Question- Discuss the forms of e-banking.

Ans.

Forms of E-Banking

Electronic banking reduces cash handling and transport costs, lowers the risk of theft or counterfeit bank notes, increases speed and enhances the comfort of making payments. E-banking is convenient, faster, and often cheaper for clients. It is suitable to use combinations of several communication means, depending on individual segments, clients, and types of operations, products and situations.

E-banking is divided on the basis of the instruments used telephone connection, personal computers, means of payment [bank cards] and self-service zones.

1. E-Banking Using a Telephone Connection : Telephone banking and the first banking services using classic telephone lines for communication date back to the turn of the end of the last century. At the close of the 20th century mobile phones also started to be used in banking. A mobile phone can be used to communicate with a so-called telephone banker or an automated telephone system. E-banking using a telephone connection is divided into phone banking (ATS, client advisor) and mobile banking (SMS banking, GSM SIM Toolkit and WAP).

2. SMS Banking : SMS banking uses short text messages sent through the client's mobile phone. SMS text messages can be used for both passive and active operations similarly as with classic telephone banking. A client can automatically receive information about his account balance: an SMS is sent to the client immediately after a certain operation is performed, or on request: a client sends the bank a correctly formatted message which processes it and answers the client's request by SMS. Information sent on request mostly concerns current interest rates or currency exchange rates. Providing these is simple for the bank because this is publicly accessible information. It is a type of mobile banking. It is a technology-enabled service offering from banks to its customers, permitting them to operate selected banking services over their mobile phones using SMS messaging.

3. GSM SIM Toolkit : For it the client needs to be using services of an operator supporting this standard in its network, be a client of a bank that offers handling of accounts through the GSM SIM Toolkit, have a mobile phone supporting GSM SIM Toolkit technology and use a special SIM card. After buying a special SIM card the client can begin using this service. The mobile phone menu will be widened to include the Banking Services item, through which it is possible to carry out active or passive banking operations. To access banking services it is necessary to know BPUK (PUK for banking applications) and BPIN. BPUK is assigned to a client by the bank when the application is activated and recorded on the mobile phone's SIM card. BPIN is used for every access to protected items in the banking application. When a client makes three unsuccessful attempts to type the BPIN, access to the banking application and its items is blocked, it is necessary to know the BPUK to unblock it. When the client fails ten times to type the right BPUK the SIM card can no longer be used for banking services. The main advantage of this service is its simplicity. A client just follows instructions on the mobile phone. The GSM SIM Toolkit service can only be used from a mobile phone. This Toolkit is a software interface that enables arbitrary changes to the mobile phone menu. Operators supporting this technology can use it to personalize mobile phone menus.

4. E-Banking using Personal Computers : Personal computers have greater and modernize banking service provision. This instrument plays an irreplaceable role and is indispensable for the present day banking sphere. The area of electronic banking realized through personal computers can be divided into home banking, internet banking and mail banking. A home banking consists of two parts: a bank computer program and a program in the client's computer. The bank program works as a server. It receives calls from clients, verifies their identity, receives data from them, authenticates digital signatures, generates digital receipts and sends data to clients. A home banking computer system is a multi user application, meaning that several of the client's employees can work with it. Home banking is a service that enables a bank client to handle his accounts from a computer from a place selected in advance, at home or in the office. The main features of home banking systems are the high level of security, comfort, simplicity of use, openness of the system, networking, definition of users and their rights, automated data transmission etc.

In Internet banking banks protect large volume transactions with additional security means, such as an encryption (authentication) calculator, or a token, which generates nonrecurring random passwords, which a client types on confirming an order. The token itself is protected by certain security features. Work with it is only enabled after the client types a four-digit PIN code, whereby the user can change the PIN at any time. In the event of three failed attempts to type the correct PIN the token blocks itself. After 60 seconds of inactivity a token automatically switches itself off and once switched back on, it again requests the PIN.

Mail banking makes it possible to communicate with the bank by e-mail. The most frequently used service is sending account statements at agreed periodicity to the client's mailbox.

5. M-Banking : It is also known as mobile banking or m-banking. It is. 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.

6. Wireless Application Protocol (WAP) : WAP is a form of gateway to various services prepared by a mobile network operator or another firm. One condition for using the service is that the client must have a mobile phone supporting WAP technology. This banking has not caught on very well so far, some banks however continue to offer it. WAP presents its output on a small mobile phone display, therefore concentrating on text information.

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