Comparative Analysis of Private, Public Banks Free Essays

Ibmr| study on impact of technology on customer needs in banking| | | NAYANA SHREE N S| MBA FINANCE| Project on study on impact of technology on customer needs in banking SEMESTER IV SUBMITTED BY NAYANA SHREE N S ROLL NO. IBMR COLLEGE IBMR COLLEGE Address: CERTIFICATE This is to certify that Nayana Shree N S of MBA FINANCE Semester IV {2012-13} has successfully completed the project on â€Å"Project on study on impact of technology on customer needs in banking† under the guidance of Mrs. Bickram . We will write a custom essay sample on Comparative Analysis of Private, Public Banks or any similar topic only for you Order Now Course Co-ordinatorPrincipal Project Guide/ Internal Examiner External Examiner DECLARATION I Nayana Shree N S the student of MBA Finance Semester IV {2012-13} hereby declare that I have completed the project on â€Å"Project on study on impact of technology on customer needs in banking†. The information submitted is true and original to the best of my knowledge. Signature Nayana Shree N S Roll No. ACKNOWLEDGEMENT Many people have played a part in making this project study a success by giving their valuable inputs and useful suggestions. Firstly I would express my gratitude to the University Of Mysore for providing me the opportunity to study the practical aspects of banking and insurance. I am thankful to the principal Mrs. xxxxxxx for giving me an opportunity to work on this project. I am also thankful to our co-ordinator Mrs. xxxxxx for her immeasurable encouragement and support. I am also particularly grateful to my project guide xxxxx for extending his support and time. INDEX Chapter No. | Titles| Pg. No. | 1| Introduction| 1-7| 2| Role Of Technology| 8| 3| E-Banking| 9-12| | Digital Signatures| 13-15| 5| Card Skimming| 16| 6| Credit Cards| 17-20| 7| Mobile Banking| 21-23| 8| Electronic Funds Transfer| 24-26| 9| Debit Cards| 27-33| 10| Telephone Banking| 34-35| 11| Uses Of Information Technology In Banks| 36-39| 12| Technology Vision 2020| 40-44| 13| Present Level of Computerization| 45-46| 14| Advantages of Technology| 47-48| 15| Disadvantages of Technology| 49-50| 16| Nature and Change in Banking| 51-53| 17| I ssues and Challenges| 54| 18| Countermeasures to Frauds| 55-58| 19| Conclusion| 59| 20| Bibliography| 60| INTRODUCTION In the five decades since independence, banking in India has evolved through four distinct phases. During Fourth phase, also called as Reform Phase, Recommendations of the Narasimham Committee (1991) paved the way for the reform phase in the banking. Important initiatives with regard to the reform of the banking system were taken in this phase. Important among these have been introduction of new accounting and prudential norms relating to income recognition, provisioning and capital adequacy, deregulation of interest rates easing of norms for entry in the field of banking. Entry of new banks resulted in a paradigm shift in the ways of banking in India. The growing competition, growing expectations led to increased awareness amongst banks on the role and importance of technology in banking. The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain their customer base. Indian banking industry, today is in the midst of an IT revolution. A combination of regulatory and competitive reasons have led to increasing importance of total banking automation in the Indian Banking Industry. Information Technology has basically been used under two different avenues in Banking. One is Communication and Connectivity and other is Business Process Reengineering. Information technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. In view of this, technology has changed the contours of three major functions performed by banks, i. e. , access to liquidity, transformation of assets and monitoring of risks. Further, Information technology and the communication networking systems have a crucial bearing on the efficiency of money, capital and foreign exchange markets. The Software Packages for Banking Applications in India had their beginnings in the middle of 80s, when the Banks started computerizing the branches in a limited manner. The early 90s saw the plummeting hardware prices and advent of cheap and inexpensive but high-powered PCs and servers and banks went in for what was called Total Branch Automation (TBA) Packages. The middle and late 90s witnessed the tornado of financial reforms, deregulation, globalization etc. coupled with rapid revolution in communication technologies and evolution of novel concept of ‘convergence’ of computer and communication technologies, like Internet, mobile / cell phones etc. MILESTONES In India, banks as well as other financial entities entered the world of information technology and with Indian Financial Net (INFINET). INFINET, a wide area satellite based network (WAN) using VSAT (Very Small Aperture Terminals) technology, was jointly set up by the Reserve Bank and Institute for Development and Research in Banking Technology (IDRBT) in June 1999. The Indian Financial Network (INFINET) which initially comprised only the public sector banks was opened up for participation by other categories of members. The first set of applications that could benefit greatly from the use of technological advances in the computer and communications area relate to the Payment systems which form the lifeline of any banking activity. The process of reforms in payment and settlement systems has gained momentum with the implementation of projects such as NDS ((Negotiated Dealing System), CFMS (Centralised Funds Management System) for better funds management by banks and SFMS (Structured Financial Messaging Solution) for secure message transfer. This would result in funds transfers and funds-related message transfer to be routed electronically across banks using the medium of the INFINET. Negotiated dealing system (NDS), which has become operational since February 2002 and RTGS (Real Time Gross Settlement system) scheduled towards the end of 2003 are other major developments in the area. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products services. Detailed guidelines of RBI for Internet Banking has prepared the necessary ground for growth of Internet Banking in India. The Information Technology Act, 2000 has given legal recognition to creation, trans-mission and retention of an electronic (or magnetic) data to be treated as valid proof in a court of law, except in those areas, which continue to be governed by the provisions of the Negotiable Instruments Act, 1881. As stated in RBI’s Annual Monetary and Credit Policy 2002-2003: â€Å"To reap the full benefits of such electronic message transfers, it is necessary that banks bestow sufficient attention on the computerization and networking of the branches situated at commercially important centers on a time-bound basis. Intra-city and intra-bank networking would facilitate in addressing the â€Å"last mile† problem which would in turn result in quick and efficient funds transfers across the country†. Implementation of Centralized Funds Management System The centralized funds management system (CFMS) provides for a centralized viewing of balance positions of the account holders across different accounts maintained at various locations of RBI. While the first phase of the system covering the centralized funds enquiry system (CFES) has been made available to the users, the second phase comprising the centralized funds transfer system (CFTS) would be made available by the middle of 2003. So far, 54 banks have implemented the system at their treasuries/funds management branches. Certification and Digital Signatures The mid-term Review of October 2002 indicated the need for information security on the network and the use of public key infrastructure (PKI) by banks. The Controller of Certifying Authorities, Government of India, have approved the Institute for Development and Research in Banking Technology (IDRBT) as a Certification Authority (CA) for digital signatures. Consequently, the process of setting up of registration authorities (RA) under the CA has commenced at various banks. In addition to the negotiated dealing system (NDS), the electronic clearing service (ECS) and electronic funds transfer (EFT) are also being enhanced in terms of security by means of implementation of PKI and digital signatures using the facilities offered by the CA. Committee on Payment Systems In order to examine the entire gamut of the process of reforms in payment and settlement systems which would be culminating with the real time gross settlement (RTGS) system, a Committee on Payment Systems (Chairman: Dr. R. H. Patil) was set up in 2002. The Committee, after examining the various aspects relating to payment and settlement systems, submitted its report in September 2002 along with a draft Payment Systems Bill. The draft Bill provides, inter alia, a legal basis for netting, apart from empowering RBI to have regulatory and oversight powers over payment and settlement systems of the country. The report of the Committee was put on the RBI website for wider dissemination. The draft Bill has been forwarded to the Government. Multi-application Smart Cards Recognizing the need for technology based payment products and the growing importance of smart card based payment flows, a pilot project for multi-application smart cards in conjunction with a few banks and vendors, under the aegis of the Ministry of Communications and Information Technology, Government of India, has been initiated. The project is aimed at the formulation of standards for multi-application smart cards on the basis of inter-operable systems and technological components of the entire system. Special Electronic Funds Transfer As indicated in the mid-term Review of October 2002, national EFT (NEFT) is being introduced using the backbone of the structured financial messaging system (SFMS) of the IDRBT. NEFT would provide for movement of electronic transfer of funds in a safe, secure and quick manner across branches of any bank to any other bank through a central gateway of each bank, with the inter-bank settlement being effected in the books of account of banks maintained at RBI. Since this scheme requires connectivity across a large number of branches at many cities, a special EFT (SEFT) was introduced in April 2003 covering about 3000 branches in 500 cities. This has facilitated same day transfer of funds across accounts of constituents at all these branches. National Settlement System (NSS) The clearing and settlement activities are dispersed through 1,047 clearing houses managed by RBI, the State Bank of India and its associates, public sector banks and other institutions. In order to facilitate banks to have better control over their funds, it is proposed to introduce national settlement system (NSS) in a phased manner. Real Time Gross Settlement System (RTGS) As indicated in the mid-term Review of October 2002, development of the various software modules for the RTGS system is in progress. The initial set of modules is expected to be delivered by June 2003 for members to conduct tests and familiarisation exercises. The live run of RTGS is scheduled towards the end of 2003. Reporting of Call/Notice Money Market Transactions on NDS Platform Negotiated dealing system (NDS), which has become operational since February 2002, enables on-line dealing and dissemination of trade information relating to instruments in money, government securities and foreign exchange markets. Membership in NDS is open to all institutions which are members of INFINET and are maintaining subsidiary general ledger (SGL) Account with RBI. These include banks, financial institutions (FIs), primary dealers (PDs), insurance companies, mutual funds and any other institution as admitted by RBI. At present, all deals in government securities, call/notice/term money, CDs and CP executed among NDS members have to be reported automatically through NDS, if the deal is done on NDS and within 15 minutes of concluding the deal, if done outside NDS. However, it has been observed that a very sizeable proportion of daily call/notice money market deals is not reported by members on NDS as stipulated. With a view to improving transparency and strengthening efficiency in the market, it is proposed that: 1. From the fortnight beginning May 3, 2003, it would be mandatory for all NDS members to report all their call/notice money market deals on NDS. Deals done outside NDS should be reported within 15 minutes on NDS, irrespective of the size of the deal or whether the counterparty is a member of the NDS or not. 2. Full compliance with the reporting requirement to NDS will be reviewed in September 2003. In case there is repeated non-reporting of deals by an NDS member, it will be considered whether non-reported deals by that member should be treated as invalid with effect from a future date. ROLE OF TECHNOLOGY Information Technology has basically been used under two different avenues in Banking. One is Communication and Connectivity and other is Business Process Reengineering. Information technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. In view of this, technology has changed the contours of three major functions performed by banks, i. e. , access to liquidity, transformation of assets and monitoring of risks. Further, Information technology and the communication networking systems have a crucial bearing on the efficiency of money, capital and foreign exchange markets. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products ; services. Detailed guidelines of RBI for Internet Banking has prepared the necessary ground for growth of Internet Banking in India. The Information Technology Act, 2000 has given legal recognition to creation, transmission and retention of an electronic (or magnetic) data to be treated as valid proof in a court of law, except in those areas, which continue to be governed by the provisions of the Negotiable Instruments Act, 1881. As stated in RBI’s Annual Monetary and Credit Policy 2002-2003: â€Å"To reap the full benefits of such electronic message transfers, it is necessary that banks bestow sufficient attention on the computerisation and networking of the branches situated at commercially important centres on a time-bound basis. Intra-city and intra-bank networking would facilitate in addressing the â€Å"last mile† problem which would in turn result in quick and efficient funds transfers across the country†. E-BANKING Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society. Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific. The common features fall broadly into several categories Transactional (e. g. , performing a financial transaction such as an account to account transfer, paying a bill, wire transfer, apply for a loan, new account, etc. ) * Payments to third parties, including bill payments and telegraphic/wire transfers * Funds transfers between a customer’s own transactional account and savings accounts * Investment purchase or sale * Loan applications and transactions, suc h as repayments of enrollments * Non-transactional (e. g. , online statements, cheque links, cobrowsing, chat) * Viewing recent transactions Downloading bank statements , for example in PDF format * Viewing images of paid cheques * Financial Institution Administration * Management of multiple users having varying levels of authority * Transaction approval process Features commonly unique to Internet banking include Personal financial management support, such as importing data into personal accounting software Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions. History of E-Banking The precursor for the modern home online banking services were the distance banking services over electronic media from the early 1980s. The term online became popular in the late ’80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. ‘Home banking’ can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the city’s major banks (Citibank, Chase Manhattan, Chemical andManufacturers Hanover) offered home banking services[1] using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used. The UK’s first home online banking services[2] was set up by Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983. [3] The system used was based on the UK’s Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as ‘Homelink’) allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in October 1994. [citation needed] Today, many banks are internet only banks. Unlike their predecessors, these internet only banks do not maintain brick and mortar bank branches. Instead, they typically differentiate themselves by offering better interest rates and online banking features. Security Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Basically there exist two different security methods for online banking. 1. The PIN/TAN system where the PIN represents a password, used for the login and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. The most secure way of using TANs is to generate them by need using asecurity token. These token generated TANs depend on the time and a unique secret, stored in the security token (this is called two-factor authentication or 2FA). Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed. Another way to provide TANs to an online banking user is to send the TAN of the current bank transaction to the user’s (GSM) mobile phone via SMS. The SMS text usually quotes the transaction amount and details, the TAN is only valid for a short period of time. Especially in Germany and Austria, many banks have adopted this â€Å"SMS TAN† service as it is considered very secure. 2. Signature based online banking where all transactions are signed and encrypted digitally. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation. Attacks Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information. A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background. A recent FDIC Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states. The most recent kind of attack is the so-called Man in the Browser attack, where a Trojan horse permits a remote attacker to modify the destination account number and also the amount. Countermeasures There exist several countermeasures which try to avoid attacks. Digital certificates are used against phishing and pharming, the use of class-3 card readers is a measure to avoid manipulation of transactions by the software in signature based online banking variants. To protect their systems against Trojan horses, users should use virus scanners and be careful with downloaded software or e-mail attachments. DIGITAL SIGNATURES A digital signature or digital signature scheme is a mathematical scheme for demonstrating the authenticity of a digital message or document. A valid digital signature gives a recipient reason to believe that the message was created by a known sender, and that it was not altered in transit. Digital signatures are commonly used for software distribution, financial transactions, and in other cases where it is important to detect forgery or tampering. Digital signatures are often used to implement electronic signatures, a broader term that refers to any electronic data that carries the intent of a signature, but not all electronic signatures use digital signatures. In some countries, including the United States, India, and members of the European Union, electronic signatures have legal significance. However, laws concerning electronic signatures do not always make clear whether they are digital cryptographic signatures in the sense used here, leaving the legal definition, and so their importance, somewhat confused. Digital signatures employ a type of asymmetric cryptography. For messages sent through a nonsecure channel, a properly implemented digital signature gives the receiver reason to believe the message was sent by the claimed sender. Digital signatures are equivalent to traditional handwritten signatures in many respects; properly implemented digital signatures are more difficult to forge than the handwritten type. Digital signature schemes in the sense used here are cryptographically based, and must be implemented properly to be effective. Digital signatures can also provide non-repudiation, meaning that the signer cannot successfully claim they did not sign a message, while also claiming their private key remains secret; further, some non-repudiation schemes offer a time stamp for the digital signature, so that even if the private key is exposed, the signature is valid nonetheless. Digitally signed messages may be anything representable as a bitstring: examples include electronic mail, contracts, or a message sent via some other cryptographic protocol. A digital signature scheme typically consists of three algorithms: 1. A key generation algorithm that selects a private key uniformly at random from a set of possible private keys. The algorithm outputs the private key and a corresponding public key. 2. A signing algorithm that, given a message and a private key, produces a signature. 3. A signature verifying algorithm that, given a message, public key and a signature, either accepts or rejects the message’s claim to authenticity. Two main properties are required. First, a signature generated from a fixed message and fixed private key should verify the authenticity of that message by using the corresponding public key. Secondly, it should be computationally infeasible to generate a valid signature for a party who does not possess the private key. Uses of digital signatures As organizations move away from paper documents with ink signatures or authenticity stamps, digital signatures can provide added assurances of the evidence to provenance, identity, and status of an electronic document as well as acknowledging informed consent and approval by a signatory. The United States Government Printing Office (GPO) publishes electronic versions of the budget, public and private laws, and congressional bills with digital signatures. Universities including Penn State, University of Chicago, and Stanford are publishing electronic student transcripts with digital signatures. Below are some common reasons for applying a digital signature to communications: Authentication Although messages may often include information about the entity sending a message, that information may not be accurate. Digital signatures can be used to authenticate the source of messages. When ownership of a digital signature secret key is bound to a specific user, a valid signature shows that the message was sent by that user. The importance of high confidence in sender authenticity is especially obvious in a financial context. For example, suppose a bank’s branch office sends instructions to the central office requesting a change in the balance of an account. If the central office is not convinced that such a message is truly sent from an authorized source, acting on such a request could be a grave mistake. Integrity In many scenarios, the sender and receiver of a message may have a need for confidence that the message has not been altered during transmission. Although encryption hides the contents of a message, it may be possible to change an encrypted message without understanding it. (Some encryption algorithms, known as nonmalleable ones, prevent this, but others do not. ) However, if a message is digitally signed, any change in the message after signature will invalidate the signature. Furthermore, there is no efficient way to modify a message and its signature to produce a new message with a valid signature, because this is still considered to be computationally infeasible by most cryptographic hash functions (see collision resistance). Digital signatures vs. nk on paper signatures An ink signature can be easily replicated from one document to another by copying the image manually or digitally. Digital signatures cryptographically bind an electronic identity to an electronic document and the digital signature cannot be copied to another document. Paper contracts often have the ink signature block on the last page, and the previous pa ges may be replaced after a signature is applied. Digital signatures can be applied to an entire document, such that the digital signature on the last page will indicate tampering if any data on any of the pages have been altered. CARD SKIMMING Card skimming’ is the illegal copying of information from the magnetic strip of a credit or ATM card. It is a more direct version of a phishing scam. The scammers try to steal your details so they can access your accounts. Once scammers have skimmed your card, they can create a fake or ‘cloned’ card with your details on it. The scammer is then able to run up charges on your account. Card skimming is also a way for scammers to steal your identity (your personal details) and use it to commit identity fraud. By stealing your personal details and account numbers the scammer may be able to borrow money or take out loans in your name. Warning signs †¢A shop assistant takes your card out of your sight in order to process your transaction. †¢You are asked to swipe your card through more than one machine. †¢You see a shop assistant swipe the card through a different machine to the one you used. †¢You notice something suspicious about the card slot on an ATM (e. g. an attached device). †¢You notice unusual or unauthorised transactions on your account or credit card statement. Protect yourself from card skimming †¢Keep your credit card and ATM cards safe. Do not share your personal identity number (PIN) with anyone. Do not keep any written copy of your PIN with the card. Check your bank account and credit card statements when you get them. If you see a transaction you cannot explain, report it to your credit union or bank. †¢Choose passwords that would be difficult for anyone else to guess. CREDIT CARDS A credit card is a small plastic card issued to users as a system of payment. It a llows its holder to buy goods and services based on the holder’s promise to pay for these goods and services. [1] The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card is different from a charge card: a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card, which can be used like currency by the owner of the card. Most credit cards are issued by banks or credit unions, and are the shape and size specified by the ISO/IEC 7810standard as ID-1. This is defined as 85. 60 ? 53. 98 mm (3. 370 ? 2. 125 in) (33/8 ? 21/8 in) in size . How credit cards work Credit cards are issued by a credit card issuer, such as a bank or credit union, after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card. Merchants often advertise which cards they accept by displaying acceptance marks – generally derived from logos – or may communicate this orally, as in â€Å"Credit cards are fine† (implicitly meaning â€Å"major brands†), â€Å"We take (brands X, Y, and Z)†, or â€Å"We don’t take credit cards†. When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receiptwith a record of the card details and indicating the amount to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a card not present transaction (CNP). Electronic verification systems allow merchants to verify in a few seconds that the card is valid and the credit card customer has sufficient credit to cover the purchase, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or point-of-sale (POS) system with a communications link to the merchant’s acquiring bank. Data from the card is obtained from amagnetic stripe or chip on the card; the latter system is called Chip and PIN in the United Kingdom and Ireland, and is implemented as anEMV card. For card not present transactions where the card is not shown (e. g. , e-commerce, mail order, and telephone sales), merchants additionally verify that the customer is in physical possession of the card and is the authorized user by asking for additional information such as thesecurity code printed on the back of the card, date of expiry, and billing address. Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect (see 15 U. S. C.  § 1643, which limits cardholder liability for unauthorized use of a credit card to $50, and the Fair Credit Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The credit issuer charges interest on the amount owed if the balance is not paid in full (typically at a much higher rate than most other forms of debt). In addition, if the credit card user fails to make at least the minimum payment by the due date, the issuer may impose a â€Å"late fee† and/or other penalties on the user. To help mitigate this, some financial institutions can arrange for automatic payments to be deducted from the user’s bank accounts, thus avoiding such penalties altogether as long as the cardholder has sufficient funds. Interest charges Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid. For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even $1. 00 of the total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. The general calculation formula most financial institutions use to determine the amount of interest to be charged is APR/100 x ADB/365 x number of days revolved. Take the annual percentage rate (APR) and divide by 100 then multiply to the amount of the average daily balance (ADB) divided by 365 and then take this total and multiply by the total number of days the amount revolved before payment was made on the account. Financial institutions refer to interest charged back to the original time of the transaction and up to the time a payment was made, if not in full, as RRFC or residual retail finance charge. Thus after an amount has revolved and a payment has been made, the user of the card will still receive interest charges on their statement after paying the next statement in full (in fact the statement may only have a charge for interest that collected up until the date the full balance was paid, i. e. when the balance stopped revolving). The credit card may simply serve as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments. Usually this compartmentalization is the result of special incentive offers from the issuing bank, to encourage balance transfers from cards of other issuers. In the event that several interest rates apply to various balance segments, payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument, or even if the issuing bank decides to raise its revenue. Benefits to customers The main benefit to each customer is convenience. Compared to debit cards and cheques, a credit card allows small short-term loans to be quickly made to a customer who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card. Credit cards also provide more fraud protection than debit cards. In the UK for example, the bank is jointly liable with the merchant for purchases of defective products over ? 100. [5] Many credit cards offer rewards and benefits packages, such as offering enhanced product warranties at no cost, free loss/damage coverage on new purchases, and points which may be redeemed for cash, products, or airline tickets. Additionally, carrying a credit card may be a convenience to some customers as it eliminates the need to carry any cash for most purposes. MOBILE BANKING Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS. With the introduction of the first primitive smart phones withWAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers . Mobile banking has until recently (2010) most often been performed via SMS or the Mobile Web. Apple’sinitial success with iPhone and the rapid growth of phones based on Google’s Android (operating system)have led to increasing use of special client programs, called apps, downloaded to the mobile device. Mobile Banking Services Mobile banking can offer services such as the following: Account Information 1. Mini-statements and checking of account history 2. Alerts on account activity or passing of set thresholds 3. Monitoring of term deposits 4. Access to loan statements 5. Access to card statements . Mutual funds / equity statements 7. Insurance policy management 8. Pension plan management 9. Status on cheque, stop payment on cheque 10. Ordering cheque books 11. Balance checking in the account 12. Recent transactions 13. Due date of payment (functionality for stop, change and deleting of payments) 14. PIN provision, Change of PIN and reminder over the Internet 15. Blocki ng of (lost, stolen) cards Payments, Deposits, Withdrawals, and Transfers 1. Domestic and international fund transfers 2. Micro-payment handling 3. Mobile recharging 4. Commercial payment processing 5. Bill payment processing . Peer to Peer payments 7. Withdrawal at banking agent 8. Deposit at banking agent A specific sequence of SMS messages will enable the system to verify if the client has sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When depositing money, the merchant receives cash and the system credits the client’s bank account or mobile wallet. In the same way the client can also withdraw money at the merchant: through exchanging sms to provide authorization, the merchant hands the client cash and debits the merchant’s account. Investments 1. Portfolio management services 2. Real-time stock quotes 3. Personalized alerts and notifications on security prices Support 1. Status of requests for credit, including mortgage approval, and insurance coverage 2. Check (cheque) book and card requests 3. Exchange of data messages and email, including complaint submission and tracking 4. ATM Location Content Services 1. General information such as weather updates, news 2. Loyalty-related offers 3. Location-based services Based on a survey conducted by Forrester, mobile banking will be attractive mainly to the younger, more â€Å"tech-savvy† customer segment. A third of mobile phone users say that they may consider performing some kind of financial transaction through their mobile phone. But most of the users are interested in performing basic transactions such as querying for account balance and making bill payment. ELECTRONIC FUNDS TRANSFER Electronic funds transfer or EFT is the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. The term is used for a number of different concepts: Cardholder-initiated transactions, where a cardholder makes use of a payment card * Direct deposit payroll payments for a business to its employees, possibly via a payroll service bureau * Direct debit payments, sometimes called electronic checks, for which a business debits the consumer’s bank accounts for payment for goods or services * Electronic bill payment in online banking, which may be delivered by EFT or paper check * Transactions involving stored value of electronic money, possibly in a private currency * Wire transfer via an international banking network (carries a higher fee in North America) * Electronic Benefit Transfer In 1978 U. S. Congress passed the Electronic Funds Transfer Act to establish the rights and liabilities of consumers as well as the responsibilities of all participants in EFT activities in the United States. RTGS Real time gross settlement systems (RTGS) are funds transfer systems where transfer of money or securities[1] takes place from one bank to another on a â€Å"real time† and on â€Å"gross† basis. Settlement in â€Å"real time† means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. â€Å"Gross settlement† means the transaction is settled on one to one basis without bunching or netting with any other transaction. Once processed, payments are final and irrevocable. Fees for RTGS vary from bank to bank. RBI has prescribed upper limit for the fees which can be charged by all banks both for NEFT and RTGS. Both the remitting and receiving must have Core banking in place to enter into RTGS transactions. Core Banking enabled banks and branches are assigned an Indian Financial System Code (IFSC) for RTGS and NEFT purposes. This is an eleven digit alphanumeric code and unique to each branch of bank. The first four alphabets indicate the identity of the bank and remaining seven numerals indicate a single branch. This code is provided on the cheque books, which are required for transactions along with recipient’s account number. RTGS is a large value (minimum value of transaction should be Rs 2,00,000) funds transfer system whereby financial intermediaries can settle interbank transfers for their own account as well as for their customers. The system effects final settlement of interbank funds transfers on a continuous, transaction-by-transaction basis throughout the processing day. Customers can access the RTGS facility between 9 am to 4:30 pm on week days and 9 am to 1:30 pm on Saturday. However, the timings that the banks follow may vary depending on the customer timings of the bank branches. Banks could use balances maintained under the cash reserve ratio (CRR) and the intra-day liquidity (IDL) to be supplied by the central bank, for meeting any eventuality arising out of the real time gross settlement (RTGS). The RBI fixed the IDL limit for banks to three times their net owned fund (NOF). The IDL will be charged at Rs 25 per transaction entered into by the bank on the RTGS platform. The marketable securities and treasury billswill have to be placed as collateral with a margin of five per cent. However, the apex bank will also impose severe penalties if the IDL is not paid back at the end of the day. National Electronic Fund Transfer National Electronic Fund Transfer (NEFT) is an online system for transferring funds of Indian financial institution (especially banks). There is no minimum limit for fund transfer in NEFT system. DEBIT CARDS A debit card (also known as a bank card or check card) is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution. Some cards have a stored value with which a payment is made, while most relay a message to the cardholder’s bank to withdraw funds from a designated account in favor of the payee’s designated bank account. The card can be used as an alternative payment method to cash when making purchases. In some cases, the cards are designed exclusively for use on the Internet, and so there is no physical card. In many countries the use of debit cards has become so widespread that their volume of use has overtaken or entirely replaced the check and, in some instances, cash transactions. Like credit cards, debit cards are used widely for telephone and Internet purchases. However, unlike credit cards, the funds paid using a debit card are transferred immediately from the bearer’s bank account, instead of having the bearer pay back the money at a later date. Debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash and as a check guarantee card. Merchants may also offer cashback facilities to customers, where a customer can withdraw cash along with their purchase. Online Debit System Online debit cards require electronic authorization of every transaction and the debits are reflected in the user’s account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine(ATM) cards. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is becoming commonplace for all card transactions in many countries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may only issue online debit cards. Some on-line debit systems are using the normal authentication processes of Internet banking to provide real-time on-line debit transactions. The most notable of these are Ideal and POLi. Offline Debit System Offline debit cards have the logos of major credit cards (for example, Visa or MasterCard) or major debit cards (for example, Maestro in the United Kingdom and other countries, but not the United States) and are used at the point of sale like a credit card (with payer’s signature). This type of debit card may be subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from which it draws funds. Transactions conducted with offline debit cards require 2–3 days to be reflected on users’ account balances. In some countries and with some banks and merchant service organizations, a â€Å"credit† or offline debit transaction is without cost to the purchaser beyond the face value of the transaction, while a small fee may be charged for a â€Å"debit† or online debit transaction (although it is often absorbed by the retailer). Other differences are that online debit purchasers may opt to withdraw cash in addition to the amount of the debit purchase (if the merchant supports that functionality); also, from the merchant’s standpoint, the merchant pays lower fees on online debit transaction as compared to â€Å"credit† (offline) debit transaction. Prepaid debit cards Prepaid debit cards, also called reloadable debit cards or reloadable prepaid cards, are often used for recurring payments. The payer loads funds to the cardholder’s card account. Prepaid debit cards use either the offline debit system or the online debit system to access these funds. Particularly for companies with a large number of payment recipients abroad, prepaid debit cards allow the delivery of international payments without the delays and fees associated with international checks and bank transfers. Providers include Caxton FX prepaid cards, Escape prepaid cards, Travelex prepaid cards and TransCash prepaid Visa cards. Whereas, web-based services such as stock photography websites (istockphoto), outsourced services (oDesk),money transfer services (Western Union) and affiliate networks (MediaWhiz) have all started offering prepaid debit cards for their contributors/freelancers/vendors. Advantages of debit cards a. A consumer who is not credit worthy and may find it difficult or impossible to obtain a credit card can more easily obtain a debit card, allowing him/her to make plastic transactions. For example, legislation often prevents minors from taking out debt, which includes the use of a credit card, but not online debit card transactions. b. For most transactions, a check card can be used to avoid check writing altogether. Check cards debit funds from the user’s account on the spot, thereby finalizing the transaction at the time of purchase, and bypassing the requirement to pay a credit card bill at a later date, or to write an insecure check containing the account holder’s personal information. c. Like credit cards, debit cards are accepted by merchants with less identification and scrutiny than personal checks, thereby making transactions quicker and less intrusive. Unlike personal checks, merchants generally do not believe that a payment via a debit card may be later dishonored. d. Unlike a credit card, which charges higher fees and interest rates when a cash advance is obtained, a debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge, other than a foreign ATM fee. Disadvantages of debit cards a. Use of a debit card is not usually limited to the existing funds in the account to which it is linked, most banks allow a certain threshold over the available bank balance which can cause overdraft fees if the users transaction does not reflect available balance. b. Many banks are now charging over-limit fees or non-sufficient funds fees based upon pre-authorizations, and even attempted but refused transactions by the erchant (some of which may be unknown until later discovery by account holder). c. Many merchants mistakenly believe that amounts owed can be â€Å"taken† from a customer’s account after a debit card (or number) has been presented, without agreement as to date, payee name, amount and currency, thus c ausing penalty fees for overdrafts, over-the-limit, amounts not available causing further rejections or overdrafts, and rejected transactions by some banks. d. In some countries debit cards offer lower levels of security protection than credit cards. [9] Theft of the users PIN using skimming devices can be accomplished much easier with a PIN input than with a signature-based credit transaction. However, theft of users’ PIN codes using skimming devices can be equally easily accomplished with a debit transaction PIN input, as with a credit transaction PIN input, and theft using a signature-based credit transaction is equally easy as theft using a signature-based debit transaction. e. In many places, laws protect the consumer from fraud much less than with a credit card. While the holder of a credit card is legally responsible for only a minimal amount of a fraudulent transaction made with a credit card, which is often waived by the bank, the consumer may be held liable for hundreds of dollars, or even the entire value of fraudulent debit transactions. The consumer also has a shorter time (usually just two days) to report such fraud to the bank in order to be eligible for such a waiver with a debit card,[9] whereas with a credit card, this time may be up to 60 days. A thief who obtains or clones a debit card along with its PIN may be able to clean out the consumer’s bank account, and the consumer will have no recourse. f. An automated teller machine (ATM), also known as a Cash Point, Cash Machine or sometimes a Hole in the Wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. ATMs are known by various other names including automatic banking machine, cash machine, and various regional variants derived from trademarks on ATM systems held by particular banks. g. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN). h. Using an ATM, customers can access their bank accounts in order to make cash withdrawals,credit card cash advances, and check their account balances as well as purchase prepaid cellphone credit. If the currency being withdrawn from the ATM is different from that which the bank account is denominated in (e. g. Withdrawing Japanese Yen from a bank account containing US Dollars), the money will be converted at a wholesale exchange rate. Thus, ATMs often provide the best possible exchange rate for foreign travelers and are heavily used for this purpose as well Alternative uses Two NCR Personas 84 ATMs at a bank inJersey dispensing two types of pound st erling banknotes: Bank of England noteson the left, and States of Jersey notes on the right Although ATMs were originally developed as just cash dispensers, they have evolved to include many other bank-related functions. In some countries, especially those which benefit from a fully integrated cross-bank ATM network (e. g. Multibanco in Portugal), ATMs include many functions which are not directly related to the management of one’s own bank account, such as: 1. Deposit currency recognition, acceptance, and recycling[61][62] 2. Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc. ) 3. Printing bank statements 4. Updating passbooks 5. Loading monetary value into stored value cards 6. Purchasing 7. Postage stamps. 8. Lottery tickets 9. Train tickets 10. Concert tickets 11. Movie tickets 12. Shopping mall gift certificates. 13. Games and promotional features 14. Fastloans 15. CRM at the ATM 16. Cheque Processing Module 17. Adding pre-paid cell phone / mobile phone credit. Increasingly banks are seeking to use the ATM as a sales device to deliver pre approved loans and targeted advertising using products such as ITM (the Intelligent Teller Machine) from Aptra Relate from NCR. ATMs can also act as an advertising channel for companies to advertise their own products or third-party products and services. In Canada, ATMs are called guichets automatiques in French and sometimes â€Å"Bank Machines† in English. The Interac shared cash network does not allow for the selling of goods from ATMs due to specific security requirements for PIN entry when buying goods. CIBC machines in Canada, are able to top-up the minutes on certain pay as you go phones. TELEPHONE BANKING Telephone banking is a service provided by a financial institution, which allows its customers to perform transactions over the telephone. Most telephone banking services use an automated phone answering system with phone keypad response or voice recognition capability. To guarantee security, the customer must first authenticate through a numeric or verbal password or through security questions asked by a live representative (see below). With the obvious exception of cash withdrawals and deposits, it offers virtually all the features of an automated teller machine: account balance information and list of latest transactions, electronic bill payments, funds transfers between a customer’saccounts, etc. Usually, customers can also speak to a live representative located in a call centre or a branch, although this feature is not always guaranteed to be offered 24/7. In addition to the self-service transactions listed earlier, telephone banking representatives are usually trained to do what was traditionally available only at the branch: loan applications, investment purchases and redemptions, chequebook orders, debit cardreplacements, change of address, etc. Banks which operate mostly or exclusively by telephone are known as phone banks. They also help modernise the user by using special technology. A credit card balance transfer is the transfer of the balance (the money) in a credit card account to an account held at another credit cardcompany. This process is actively encouraged by almost all credit card issuers as a means to attract new customers. Such an arrangement is attractive to the consumer because the new bank or credit card issuer will offer incentives such as a low interest or interest-free period, loyalty points or some such other device or combination of incentives. It is also attractive to the credit card company which uses this process to gain that new customer, and of course detrimental to the prior credit card company. An order of payments for every credit card specifies which balance(s) will be paid first. In nearly all cases payments apply to lowest-rate balances first – highest-rate last. Any balance under a teaser rate or fixed rate will be paid off sooner than any purchases or cash advances (which usually have the highest APR). By avoiding making purchases or taking cash advances altogether, the borrower can ensure they maintain the full benefits of the original balance transfer. The process is extremely fast and can be concluded within a matter of hours in some cases. Automated services exist to help facilitate such balance transfers. Other similar services do exist, but they may not be free to use. USES OF INFORMATION TECHNOLOGY IN BANKS Information Technology uses in Banking sector: – †¢Business banking †¢Retail banking †¢Banking technology †¢Banking environment †¢Card Market Business banking: BMI-Tec Knowledge has been publishing their annual report on Business Electronic Banking for the past 13 years. The report provides valuable year on year trend analysis for the major banks in South Africa. There are two parallel research objectives of the publication, to report on business banking trends and more specific information on each of the electronic banking products offered by the banks. Each year, the questionnaire used for the research process retains a generic core but incorporates changes that reflect the ever changing banking environment and the related impact of technology. The research is focused on business banking and specifically for companies that use an online or electronic banking product in their ay-to-day administration of their business banking administration. The key area of segmentation for this report is by the four major banks in South Africa: Absa, First National Bank, Nedbank and Standard Bank. Other areas of segmentation include size of company by emp loyees and annual turnover and whether these companies are single banked or multi banked. Retail banking: Understanding the financial delivery channels BMI-T has conducted a recent benchmarking study to highlight external expertise and knowledge that is currently available in the ATM and SST environment. From this collated information, the client was able will be able to benchmark their own operations against these parameters. This study assisted the client in identifying and determining the current and potential best practices around ATMs and to see where they are currently placed in this context. The scope of the research covered both local and international perspectives with the international perspective be segmented further by a split between Africa in comparison with the Rest of the World and South Africa Business Electronic Banking in the Small to Medium Business sector BMI-Tec Knowledge has been publishing their annual report on Business Electronic Banking in the corporate sector for the past 13 years. This new report, Business electronic banking in the SMB sector will be a parallel report in order to fully understand both markets; corporates and the SMB sector. There are two parallel research objectives of the publication, to report on business banking trends in the small to medium business sector and provide more specific information on each of the electronic banking products offered by the banks. The research is focused on business banking and specifically for companies that use an online or electronic banking product in their day-to-day administration of their business banking administration. The key area of segmentation for this report is the four major banks in South Africa: Absa, First National Bank, Nedbank and Standard Bank. Other areas of segmentation include size of company by employees and annual turnover and whether these companies are single banked or multi banked. Multi-Channel Banking for Retail Financial Services 2005: BMI-T conducts research in the financial delivery channels to the retail market. This research covers the following issues: †¢The optimum balance between customer experience and lower costs, †¢International overview of financial delivery channels and the road to multi-channel integration, †¢Trends and market drivers and/or inhibitors that have driven the changes in global banks, †¢South African comparison of financial delivery channels and their related offerings from the banks, †¢Comparison of pricing and products and services that are available on each channel from each financial provider, †¢Number of customer points such as ATMs, †¢Number of banking branches and level of change and expected growth for the future. Research to test the future for High-value-low frequency channels or low-value-high frequency channels, current and future usage patterns of financial delivery channels from the South African retail customers (which channels, frequency, timing and for which transactions plus trend analysis with past annual data). Ban king technology: South Africa is in many ways a global leader in the adoption and use of technology to improve competitiveness and de How to cite Comparative Analysis of Private, Public Banks, Essay examples

Comparative Analysis of Private, Public Banks Free Essays

Ibmr| study on impact of technology on customer needs in banking| | | NAYANA SHREE N S| MBA FINANCE| Project on study on impact of technology on customer needs in banking SEMESTER IV SUBMITTED BY NAYANA SHREE N S ROLL NO. IBMR COLLEGE IBMR COLLEGE Address: CERTIFICATE This is to certify that Nayana Shree N S of MBA FINANCE Semester IV {2012-13} has successfully completed the project on â€Å"Project on study on impact of technology on customer needs in banking† under the guidance of Mrs. Bickram . We will write a custom essay sample on Comparative Analysis of Private, Public Banks or any similar topic only for you Order Now Course Co-ordinatorPrincipal Project Guide/ Internal Examiner External Examiner DECLARATION I Nayana Shree N S the student of MBA Finance Semester IV {2012-13} hereby declare that I have completed the project on â€Å"Project on study on impact of technology on customer needs in banking†. The information submitted is true and original to the best of my knowledge. Signature Nayana Shree N S Roll No. ACKNOWLEDGEMENT Many people have played a part in making this project study a success by giving their valuable inputs and useful suggestions. Firstly I would express my gratitude to the University Of Mysore for providing me the opportunity to study the practical aspects of banking and insurance. I am thankful to the principal Mrs. xxxxxxx for giving me an opportunity to work on this project. I am also thankful to our co-ordinator Mrs. xxxxxx for her immeasurable encouragement and support. I am also particularly grateful to my project guide xxxxx for extending his support and time. INDEX Chapter No. | Titles| Pg. No. | 1| Introduction| 1-7| 2| Role Of Technology| 8| 3| E-Banking| 9-12| | Digital Signatures| 13-15| 5| Card Skimming| 16| 6| Credit Cards| 17-20| 7| Mobile Banking| 21-23| 8| Electronic Funds Transfer| 24-26| 9| Debit Cards| 27-33| 10| Telephone Banking| 34-35| 11| Uses Of Information Technology In Banks| 36-39| 12| Technology Vision 2020| 40-44| 13| Present Level of Computerization| 45-46| 14| Advantages of Technology| 47-48| 15| Disadvantages of Technology| 49-50| 16| Nature and Change in Banking| 51-53| 17| I ssues and Challenges| 54| 18| Countermeasures to Frauds| 55-58| 19| Conclusion| 59| 20| Bibliography| 60| INTRODUCTION In the five decades since independence, banking in India has evolved through four distinct phases. During Fourth phase, also called as Reform Phase, Recommendations of the Narasimham Committee (1991) paved the way for the reform phase in the banking. Important initiatives with regard to the reform of the banking system were taken in this phase. Important among these have been introduction of new accounting and prudential norms relating to income recognition, provisioning and capital adequacy, deregulation of interest rates easing of norms for entry in the field of banking. Entry of new banks resulted in a paradigm shift in the ways of banking in India. The growing competition, growing expectations led to increased awareness amongst banks on the role and importance of technology in banking. The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain their customer base. Indian banking industry, today is in the midst of an IT revolution. A combination of regulatory and competitive reasons have led to increasing importance of total banking automation in the Indian Banking Industry. Information Technology has basically been used under two different avenues in Banking. One is Communication and Connectivity and other is Business Process Reengineering. Information technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. In view of this, technology has changed the contours of three major functions performed by banks, i. e. , access to liquidity, transformation of assets and monitoring of risks. Further, Information technology and the communication networking systems have a crucial bearing on the efficiency of money, capital and foreign exchange markets. The Software Packages for Banking Applications in India had their beginnings in the middle of 80s, when the Banks started computerizing the branches in a limited manner. The early 90s saw the plummeting hardware prices and advent of cheap and inexpensive but high-powered PCs and servers and banks went in for what was called Total Branch Automation (TBA) Packages. The middle and late 90s witnessed the tornado of financial reforms, deregulation, globalization etc. coupled with rapid revolution in communication technologies and evolution of novel concept of ‘convergence’ of computer and communication technologies, like Internet, mobile / cell phones etc. MILESTONES In India, banks as well as other financial entities entered the world of information technology and with Indian Financial Net (INFINET). INFINET, a wide area satellite based network (WAN) using VSAT (Very Small Aperture Terminals) technology, was jointly set up by the Reserve Bank and Institute for Development and Research in Banking Technology (IDRBT) in June 1999. The Indian Financial Network (INFINET) which initially comprised only the public sector banks was opened up for participation by other categories of members. The first set of applications that could benefit greatly from the use of technological advances in the computer and communications area relate to the Payment systems which form the lifeline of any banking activity. The process of reforms in payment and settlement systems has gained momentum with the implementation of projects such as NDS ((Negotiated Dealing System), CFMS (Centralised Funds Management System) for better funds management by banks and SFMS (Structured Financial Messaging Solution) for secure message transfer. This would result in funds transfers and funds-related message transfer to be routed electronically across banks using the medium of the INFINET. Negotiated dealing system (NDS), which has become operational since February 2002 and RTGS (Real Time Gross Settlement system) scheduled towards the end of 2003 are other major developments in the area. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products services. Detailed guidelines of RBI for Internet Banking has prepared the necessary ground for growth of Internet Banking in India. The Information Technology Act, 2000 has given legal recognition to creation, trans-mission and retention of an electronic (or magnetic) data to be treated as valid proof in a court of law, except in those areas, which continue to be governed by the provisions of the Negotiable Instruments Act, 1881. As stated in RBI’s Annual Monetary and Credit Policy 2002-2003: â€Å"To reap the full benefits of such electronic message transfers, it is necessary that banks bestow sufficient attention on the computerization and networking of the branches situated at commercially important centers on a time-bound basis. Intra-city and intra-bank networking would facilitate in addressing the â€Å"last mile† problem which would in turn result in quick and efficient funds transfers across the country†. Implementation of Centralized Funds Management System The centralized funds management system (CFMS) provides for a centralized viewing of balance positions of the account holders across different accounts maintained at various locations of RBI. While the first phase of the system covering the centralized funds enquiry system (CFES) has been made available to the users, the second phase comprising the centralized funds transfer system (CFTS) would be made available by the middle of 2003. So far, 54 banks have implemented the system at their treasuries/funds management branches. Certification and Digital Signatures The mid-term Review of October 2002 indicated the need for information security on the network and the use of public key infrastructure (PKI) by banks. The Controller of Certifying Authorities, Government of India, have approved the Institute for Development and Research in Banking Technology (IDRBT) as a Certification Authority (CA) for digital signatures. Consequently, the process of setting up of registration authorities (RA) under the CA has commenced at various banks. In addition to the negotiated dealing system (NDS), the electronic clearing service (ECS) and electronic funds transfer (EFT) are also being enhanced in terms of security by means of implementation of PKI and digital signatures using the facilities offered by the CA. Committee on Payment Systems In order to examine the entire gamut of the process of reforms in payment and settlement systems which would be culminating with the real time gross settlement (RTGS) system, a Committee on Payment Systems (Chairman: Dr. R. H. Patil) was set up in 2002. The Committee, after examining the various aspects relating to payment and settlement systems, submitted its report in September 2002 along with a draft Payment Systems Bill. The draft Bill provides, inter alia, a legal basis for netting, apart from empowering RBI to have regulatory and oversight powers over payment and settlement systems of the country. The report of the Committee was put on the RBI website for wider dissemination. The draft Bill has been forwarded to the Government. Multi-application Smart Cards Recognizing the need for technology based payment products and the growing importance of smart card based payment flows, a pilot project for multi-application smart cards in conjunction with a few banks and vendors, under the aegis of the Ministry of Communications and Information Technology, Government of India, has been initiated. The project is aimed at the formulation of standards for multi-application smart cards on the basis of inter-operable systems and technological components of the entire system. Special Electronic Funds Transfer As indicated in the mid-term Review of October 2002, national EFT (NEFT) is being introduced using the backbone of the structured financial messaging system (SFMS) of the IDRBT. NEFT would provide for movement of electronic transfer of funds in a safe, secure and quick manner across branches of any bank to any other bank through a central gateway of each bank, with the inter-bank settlement being effected in the books of account of banks maintained at RBI. Since this scheme requires connectivity across a large number of branches at many cities, a special EFT (SEFT) was introduced in April 2003 covering about 3000 branches in 500 cities. This has facilitated same day transfer of funds across accounts of constituents at all these branches. National Settlement System (NSS) The clearing and settlement activities are dispersed through 1,047 clearing houses managed by RBI, the State Bank of India and its associates, public sector banks and other institutions. In order to facilitate banks to have better control over their funds, it is proposed to introduce national settlement system (NSS) in a phased manner. Real Time Gross Settlement System (RTGS) As indicated in the mid-term Review of October 2002, development of the various software modules for the RTGS system is in progress. The initial set of modules is expected to be delivered by June 2003 for members to conduct tests and familiarisation exercises. The live run of RTGS is scheduled towards the end of 2003. Reporting of Call/Notice Money Market Transactions on NDS Platform Negotiated dealing system (NDS), which has become operational since February 2002, enables on-line dealing and dissemination of trade information relating to instruments in money, government securities and foreign exchange markets. Membership in NDS is open to all institutions which are members of INFINET and are maintaining subsidiary general ledger (SGL) Account with RBI. These include banks, financial institutions (FIs), primary dealers (PDs), insurance companies, mutual funds and any other institution as admitted by RBI. At present, all deals in government securities, call/notice/term money, CDs and CP executed among NDS members have to be reported automatically through NDS, if the deal is done on NDS and within 15 minutes of concluding the deal, if done outside NDS. However, it has been observed that a very sizeable proportion of daily call/notice money market deals is not reported by members on NDS as stipulated. With a view to improving transparency and strengthening efficiency in the market, it is proposed that: 1. From the fortnight beginning May 3, 2003, it would be mandatory for all NDS members to report all their call/notice money market deals on NDS. Deals done outside NDS should be reported within 15 minutes on NDS, irrespective of the size of the deal or whether the counterparty is a member of the NDS or not. 2. Full compliance with the reporting requirement to NDS will be reviewed in September 2003. In case there is repeated non-reporting of deals by an NDS member, it will be considered whether non-reported deals by that member should be treated as invalid with effect from a future date. ROLE OF TECHNOLOGY Information Technology has basically been used under two different avenues in Banking. One is Communication and Connectivity and other is Business Process Reengineering. Information technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. In view of this, technology has changed the contours of three major functions performed by banks, i. e. , access to liquidity, transformation of assets and monitoring of risks. Further, Information technology and the communication networking systems have a crucial bearing on the efficiency of money, capital and foreign exchange markets. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products ; services. Detailed guidelines of RBI for Internet Banking has prepared the necessary ground for growth of Internet Banking in India. The Information Technology Act, 2000 has given legal recognition to creation, transmission and retention of an electronic (or magnetic) data to be treated as valid proof in a court of law, except in those areas, which continue to be governed by the provisions of the Negotiable Instruments Act, 1881. As stated in RBI’s Annual Monetary and Credit Policy 2002-2003: â€Å"To reap the full benefits of such electronic message transfers, it is necessary that banks bestow sufficient attention on the computerisation and networking of the branches situated at commercially important centres on a time-bound basis. Intra-city and intra-bank networking would facilitate in addressing the â€Å"last mile† problem which would in turn result in quick and efficient funds transfers across the country†. E-BANKING Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society. Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific. The common features fall broadly into several categories Transactional (e. g. , performing a financial transaction such as an account to account transfer, paying a bill, wire transfer, apply for a loan, new account, etc. ) * Payments to third parties, including bill payments and telegraphic/wire transfers * Funds transfers between a customer’s own transactional account and savings accounts * Investment purchase or sale * Loan applications and transactions, suc h as repayments of enrollments * Non-transactional (e. g. , online statements, cheque links, cobrowsing, chat) * Viewing recent transactions Downloading bank statements , for example in PDF format * Viewing images of paid cheques * Financial Institution Administration * Management of multiple users having varying levels of authority * Transaction approval process Features commonly unique to Internet banking include Personal financial management support, such as importing data into personal accounting software Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions. History of E-Banking The precursor for the modern home online banking services were the distance banking services over electronic media from the early 1980s. The term online became popular in the late ’80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. ‘Home banking’ can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the city’s major banks (Citibank, Chase Manhattan, Chemical andManufacturers Hanover) offered home banking services[1] using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used. The UK’s first home online banking services[2] was set up by Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983. [3] The system used was based on the UK’s Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as ‘Homelink’) allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in October 1994. [citation needed] Today, many banks are internet only banks. Unlike their predecessors, these internet only banks do not maintain brick and mortar bank branches. Instead, they typically differentiate themselves by offering better interest rates and online banking features. Security Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Basically there exist two different security methods for online banking. 1. The PIN/TAN system where the PIN represents a password, used for the login and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. The most secure way of using TANs is to generate them by need using asecurity token. These token generated TANs depend on the time and a unique secret, stored in the security token (this is called two-factor authentication or 2FA). Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed. Another way to provide TANs to an online banking user is to send the TAN of the current bank transaction to the user’s (GSM) mobile phone via SMS. The SMS text usually quotes the transaction amount and details, the TAN is only valid for a short period of time. Especially in Germany and Austria, many banks have adopted this â€Å"SMS TAN† service as it is considered very secure. 2. Signature based online banking where all transactions are signed and encrypted digitally. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation. Attacks Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information. A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background. A recent FDIC Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states. The most recent kind of attack is the so-called Man in the Browser attack, where a Trojan horse permits a remote attacker to modify the destination account number and also the amount. Countermeasures There exist several countermeasures which try to avoid attacks. Digital certificates are used against phishing and pharming, the use of class-3 card readers is a measure to avoid manipulation of transactions by the software in signature based online banking variants. To protect their systems against Trojan horses, users should use virus scanners and be careful with downloaded software or e-mail attachments. DIGITAL SIGNATURES A digital signature or digital signature scheme is a mathematical scheme for demonstrating the authenticity of a digital message or document. A valid digital signature gives a recipient reason to believe that the message was created by a known sender, and that it was not altered in transit. Digital signatures are commonly used for software distribution, financial transactions, and in other cases where it is important to detect forgery or tampering. Digital signatures are often used to implement electronic signatures, a broader term that refers to any electronic data that carries the intent of a signature, but not all electronic signatures use digital signatures. In some countries, including the United States, India, and members of the European Union, electronic signatures have legal significance. However, laws concerning electronic signatures do not always make clear whether they are digital cryptographic signatures in the sense used here, leaving the legal definition, and so their importance, somewhat confused. Digital signatures employ a type of asymmetric cryptography. For messages sent through a nonsecure channel, a properly implemented digital signature gives the receiver reason to believe the message was sent by the claimed sender. Digital signatures are equivalent to traditional handwritten signatures in many respects; properly implemented digital signatures are more difficult to forge than the handwritten type. Digital signature schemes in the sense used here are cryptographically based, and must be implemented properly to be effective. Digital signatures can also provide non-repudiation, meaning that the signer cannot successfully claim they did not sign a message, while also claiming their private key remains secret; further, some non-repudiation schemes offer a time stamp for the digital signature, so that even if the private key is exposed, the signature is valid nonetheless. Digitally signed messages may be anything representable as a bitstring: examples include electronic mail, contracts, or a message sent via some other cryptographic protocol. A digital signature scheme typically consists of three algorithms: 1. A key generation algorithm that selects a private key uniformly at random from a set of possible private keys. The algorithm outputs the private key and a corresponding public key. 2. A signing algorithm that, given a message and a private key, produces a signature. 3. A signature verifying algorithm that, given a message, public key and a signature, either accepts or rejects the message’s claim to authenticity. Two main properties are required. First, a signature generated from a fixed message and fixed private key should verify the authenticity of that message by using the corresponding public key. Secondly, it should be computationally infeasible to generate a valid signature for a party who does not possess the private key. Uses of digital signatures As organizations move away from paper documents with ink signatures or authenticity stamps, digital signatures can provide added assurances of the evidence to provenance, identity, and status of an electronic document as well as acknowledging informed consent and approval by a signatory. The United States Government Printing Office (GPO) publishes electronic versions of the budget, public and private laws, and congressional bills with digital signatures. Universities including Penn State, University of Chicago, and Stanford are publishing electronic student transcripts with digital signatures. Below are some common reasons for applying a digital signature to communications: Authentication Although messages may often include information about the entity sending a message, that information may not be accurate. Digital signatures can be used to authenticate the source of messages. When ownership of a digital signature secret key is bound to a specific user, a valid signature shows that the message was sent by that user. The importance of high confidence in sender authenticity is especially obvious in a financial context. For example, suppose a bank’s branch office sends instructions to the central office requesting a change in the balance of an account. If the central office is not convinced that such a message is truly sent from an authorized source, acting on such a request could be a grave mistake. Integrity In many scenarios, the sender and receiver of a message may have a need for confidence that the message has not been altered during transmission. Although encryption hides the contents of a message, it may be possible to change an encrypted message without understanding it. (Some encryption algorithms, known as nonmalleable ones, prevent this, but others do not. ) However, if a message is digitally signed, any change in the message after signature will invalidate the signature. Furthermore, there is no efficient way to modify a message and its signature to produce a new message with a valid signature, because this is still considered to be computationally infeasible by most cryptographic hash functions (see collision resistance). Digital signatures vs. nk on paper signatures An ink signature can be easily replicated from one document to another by copying the image manually or digitally. Digital signatures cryptographically bind an electronic identity to an electronic document and the digital signature cannot be copied to another document. Paper contracts often have the ink signature block on the last page, and the previous pa ges may be replaced after a signature is applied. Digital signatures can be applied to an entire document, such that the digital signature on the last page will indicate tampering if any data on any of the pages have been altered. CARD SKIMMING Card skimming’ is the illegal copying of information from the magnetic strip of a credit or ATM card. It is a more direct version of a phishing scam. The scammers try to steal your details so they can access your accounts. Once scammers have skimmed your card, they can create a fake or ‘cloned’ card with your details on it. The scammer is then able to run up charges on your account. Card skimming is also a way for scammers to steal your identity (your personal details) and use it to commit identity fraud. By stealing your personal details and account numbers the scammer may be able to borrow money or take out loans in your name. Warning signs †¢A shop assistant takes your card out of your sight in order to process your transaction. †¢You are asked to swipe your card through more than one machine. †¢You see a shop assistant swipe the card through a different machine to the one you used. †¢You notice something suspicious about the card slot on an ATM (e. g. an attached device). †¢You notice unusual or unauthorised transactions on your account or credit card statement. Protect yourself from card skimming †¢Keep your credit card and ATM cards safe. Do not share your personal identity number (PIN) with anyone. Do not keep any written copy of your PIN with the card. Check your bank account and credit card statements when you get them. If you see a transaction you cannot explain, report it to your credit union or bank. †¢Choose passwords that would be difficult for anyone else to guess. CREDIT CARDS A credit card is a small plastic card issued to users as a system of payment. It a llows its holder to buy goods and services based on the holder’s promise to pay for these goods and services. [1] The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card is different from a charge card: a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card, which can be used like currency by the owner of the card. Most credit cards are issued by banks or credit unions, and are the shape and size specified by the ISO/IEC 7810standard as ID-1. This is defined as 85. 60 ? 53. 98 mm (3. 370 ? 2. 125 in) (33/8 ? 21/8 in) in size . How credit cards work Credit cards are issued by a credit card issuer, such as a bank or credit union, after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card. Merchants often advertise which cards they accept by displaying acceptance marks – generally derived from logos – or may communicate this orally, as in â€Å"Credit cards are fine† (implicitly meaning â€Å"major brands†), â€Å"We take (brands X, Y, and Z)†, or â€Å"We don’t take credit cards†. When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receiptwith a record of the card details and indicating the amount to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a card not present transaction (CNP). Electronic verification systems allow merchants to verify in a few seconds that the card is valid and the credit card customer has sufficient credit to cover the purchase, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or point-of-sale (POS) system with a communications link to the merchant’s acquiring bank. Data from the card is obtained from amagnetic stripe or chip on the card; the latter system is called Chip and PIN in the United Kingdom and Ireland, and is implemented as anEMV card. For card not present transactions where the card is not shown (e. g. , e-commerce, mail order, and telephone sales), merchants additionally verify that the customer is in physical possession of the card and is the authorized user by asking for additional information such as thesecurity code printed on the back of the card, date of expiry, and billing address. Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect (see 15 U. S. C.  § 1643, which limits cardholder liability for unauthorized use of a credit card to $50, and the Fair Credit Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The credit issuer charges interest on the amount owed if the balance is not paid in full (typically at a much higher rate than most other forms of debt). In addition, if the credit card user fails to make at least the minimum payment by the due date, the issuer may impose a â€Å"late fee† and/or other penalties on the user. To help mitigate this, some financial institutions can arrange for automatic payments to be deducted from the user’s bank accounts, thus avoiding such penalties altogether as long as the cardholder has sufficient funds. Interest charges Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid. For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even $1. 00 of the total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. The general calculation formula most financial institutions use to determine the amount of interest to be charged is APR/100 x ADB/365 x number of days revolved. Take the annual percentage rate (APR) and divide by 100 then multiply to the amount of the average daily balance (ADB) divided by 365 and then take this total and multiply by the total number of days the amount revolved before payment was made on the account. Financial institutions refer to interest charged back to the original time of the transaction and up to the time a payment was made, if not in full, as RRFC or residual retail finance charge. Thus after an amount has revolved and a payment has been made, the user of the card will still receive interest charges on their statement after paying the next statement in full (in fact the statement may only have a charge for interest that collected up until the date the full balance was paid, i. e. when the balance stopped revolving). The credit card may simply serve as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments. Usually this compartmentalization is the result of special incentive offers from the issuing bank, to encourage balance transfers from cards of other issuers. In the event that several interest rates apply to various balance segments, payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument, or even if the issuing bank decides to raise its revenue. Benefits to customers The main benefit to each customer is convenience. Compared to debit cards and cheques, a credit card allows small short-term loans to be quickly made to a customer who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card. Credit cards also provide more fraud protection than debit cards. In the UK for example, the bank is jointly liable with the merchant for purchases of defective products over ? 100. [5] Many credit cards offer rewards and benefits packages, such as offering enhanced product warranties at no cost, free loss/damage coverage on new purchases, and points which may be redeemed for cash, products, or airline tickets. Additionally, carrying a credit card may be a convenience to some customers as it eliminates the need to carry any cash for most purposes. MOBILE BANKING Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS. With the introduction of the first primitive smart phones withWAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers . Mobile banking has until recently (2010) most often been performed via SMS or the Mobile Web. Apple’sinitial success with iPhone and the rapid growth of phones based on Google’s Android (operating system)have led to increasing use of special client programs, called apps, downloaded to the mobile device. Mobile Banking Services Mobile banking can offer services such as the following: Account Information 1. Mini-statements and checking of account history 2. Alerts on account activity or passing of set thresholds 3. Monitoring of term deposits 4. Access to loan statements 5. Access to card statements . Mutual funds / equity statements 7. Insurance policy management 8. Pension plan management 9. Status on cheque, stop payment on cheque 10. Ordering cheque books 11. Balance checking in the account 12. Recent transactions 13. Due date of payment (functionality for stop, change and deleting of payments) 14. PIN provision, Change of PIN and reminder over the Internet 15. Blocki ng of (lost, stolen) cards Payments, Deposits, Withdrawals, and Transfers 1. Domestic and international fund transfers 2. Micro-payment handling 3. Mobile recharging 4. Commercial payment processing 5. Bill payment processing . Peer to Peer payments 7. Withdrawal at banking agent 8. Deposit at banking agent A specific sequence of SMS messages will enable the system to verify if the client has sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When depositing money, the merchant receives cash and the system credits the client’s bank account or mobile wallet. In the same way the client can also withdraw money at the merchant: through exchanging sms to provide authorization, the merchant hands the client cash and debits the merchant’s account. Investments 1. Portfolio management services 2. Real-time stock quotes 3. Personalized alerts and notifications on security prices Support 1. Status of requests for credit, including mortgage approval, and insurance coverage 2. Check (cheque) book and card requests 3. Exchange of data messages and email, including complaint submission and tracking 4. ATM Location Content Services 1. General information such as weather updates, news 2. Loyalty-related offers 3. Location-based services Based on a survey conducted by Forrester, mobile banking will be attractive mainly to the younger, more â€Å"tech-savvy† customer segment. A third of mobile phone users say that they may consider performing some kind of financial transaction through their mobile phone. But most of the users are interested in performing basic transactions such as querying for account balance and making bill payment. ELECTRONIC FUNDS TRANSFER Electronic funds transfer or EFT is the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. The term is used for a number of different concepts: Cardholder-initiated transactions, where a cardholder makes use of a payment card * Direct deposit payroll payments for a business to its employees, possibly via a payroll service bureau * Direct debit payments, sometimes called electronic checks, for which a business debits the consumer’s bank accounts for payment for goods or services * Electronic bill payment in online banking, which may be delivered by EFT or paper check * Transactions involving stored value of electronic money, possibly in a private currency * Wire transfer via an international banking network (carries a higher fee in North America) * Electronic Benefit Transfer In 1978 U. S. Congress passed the Electronic Funds Transfer Act to establish the rights and liabilities of consumers as well as the responsibilities of all participants in EFT activities in the United States. RTGS Real time gross settlement systems (RTGS) are funds transfer systems where transfer of money or securities[1] takes place from one bank to another on a â€Å"real time† and on â€Å"gross† basis. Settlement in â€Å"real time† means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. â€Å"Gross settlement† means the transaction is settled on one to one basis without bunching or netting with any other transaction. Once processed, payments are final and irrevocable. Fees for RTGS vary from bank to bank. RBI has prescribed upper limit for the fees which can be charged by all banks both for NEFT and RTGS. Both the remitting and receiving must have Core banking in place to enter into RTGS transactions. Core Banking enabled banks and branches are assigned an Indian Financial System Code (IFSC) for RTGS and NEFT purposes. This is an eleven digit alphanumeric code and unique to each branch of bank. The first four alphabets indicate the identity of the bank and remaining seven numerals indicate a single branch. This code is provided on the cheque books, which are required for transactions along with recipient’s account number. RTGS is a large value (minimum value of transaction should be Rs 2,00,000) funds transfer system whereby financial intermediaries can settle interbank transfers for their own account as well as for their customers. The system effects final settlement of interbank funds transfers on a continuous, transaction-by-transaction basis throughout the processing day. Customers can access the RTGS facility between 9 am to 4:30 pm on week days and 9 am to 1:30 pm on Saturday. However, the timings that the banks follow may vary depending on the customer timings of the bank branches. Banks could use balances maintained under the cash reserve ratio (CRR) and the intra-day liquidity (IDL) to be supplied by the central bank, for meeting any eventuality arising out of the real time gross settlement (RTGS). The RBI fixed the IDL limit for banks to three times their net owned fund (NOF). The IDL will be charged at Rs 25 per transaction entered into by the bank on the RTGS platform. The marketable securities and treasury billswill have to be placed as collateral with a margin of five per cent. However, the apex bank will also impose severe penalties if the IDL is not paid back at the end of the day. National Electronic Fund Transfer National Electronic Fund Transfer (NEFT) is an online system for transferring funds of Indian financial institution (especially banks). There is no minimum limit for fund transfer in NEFT system. DEBIT CARDS A debit card (also known as a bank card or check card) is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution. Some cards have a stored value with which a payment is made, while most relay a message to the cardholder’s bank to withdraw funds from a designated account in favor of the payee’s designated bank account. The card can be used as an alternative payment method to cash when making purchases. In some cases, the cards are designed exclusively for use on the Internet, and so there is no physical card. In many countries the use of debit cards has become so widespread that their volume of use has overtaken or entirely replaced the check and, in some instances, cash transactions. Like credit cards, debit cards are used widely for telephone and Internet purchases. However, unlike credit cards, the funds paid using a debit card are transferred immediately from the bearer’s bank account, instead of having the bearer pay back the money at a later date. Debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash and as a check guarantee card. Merchants may also offer cashback facilities to customers, where a customer can withdraw cash along with their purchase. Online Debit System Online debit cards require electronic authorization of every transaction and the debits are reflected in the user’s account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine(ATM) cards. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is becoming commonplace for all card transactions in many countries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may only issue online debit cards. Some on-line debit systems are using the normal authentication processes of Internet banking to provide real-time on-line debit transactions. The most notable of these are Ideal and POLi. Offline Debit System Offline debit cards have the logos of major credit cards (for example, Visa or MasterCard) or major debit cards (for example, Maestro in the United Kingdom and other countries, but not the United States) and are used at the point of sale like a credit card (with payer’s signature). This type of debit card may be subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from which it draws funds. Transactions conducted with offline debit cards require 2–3 days to be reflected on users’ account balances. In some countries and with some banks and merchant service organizations, a â€Å"credit† or offline debit transaction is without cost to the purchaser beyond the face value of the transaction, while a small fee may be charged for a â€Å"debit† or online debit transaction (although it is often absorbed by the retailer). Other differences are that online debit purchasers may opt to withdraw cash in addition to the amount of the debit purchase (if the merchant supports that functionality); also, from the merchant’s standpoint, the merchant pays lower fees on online debit transaction as compared to â€Å"credit† (offline) debit transaction. Prepaid debit cards Prepaid debit cards, also called reloadable debit cards or reloadable prepaid cards, are often used for recurring payments. The payer loads funds to the cardholder’s card account. Prepaid debit cards use either the offline debit system or the online debit system to access these funds. Particularly for companies with a large number of payment recipients abroad, prepaid debit cards allow the delivery of international payments without the delays and fees associated with international checks and bank transfers. Providers include Caxton FX prepaid cards, Escape prepaid cards, Travelex prepaid cards and TransCash prepaid Visa cards. Whereas, web-based services such as stock photography websites (istockphoto), outsourced services (oDesk),money transfer services (Western Union) and affiliate networks (MediaWhiz) have all started offering prepaid debit cards for their contributors/freelancers/vendors. Advantages of debit cards a. A consumer who is not credit worthy and may find it difficult or impossible to obtain a credit card can more easily obtain a debit card, allowing him/her to make plastic transactions. For example, legislation often prevents minors from taking out debt, which includes the use of a credit card, but not online debit card transactions. b. For most transactions, a check card can be used to avoid check writing altogether. Check cards debit funds from the user’s account on the spot, thereby finalizing the transaction at the time of purchase, and bypassing the requirement to pay a credit card bill at a later date, or to write an insecure check containing the account holder’s personal information. c. Like credit cards, debit cards are accepted by merchants with less identification and scrutiny than personal checks, thereby making transactions quicker and less intrusive. Unlike personal checks, merchants generally do not believe that a payment via a debit card may be later dishonored. d. Unlike a credit card, which charges higher fees and interest rates when a cash advance is obtained, a debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge, other than a foreign ATM fee. Disadvantages of debit cards a. Use of a debit card is not usually limited to the existing funds in the account to which it is linked, most banks allow a certain threshold over the available bank balance which can cause overdraft fees if the users transaction does not reflect available balance. b. Many banks are now charging over-limit fees or non-sufficient funds fees based upon pre-authorizations, and even attempted but refused transactions by the erchant (some of which may be unknown until later discovery by account holder). c. Many merchants mistakenly believe that amounts owed can be â€Å"taken† from a customer’s account after a debit card (or number) has been presented, without agreement as to date, payee name, amount and currency, thus c ausing penalty fees for overdrafts, over-the-limit, amounts not available causing further rejections or overdrafts, and rejected transactions by some banks. d. In some countries debit cards offer lower levels of security protection than credit cards. [9] Theft of the users PIN using skimming devices can be accomplished much easier with a PIN input than with a signature-based credit transaction. However, theft of users’ PIN codes using skimming devices can be equally easily accomplished with a debit transaction PIN input, as with a credit transaction PIN input, and theft using a signature-based credit transaction is equally easy as theft using a signature-based debit transaction. e. In many places, laws protect the consumer from fraud much less than with a credit card. While the holder of a credit card is legally responsible for only a minimal amount of a fraudulent transaction made with a credit card, which is often waived by the bank, the consumer may be held liable for hundreds of dollars, or even the entire value of fraudulent debit transactions. The consumer also has a shorter time (usually just two days) to report such fraud to the bank in order to be eligible for such a waiver with a debit card,[9] whereas with a credit card, this time may be up to 60 days. A thief who obtains or clones a debit card along with its PIN may be able to clean out the consumer’s bank account, and the consumer will have no recourse. f. An automated teller machine (ATM), also known as a Cash Point, Cash Machine or sometimes a Hole in the Wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. ATMs are known by various other names including automatic banking machine, cash machine, and various regional variants derived from trademarks on ATM systems held by particular banks. g. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN). h. Using an ATM, customers can access their bank accounts in order to make cash withdrawals,credit card cash advances, and check their account balances as well as purchase prepaid cellphone credit. If the currency being withdrawn from the ATM is different from that which the bank account is denominated in (e. g. Withdrawing Japanese Yen from a bank account containing US Dollars), the money will be converted at a wholesale exchange rate. Thus, ATMs often provide the best possible exchange rate for foreign travelers and are heavily used for this purpose as well Alternative uses Two NCR Personas 84 ATMs at a bank inJersey dispensing two types of pound st erling banknotes: Bank of England noteson the left, and States of Jersey notes on the right Although ATMs were originally developed as just cash dispensers, they have evolved to include many other bank-related functions. In some countries, especially those which benefit from a fully integrated cross-bank ATM network (e. g. Multibanco in Portugal), ATMs include many functions which are not directly related to the management of one’s own bank account, such as: 1. Deposit currency recognition, acceptance, and recycling[61][62] 2. Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc. ) 3. Printing bank statements 4. Updating passbooks 5. Loading monetary value into stored value cards 6. Purchasing 7. Postage stamps. 8. Lottery tickets 9. Train tickets 10. Concert tickets 11. Movie tickets 12. Shopping mall gift certificates. 13. Games and promotional features 14. Fastloans 15. CRM at the ATM 16. Cheque Processing Module 17. Adding pre-paid cell phone / mobile phone credit. Increasingly banks are seeking to use the ATM as a sales device to deliver pre approved loans and targeted advertising using products such as ITM (the Intelligent Teller Machine) from Aptra Relate from NCR. ATMs can also act as an advertising channel for companies to advertise their own products or third-party products and services. In Canada, ATMs are called guichets automatiques in French and sometimes â€Å"Bank Machines† in English. The Interac shared cash network does not allow for the selling of goods from ATMs due to specific security requirements for PIN entry when buying goods. CIBC machines in Canada, are able to top-up the minutes on certain pay as you go phones. TELEPHONE BANKING Telephone banking is a service provided by a financial institution, which allows its customers to perform transactions over the telephone. Most telephone banking services use an automated phone answering system with phone keypad response or voice recognition capability. To guarantee security, the customer must first authenticate through a numeric or verbal password or through security questions asked by a live representative (see below). With the obvious exception of cash withdrawals and deposits, it offers virtually all the features of an automated teller machine: account balance information and list of latest transactions, electronic bill payments, funds transfers between a customer’saccounts, etc. Usually, customers can also speak to a live representative located in a call centre or a branch, although this feature is not always guaranteed to be offered 24/7. In addition to the self-service transactions listed earlier, telephone banking representatives are usually trained to do what was traditionally available only at the branch: loan applications, investment purchases and redemptions, chequebook orders, debit cardreplacements, change of address, etc. Banks which operate mostly or exclusively by telephone are known as phone banks. They also help modernise the user by using special technology. A credit card balance transfer is the transfer of the balance (the money) in a credit card account to an account held at another credit cardcompany. This process is actively encouraged by almost all credit card issuers as a means to attract new customers. Such an arrangement is attractive to the consumer because the new bank or credit card issuer will offer incentives such as a low interest or interest-free period, loyalty points or some such other device or combination of incentives. It is also attractive to the credit card company which uses this process to gain that new customer, and of course detrimental to the prior credit card company. An order of payments for every credit card specifies which balance(s) will be paid first. In nearly all cases payments apply to lowest-rate balances first – highest-rate last. Any balance under a teaser rate or fixed rate will be paid off sooner than any purchases or cash advances (which usually have the highest APR). By avoiding making purchases or taking cash advances altogether, the borrower can ensure they maintain the full benefits of the original balance transfer. The process is extremely fast and can be concluded within a matter of hours in some cases. Automated services exist to help facilitate such balance transfers. Other similar services do exist, but they may not be free to use. USES OF INFORMATION TECHNOLOGY IN BANKS Information Technology uses in Banking sector: – †¢Business banking †¢Retail banking †¢Banking technology †¢Banking environment †¢Card Market Business banking: BMI-Tec Knowledge has been publishing their annual report on Business Electronic Banking for the past 13 years. The report provides valuable year on year trend analysis for the major banks in South Africa. There are two parallel research objectives of the publication, to report on business banking trends and more specific information on each of the electronic banking products offered by the banks. Each year, the questionnaire used for the research process retains a generic core but incorporates changes that reflect the ever changing banking environment and the related impact of technology. The research is focused on business banking and specifically for companies that use an online or electronic banking product in their ay-to-day administration of their business banking administration. The key area of segmentation for this report is by the four major banks in South Africa: Absa, First National Bank, Nedbank and Standard Bank. Other areas of segmentation include size of company by emp loyees and annual turnover and whether these companies are single banked or multi banked. Retail banking: Understanding the financial delivery channels BMI-T has conducted a recent benchmarking study to highlight external expertise and knowledge that is currently available in the ATM and SST environment. From this collated information, the client was able will be able to benchmark their own operations against these parameters. This study assisted the client in identifying and determining the current and potential best practices around ATMs and to see where they are currently placed in this context. The scope of the research covered both local and international perspectives with the international perspective be segmented further by a split between Africa in comparison with the Rest of the World and South Africa Business Electronic Banking in the Small to Medium Business sector BMI-Tec Knowledge has been publishing their annual report on Business Electronic Banking in the corporate sector for the past 13 years. This new report, Business electronic banking in the SMB sector will be a parallel report in order to fully understand both markets; corporates and the SMB sector. There are two parallel research objectives of the publication, to report on business banking trends in the small to medium business sector and provide more specific information on each of the electronic banking products offered by the banks. The research is focused on business banking and specifically for companies that use an online or electronic banking product in their day-to-day administration of their business banking administration. The key area of segmentation for this report is the four major banks in South Africa: Absa, First National Bank, Nedbank and Standard Bank. Other areas of segmentation include size of company by employees and annual turnover and whether these companies are single banked or multi banked. Multi-Channel Banking for Retail Financial Services 2005: BMI-T conducts research in the financial delivery channels to the retail market. This research covers the following issues: †¢The optimum balance between customer experience and lower costs, †¢International overview of financial delivery channels and the road to multi-channel integration, †¢Trends and market drivers and/or inhibitors that have driven the changes in global banks, †¢South African comparison of financial delivery channels and their related offerings from the banks, †¢Comparison of pricing and products and services that are available on each channel from each financial provider, †¢Number of customer points such as ATMs, †¢Number of banking branches and level of change and expected growth for the future. Research to test the future for High-value-low frequency channels or low-value-high frequency channels, current and future usage patterns of financial delivery channels from the South African retail customers (which channels, frequency, timing and for which transactions plus trend analysis with past annual data). Ban king technology: South Africa is in many ways a global leader in the adoption and use of technology to improve competitiveness and de How to cite Comparative Analysis of Private, Public Banks, Essay examples

Cyber Security Smart Survey And Challenges â€Myassignmenthelp.Com

Questions: What Is The Impact Of Cyber-Security Challenges On The Business? What Strategies Can Be Developed To Deal With Cyber-Attacks? Answers: Introduction The proposed research is based on the challenges and issues observed in cyber security for the business in the recent time. It has been observed that businesses are now fully depended on the technology, which means that due to the technological advancement, the ways of leading the business in a dynamic environment has become quite easy for the marketers. However, even though, the technology plays a big role in todays modern business, due to the loophole in the technologies, the businesses often face external threats such as stealing valuable information, anonymous access to bank accounts or organizations official sites and other cyber attacks. According to Aloul et al., (2012) ICT devices as well as elements are largely interdependent and disrupt of one could affect many others. The Information Technology experts and the policy makers have expressed their concern regarding the protection of businesses from the cyber attacks. Here, the acts of protecting the ICT system as well as thei r contents are considered as cyber security. In this report, a detail about the proposed research has been discussed elaborately. The report presents the idea how the research is going to be conducted. The report provides the project scope, which includes the determining and documenting a list of particular project goals, features, tasks, deadline and other significant factors. Likewise, the report also includes the key objectives of the proposed research. Considering the background to the research, the research questions and objectives have been provided in this report. Furthermore, the research report also includes a set of research techniques that will be applied to the proposed study. Background to research Several studies have been conducted to learn the impact of the issues related to cyber-security on businesses. The current scenario indicates that the marketers rush to implement all policies related to cyber security to protect their business from the external threats. It is observed that the federal role in cyber security includes both securing federal system as well as assisting in preserving the non-federal systems. A study conducted by Busch and Givens (2012) mentioned that protecting the valuable intellectual property as well as the business information in the digital form against the theft as well as misuse remains as the critical management issue. Dunn Cavelty (2013) indicated in their study that organization must have to fend off the regular cyber-attacks and the threats of cyber criminal. Dumitras and Neamtiu, (2011) mentioned that sophisticated organizations have recently endured the public breaches to their technological environment and many incidents went unreported but the marketers are not eager to advertise or describe the vulnerabilities. On the other side, the study conducted by Liu et al. (2012), mentioned that most large organizations have gradually reinforced their cyber security capabilities over the past few years. Nonetheless, due to this argumentative outcome, the present study observes the importance of conducting an investigation on cyber security challenge and its impact on the businesses. Project Scope Understanding the importance of examining the impact of cyber-security on business, the proposed research has been framed with a primary analysis. This will help to conduct the analysis with the practical evidences. The proposed study abandons the secondary analysis because the research might not provide an authentic outcome that is related to the real-world context. In order to conduct a primary analysis, an organization- Australian National Bank will be considered as the case study organization in the proposed study. Moreover, the proposed study also focuses on the existing studies conducted on the same topic. In order to conduct the literature review, 20 journals have been considered and hence, the analysis will help to find out the gaps in the previous studies. In addition to this, to collect the primary data, a survey and interview will be conducted among the employees and senior executives of Australian National Bank. However, the research is restricted to primary analysis only , any sort thematic and comparative analysis will not be included in the proposed study. Eventually, a research time line has been provided in the following, which shows how the research has been scheduled to be conducted. Project Objectives and aim The major aim of the study is to examine the impact of cyber-security challenges and issues on the business organizations. The following are the key objectives of the research: To critically investigate the impact of cyber security challenges on the business To critically understand the importance of protecting the business information from the cyber attacks To develop suitable strategies to resolve the cyber-security issues Research Hypotheses H0-Cyber security challenges have no impact on the businesses H1- Cyber security challenges have impact on the businesses Literature Review Many studies have been conducted on cyber security challenges and their impact on the businesses. Each study has been framed with variety of requirements and techniques; thereby, the outcome of the study came out to be different. The study conducted by Bonaci et al., (2015) mentioned that as the technology is continuously growing to develop, the opportunities and challenges also come out. However, as the society that runs widely on the technology, the business, as the consequences are dependent on it. The technology also brings the greater threats. According to Wang and Lu (2013), by the very nature of the opportunities, the technology presents, the technology becomes a focal point for the cyber attacks and threats. Sridhar, Hahn and Govindarasu (2012) particularly focused on the threats of data manipulation, identify theft and cyber-warfare that have a strong impact on the businesses. Moreover, the studies claim that as the world environment transitions large amount of products and service online, the people in turn depend on them. Protecting this technology infrastructure has now become a fundamental building block for the information system internationally. It is understood that existing studies have focused on the type of threats and attacks occurred in the businesses through the technological adoption but the studies have hardly provided any relevant outcome in terms of the strategies. However, an in-depth literature review will be conducted considering 20 different journals conducted on the present topic. Research Methodology Research methodology determines the outcome of the study, which means the implementation of the techniques determine the result of the study. In order to conduct the proposed study, appropriate primary research techniques will be applied to the study. The type of methods will be applied to the study has been discussed in the following. Data collection methods The data collection is usually divided into two different categories primary and secondary data collection. Primary data collection- The primary data collection method is categorized into two different groups such quantitative and qualitative data collection. It is observed that quantitative data collection techniques are based in mathematical calculation in different formats. In the proposed study, the primary data collection techniques include the questionnaire with the close-ended questions such as the method of correlation, mean, mode, median and others. On the contrary, the qualitative research method does not consist of number and mathematical calculation and this method is rather related to emotion, sounds, voices and other relevant elements. This research methodology focuses on the level of depth of understanding. In the proposed study, the quantitative data collection involves the survey method, which will be conducted among the employees of Australian National Bank. Conversely, for collecting qualitative data, interview method will be applied to the proposed study. However, for c onducting the survey and interview, a particular sampling method will be applied, which is discussed in the following. Secondary data- The secondary data will be used for conducting the literature review in the proposed study. Almost 20 journals have been selected for conducting the literature review. The secondary data will be collected from the journals, books, blogs, newsletter, annual report and other reliable secondary sources. Apart from the collection of data, reliability and validity of the papers will also be checked. Sampling method As put forward by Babbie (2010), sampling can be described as the particular principle applied to make the choices of members of population to be included in the research. It is also appropriately noted that as many population interest are very large to work directly. It can be mentioned that because of the brad size of target population, the studies do not have any choices besides to research a number of case elements in the population to present the population and reach the population. For the proposed study, the sampling has been categorized into two different categories such as probability and non-probability sampling. In probability sampling, every individual of the population has less or zero chance of being involved in the study. On the other side, non-probability samplings are chosen on a non-random manner; thereby, not each population member has a chance to take part in the study. However, in the present study, both probability and non-probability sampling method will be applied. The probability sampling method will include the general employees of Australian National Bank. Hence, the employees are eligible for the survey because they do not need much knowledge about the occurrence of cyber threats and challenges and their impact on the businesses. Conversely, the non-probability sampling method will include IT executives and managers of Australian National Bank; certainly, they have much knowledge about the type of threats, attacks, thefts and other relevant technological attacks. Thereby, the managers and the executives are the perfect the suitable individuals among all type of population. This means, the proposed study will include a mixed sampling method. The sample size for the proposed survey and interview is 100 employees and 5 managers respectively. It is identified that reliability and validity should be tested and clarified before applying the method s to the study. Research reliability and validity As put forward by Wilson (2010) the reliability is referred to the extent to which the same response can be derived with the help of the same instruments many a time. The outcome of the proposed study will be reliable because if the analysis is made using the same interview and survey method. Therefore, in future when other researchers will conduct the research on the same topic, they could derive the same result with interview and survey methods. In this context, Babbie (2010) mentioned that reliability revolves around the source and it is mostly associated with the subjectivity. On the contrary, the data that will be collected for analysis is validity because to conduct the research, appropriate time scale of the research along with appropriate research method will be selected. In addition, to conduct the study, the most suitable method for the research will be selected. Whenever, the study will be conducted with such similar methods, the same response will come out. Moreover, it i s not possible to eliminate the threats to studys reliability and validity but it is ensured that much effort will be put to minimize as much risk as possible. Research Limitation The proposed study is limited to primary analysis only; this means that no thematic and comparative analysis will be conducted in the proposed study. In addition to this, sample size for the proposed study is very constrained. The study will be conducted considering one single organization only, but the study would be more intensive, if a comparative is conducted. Research Timeline Main activities/ stages Month Aug- Month Sep-Dec- Month Jan-march- Month April-July- Month August-September- Month October Topic Selection Data collection from secondary sources Framing layout of the research Literature review Formation of the research Plan Selection of the Appropriate Research Techniques Primary data collection Analysis Interpretation of Data Collection Conclusion of the Study Formation of Rough Draft Submission of Final Work Table 1: Research Timeline Conclusion In conclusion, it can be mentioned that the proposed study will provide a desired result because all relevant methods will be applied to the study. In addition to this, the literature review will help to focus on the relevant areas as previous studies have missed out several relevant factors. However, in the proposed study, those factors will be covered References Aloul, F., Al-Ali, A. R., Al-Dalky, R., Al-Mardini, M., El-Hajj, W. (2012). Smart grid security: Threats, vulnerabilities and solutions.International Journal of Smart Grid and Clean Energy,1(1), 1-6. Babbie, E. R. (2010) The Practice of Social Research, Cengage Learning Bonaci, T., Herron, J., Yusuf, T., Yan, J., Kohno, T., Chizeck, H. J. (2015). To make a robot secure: An experimental analysis of cyber security threats against teleoperated surgical robots.arXiv preprint arXiv:1504.04339. Busch, N. E., Givens, A. D. (2012). Public-private partnerships in homeland security: Opportunities and challenges.Homeland Security Affairs,8(1). Choo, K. K. R. (2011). The cyber threat landscape: Challenges and future research directions.Computers Security,30(8), 719-731. Dumitras, T., Neamtiu, I. (2011). Experimental Challenges in Cyber Security: A Story of Provenance and Lineage for Malware.CSET,11, 2011-9. Dunn Cavelty, M. (2013). From cyber-bombs to political fallout: Threat representations with an impact in the cyber-security discourse.International Studies Review,15(1), 105-122. Line, M. B., Tndel, I. A., Jaatun, M. G. (2011, December). Cyber security challenges in Smart Grids. InInnovative Smart Grid Technologies (ISGT Europe), 2011 2nd IEEE PES International Conference and Exhibition on(pp. 1-8). IEEE. Liu, J., Xiao, Y., Li, S., Liang, W., Chen, C. P. (2012). Cyber security and privacy issues in smart grids.IEEE Communications Surveys Tutorials,14(4), 981-997. OConnell, M. E. (2012). Cyber security without cyber war.Journal of Conflict and Security Law,17(2), 187-209. Sridhar, S., Hahn, A., Govindarasu, M. (2012). Cyberphysical system security for the electric power grid.Proceedings of the IEEE,100(1), 210-224. Wang, W., Lu, Z. (2013). Cyber security in the Smart Grid: Survey and challenges. Computer Networks, 57(5), 1344-1371. Wilson, J. (2010) Essentials of Business Research: A Guide to Doing Your Research Project SAGE Publications

Ben Franklin Biography/Critique Essays - Benjamin Franklin

Ben Franklin Biography/Critique Ben Franklin: Early Life In his many careers as a printer, moralist, essayist, civic leader, scientist, inventor, statesman, diplomat, and philosopher, for later generations of Americans he became both a spokesman and a model for the national character. He was born in Boston, Massachusetts on Jan. 17, 1706, into a religious Puritan household. His father, Josiah, was a candlemaker and a skillful mechanic. His mother, Abiah Ben's parents raised thirteen children--the survivors of Josiah's seventeen children by two wives (#1). Printer & Writer Franklin left school at ten years old when he was pressed into his father's trade. At twelve Ben was apprenticed to his half brother James, a printer of The New England Courant. He generally absorbed the values and philosophy of the English Enlightenment. At the age of 16, Franklin wrote some pieces for the Courant signed Silence Dogood, in which he parodied the Boston authorities and society (#3). At one point James Franklin was imprisoned for his liberal statements, and Benjamin carried on the paper himself. Having thus learned to resist oppression, Benjamin refused to suffer his brother's own domineering qualities and in 1723 ran away to Philadelphia (#1). Soon Franklin found a job as a printer. After a year he went to England, where he became a master printer, sowed some wild oats, amazed the locals with his swimming feats, and lived among inspiring writers of London. By 1726 Franklin was tiring of London (#1). He considered becoming an itinerant teacher of swimming, but when a Quaker merchant by the name of Thomas Denham offered him a clerkship in his store in Philadelphia, he decided to return home (#5). Returning to Philadelphia in 1726, he soon owned a newspaper, the Pennsylvania Gazette, and began to print Poor Richard's Almanac. In the Pennsylvania Gazette, a citizen asked editor Franklin the following question: If A found out that his neighbor B was sleeping with his wife, was he justified in telling B's wife, and persuading her to seek a little revenge with A? The editor's response: If an ass kicks me, should I kick him again? (#4) His business expanded further when he contracted to do the public printing of the province, and established partnerships with printers in other colonies. He also operated a bookshop and became clerk of the Pennsylvania Assembly and postmaster of Philadelphia (#3). Civic Leader & Scientist In 1727, Franklin began his career as a civic leader by organizing a club of aspiring tradesmen called the Junto. They aspired to build their own businesses, insure the growth of Philadelphia, and improve the quality of its life. Franklin led the Junto in founding a library (1731), fire company (1736), learned society (1743), college (later the University of Pennsylvania, 1749), and an insurance company and a hospital (1751). The group also carried out plans for paving, cleaning, and lighting the streets and for making them safe by organizing an efficient night watch. They even formed a voluntary militia (#1). Franklin had steadily extended his own knowledge by study of foreign languages, philosophy, and science. He repeated experiments of other scientists and added his own ideas that led to inventions of the Franklin stove, bifocal eyeglasses, and a glass harmonica. The phenomenon of electricity interested him deeply, in 1748 he turned his printing business over to his foreman, intending to devote his life to science (#5). Experiments he proposed, showed that lightning was in fact a form of electricity. Later that year his famous kite experiment, in which he flew a kite with the wire attached to a key during a thunderstorm, further established that laboratory-produced static electricity was akin to a previously mysterious and terrifying natural phenomenon (#1). He was elected to the Royal Society in 1756 and to the French Academy of Sciences in 1772(#3). His later achievements included formulating a theory of heat absorption, measuring the Gulf Stream, designing ships, and tracking storm paths. Statesman & Diplomat Franklin held local public offices and served twelve years as a postmaster for Philadelphia. In the Plan of Union, which he presented (1754), to the Albany Congress, he proposed partial self-government for the American colonies. When he went to England in 1757 as agent of the Pennsylvania Assembly, he was alarmed to hear

Role of Women in My Antonia Essay Example

Role of Women in My Antonia Essay Example Role of Women in My Antonia Paper Role of Women in My Antonia Paper Essay Topic: Literature In Willa Cathers novel, My Antonia, there is a distinct difference in the roles of women. One sees the female characters taking on not so feminine roles by working in the fields or playing in the dust and dirt with boys. We also get to see a great independence for women as they get jobs and raise families. Willa Cather could very well have been a blossoming feminist in her time since she crumbled the stereotypes of women and boldly placed them in positions of power. She made not only the main female character of this book, Antonia, but all of the women reject society rules and have the confidence to make their own decisions about what to do with their lives. Willa Cathers novel really escapes from the societal norm of women at the time and replaces it with female characters unbound by stereotypes. Running a business, unheard of for women at that time, yet Cather has one of her characters, Lena Lingard, practice dress making. She eventually gets a job and starts selling what she makes. This eventually leads to her running her own store and having a well-respected place in society. It is worth noticing that Cather doesnt put her in the position of struggling to keep her business going but as being successful and happy. It seemed to me wonderful that she should have got on so well in the world (Cather, 171). Cather also included several other characters that embodied a strong independent woman like Mrs. Gardener. It was Mrs. Gardener who ran the business and looked after everything. Her husband stood at the desk and welcomed incoming travelers. He was a popular fellow, but no manager (Cather, 117). With Mrs. Gardener she had her running the business and the husband doing all the petty work, effectively switching gender roles. Lastly she writes a couple pages on what happened with Tiny Soderball, who went up north during the gold rush and ran a hotel-like business from there. There she sometimes fed a hundred and fifty people a day. Miners came in on snowshoes from their placer claims 20 miles away to by fresh bread from her, and paid for it in gold (Cather, 193). We also see a swap in gender roles here where all of these men are depending on a woman instead of the other way around. Cather really breaks women free of stereotypical bonds and has them makes their own independent choices. Miss Cather, I think, in this book has taken herself out of the rank of provincial writers and given us something we can fairly class with modern literary feminism (Bloom, 5). Country women in the novel were not confined to staying inside and caring for the children while making dinner. Antonia is the perfect example of this because, early on, we see that she is a lively young girl whose youth is not yet affected by the social norms of that time. Antonia had opinions about everything, and she was soon able to make them known (Cather, 22). When her father died she had to take up labor in the fields to help her family survive. She didnt complain about it like Ambrosch did, it seemed very much like Ambrosch did very little work and just spent his time bossing her around. Ambrousch hired his sister out like a man, and she went from farm to farm, binding sheaves or working with the threshers. (Cather, 95). Throughout the novel, Antonia was probably the one who did the most work out of anyone. In the end when Jim returns to meet her we find out that she is still working even after she has born numerous children. Though Antonia seems old and worn shes still the happy, energetic kid Jim remembers from his childhood. Antonia had not lost the fire in her life. Her skin, so brown and hardened, had not that look of flabbiness, as if the sap beneath it had been secretly drawn away. (Cather, 217). Cather had her be the vision of a woman who could still be proud even after a life of hardship. Cathers use of the daughters being the main lifeline for families switches the roles between them and the sons (Bloom, 17). Bloom brings up a very good point in that the families often relied on their daughters for support rather than their sons. Frances was the oldest daughter of the Harlings. Frances, was a very important person in our world. She was her fathers chief clerk, and virtually managed his Black Hawk office during his frequent absences (Cather, 97). Antonia was the Shimerdas communicator for the outside world and she also worked in the fields to support her family when her father died. When Lena, Tiny and Antonia went to Black Hawk for work they always sent the money back to their families, keeping only enough to get by for themselves. Antonia seemed fine with this and often bragged how much ploughing she had done that day. (Cather, 118). So, where were the boys while the females labored tirelessly? They were almost never out in the fields working, they were just in school. Other farmers greatly approved of women working to support their family and saw nothing unusual with women doing a mans job. The farmers liked her and were kind to her, said they would rather have her for a hand than Ambrousch (Cather, 95). Women could do more than just stay inside and cook, they could do hard labor and have jobs just like any man could. Willa Cather portrayed all of her women characters as strong roles models ready to combat whatever came their way. They could run business, work on the farm and raise a family all by themselves. These women were not affected by societys beliefs, stereotypes bounced off them as they went on their way, being just as capable as men. They were independent and could lead their own lives. Cathers novel helps pave the way for women equality everywhere. (Bloom, 2).

Horror movie- Man versus monsters Essay Example | Topics and Well Written Essays - 2250 words

Horror movie- Man versus monsters - Essay Example An all-time rival of Mr. James Devin- The neighbor of Mr. James who also does fishing. Martha- An old superstitious neighbor of Mr. James. She is a widower who lives alone with her numerous cats. Plot The movie starts with Mr. James on the lake in his boat. It is late in the afternoon and Mr. James is fatigued with the day’s work. He harms his usual favorite tune as he goes about his final fishing of the day. Devin, his childhood friend and a neighbor, is watching from the sides of the lake as he smokes tobacco from his pot. Somehow Mr. James’ vessel stops to move and he does not understand why. He tries to speed up the engine but all is in vain as the boat rocks up and down from the forming waves in the lake but does not move a single inch forward. From the shores of the lake, Devin spots the mayhem that is going on in the lake. He stands up and looks on more keenly and closely. He discovers that Mr. James is indeed in some kind of a limbo and that not all is well with him. He shouts at the top of his voice inquiring on how Mr. James is faring. His voice is however drowned by the sound of the roaring engine of the vessel which Mr. James is trying to speed up so as to get off the stuck position. â€Å"James, are you alright?† shouts Devin over and over again. After struggling with the vessel for some four or so minutes, Mr. James decides to find out what is getting the vessel stuck and to deal with it at once. Over the years of his fishing endeavors, Mr. James has come about such instances but every time the vessel would veer off the path of whatever was getting it stuck if the engine was speeded up. This does not seem to work this time round and it got Mr. James a little bit nervous. As Mr. James approaches the side of the boat to check out the state of the water surrounding the boat, the entire vessel is abruptly lifted up and it comes down tumbling in the water in a capsizing position. Devin gets all jittery as he is helplessly watching Mr. James going into the water with his head first. Mr. James has been brought up near the lake and he has very perfect swimming skills. He drops into the water and recollects his senses, then immediately tries to come up above the level of the water and swim to the shore. He feels something pulling his leg down in a manner that would definitely get to drown him. He uses his left foot to kick the foreign creature that is pulling him down. The first sight of the monster flashes on the screen for seconds as it is shown receiving the kick blow from Mr. James and letting him loose. As proposed by Kleeblatt (58), this is a perfect way of introducing a key element in a film. Apparently, Mr. James gets to kick the monster in his left eye and it loses its composure. Devin jumps into the water and helps James as he is swimming outside. They get to the shore and both can not tell what exactly has attacked them. The winds drive the James’ boat to the shoreline and it spends the night th ere unmanned. James and his neighbor Devin go home with no fish and with very frightened faces. Soon, the story of the ordeal that has happened at the lake gets to the entire locality. People have mixed reactions concerning the story. Most of the people find it difficult to believe that the story has indeed happens. Some believe in it partially, but still leave some room for doubt. The James’ old neighbor Martha is among those who have a very weird explanation of the ordeal. She believs that the story

Short Literature Review and Project Specification Essay

Short Literature Review and Project Specification - Essay Example However, as yet no study has been conducted to verify the above claims of kiosk vendors. Using a kiosk system, the customers are relieved from standing in the queue for getting a product or service (Whitech Solutions, n.d.); rather they can use the self service feature that is provided by the kiosk system at POS sites to reduce the response time that is otherwise on a higher side in traditional systems. A company needs to adopt an organized approach for implementing a kiosk system at its POS sites. This strategic IT decision should be taken after careful analysis of costs and the perceived expected benefits of the implementation. The site, technology, type of kiosk to implement, the hardware and software requirements, the vendors and strategic partners for the implementation are needed to be identified well before the actual implementation gets underway. As with any strategic IT implementation, the Return On Investment (ROI) must be calculated for this decision as well. However, since a number of qualitative factors are involved in this scenario, it is relatively a bit difficult to do a quantitative analysis to determine the degree of effectiveness and efficiency that a kiosk will provide to the business. This inherent limitation requires the organization to apply a focused effort to carefully examine and evaluate different criteria that it believes will have an impact on the overa ll implementation. 1.3 Managing the Change Although it is believes that kiosks add value to the business, yet the implementation needs to be monitored and supervised. A great technology with great potential in a great market will be useless if there is lack of support for it by employees and customers (Mitra, 2007). The project should be appropriately managed taking the employees into confidence that there jobs will not be at stake once the new system gets implemented. In addition, they need to be assured that the new system will actually assist them in improving their performance; for instance, installing a self service kiosk at a retail store will reduce the queue at the till, thus allowing the customer service personnel to give more time to each customer, and improve the quality of customer service; which will ultimately be reflected in his/her appraisal. 1.4 Benefits of Kiosk Implementations Kiosks have been implemented in organizations of all sizes, forms and belonging to various industries (Harris, 2006, p.1). The goal of any kiosk implementation can range from more sales, improved services to customers, controlling human resource related cost overheads, and create customer loyalty by offering an attractive, fast and responsive self service technique. 1.5 Issues with Kiosk Implementat