Challenges of Internet Banking - Case Study Example

CHALLENGES OF INTERNET BANKING (CASE STUDY OF BARCLAYS BANK) Executive summary The future of financial services and its development particularly in the banking industry is being controlled by information technology which is emerging as at now. The fact that there is increased use of mobile services, including internet services as the trending distribution channel, has also necessitated critical attention in dealing with the security breaches that promote fraud. The constant changes in information technology particularly with the increased research and development has brought about changes in nearly all aspects of life. The banking industry has equally improved their practices in response to these technological changes in the form of internet banking. This kind of banking is quickly dislodging the traditional modes of banking. There are a number of benefits that enhances the value of customers’ satisfaction as well as the quality of services being offered by the customers. In a similar way, banks are able to favourably compete in the market against their competitors, who have maintained the traditional banking modes. This paper has identified a corporate situation in Barclays Bank and is discussing some of the changes that are emerging in the economy. Table of Contents Table of Contents 3 Introduction and problem definition 4 Research Method and Limitations 7 Research Findings 8 Conclusion and Recommendations 9 Introduction and problem definition Most of the developing countries have their economies driven by cash. This means that most of the transactions that take place in these countries are made through exchange of notes and coins in return of goods and services. There is no doubt that the change in the information technology is now taking toll all over including in the developing countries where the use of sophisticated payment methods is now quickly being embraced. The sophisticated methods allow the system to convert the existing currencies and notes in a form of data. These data can therefore be transmitted through satellite transponders as well as telephone lines. This has also been necessitated by the rapidness in the technological development and the progress in the financial market. The process allows for faster delivery between the customers and the service providers and as such, reveals the difference between internet banking system and the traditional banking system. The ability to deliver this information in this quick form allows for transfer of money in information storage medium such as credit cards cheques as well as in electronic forms. In the long run, the sale of goods and services becomes relatively easier making banks to achieve high performance in the industry. Since mid 1990s, banking industry has been undergoing transformation in the form of adoption of modern technology in information acquisition, and channelling as well as the transformation and development in electronic commerce. These changes have for long time presented threat to the traditional bank operations. This is irrespective of the fact that the electronic system is still undergoing transformation. Ozuru et.al (2010), suggests that there can never be a perfect emphasis on the significance of electronic payment system in any society considering that there is a spectacular change in the advancement of technology experienced globally. Internet Banking The new age of banking has necessitated the use of the term internet banking. It may be defined as the use of internet to convey banking activities like transfer of funds, payment of bills, viewing current and savings account balances, paying of mortgages as well as paying of financial instruments and the deposits certificates. This kind of banking is known as internet banking. Recently, technological development has had adverse effect on business organizations in varied ways mostly in decision making, research and marketing management and operations. This is the motivation behind the quest by every organization to tap on the benefits that accrue from the development of technology. In other words, several organizations have had opportunities to enjoy the advantages that are embedded in the new technologies. When businesses got involved in the improvement of the service delivery and efficiency through information technology, costs were also substantially reduced. As a result, most banks resorted to diversion of focus towards extensive electronic operations and computerization. The fact that most banks have endeavoured in ensuring strong relationship and assured satisfaction of service delivery, has propelled the banks to insist on the advancement of the use of internet banking as the ideal way to ensure sustainable relationship with customers. This undoubtedly confirms the threat that e-banking presents to traditional banking methods considering that most of the developing countries have been preoccupied with the building of the infrastructures that pave way to the e-banking, e-commerce as well as e-learning. The background of internet banking may be traced from the simple functions like access to information in real time including; checking of the account balances, checking interest rates and the ability for individuals to compute loan eligibility. It is from this background that these services found their way to the online bill payment and funds transfer between cash management services for corporate organizations and individuals. Because of this development of the internet and other online networks, new commercial opportunities have been created, particularly on e-commerce, and this has created new commercial opportunities and as a result, created a completely new set of relationship in the global arena. Consequently, e-banking and e commercial have now been recognized as unavoidable aspects of financial services. This kind of banking has also aided in the elimination of barrier limitations, convenience because of the minimal cost that are realized, transformation of the traditional banking practices as well as the recognition that internet banking is the only way through which a service provider may keep in touch with the customer anywhere they are. This facilitates high returns because of the enhanced speed of service delivery. The preference of the use of e banking is because it saves the customer’s time, and makes it possible for them to use innovative products and services at a low fee. Managing of the queue in the case of service delivery at the bank equally encourages the customers to adopt the use of internet banking. Research Method and Limitations Introduction This chapter discussed the overall methodology that was used in the study. The areas to be covered in this chapter include research design, target population, sampling procedures, data collection procedure and analysis Data collection Techniques The study adopted descriptive research designs which aimed establishing the extent to which security token device affect a costumer’s online banking satisfaction in Barclays Bank in UK. The study used primary data of questionnaires. The study also adopted secondary data such as review of the reported cases from the customers of Barclays Bank on the experience they have with the use of internet banking. The available information on internet banking was extensively used in exploration of the level of satisfaction by the customers with the online banking. Other useful and relevant articles and journals were critical in finalization of this study. Financial products and services were certainly available over the internet which it turn, became essential distribution channel for quite a number of banks including Barclays. Barclays has boosted information technology in order to maximize it its revenue and increased its competitiveness in the industry. The purpose of this study was to establish the effectiveness of internet banking and whether the customers were satisfied by the plan. Research Findings Conclusion and Recommendations Read More