Internet banking applications - Research Paper Example

?Overview of Internet Banking Applications Aims of the Dissertation As soon as technology bulged out from the conventional manual working trends, people who were tired of time consuming repetitive tasks obliged, and accepted it. That is the sole reason behind technology gaining sudden fame and it is only the charisma of technology that the power of mainframes is now present in handhelds. Such rapid advancement in technology was due to man’s eagerness and need of making things work on his fingertips. Technology, soon after its introduction in the markets and after the revelation of its endless benefits became a necessity for everyone. From MNCs to home users, technology is everywhere. The usage of technology of course is different with everyone but the truth is that it is used everywhere in some capacity or the other (Heidegger, 1982). Banking is one of the oldest businesses in the world. Since the evolution of human mind, human beings are constantly involved in making transactions and carrying out trade and business. Slowly but steadily, the banking system also gained popularity and became popular. This meant that the clientele of each bank were increasing exponentially. Therefore, banking theories and studies became a crux part of finance and accounting curriculum. It was soon realized that banks should use the numeric computation and storage power of computers to enhance their business processes. This made competition stiffer and this is by virtue of this competition that value added services were introduced by banks. These value added services such as ATM’s and Internet Banking not only provided the banks competitive edge but also first mover advantage. This influx of technology not only introduced several different technologies at the workplace but also ensure that banks were making great sales as customers were willing to pay more for these value added services (Ghaziri, 1998). The term ‘Internet Banking’ was coined in 1980’s (Scholasticus, n.d.) but it’s no more a technical jargon these days as even basic customers who have very little knowledge of internet can use this technology to make financial transactions. This idea of doing online transactions got very modest reception when it was first launched primarily because of high internet costs and the vulnerability of such applications. The idea of virtual transactions didn’t appeal the conventional users but time proved them, otherwise. The aim of this dissertation is to do a threadbare analysis on internet banking applications that are currently in use in the industry. Some relevant questions that we will look to answer are: How actually these internet banking applications work? Are these applications really worth it? How these internet banking applications have evolved over the period of time and what extra features are now available in these applications? These questions will just act as the starting point of our research and will be answered comprehensively. Moreover, a peep into currently used architectures and applications themselves will also be a point of focus throughout our studies. 2. Objectives The objectives of this research are clearly elicited and they will help in providing a broader overview of the complete architecture that is normally being deployed in a bank. To calculate ROI generated because of this value added feature To perform trend analysis on different internet banking applications To determine different KPI’s that will help us analyze an internet banking application’s efficiency To study the general 3-tier architecture of a complete internet banking application To study factors that can further enhance an internet banking application To study peripheral applications that work with mainstream Internet Banking application To examine other channels that interact and study if they can work in line with the internet banking application To determine factors that can affect internet banking software’s performance 3. Background The forerunner of the modern times, Internet Banking was started as distance banking services which was performed through electronic media (Cronin, 1997). After the expected popularity of distance banking services, it was expected that the advent of online banking was near and right after the inception of distance banking; online banking was introduced in 1980s. At that time, banking systems were accessed through the help of local phone lines, keyboard and a TV. This was the breakthrough banking industry was precisely waiting for. Technology improved, thereby reducing the cost of hardware acquisition and installation. The official introduction of online internet banking services was first offered by the Stanford Federal Credit Union to all its account members in 1994 (Shareef, Archer & Dutta, 2011, 182). Since then, different internet banking applications have been released and many more are in beta stage coupled with new features that will provide non-imaginative ease to the user. Nonetheless, the question of optimality with compatibility of these Internet Banking Applications is still at its place. And if at all optimality with compatibility cannot be achieved, than what is the best way possible to utilize these Internet Banking Applications. What are the features that can be added to maximize the benefits and usage of these applications to the bank and its customers? 4. Literature Review Internet Banking is now an integral arm of banking industry and is considered a core banking application. In order to discuss everything about Internet Banking applications, it is necessary to get fully conversant with the fundamentals of whole banking system and application layout and architecture first. These Internet Banking Applications through which customers access their accounts information online and perform trivial and non-trivial channels are basically delivery channels. The term ‘delivery channel’ in banking terminology is a source through which customer interacts with a host. These channels are basically connected with the host through a middleware. Host is the main core banking application capturing every single financial transaction that takes place in a particular bank, whereas, a middleware acts as an intermediary between a core banking applications (host) and different delivery channels (Internet Banking, ATM and One Link) (Online Banking, 2012). Some popular core banking applications (hosts) that are widely used in the industry are Misys, Oracle Financials, Diasoft and Temenos (Inntron, 2012, 1). These are some hosts that have a larger market share and are widely used in banks all over the world. These hosts (core banking applications) are then connected to a middleware that allows these hosts to interact with different channels. The middleware is actually responsible for connecting with the authentication and security modules, thus, limiting hosts work to core banking transaction only. It is obvious that without middleware, both, the core banking applications and channels cannot perform their functions properly. The most popular and prevailing middleware in the industry are Rendezvous, Web Sphere and Castanet. These middleware are responsible for landing user response and transmitting requests to the core banking software. Middleware are perhaps the most flexible software in this 3-tier architecture (Fong & Hui, 1999). These prevailing hosts and middleware are then supported by the main Internet Banking application like Fundamo or iBank. These applications provide the bank customers with value added services such as the funds transfer, bill payment, top-ups and other financial and non-financial transactions. These features of course vary with different software but still the basics of a typical internet banking application remain the same. These applications are flexible enough to accommodate wrappers that can be coded to directly interact with them in case an ad hoc query needs to be answered. There has been tremendous improvement in the way these systems have evolved over the period of time. They are much more secure and robust now. Although, this doesn’t really mean that bugs are completely absent from these applications. The 3-tier structure actually means that there can be bugs at three different levels and bug at any level can severely impact the performance of internet banking application. Therefore, there is a need to align all the three software for the successful implementation of an internet banking project. 5. Research Methods The prime focus of this research paper is to provide a general overview of Internet Banking Application and how these applications can be made more useful. In order to accomplish this mission, it is necessary to use both qualitative as well as quantitative analysis. Qualitative research analysis will help improve the quality and features of these applications, whereas the quantitative figures will reflect the true status of performance of these applications in the market (Chantler, 2011). To cater to different scenarios, different methods of collecting exploratory data will be employed. These methods will include interviews, ethnographic sessions, focus groups, surveys and questionnaires. For quantitative data collection, we can float self-supervised close ended specific questions for a specific target audience. These questionnaires can be online and can be hosted at either Google Docs or Survey Monkey. These questionnaires will be designed according to the organizational structure with the top level management being given a chance to comment and provide suggestions on open ended questions whereas the customers or end users were given close ended questions so that their feedback can be properly quantified. This demarcation will help us to bridge down the requirements of both, users and administrators of this system. 6. Research Design The collected data through these exploratory mechanisms will be used for qualitative analysis as well. In this procedure, certain data variables will be given more weight age on other and data will be trained in a manner to test incoming data. This study is very useful as it will help to list down errors and will also extract out the refined changes that needs to be incorporated in a current Internet banking application. Statistical measure such as confidence level and z-scores will be set according to the sample size and people who want to be a part of this research activity. Random sampling will be done as it will take care of most biases among the target audience. For authentication, all selected employees and customers will be required to sign off the surveys. All the information will be kept confidential. Statistics from these data collection methods will be analyzed via SPSS and SAS (SPSS and SAS for Statistical Analysis, 2012). Regression Analysis will be done to reduce distortion and Chi-Square will check the dependence or inter dependence of data. Co-relations will be studied and data will be preserved by means of a data warehouse for other researchers to work upon it. 7. Project Plan Research Proposal - Gantt Chart Objectives Start Date Duration (Days) End Date Objective 1 10/1/2012 20 10/21/2012 Task 1 10/1/2012 10 10/11/2012 Task 2 10/11/2012 10 10/21/2012 Objective 2 10/21/2012 21 11/11/2012 Task 1 10/21/2012 7 10/28/2012 Task 2 10/28/2012 7 11/4/2012 Task 3 11/4/2012 7 11/11/2012 Objective 3 11/11/2012 20 12/1/2012 Task 1 11/11/2012 10 11/21/2012 Task 2 11/21/2012 10 12/1/2012 Objective 4 12/1/2012 20 12/21/2012 Task 1 12/1/2012 10 12/11/2012 Task 2 12/11/2012 10 12/21/2012 Christmas Holidays 12/22/2012 16 1/6/2013 Objective 5 1/6/2013 20 1/26/2013 Task 1 1/6/2013 10 1/16/2013 Task 2 1/16/2013 10 1/26/2013 Objective 6 1/26/2013 20 2/15/2013 Task 1 1/26/2013 7 2/2/2013 Task 2 2/2/2013 6 2/8/2013 Task 3 2/8/2013 7 2/15/2013 Objective 7 2/15/2013 20 3/7/2013 Task 1 2/15/2013 10 2/25/2013 Task 2 2/25/2013 10 3/7/2013 Objective 8 3/7/2013 20 3/27/2013 Task 1 3/7/2013 10 3/17/2013 Task 2 3/17/2013 10 3/27/2013 Easter Holidays 3/28/2013 8 4/4/2013 Final Review 4/5/2013 5 4/10/2013 OBJECTIVE 1: “To determine ROI generated because of this value added feature” Task 1 Calculate organization cost and assets value of implementing this system. Task 2 Quantify the increase in customers’ satisfaction level OBJECTIVE 2: “To perform trend analysis on different internet banking applications” Task 1 Regression analysis using SPSS Task 2 Competitors Analysis using SPSS & SAS Task 3 Performing a general industry analysis OBJECTIVE 3: “To determine different KPIs that will help us analyze an internet banking application efficiency” Task 1 Identification of different KPIs considering the business goals and current market scenario Task 2 Analyzing these filtered KPIs through a BI Software OBJECTIVE 4: “To study the general three-tier architecture of a complete internet banking application” Task 1 Choosing a particular Internet Banking Application and understanding its three-tier architecture Task 2 Analyzing and comparing its three-tier architecture with other Internet Banking applications’ architecture OBJECTIVE 5: “To study factors that can further enhance an internet banking application” Task 1 Finding out the missing features in an Internet banking applications Task 2 Proposing ideas after analyzing research surveys that can fill in the gap of an Internet Banking Application OBJECTIVE 6: “To study peripherals applications that work with mainstream Internet Banking application” Task 1 To figure out all the possible peripheral applications, which are/can be connected with the mainstream Internet Banking application. Task 2 Analysis of these peripheral applications that how and why they are connected with the mainstream Internet Banking Application Task 3 Analyzing open source solutions OBJECTIVE 7: “To examine other channels which interact and to study if they can work in line with the Internet banking applications” Task 1 Analyzing all the channels individually and thoroughly that interact with the Internet Banking Application Task 2 Examining the fruitfulness of other channels that have tendency to work in line with the Internet Banking Applications OBJECTIVE 8: “To determine factors that can affect internet banking software performance” Task 1 In-depth analysis of the factors that bring down the performance of an Internet Banking Application Task 2 Eradication of these factors via strong information security policy or some other measure References Chantler, K., 2011. Characteristics of Quantitative and Qualitative Research. [ONLINE] Available at: http://www.rdinfo.org.uk/flowchart/Characteristics.htm [Accessed 02 April 2012] Cronin, M. J., 1997. Banking and Finance on the Internet (Internet Management Series). John Wiley & Sons Fong, J., Hui, R., 1999. Application of Middleware in the Three Tier Client/server Database design Methodology. Journal of Brazilian Computer Society, [ONLINE] Available at: http://www.scielo.br/scielo.php?pid=S0104-65001999000200005&script=sci_arttext [Accessed 02 April 2012] Ghaziri, H., 1998. Information Technology in Banking Sector: Opportunities, Threats and Strategies. AUB. [ONLINE] Available at: http://ddc.aub.edu.lb/projects/business/it-banking.html [Accessed 02 April 2012] Heidegger, M., 1982. Question Concerning Technology, and Other Essays. Sagebrush Education Resources Inntron., 2012. Core Banking Software Systems Ranking and Intelligence. [ONLINE] Available at: http://www.inntron.com/core_banking.html [Accessed 02 April 2012] Online Banking., 2012. About Online Banking, Evolution, Security, Advantages & Disadvantages. [ONLINE] Available at: http://www.onlinebanking.net/ [Accessed 02 April 2012] Scholasticus, K., n.d. History of Internet Banking. [ONLINE] Available at: http://www.buzzle.com/articles/history-of-internet-banking.html. [Accessed 02 April 2012] Shareef, M. A., Archer, N. & Dutta, S., 2011. E-Government Services Maturity and Development: Cultural, Organizational and Technological Perspectives. IGI Global. p. 182 SPSS and SAS for Statistical Analysis., 2012. Appendix A: SPSS and SAS for Statistical Analysis. pp. 708-733 [ONLINE] Available at: http://www.stat.ufl.edu/~aa/sta6127/appendix.pdf [Accessed 02 April 2012] Read More