1999). Wah (1999) remarks that

the success of banks operating via the Internet depends on their ability to attract and keep

customers. Sheshunoff (2000) admits that banks implement Internet banking services in

an attempt to create powerful barriers to customers exiting. In general, it has been

reported that Internet banking saves time and money, provides convenience and

accessibility, and has a positive impact on customer satisfaction (Karjaluoto, 2002;

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Mattila, 2001). To summarize, Internet banking offers many benefits both to banks and

their customers (Karjaluoto, 2002; Mattila, 2001).

Despite of these benefits Internet banking includes many challenges. HCI-related

challenge of Internet banking is how to satisfy new online customer segments. Hiltunen et

al. (2002) argue that a key factor in this competition for online customers is the quality of

customer service, which includes usable user interfaces of Internet banking. From this

perspective the usability of Internet banking becomes an essential factor in the

competition for online customers.

DEFINITIONS OF USABILITY

The concept of usability has been defined in many ways in the academic literature

(Nielsen, 1993; Shneiderman & Plaisant, 2005). Nielsen (1993) stresses that usability is

not a single, one-dimensional property of a user interface, and argues that usability could

be defined by using five attributes, which are learnability, efficiency, memorability, errors

and satisfaction. A formal and stricter definition of the term is derived from the ISO

9241-11 (1998) standard, which defines usability as:

The extent to which a product can be used by specified users to achieve specified goals

with effectiveness, efficiency and satisfaction in a specified context of use.

FRAMEWORK TO MEASURE THE USER SATISFACTION

The concept of user satisfaction has been used since the early 1980 (Bailey & Pearson,1983; Ives, Olson, & Baroudi, 1983) and the end user computing satisfactions have been

studied since the 1980 (Bailey & Pearson, 1983; J. Chin, Diehl, & Norman, 1988; Ives et

al., 1983; Rivard & Huff, 1988; Rushinek & Rushinek, 1986). Bailey et al. (1983) state

that several factors affect the user satisfaction and it can be seen as a bi-dimensional

attitude. The user satisfaction can be seen sum of users feeling and attitudes toward

several factors that affect the usage situation (Bailey et al., 1983).

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Recently, there has been growing interest in user experience (Hiltunen et al., 2002;

Lindgaard & Dudek, 2003; Wilson & Sasse, 2004), which can be seen as much larger

concept than user satisfaction. User experience has become an important factor in e-

business because the end user often pays for the majority of new products and services,

which indicates that new products characteristics such as perceived usability, usefulness,

appeal and value of money must be matched or exceeded with user expectations toward

the product (Wilson & Sasse, 2004). From this perspective, assessing the user experience

is essential for many technology products and services (Wilson & Sasse, 2004).

Lindgaard & Dudek (2003) state that user experience consists of some senses of

"satisfaction". They define user satisfaction as a subjective sum of the interactive

experience. Recently, Tractinsky, Katz, & Ikar (2000) show that perceived aesthetics and

perceived usability correlated strongly with each other. They argue that "beauty" or

"appeal" is linked to the perceived usability, and consequently what is seen as beautiful is

also perceived as usable. However, Lindgaard & Dudek (2003) argue that those business

to consumer (B2C) web sites which got high appeal scores but low perceived usability

score from users yielded very high satisfaction, but low perceived usability scores,

suggesting that what is perceived as beautiful need not also be perceived to be usable.

Lindgaard & Dudek (2003) emphasize that aesthetics, emotion, expectation, likeability

and usability all influence the interactive experience, but their significance depends on the

current situation. Furthermore, they argue that usability is a important factor in

experiencing interactive B2C sites, but it is not known is user interaction with B2C sites

whether usability- or satisfaction driven. Their results suggested that web designers

should pay attention to both visual appeal and usability. Bailey et al., (1983) report that

the HCI research needs a clear definition of user satisfaction, including a complete and

valid set of factors and instrument that measures this phenomenon. Lindgaard & Dudek

(2003) add that HCI researchers should formulate a clear user experience notion, where

the relationship between satisfaction, appeal, perceived and actual usability would be

determined. User satisfaction and usability measurements will be next clarified.

In general, user interfaces can be evaluated in many ways (J. Chin et al., 1988). In

addition, it has been stated that each component of usability such as effectiveness,efficiency and satisfaction can be examined by using either objective or subjective

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measures (Nielsen, 1993; ISO 9241-11, 1998). User satisfaction has mainly been

examined with subjective measurements such as a multiple-item user questionnaire (J.

Chin et al., 1988; Lewis, 2002; Lindgaard & Dudek, 2003). Furthermore, the subject

satisfaction, which is measured in user test, has been also used as a indicator of user

satisfaction, but results are contradictory (Notes & Swan, 2003). Recently, other

approaches such as the objective measurement of user experience have been introduced

(Wilson & Sasse, 2004).

Wilson & Sasse (2004) show that in some cases objective psychophysiological measures

such as skin conductance, heart rate and blood volume pulse can reveal users responses

toward product which they are either not aware of, or cannot recall at subjective

assessment session after the test. However, there are several problems in using

physiological measures to analyze user satisfaction and user experience. For example,

data analysis and learning to use the equipment are time consuming, and equipment and

sensors are financial costly (Wilson & Sasse, 2004). Furthermore, interpretation of users

mental process and experiences contain difficult problems even in studies where a clear

cause and effect relationship has been revealed (Ward & Marsden, 2004). Because of

these problems of physiological measures, this research concentrated on examining howthe user experience of Internet banking can be evaluated by using subjective measures.

Many studies have concentrated on developing tools to measuring user satisfaction (J.

Chin et al., 1988; Rivard & Huff, 1988), user information satisfaction (W. Chin & Lee,

2000; Ives et al., 1983) and usability (Lin, Choong, & Salvendy, 1997). In general, the

user satisfaction measurements have been questionnaire scales for which either a Likert or

a semantic differential scale have been used.

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33

RESEARCH

METHODOLOGY


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RESEARCH METHODOLOGY

Descriptive research

Descriptive research is also called Statistical Research. The main goal of this type ofresearch is to describe the data and characteristics about what is being studied. The idea

behind this type of research is to study frequencies, averages, and other statistical

calculations. Although this research is highly accurate, it does not gather the causes

behind a situation. Descriptive research is mainly done when a researcher wants to gain a

better understanding of a topic for example, a frozen ready meals company learns that

there is a growing demand for fresh ready meals but does not know much about the area

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of fresh food and so has to carry out research in order to gain a better understanding. It is

quantitative and susses surveys and panels and also the use of probability sampling.

Descriptive research is the exploration of the existing certain phenomena. The details of

the facts wont be known. The existing phenomenas facts are not known to the persons.

Sample Size : 30

Sample unit : Employee of Yes Bank

Types of data : Primary And Secondary Data

Primary data source : Questionnaires.

Secondary data : Internet and Books

Sampling procedure : Non probability Convenience Sampling.

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DATA ANALYSIS&

INTERPRETATION


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DATA ANALYSIS & INTERPRETATION

Q.1. Computerized banking system is better than the manual system

a ) Yes 83%

b) No 17%

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Interpretation:

83% respondent say Computerized banking system is better than the manual system and

17% say no.

Q.2. ATM service is useful to withdraw cash & cheques

a ) Yes 77%

b) No 23%

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Interpretation:

77% respondent say ATM service is useful to withdraw cash & cheques and 23% say no.

Q.3. Are you using internet banking?

a ) Yes 63%

b) No 37%

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Interpretation:

63% respondent using internet banking and 37% respondent are not using internet

banking.

Q.4. Core banking system helps you to transfer funds from the different branches

a ) Yes 75%

b) No 25%

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Interpretation:

75% respondent say Core banking system helps you to transfer funds from the different

branches and 25% say no.

Q.5. Internet banking helps to secure your personal information

a ) Yes 68%

b) No 32%

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Interpretation:

68% respondent say Internet banking helps to secure your persona information and 32%

respondent say no.

Q.6. Which types of computerized banking services do you prefer?

a) ATM 55%

b) Internet Banking 25%

c) Core banking system 15%

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d) Other services 5%

Interpretation:

55% respondent prefer ATM services, 25% prefer Internet banking, 15% prefer core

banking system and 5% prefer other services of computerized banking

Q.7 Do you think that online banking is important in these days?

a ) Yes 94%

b) No 6%

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Interpretation:

94% respondent say online banking is important in these days and 6% say no.

Q.8 Have you banks internet banking?

a ) Yes 94%

b) No 6%

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Interpretation:

94% respondent say yes Yes Bank internet banking is better and 6% say no.

Q.9 Which kind of problem you faced in online banking?

(a) Knowledge 15%

(b) Lack of information 20%

(c) Speed of internet service 35%

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(d) Any other 30%

Interpretation:

15% respondent knowledge problem faced in online banking, 20% respondent lack of

information problem, 35% faced speed of internet service and 30% faced any other

problem.

Q.10. By which bank you do online banking?

(a) SBI 30%

(b) PNB 15%

(c) Yes Bank 45%

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(d) ICICI 5%

(e) Any other 5%

Interpretation:

30% respondent use SBI online banking, 15% use PNB online banking, 45% use Yes

Bank online banking , 5% use ICICI online banking and 5% use other bank online

banking.

Q.11 why do you prefer for online banking?

(a) Time saving 45%

(b) For best service 10%

(c) Security 20%(d) any other reason 25%

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Interpretation:

45% respondent say that time saving go for online banking, 10% say for best service,

20% sy security and 25% say any other reason for go online banking

Q.12 Are you satisfied with the online banking?

a) Yes 95%

b) No 5%

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Interpretation:

95% respondent are satisfied with the online banking and5% are not satisfied with the

online banking.

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RESULTS / FINDINGS

Most of the respondent say Computerized banking system is better than the

manual system .

Most of the respondent say ATM service is useful to withdraw cash & cheques.

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RESULTS / FINDINGS


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Most of respondent using internet banking.

Most of the respondent say Core banking system helps you to transfer funds

from the different branches.

Most of the respondents say Internet banking helps to secure your personal

information.

Most of the respondent prefer ATM services.

Most of the respondent say online banking is important in these days.

Most of the respondent say yes Yes Bank internet banking is better .

Most of the respondent problem faced speed of internet service.

Most of the respondent used Yes Bank online banking.

Most of the respondent say that time saving go for online banking.

Most of the respondent are satisfied with the online banking.

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51

CONCLUSION


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CONCLUSION

As use of the Internet expands, more banks are using it to offer products and services to

their consumers. However, despite Web potential for safe and convenient new ways for

financial services and banking business, the scary truth is that online banking fraud is on

the rise and there are a number of ways it can be done.

Also, there are a number of ways how you can protect your credit card and bank account

if you transact over the internet.

Dont use the same password for everything

Never give your passwords to anyone

Customers should never access their Internet banking accounts through hyperlinks

embedded in e-mails, suspicious pop-up windows, or Internet search engines.

keep your computer secure and the access to it;

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SUGGESTIONS


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SUGGESTIONS

As use of the Internetexpands, more banks are using it to offer products and services to

their consumers. However, despite Web potential for safe and convenient new ways for

financial services and banking business, the scary truth is that online banking fraud is on

the rise and there are a number of ways it can be done.

Also, there are a number of ways how you can protect your credit card and bank account

if you transact over the internet.

CHECK THE BANK

First, you have to confirm that an online bank is legitimate and that your deposits are

insured. You will do that if you follow these steps:

1. Read key information about the bank posted on its Web site

Most Banks Web sites have an "About Us" section that describes the institution. There

can be found useful info about history of the bank, name and address of the banks

headquarters, insurance, etc.

2. Protect yourself from fraudulent Web sites

Watch out for copycat Web sites that deliberately use a name or Web address very similar

to, but not the same as, that of a real financial institution. The intent is to lure you into

clicking onto their Web site and giving your personal information, such as your account

number and password. Always check to see that you have typed the correct Web site

address for your bank before conducting a transaction.

Also, fraud can be done through the spam emails you receive every day. Although, the

link in those emails can be the same of your bank, always check the validity of the links.

That means that fraudulent links will be different from the bank links in the mail. that

can be checked by simple looking at the bottom of your email client (Gmail, Yahoo, or

Outlookif you use it) or using the Right Click/Properties option on link itself.

CHOOSE AND PROTECT ID AND PASSWORD

* After you chose your bank, youll have to create an account. for that youll

need an ID and a password.* Keep in mind that yoursecurityis our top priority, especially in this part

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which is the most vulnerable to attacks.

* While ID is static and can be change usually by the bank per request, you

can change your password yourself.

* Its been recommended that you should change your password frequently.

HERE ARE SOME QUICK PASSWORD TIPS:

Dont use the same password for everything

Dont use a predictable password Dont use your birthday , your SSN, your

childs birthday or pets name. Use something that makes sense to you and that

you will easily remember.

If you must write down your passwords, store them in a safe place.

Never give your passwords to anyone

THESE ARE TIPS THAT EVERY USER OF ONLINE BANKING SHOULD

KNOW:

1. First, bank customers should never access their Internet banking accounts

through hyperlinks embedded in e-mails, suspicious pop-up windows, or

Internet search engines.

2. Second, as has been said above, users should be aware of opening

unexpected e-mails with attachments or click on suspicious links in the

emails. Users should access their bank accounts by typing the website

addresses at the address bar of the browser, or even better, by

bookmarking the genuine website and using that function to access own

accounts.

3. Thirdly, its a good idea to always have installed personal firewall

software and anti-virus and antispyware software, and regularly download

the latest updates available. This software will be of great help in

defending the users from the attempts by fraudsters to plant harmful

viruses or worms in theirpersonal computers.

FOR THE END, THERE IS A RESUME OF THE TIPS FOR SAFE INTERNET

BANKING:

Keep your computer secure and the access to it;

Don't send credit card or account details by e-mail;

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Reject any email that asks you to follow a link to website and input account details for

verification - even if the website looks authentic, its probably a fake replicamake sure

you log out of your online account when finished - especially at work, libraries and

net cafes.

Deal only with established and reputable merchants;

Only make payments to secure websites - look for the padlock symbol in the bottom-

right of your browser and click for details

If using a new site, do business first in a small way;

Check your accounts and report discrepancies immediately;

Ignore the "remember my password option" on banking and shopping sites

MORE INFORMATION

TAKE CARE

Delete without opening emails requesting personal details such as PINs or passwords

legitimate financial institutions and companies will not ask you to provide PINs or

passwords.

Delete suspicious emails with attachments and never open the attachments. Check for a secure connection. (Secure website addresses have https at the start. The

s indicates secure. They will also have a padlock icon on the bottom right corner.

Double clicking the icon will show who owns the certificate).

Follow your own path to the site you choose it is possible to create a link on a web

page or in an email and make it look as if it is taking you to a bona fide website when

it is sending you elsewhere. Your safest course is to check that you have the correct

address (URL) and then type it each time into your address bar.

Consider whether the message you have received is a message that you would expect

to receive is it one you have received from your financial institution before?

(Incorrect grammar or spelling is usually an immediate indicator of a suspect email or

website).

Are there related announcements on the financial institutions or companys website?

Reconcile your account(s) either on-line or by statements frequently and regularly.

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57

LIMITATIONS


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LIMITATIONS

Difficulties in the identification of the source.

The facilities or capabilities of the agency that originally collected the data might be

questionable.

The data may not fit into the needs of investigation. There may be difference in the

units of measurement, there may be surrogated data, discrepancy of class & data may

pertain to some other period of time.

Difficulty to find secondary data that exactly the needs of some specific research

investigation.

It is observed that it is rather difficult to measure the degree of approximation used in

the collection of information as well as the competence of the investigator in

motivating the persons to supply the desired information.

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59

BIBLIOGRAPHY


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BIBLIOGRAPHY

Books:

Kothari C.R Research MethodologySecond Edition,Wishwa PraKashan,2000

Gupta S.L., Marketing Research, Excel Books

Kotler Philip, Marketing Management: Prentice Hall of India Pvt.

Webliography

http://www.en.articlesgratuits.com/online-banking-the-pros-and-cons-id843.php

http://www.bhg.com/health-family/finances/tips/the-pros-and-cons-of-banking-

online/

http://www.essortment.com/home/onlinebankingp_scde.htm

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61

ANNEXURE

(QUESTIONNAIRE)


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QUESTIONNAIRE

Q.1. Computerized banking system is better than the manual system.

a ) Yes

b) No

Q.2. ATM service are useful to deposit cash & cheques.

a ) Yes

b) No

Q.3. Are you using internet banking?a ) Yes

b) No

Q.4. Core banking system helps you to transfer funds from the different branches.

a ) Yes

b) No

Q.5. Internet banking helps to secure your persona information.

a ) Yes

b) No

Q.6. Which types of computerized banking services do you prefer?

a) ATM

b) Internet Banking

c) Core banking system

d) Other services

Q.7 Do you think that online banking is important in these days?

a ) Yes

b) No

Q.8 Have you banks internet banking?

a ) Yes

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b) No

Q.9 Which kind of problem you faced in online banking?

(a) Knowledge

(b) Lack of information

(c)speed of internet service

(d) Any other

Q.10. By which bank you do online banking?

(a) SBI

(b) PNB

(c) Yes Bank

(d) ICICI

(e) Any other

Q.11 why do you prefer for online banking?

(a) Time saving

(b) For best service

(c) Security

(d) any other reason

Q.12 Are you satisfied with the online banking?

a) Yes

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b) No

impact of it banking

Documents