Project report on Customers Perception of Online Banking

1.0 INTRODUCTION
This chapter takes into consideration the background of the study, sources
of information, objective of the study, research question, scope of the
project, and limitation of the study and research methodology.

1. BACKGROUND OF THE STUDY
Modern banks play an important role in promoting economic development of a
country. Banks provide necessary funds for executing various programs
underway in the process of economic development. They collect savings of
large masses of people scattered throughout the country, which in the
absence of banks would have remained ideal and unproductive. These
scattered amounts are collected, pooled together and made available to
commerce and industry for meeting the requirements.

As a servicing industry, the Banks are customers oriented. Customers are
the driven power of a Bank and it earns profit by providing services to
customers. Customers are the person or institutions which deal with the
Bank. In general, he, who has an account in a Bank, may be treated as a
customer. In broad sense, customers may be seen from the two wings –
Depositors and Borrowers. Beside these, other short-term served customers
may exist in a Bank. As the Banking area is very hard and competitive, in
order to survive and successfully compete with other Banks, a Bank has to
serve its customers very carefully. Now, in Bangladesh more than 50
scheduled Banks are operating their activities to serve customers.

To fulfill the demand of time and impress the customer most of the banks
are now trying to make their whole banking operation through online.

Online banking is the demand of time. It is now no longer a "nice to have"
but an "impossible to survive without" for all banks. IFIC Bank Ltd
performs many of its operation in on line and trying to include rest of the
operations.

Online banking comes with huge benefits. Many customers warmly adopt the
habit of online banking. Some eagerly wait for new online services. But
some still prefer traditional banking. They find traditional banking easy,
hassle free and more trustworthy than online banking.

IFIC Bank Ltd is continuing to begin new online services one by one. During
my project period I got the opportunity to observe customer closely. I
found that many customer want more online services to save their time and
cost. Many customers are happy with traditional banking. Some customers
have no faith on online banking.

Online banking makes life easier, there is no doubt. But introducing a new
system is not easy because it brings some difficulties with it. In case of
starting full online banking; the bank has to introduce some new
system/products. In that situation both employees and customers face some
problem to adopt that new system/product.

1.2 Sources of the Information
Information collected to furnish this report is both from primary and
secondary sources. Secondary data was derived from various sources
including banks papers, different circular sent by Head Office of IFIC Bank
and Bangladesh Bank, other related researcher reports, website, previous
seminar papers etc. Primary information was obtained from the specific
person dealing certain products, interview with customers, interview with
banking staffs, own observation, working experiences with banking staffs.
For the industry related, legal, infrastructure related information
internet was a good source.

1.3 OBJECTIVE of the Study
A Bank operates its activities not only to earn profit, but also to serve
its clients in accordance with their needs and demands. Online banking is
the demand of time as well as the demand of customer. IFIC Bank is popular
for its better customer services. The main objectives of the study are to
evaluate the customer expectations in term of online banking, their
problems with online banking, etc. However, besides this, the study is an
attempt to fulfill the following objectives:

To identify customers perception of online banking
To find out the facilities of online banking available in IFIC Bank
Ltd.
To find out the level of customer satisfaction with the available
online banking facilities.
To analyze the customers' opinions towards different online services of
IFIC Bank Ltd.
To identify the customers' reactions when suddenly they asked for some
extra rules to make the system online.
To analyze the employees opinions towards different online system of
IFIC Bank Ltd.
To identify employees problem to operate the system that newly
installed.

1.4 Research question
The research questions are:
1. What are online banking products and services that IFIC Bank Ltd
offers to their customers?
2. What are the upcoming online banking products and services that IFIC
Bank Ltd is going to offer their customers?
3. What is the perception of customers of online banking?
1.5 Scope of the project
Banking sector is a large and difficult area. A Bank has different
products, different services and different customers. Different departments
of a Bank perform different activities.

This study says only about the customers of IFIC Bank Ltd. Different Bank
has different types/classes of customers. Their reaction will differ on
same matter. The major parts of the customer's opinions are taken from that
branch.

1.6 Limitations of the Study
The major difficulties are as follows:
A study that encloses interviews of very few clients can not conclude
anything accurately.
A Bank has some restriction to present all the real data of the bank
to the general people, so all relevant data and document collection is
difficult.
It was very much hard to collect information. Customers are very much
busy. So they are not so interested to give genuine information.
Some of the customers are afraid to provide answer/information.
The authority was very busy, so they could not give me enough time
for discussion about various problems.
Personal barriers like inability to understand some official terms,
office decorum etc. creates a few problems to me.
Finally, Due to time limitation large-scale research is not possible.

1.7 Research Methodology
Firstly I made a plan about what to do. Then check out some banking
activities of the bank staffs. Gather some practical banking knowledge from
some banker of IFIC Bank Ltd.Then working few days with them and acquire
some experiences. After learning some work I gave some customer services.
When I became easy with customers I collect some primary data from them. I
also talk with few bank staffs personally to collect more primary data. I
collect my secondary data from different sources like bank website,
brochures, commercials etc. After collecting necessary data I made the
project.

The whole project was prepared through the following seven steps:

Step 1 Planning for the study
Step 2 Acquire knowledge about several banking activities
Step 3 Work few bays like a banker and gather some experience
Step 4 dealing with customers
Step 5 Data collection from different sources of bank (primary and
secondary)
Step 6 Analysis of collected data
Step 7 Draw summary and recommendations.
Chapter 2
Literature Review
2.0 Introduction
This chapter seeks to analyze relevant research documentation and findings
essential to improve this research and its capacity to analyze the concerns
it seeks to accomplish. Several researches have been carried out on online
banking and it is important to examine them in relation to this research
topic. This will enhance effectiveness and stimulate an all inclusive
analysis and discussions of critical issue in relation to the topic under
consideration. The content of this chapter comprise the theoretical
framework. El-Sherbini et al. (2007) investigated the customers'
perspectives of online banking, their perceived importance for it, usage
patterns and problems rising on its utilization. The paper discussed the
strategic implications of the research findings. Empirical data were
gathered from bank customers in Bangladesh to achieve the research
objectives. All bank customers in Bangladesh were considered as population
of research interest. The results showed the perceived importance of online
banking services by customers, current and potential use of IB services in
Bangladesh and problems perceived by bank customers in using IB. The
researchers' main hypothesis tested that top five services considered
relative important in IFIC Banks were "Review account balance", "Obtain
detailed transactions histories, "Open accounts", Pay bills" and Transfer
funds between own accounts". Akinici et al. (2004) developed an
understanding of consumers' attitudes and adoption of Internet banking
among sophisticated consumers. Based on a random sample of academicians,
demographic, attitudinal, and behavioral characteristics of Internet
banking (IB) users and non-users were examined. The analyses revealed
significant differences between the demographic profiles and attitudes of
users and non-users. IB users were further investigated, and three sub-
segments were defined according to a set of bank selection criteria.
Finally, based on the similarities between various Web-based bank services,
four homogeneous categories of services were defined.

2.1 Online banking
Online banking is the practice of making bank transactions via the
Internet. Online banking allows us to make deposits, withdrawals, pay bills
etc all with the click of a mouse. Online Banking is one of the few web
applications where benefits to customers and banks are already widely
proven. It is now no longer a "nice to have" but an "impossible to survive
without" for all banks. Online banking means a kind of self-help financial
services provided by the bank for its clients by the medium of Internet,
including account information inquiry, account transfer & payment, online
payment, agency services, etc.

The benefits are many.
For the online banking customer, the convenience factor rates high. No
longer does a person have to wait for the bank statement to arrive in the
mail to check account balances. One can check the balance every day just by
logging onto one's account. In addition to checking balances and
transactions, one can catch discrepancies in the account right away and
deal with them swiftly. The best part is that this can be done anywhere! As
long as one has Internet access, one can practice online banking. All the
online banking facilities are not till available in Bangladesh.

Since bills are paid online, the necessity of writing checks, affixing
postage and posting the payment in the mail is eliminated. Once the amount
is entered and the payee is checked off, the funds are automatically
deducted from the payer's choice of account.

Since the cost to the bank is minimal, the cost to the consumer, in many
cases, is also minimal. While there is usually a fee for online banking, it
can be extremely low. Those who partake in online banking all agree it's
worth every penny.

Online banking also eliminates paper waste, which is a plus not only for
those who have to handle all the paper work, but also for the environment.

Of course, there are also cons.
Banking sites can be difficult to navigate at first. Plan to invest some
time and/or read the tutorials in order to become comfortable in your
virtual lobby.

Security is always an issue with Internet transactions. Although
information is encrypted, and the chances of your account being hacked are
slim, it happens. Banks pay big bucks to install high tech firewalls.

You're also missing the personal service. No smiling teller or
representative hands you a receipt. Instead, except for what's printed into
your account, all the paperwork is up to you. Always print copies of
important transactions.

If you have to deposit cash or checks, you'll still have to spend time at
the ATM. unless a payment to you is directly deposited; this is one thing
you'll always have to handle manually.

Sound management of banking products and services, especially those
provided over the internet, is fundamental to maintaining a high level of
public confidence not only in the individual bank and its brand name but
also in the banking system as a whole. Key components that will help
maintain a high level of public confidence in an open network environment
include:
Security: Banks must have a sound system of internal controls to
protect against security violate for all forms of electronic access.
Authentication: In cyberspace, as in the physical world, customers,
banks, and merchants need assurances that they will receive the
service as ordered or the merchandise as requested, and that they know
the identity of the person they are dealing with.
Trust: Public and Private Key cryptographic systems can be used to
secure information and authenticate parties in transactions in
cyberspace. A trusted third party is a necessary part of the process.
That third party is the certification authority.
Non-repudiation: Non-repudiation is the undeniable proof of
participation by both the sender and receiver in a transaction. It is
the reason public key encryption was developed, i.e. to authenticate
electronic messages and prevent denial or repudiation by the sender or
receiver.
Privacy: For the case of online banking personal information is very
confidential. So the information should be very much private. The
banks should ensure the privacy of all these information.
Availability: The bank should maintain their service at every moment.
The customers of online banking are time conscious and time is much
more important to them. So the service should be available all the
time.

2.2 online Banking products and services
Online Banking products and services can include wholesale products for
corporate customers as well as retail products for individual customers.
Ultimately, the products and services obtained through online banking may
mirror products and services offered through other bank delivery channels.
Some examples of online products and services include:
Cash management
Automated clearinghouse transactions
Bill presentment and payment
Balance inquiry
Funds transfer
Downloading transaction information
Bill presentment and payment
Loan applications
Investment activity
Other value-added services

Other internet banking services may include providing internet access as an
Internet Service provider (ISP). Historically, banks have used information
systems technology to process checks (item processing), drive ATM machines
(transaction processing), and produce reports (management information
systems). In the past, the computer systems that made the information
systems operate were rarely noticed by customers. Today, websites,
electronic bill presentment and payment systems are an important way for
banks to reach their customers.

2.3 What is a Customer?
In general terms, a customer is a person or organization that a marketer
believes will benefit from the goods and services offered by the marketer's
organization. As this definition suggests, a customer is not necessarily
someone who is currently purchasing from the marketer. In fact, customers
may fall into one of three customer groups:
Existing Customers – Consists of customers who have purchased or
otherwise used an organization's goods or services, typically within
a designated period of time. For some organizations the time frame
may be short, for instance, a coffee shop may only consider someone
to be an Existing Customer if they have purchased within the last
three months. Other organizations may view someone as an Existing
Customer even though they have not purchased in the last few years
(e.g., television manufacturer). Existing Customers are by far the
most important of the three customer groups since they have a
current relationship with a company and, consequently, they give a
company a reason to remain in contact with them. Additionally,
Existing Customers also represent the best market for future sales,
especially if they are satisfied with the relationship they
presently have with the marketer. Getting these Existing Customers
to purchase more is significantly less expensive and time consuming
than finding new customers mainly because they know and hopefully
trust the marketer and, if managed correctly, are easy to reach with
promotional appeals (i.e., emailing a special discount for new
product).

Former Customers – This group consists of those who have formerly
had relations with the marketing organization typically through a
previous purchase. However, the marketer no longer feels the
customer is an Existing Customer either because they have not
purchased from the marketer within a certain time frame or through
other indications (e.g., a Former Customer just purchased a similar
product from the marketer's competitor). The value of this group to
a marketer will depend on whether the customer's previous
relationship was considered satisfactory to the customer or the
marketer. For instance, a Former Customer who felt they were not
treated well by the marketer will be more difficult to persuade to
buy again compared to a Former Customer who liked the marketer but
decided to buy from someone else who had a similar product that was
priced lower.

Potential Customers – The third category of customers includes
those who have yet to purchase but possess what the marketer
believes are the requirements to eventually become Existing
Customers. Locating Potential Customers is an ongoing process for
two reasons. First, Existing Customers may become Former Customers
(e.g., decide to buy from a competitor) and, thus, must be replaced
by new customers. Second, while we noted above that Existing
Customers are the best source for future sales, it is new customers
that are needed in order for a business to significantly expand. For
example, a company that sells only in its own country may see less
room for sales growth if a high percentage of people in the country
are already Existing Customers. In order to realize stronger growth
the company may seek to sell their products in other countries where
Potential Customers may be quite high.

2.3.1 CUSTOMER PERCEIVED VALUE
According to BusinessDictionary.com(2007-2008) defines the value offered by
a firm as: Extent to which a goods or service is perceived by its customer
to meet his or her needs or wants, measured by customers willingness to pay
for it. It commonly depends more on the customers' perception of the worth
of the product than on its intrinsic value

2.4 Expand of online banking
Numerous factors are motivating banks towards online banking. The challenge
is to make sure the savings from online banking technology more than offset
the costs and risks associated with conducting business in cyberspace.

There are many market factors that drive a bank's strategy towards on line
banking. Some are discussing below:

Cost efficiencies: Banks can deliver banking services on the internet at
transaction costs far lower than traditional ways. The actual costs to
execute a transaction will vary depending on the delivery channel used.
These costs are expected to continue to decline.

Revenue Enhancement: By reducing cost and attracting new customer bank can
increase its revenue.

Competition: The competitive pressure is the chief driving force behind
increasing use of online banking technology, ranking ahead of cost
reduction and revenue enhancement. Banks see online banking as a way to
keep existing customers and attract new ones to the bank.

Geographical Reach: Online Banking allows expanded customer contact through
increased geographical reach and lower cost of delivery channels. In fact
some banks are doing business exclusively via the internet – they do not
have traditional banking offices and only reach their customers online.

Branding: Relationship building is a strategic priority for most banks.
Online banking technology and products can provide a means for banks to
develop and maintain an ongoing relationship with their customers by
offering easy access to a broad array of products and services. By
capitalizing on brand identification and by providing a broad array of
financial services, banks hope to build customer loyalty, and enhance
repeat businesses.

Customer Demographics: Online banking allows banks to offer a wide array of
options to their banking customers. Some customers will rely on traditional
branches to conduct their banking business. Other customers are early
adopters of new technologies that arrive in the marketplace. The challenge
to banks is to understand their customer base and find the right mix of
delivery channels to deliver products and services profitably to their
various market segments.

As use of the internet continues to expand, more banks are using the web to
offer products and services or otherwise enhance communications with
consumers. The internet offers the potential for safe, fast, and convenient
new ways to shop for financial services and conduct banking business, any
day, any time.

2.5 Global scenario of online banking
Online banking has grown gradually in the UK over the past decade and is
now used by 39% of adults, or 17 million people. But growth has slowed in
the past couple of years. That's odd because only46% of UK Net users access
their bank accounts online, yet 74% regularly shop online. By 2012, it is
expected that 44% of adults to use online banking in the UK, or nearly 22
million people. It is hoped that between 2009 and 2014, the total number of
US online bill payment households will increase from 48 million to 63
million. Online banking has grown steadily in France over the past decade,
boosted by the growth in Net use overall, and is now used by 31% of adults,
or 15 million people. Growth to continue at a similar rate for the next
five years because French Net users are becoming increasingly confident
with the channel and because banks can still do more to persuade customers
to bank online, starting with reducing or eliminating the charges that many
still impose on customers who bank online. By 2013, it is expected that 42%
of adults to use online banking, or more than 22 million people. With only
12% of Swedish banking customers using branches, Sweden has the lowest
branch use in Europe. Swedish banks have successfully migrated the majority
of their customers to ATMs and online banking 83% and 71%, respectively. It
is projected that, by 2012-2013, 81% of Dutch and 47% of German consumers
will use Internet banking.

2.6 THE SUPPORTING IT INFRASTRUCTURE
Though the first main frame computer came to Bangladesh in 1964, but the
usage of PC became popularize very late to the common people. Several large
banks and private entrepreneurs in industrial sectors are the path makers
of achieving benefits from computer and computerized applications. Bureau
of Statistics and a few nationalized banks are the leaders in using
computer in government sector by processing data and information, while
industrial concerns in private sectors are the leaders in applying computer
for their accounting, payroll and inventory related applications.

Today the people are getting more technology conscious. They are well aware
of the benefits of the technology. This made many people a user of the
internet facilities. The number of users increased fast over the years.

Internet Usage and Population Statistics:

"YEAR "No. of "Population "% "
" "Users " " "
"2000 "100,000 "134,824,000"0.1 "
"2007 "450,000 "137,493,990"0.3 "
"2009 "556,000 "156,050,883"0.4 "
"2010 "617,300 "158,065,841"0.4 "
"2011 "5,501,609 "158,570,535"3.5 "

Source: World Bank Statistics and Data for Bangladesh
Figure 1: Internet Usage and Population Statistics
Though we have seen some sharp rise in the growth of internet and internet
users, there are some impediments on the way to the growth of internet in
Bangladesh. Some of the reasons are listed below:
Underdeveloped IT industry
Lack of efficient use of IT network
No direct access to the information super highway
Limited skilled human resources
Poor telecommunication infrastructure
Low-level of computer literacy
Widespread poverty
Low telephone penetration
Lack of software in the Bengali language

Opportunities for a better Internet support
Bangladesh has a nationwide fiber-optic network established by
Bangladesh Railway. This facility can provide excellent backbone for
nationwide voice and data communication.
As we have no direct access to the information super highway the only
option is to communicate through satellite. Satellite communication is
costlier than fiber optic.
To avoid satellite communication and its high cost, we can establish
the missing link to the information super highway if the nation-wide
fiber-optic network is allowed to link up with the high speed fiber-
optic backbone in India.
Availability of telephone lines and reduction in service fee will
attract many professionals into internet arena.
Young generation should play a vital role in developing IT industry
in Bangladesh.

2.7 ONLINE BANKING OF BANGLADESH
At present the banks in Bangladesh are using the limited electronic banking
services. It is expected that bank can attain more profit and offer better
services to its customers by, introducing on line banking facilities. The
foreign commercial banks operating in Bangladesh like Standard Chartered
Bank, Citi Corp. N.A. and the HSBC are the pioneers to introduce the
electronic banking facilities. They provide ATM, Debit Card, Credit Card,
Home Banking, Internet Banking, Phone Banking, on line banking etc.
services.

Among the indigenous banks, the Private Banks are ahead of the public
banks. Prime bank ltd, Dhaka bank ltd., BRAC bank ltd., Dutch-Bangla bank
ltd, Eastern Bank Ltd., Mercantile bank Ltd., and IFIC Bank Ltd. is already
stepped on towards electronic banking facilities. Apart from these banks,
Mutual Trust Bank ltd. also introduced ATM service. Among the four
Nationalized Commercial Banks (NCBs), Agrani and Janata bank has some
access to the electronic banking facilities. Bangladesh Bank, the Central
Bank of Bangladesh, is also trying to formulate the structure of electronic
banking facilities. All of these private banks offering limited on line
banking services. Most of these banks only offer services by providing ATM
card. Most of them do not offer wide range of internet banking facilities
which is the main advantages of e-banking. Can deposit money in any branch
and withdraw money from ATM machine- is treated the best e-banking facility
available in Bangladesh While electronic money transfer starts in a limited
edition. Sonali and Agrani Bank Ltd., is also providing on line banking
services in a limited scale. Rupali Bank Ltd. is also developing on line
banking. BASIC bank which is 100 percent public owned but served as private
sector banking has a technological advancement.

A broad spectrum of Internet banking services, a subset of electronic
finance, is available in Bangladesh with different degree of penetration.
The credit card is available from VISA, MasterCard and VANIK. Some foreign
banks provide electronic fund transfer (EFT) services. It is at an early
stage and used on a very limited scale. Microchips embedded Smart Card is
also becoming popular in the country, particularly for utility bill
payment. Automated teller machine (ATM) is expanding rapidly in major
cities. A group of domestic and foreign banks operate shared ATM network,
which drastically increase access to this type of electronic banking
service. The network will gradually be extended to other parts of the
country.

The e-banking services provided by the banks in Bangladesh could be divided
in three groups: ATM Services, Internet Banking (i-Banking), and SMS
Banking. The scopes of these services are vast, but the banks in Bangladesh
do not provide all of these services. Some of the banks provide these or
other services and charges fees for ATM transaction, SMS and i-Banking
while the western banks inspire clients to do ATM banking without fee or a
minimum fee to reduce banking expense.

Last couple of years shows dramatic improvement in the awareness situation
in the banking sector regarding the comprehensive application of ICT. Local
software companies have been starting competition to supply useful complete
banking software with all the basic features of banking module. However,
many forms of electronic banking services are not possible to offer in
Bangladesh at this moment due to the technology backwardness,
infrastructural underdevelopment and legal infrastructure. Those products
would be very useful for export-oriented industry to reduce lead-time in
export and keep comparative advantage in the international market.

2.8 PROBLEM OF ONLINE BANKING SYSTEM IN BANGLADESH
Numerous problems have been identified in the field of on line banking
system in Bangladesh. Some of them are in the followings:
Inefficiency and inadequate knowledge of the bank management about
the on line banking.
Lack of proper Strategic plan to gain and retain market share of the
indigenous banks.
Lack of international standard communication channel.
High cost of establishing on line banking system.
Inadequate back and front office management.
Lack of integrated plan among the banks and the Central Bank
authority.
Inefficient Clearing House Facilities.
Inappropriate software and less trust by the Bank authorities on
local software.
Biased-ness of the management of bank towards foreign software.
Legal barriers and appropriate policy framework.

2.9 SWOT ANALYSIS
To find out the viability of a particular product we must perform a SWOT
Analysis of the product. This will analyze the Strengths, Weaknesses,
Opportunities, and Threats of the particular product. For analyzing the
performance of Online Banking in Bangladesh we the following SWOT Analysis
is considered.

2.9.1 STRENGTH
Online Banking is new in our market. Only a few banks are now
offering online services in solving banking problems. Most of the
banks are offering only accounting information online. Actual fund
transfer and fund disbursement is not possible in all the banks that
are offering online services. So this product will enjoy the benefit
of a first mover.
It is cheap both for the banks and the customers. The bank will be
able to lower down the overhead costs and make more profit out of it.
Online banking will require less manual workers. Again the customers
will be able to save time as well as money for their transaction
needs.
Internet banking is convenient as the service is available all the
time at just a click away.

2.9.2 WEAKNESSES
Security breakdown: The system will have a problem with the
identification of the individual who is initiating the transaction. In
Bangladesh, the identification of an individual is not yet supported
digitally. So there will be a problem in moving to the Internet era
for banking purposes just now. First we will have to develop a digital
database of the users of the internet banking services.
The transaction can be cancelled only via internet. The internet
infrastructure of our country is not that much supportive to provide
all time access to the web. So there will be a problem in executing
the service with its full functionality.

2.9.3 OPPORTUNITIES
Non-branch banking is becoming popular in our country. Many banks are
now offering non-branch banking facilities. A person can withdraw or
deposit money in any branch of the bank he has account with. So moving
to online banking will allow the banks to offer non-branch banking
facilities.
The internet services are becoming very common to us. So a service
offered through the internet will be widely accepted in the near
future.

2.9.4 THREATS
People have concern about security and privacy. They like to feel
their money with their hand. They actually don't believe in virtual
money transfer.
In the field of IT new technology is coming every day. The one which
is very popular today might get obsolete tomorrow. So to have a
competitive edge over the competitors the banks must always update
their services.
The movement towards online banking might marginalized the customers
who do not have internet access or who are not technologically sound.

2.10 ONLINE SERVICES OFFERED BY SOME BANK OF BANGLADESH
In Bangladesh more than 50 scheduled banks are operating their activities
to serve customers. Many of those banks offer exciting online product and
services. Some are described below:

Dutch Bangla Bank:
Internet Banking Features
Account Summary: The Customer will be able to view the list of
Current, Saving, Term Deposit and Loan accounts with the current
balance.
Account Details: The Customer can choose a particular account and see
the account details including unclear fund, limit, interest accrued
etc.
Account Activity: The customer can see or print his transaction
activity in a given account for a particular period.
Transfer Funds: The customer can transfer funds from one of his
accounts to another of his accounts within the bank.
Standing Instructions: The customer can setup, modify or delete
standing instructions for transferring fund from one of his account to
another account (his account or 3rd party).
Open/Modify Term Deposit: The customer can open a term deposit by
transferring funds from one of his current or savings accounts with
the bank. He can also modify the TD and redeem / part-redeem it.
Loan Repayments: The customer can make payment of the loan
installment from his CASA account.
Statement Request: The customer can make a request for account
statement for a required period. The bank will manually service this
request.
Cheque Book Request: The customer can make a request for a Cheque
book.
Cheque Status Inquiry: The customer can choose an account and enter
the Cheque number for which the status should be viewed.
Stop Payment Cheque: The customer can mark his Cheque leaf as stop
payment.
Interest Rate Inquiry: The customer can query on the interest rates
on CASA & Term Deposit Products.
Foreign Exchange Rate Inquiry: The customer can query on the Foreign
Exchange (FX) Rates using this function.
Refill Pre-Paid Card: The customer can buy a refill number for his
pre-paid mobile phone or ISP link.
Change Password: The customer can change his Internet Banking
Password using this function.

Additional Internet Banking Features for Corporate Banking
Letter of Credit: The customer can initiate the LC application
through Internet Banking.
Bank Guarantee: The customer can initiate the Bank Guarantee through
Internet Banking.
Limits Query: The customer can view his Loan Limits and Limits
Utilization through Internet Banking.
Eastern Bank Limited
EBL Internet banking application addresses the needs of small, individual
and corporate account holders of the bank. This application provides a
comprehensive range of banking services that enable the customer to meet
most of their banking requirements over the Net. The transactions that are
supported by the internet banking provided by Eastern Bank Limited are as
follows:
Round the clock access
Real-time transaction history
Loan account inquiry
Pay bills
o BTCL
o GRAMEEN PHONE
o PACIFIC BD. TELECOM (CITYCELL)
o ORASCOM LTD. ( BANGLALINK)
o AIRTELL LTD.
o ACCESS TELECOM LTD.
o AGNI SYSTEMS LTD.
o DEKKO AIRNET LTD.
o EBL CREDIT CARD
Transfer to own accounts
Issue Pay Order
Open new fixed deposits

HSBC
Internet Banking service manage customers finances. They can take control
of their account whether at home or abroad. They can access their accounts
anytime, from anywhere in the world! Other services include:
Access your account 24/7 (subject to planned maintenance periods).
View your balances and transactions
Make transfers between eligible HSBC accounts.
Online Bill Payments - Make life easier. Pay your bills online
Create, view, amend and cancel standing orders
Apply online for different products.
Update your email address, contact telephone numbers and other
personal information
Foreign Exchange - Perform foreign exchange enquiries
Statements - View, print and download your Statements to track your
transactions.
Total Banking Portfolio, Net worth & Account Summary - Check/update
your personal information/account.
Time Deposits - Placement of new time deposit, check or update your
personal information and accounts.

Mercantile Bank
Clients can access their personal and business accounts and manage their
money 24/7 hours a day. The highest level of encryption protection
safeguards each and every one's account information. Through electric
banking one can easily avail following services:
Check account balances and deposits
See which checks have cleared
Transfer funds between accounts
Schedule future transfers
View recent transactions
Make bill payments
View images of cleared checks daily
Statement viewing and canceled check retrieval

How to work CitiDirect®
To gain more control over ones cash positions, one needs easy access to
accounts and information in real time. One needs an application that is
easily customized by individual users and streamlines day-to-day
operations. One will need the convenience of local banking and the global
solutions of an industry leader. The solution is CitiDirect® Online
Banking. The motto of CitiDirect® is "Money isn't everything but it can be
everywhere". The facilities available are:
Online Direct Debit Transaction Process
Information Reporting
Real-time information reporting for more effective cash
management
Delivered with the highest level of security
Easy-to-use application
World Link through CitiDirect
comprehensive payment transaction solution
Flexible, streamlined functionality
Reliability, speed and information
Payments through CitiDirect
A comprehensive payments solution globally and locally
Simplified, secure transaction management
Timely, accurate information
E-mail and Wireless Banking Alerts by CitiDirect

SCB
Standard Chartered offers the client a comprehensive range of Cash
Management services. Whether it is a financial institution, a multi-
national corporation or a domestic company, Electronic Banking application
has the capability to support full range of Cash Management reporting and
transaction initiation needs. It provides the secure, reliable and
effective link between the client and client's accounts anywhere across the
Standard Chartered network. Electronic Banking provides various types of
support through a wide range of operating systems, sweeping transaction
accessories with the provision of reporting features or other special
functions. There are 10 offices and 50 employees under this division, which
operates in 26 countries.
Chapter 3
COMPANY OVERVIEW
3.0 INTRODUCTION
This study is based on customer perception of online banking. And the
customers who participate in this study as respondent are from IFIC Bank
Ltd. So, it is necessary to know the bank. This chapter discuss about the
bank from different angle.

3.1 HISTORICAL BACKGROUND OF IFIC BANK LTD.
International Finance Investment and Commerce Bank Limited (IFIC Bank) is
banking company incorporated in the People's Republic of Bangladesh with
limited liability. It was set up at the instance of the Government in 1976
as a joint venture between the Government of Bangladesh and sponsors in the
private sector with the objective of working as a finance company within
the country and setting up joint venture banks/financial institutions
aboard. In 1983 when the Government allowed banks in the private sector,
IFIC was converted into a fully fledged commercial bank. The Government of
the People's Republic of Bangladesh now holds 32.75% of the share capital
of the Bank. Directors and Sponsors having vast experience in the field of
trade and commerce own 8.62% of the share capital and the rest is held by
the general public. Initially, the bank's authorized capital was Tk 100
million divided into 1 million ordinary shares of Tk 100 each. IFIC
conducts all types of commercial and investment banking functions.

3.2 VISIONS OF IFIC BANK LIMITED
To cope with the challenge of the new millennium, it hired experienced and
well-reputed banker of the country from the inception. The bank has
efficient and dedicated professional and equipped with modern technology to
provide the best service in the need of the people and thus realize its
vision. So its vision: "to be the most efficient bank in terms of customer
service, profitability and technology application".

3.3 MISSION OF IFIC BANK LIMITED
To provide service to their clients with the help of a skilled and
dedicated workforce whose creative talents, innovative actions and
competitive edge make their position unique in giving quality service to
all institutions and individuals that bank care for.
The bank is committed to the welfare and economic prosperity of the people
and the community. Bank wants to be the leader among banks in Bangladesh
and make our indelible mark as an active partner in regional banking
operating beyond the national boundary.

In an intensely competitive and complex financial and business environment,
bank particularly focuses on growth and profitability of all concerned.

3.4 GOALS & OBJECTIVES OF IFIC BANK LIMITED:
A Bank operates its activities not only to earn profit, but also to serve
its clients in accordance with their needs and demands. In this sense,
customer service is one of the important jobs of the Banks. The main
objectives of the study are to evaluate the efficiency and effectiveness of
the IFIC Bank Ltd. officials in servicing their customers.
Maximization of profit through customer satisfaction is the main objective
of the Bank .in addition .the others relevant objectives are:
1. To develop saving attitude and making acquaintance with banking
facilities.
2. To be market leader in high quality banking products and services.
3. To contribute in economic growth.
4. To help in poverty alleviation and employment generations.
5. To ensure an adequate rate of return on investment.
6. To ensure optimum utilization of all available resources.
7. To remain one of the best banks in Bangladesh in terms of
profitability and assets quality.
8. Achieve excellences in customer service.
9. To play a significant role in the economic development of the
country.
10. To protect money laundering

3.5 CORPORATE INFORMATION PROFILE

"Name of the Company "International Finance Investment and "
" "Commerce (IFIC) Bank Limited "
"Legal Form "IFIC Bank Limited was incorporated in "
" "Bangladesh and registered with Joint "
" "Stock Companies and Firms as a public "
" "company limited by shares "
"Company Registration "4967,Dated October 08,1976 "
"Number " "
"Listing Status "Listed with Dhaka stock Exchange Ltd. "
" "(DSE) and Chittagong stock Exchange Ltd. "
" "CSE In 1986 $1995 Respectively. "
"Market Category "A category "
"Tax Payer Identification "210-200-0537,LTU,DHAKA "
"Number ( TIN) " "
"Vat Registration Number "9021077014 "
"REGISTERED OFFICE "BDBL Bhaban (10th, 12th, 17th ,18th ,19th"
" "floor ) "
" "8 Rajuk Avenue, Dhaka -1000 "
" "Tel:9563020-29,fax.9562015 "
" "TelexIFIC BD "
" "E-MAIL: [email protected] "
" "Web:www.IFICbankbd.com "
"Name of Chairman "Mr. Salman F Rahman "
"Name of Managing Director"Mr. Mohammad Abdullah "
"Number of Branches "101 Domestics & 4 Affiliates "

3.6 MILESTONES IN THE DEVELOPMENT OF IFIC BANK
" "
" "
"1976 "
"Established as an Investment & Finance Company under "
"arrangement of joint venture with the Govt. of Bangladesh. "
" "
"1980 "
"Commenced operation in Foreign Exchange Business in a limited"
"scale. "
" "
"1982 "
"Obtained permission from the Govt. to operate as a commercial"
"Bank, Set up its first overseas joint venture (Bank of "
"Maldives Limited) in the Republic of Maldives (IFIC's share "
"in Bank of Maldives limited was subsequently sold to Maldives"
"Govt. in 1992) "
" "
"1983 "
"Commenced operation as a full-fledged commercial bank in "
"Bangladesh. "
" "
"1985 "
"Set up a joint venture Exchange Company in the Sultanate of "
"Oman, titled Oman Bangladesh Exchange Company (Subsequently "
"renamed as Oman International Exchange, LLC) "
" "
"1987 "
"Set up its first overseas branch in Pakistan at Karachi "
" "
"1993 "
"Set up its second overseas branch in Pakistan at Lahore "
" "
"1994 "
"Set up its first joint venture in Nepal for banking "
"operation, titled Nepal Bangladesh Bank Ltd. "
" "
"1999 "
"Set up its second joint venture in Nepal for lease financing,"
"titled Nepal Bangladesh Finance & Leasing Co. Ltd. (Which was"
"merged with NBBL in 2007) "
" "
"2003 "
"Set up a new Bank in Pakistan, NDLC-IFIC Bank Ltd. "
"(Subsequently renamed as NIB Bank Ltd.) and the Overseas "
"Branches of IFIC and a local leasing company, NDLC were "
"amalgamated with and into it. "
" "
"2005 "
"Acquired MISYS solution for real time online banking "
"application Core Risk Management implemented "
" "
"2007 "
"Launched VISA branded Credit Card (completed full range of "
"Cards i.e. Debit, Credit & Prepaid by 2010) "
" "
"2010 "
"Set up Offshore Banking Unit (OBU) "
" "
"2011 "
"Established a fully owned subsidiary exchange company named "
"IFIC Money Transfer (UK) Ltd. "
" "
"2012 "
"Launch 100th Branch at 24th June "
" "

3.7 TECHNOLOGY
Since the beginning of its journey as a commercial bank in 1983, IFIC Bank
has been giving great emphasis on the adoption of modern technology. It
became the pioneer in the field of automation by introducing computerized
branch banking right in the same year. Subsequently, all the branches were
brought under similar automated platforms with upgraded software
applications to offer all the critical banking features. At present all 100
domestic branches are fully computerized under networked environment.

The Bank has taken up a new project with Misys International Banking System
Inc. (UK) to further upgrade its banking operation to state-of-art world
class on-line banking solutions to provide faster and even more convenient
centralized services to the clients.

Besides, the Bank is also operating fully on-line Automated Teller Machine
(ATM) services under the banner Q-Cash at a number of locations in Dhaka
and Chittagong. The ATM facilities are available to the customers at Q-Cash
booth.

Since the importance of Web presence in the Internet is absolutely
critical, IFIC Web Site www.ificbankbd.com has long been launched for the
convenience of the customers, where all the activities and information are
constantly being posted and updated. A Central Mailing System is
operational at the Head Office to let the customers have direct electronic
access to the selected staff.

3.7.1 SOFTWARE USE BY IFIC BANK

"Service "Software Use "Vendor's Name "
"Core Banking "Equation Branch Server "Misys International "
" " "Banking System Ltd. UK "
" "Equation Branch "DO "
" "Automation " "
" "Trade Innovation "DO "
"SMS Banking "Mobile Banking Management"SSL Wireless Limited "
"Internet "iBanking "In-house "
"Banking " " "
"Various Cards "Q-cash "IT Consultants Limited "
" " "(ITC) "
" "VISA " "
"ATM Shared "Tranzware,Compass Plus "IT Consultants Limited "
"(VISA/MASTER) " "(ITC) "
"POS Terminal "Tranzware Online "IT Consultant, BD, "
" "Switching "Russia "
"EFT "Money Gram " "
" "X-press "UAE Exchange, UAE "
" "Placid Express "Plasic N.K corporation "
" " "USA "
" "Coinstar Money Transfer "Coinstar Money Transfer,"
" " "India "
"SWIFT "SWIFT "Belgium "
" "SWIFT Alliance " "
" "PC CONNECT "NBP Karaci, Pakistan "
"Offline Branch"BexiBank4000 "Beximco Computers "
"Computerizatio" " "
"n " " "

3.8 LIST OF BRANCH & DATE OF COMPUTERIZATION
"SL "CODE "BRANCH NAME "ONLINE FROM "
"1 "2030 "AGRABAD BRANCH "26-06-08 "
"2 "2056 "ALANKER MORE BRANCH "28-12-10 "
"3 "2155 "ASHUGANJ BRANCH "29-12-10 "
"4 "1197 "ASHULIA BRANCH "26-11-07 "
"5 "1112 "BAJITPUR BRANCH "23-04-09 "
"6 "1096 "BANANI BRANCH "02-04-08 "
"7 "6187 "BANESHWAR BRANCH "04-02-10 "
"8 "1011 "BANGSHAL BRANCH "08-10-08 "
"9 "1070 "BASHUNDHARA BRANCH "31-07-11 "
"10 "5064 "BARISAL BRANCH "12-11-09 "
"11 "3138 "BEANI BAZAR BRANCH "23-10-08 "
"12 "6188 "BELKUCHI BRANCH "29-10-09 "
"13 "4166 "BENAPOLE BRANCH "14-01-10 "
"14 "5202 "BHOLA BRANCH "26-12-11 "
"15 "1177 "BOARD BAZAR BRANCH "09-11-08 "
"16 "6082 "BOGRA BRANCH "27-11-08 "
"17 "4067 "BORO BAZAR BRANCH "12-02-09 "
"18 "2034 "BRAHMANBARIA BRANCH "12-03-09 "
"19 "2054 "CDA AVENUE BRANCH "22-01-10 "
"20 "6086 "CHAPAI NAWABGANJ BRANCH "19-03-09 "
"21 "2040 "CHAWK BAZAR BRANCH "10-07-08 "
"22 "2050 "CHOUMUHANI BRANCH "28-01-10 "
"23 "2035 "COMILLA BRANCH "13-11-08 "
"24 "2148 "COMPANYGANJ BRANCH "09-04-09 "
"25 "2044 "COX'S BAZAR BRANCH "26-02-09 "
"26 "2157 "CHANDINA BRANCH "28-11-11 "
"27 "1193 "DANIA BRANCH "28-12-08 "
"28 "1178 "DHAMRAI SME/KRISHI BRANCH "12-12-10 "
"29 "1006 "DHANMONDI BRANCH "17-04-08 "
"30 "6083 "DINAJPUR BRANCH "30-07-09 "
"31 "1014 "ELEPHANT ROAD BRANCH "31-07-08 "
"32 "1023 "FARIDPUR BRANCH "03-12-09 "
"33 "2152 "FATIKCHARI BRANCH "25-03-09 "
"34 "1008 "FEDERATION BRANCH "13-09-07 "
"35 "2041 "FENI BRANCH "13-11-08 "
"36 "1109 "GHORASAL BRANCH "20-11-08 "
"37 "3151 "GOALA BAZAR BRANCH "23-10-08 "
"38 "1002 "GULSHAN BRANCH "24-05-07 "
"39 "2137 "HATHAZARI BRANCH "25-03-09 "
"00 "9900 "HEAD OFFICE " 23-02-08 "
"40 "1005 "ISLAMPUR BRANCH "12-06-08 "
"41 "4061 "JESSORE BRANCH "19-02-09 "
"42 "6058 "JOYPURHAT BRANCH "23-12-10 "
"43 "4168 "KALIGANJ SME/KRISHI BRANCH "01-03-08 "
"44 "6189 "KASHINATHPUR SME/KRISHI BRANCH "11-10-10 "
"45 "1017 "KAWRAN BAZAR BRANCH "01-03-08 "
"46 "1195 "KERANIGANJ BRANCH "30-11-08 "
"47 "2031 "KHATUNGANJ BRANCH "10-07-08 "
"48 "4060 "KHULNA BRANCH "12-02-09 "
"49 "1121 "KONABARI BRANCH "16-10-08 "
"50 "4062 "KUSHTIA BRANCH "19-11-09 "
"51 "1025 "LALMATIA BRANCH "31-07-08 "
"52 "2153 "MADAM BIBIR HAT BRANCH "22-01-10 "
"53 "1118 "MADHABDI BRANCH "08-10-08 "
"54 "1019 "MALIBAGH BRANCH "28-08-08 "
"55 "1013 "MIRPUR BRANCH "27-12-10 "
"56 "1094 "MOHAKHALI BRANCH "28-12-08 "
"57 "1001 "MOTIJHEEL BRANCH "08-11-07 "
"58 "1004 "MOULVI BAZAR BRANCH "15-05-08 "
"59 "3046 "MOULVI BAZAR BRANCH (DIST.) "30-10-08 "
"60 "1115 "MUKTARPUR BRANCH "12-02-10 "
"61 "1022 "MYMENSINGH BRANCH "09-04-09 "
"62 "1201 "MOHAMMADPUR BRANCH "05-12-11 "
"63 "6085 "NAOGAON BRANCH "19-03-09 "
"64 "1003 "NARAYANGANJ BRANCH "22-05-08 "
"65 "1110 "NARSINGDI BRANCH "20-11-08 "
"66 "1175 "NAWABGANJ SME/KRISHI BRANCH "14-06-10 "
"67 "1029 "NAWABPUR ROAD BRANCH "12-06-08 "
"68 "1020 "NAYA PALTAN BRANCH "28-08-08 "
"69 "1016 "NETAIGANJ BRANCH "29-05-08 "
"70 "4163 "NOAPARA BRANCH "19-02-09 "
"71 "1028 "NORTH BROOKE HALL ROAD BRANCH "11-09-08 "
"72 "6084 "PABNA BRANCH "19-11-09 "
"73 "1027 "PALLABI BRANCH "30-04-08 "
"74 "1173 "PANCHABOTI BRANCH "18-11-09 "
"75 "4169 "PORADAH BRANCH "11-10-10 "
"76 "1072 "PRAGATI SARANI BRANCH "23-12-09 "
"77 "6080 "RAJSHAHI BRANCH "04-02-10 "
"78 "6081 "RANGPUR BRANCH "27-11-08 "
"79 "1198 "RUPGONJ BRANCH "08-10-08 "
"80 "4065 "SATKHIRA BRANCH "14-01-10 "
"81 "1171 "SAVAR BAZAR BRANCH "26-10-09 "
"82 "2042 "SHAH AMANAT MARKET BRANCH "17-07-08 "
"83 "1007 "SHANTINAGAR BRANCH "11-09-08 "
"84 "1092 "SHARIATPUR BRANCH "23-04-09 "
"85 "2132 "SHEIKH MARKET BRANCH (OLD)/ "25-03-09 "
" " "NOZUMIA HAT BRANCH (NEW) " "
"86 "6179 "SHETABGONJ SME/KRISHI BR "15-12-10 "
"87 "2045 "SHEIKH MUJIB ROAD BR "17-07-08 "
"88 "3047 "SHREEMONGAL BRANCH "30-10-08 "
"89 "1090 "STOCK EXCHANGE BRANCH "07-10-09 "
"90 "3043 "SUBID BAZAR BRANCH "14-08-08 "
"91 "3033 "SYLHET BRANCH "07-08-08 "
"92 "1126 "TAKERHAT BRANCH "03-12-09 "
"93 "1091 "TANBAZAR BRANCH "02-09-09 "
"94 "1076 "TANGAIL BRANCH "11-10-10 "
"95 "2036 "TERRI BAZAR BRANCH "17-08-08 "
"96 "1174 "TONGI SME/KRISHI BRANCH "27-12-10 "
"97 "3139 "TULTIKAR BRANCH "07-08-08 "
"98 "3049 "UPOSHOHAR BRANCH "14-08-08 "
"99 "1024 "UTTARA BRANCH "24-04-08 "
"100 "1203 "GULSHAN TEJGAON LINK ROAD BRANCH "24-06-12 "

Source: IFIC Bank
Ltd

3.9 LIST OF PRODUCTS/SERVICES OF IFIC BANK LTD
Deposit Product: Savings Account, Smart Savings Account, Super Saving Plus
- More Money, Current Account, Special Notice Deposit - SND Account, Fixed
Deposit Receipt (FDR), Pension Savings Scheme (PSS), School Savings Plan –
A Plus, Monthly Income Scheme – Protimash, Three Years Deposit Plus (3YDP),
Double Return Deposit Scheme (DRDS), Millionaire Dream Plan (MDP)

NRB Account: Foreign Currency A/C, NFCD, Wage Earners Development Bond, USD
Premium Bond, USD Investment Bond, Inward Foreign Remittance
List of Exchange Houses:
"SL. NO. "EXCHANGE HOUSE "
"01. "Oman International Exchange LLC, Oman"
"02. "Placid N. K. Corporation, USA "
" "(Global) "
"03. "Multinet Trust Exchange LLC, UAE "
"04. "Al-Fardan Exchange, UAE "
"05. "Coinstar Money Transfer Ltd., UK "
" "(Global) "
"06. "MoneyGram Payment System, USA "
" "(Global) "
"07. "Xpress Money Services Ltd., UK "
" "(Global) "
"08. "Wall Street Finance LLC, USA "
"09. "Ceylinco FastCash, Sri Lanka (Global)"

Source: World Bank

Loan Products:
IFIC Easy Loan, Consumer Durable Loan, Parua (Education Loan), Thikana
(Home Loan), Any Purpose Loan, IFIC Marriage Loan, CNG Conversion Loan,
IFIC Home Renovation Loan, IFIC Medical Loan, IFIC Holiday Loan, IFIC
Peshajeebi Loan, IFIC Auto Loan

Other Products / Services: Q-cash, VISA Debit Card, Credit Card, SMS
banking, Internet banking

3.10 LIST OF ONLINE PRODUCTS/SERVICES OF IFIC BANK LTD
- More Money, Current Account, Special Notice Deposit - SND Account,
Pension Savings Scheme (PSS), Double Return Deposit Scheme (DRDS),
Millionaire Dream Plan (MDP)

SMS Banking: This service allow customer to do some banking activities
through SMS from their mobile. The services are as follows
Check account balance
Short Statement of last 5 transaction, etc.

POS: Point of Sales Service for the customer who wants to withdraw money
from any branch using their card.

Card Transaction: This product allow customer to withdraw money anytime
from ATM booth. Here, customer can do account transaction, balance enquiry
etc. They don't need to carry much cash with them.

Cash and Cheque Deposit and Withdraw: Customer can deposit cash and cheque
in any branch of the bank. A customer can also withdraw money from any
branch whether he has an account in that branch or not.

Internet Banking: This service allow customer to do some banking activities
through internet from his home or office or anywhere of the world. The
services are as follows
View and verify transactions on account
View Statement
Print Account Summary
Print Account Statement
View Check-Book usage status
View & update short profile

Chapter 4
Results
4.0 INTRODUCTION
Here I present the data collected from the two samples, i.e, and the
interviews with the online banking staff of IFIC Bank Ltd and the
collective response to the questionnaires by the customers. The
presentation will be in two parts, data collected from the bank staff and
that collected from the customers.

4.1 BACKGROUND OF THE BANK
Before I sort out and analyzed the data collected, I present a background
of the bank with regards to what the online products and services they
offer. This information was gathered from their websites and brochures and
compared with what was gathered from the interview with bank staffs and
what customers confirmed they received from online banking.

4.1.1 BACKGROUND OF THE RESPONDENTS
Staff members of bank represent the bank. They were made up of three female
and two male respondents. All the five respondents have worked in their
banks for over three years and were quite familiar with the operations of
online banking. All of the respondent customers has at least an account in
Progoti Sarani Branch of IFIC Bank and also familiar with all the online
product and services offered by the bank.

4.2 MAJOR ONLINE BASE PRODUCTS AND SERVICES PROVIDED BY THE BANK
- More Money, Current Account, Special Notice Deposit - SND Account,
Pension Savings Scheme (PSS), Double Return Deposit Scheme (DRDS),
Millionaire Dream Plan (MDP)

SMS Banking: This service allow customer to do some banking activities
through SMS from their mobile. The services are as follows
Short Statement of last 5 transaction, etc.

POS: Point of Sales Service for the customer who wants to withdraw money
from any branch using their card.

Card Transaction: This product allow customer to withdraw money anytime
from ATM booth. Here, customer can do account transaction, balance enquiry
etc. They don't need to carry much cash with them.

Cash and Cheque Deposit and Withdraw: Customer can deposit cash and cheque
in any branch of the bank. A customer can also withdraw money from any
branch whether he has an account in that branch or not.

Internet Banking: This service allow customer to do some banking activities
through internet from his home or office or anywhere of the world. The
services are as follows
View Statement

In contrast to traditional banking products/services, all the product and
services of online banking can be obtained from the traditional channel.
The difference here therefore rests solely on the difference in channel
delivery.

4.3 DATA COLLECTED FROM INTERVIEW WITH BANK STAFFS TO ADDRESS THE
RESEARCH QUESTION
1. What are online banking products and services that IFIC Bank Ltd
offers to their customers?
2. What are the upcoming online banking products and services that IFIC
Bank Ltd is going to offer their customers?
3. What is the perception of customers of online banking?

INTERVIEW QUESTIONS FOR BANKING STAFF
1. What are the major online base products / services your bank provides
to its customers?
Answer: According to respondents, major online products/services are as
follows: Internet Banking, SMS Banking, Card Transaction, Cash and Cheque
Deposit and Withdraw. Others are the same as cataloged and explained in the
preceding heading and this corroborated what I found on their websites,
brochures, commercials and customers' identification of the online products
and services that they access from the bank. The feedback from the
customers was especially important because some services could only be
assessed with a customer password and cannot be confirmed by merely
visiting the websites.

2. How has online banking improved your bank's productivity?
Answer: Live Branch position, Customer's flexibility to enjoy banking
facilities from any branch of the bank all over Bangladesh by opening
accounts in one branch. Customers are very happy with that. The respondents
indicate that online banking has increased the productivity of their bank
as well as that of their customers. Both the bank and its customer save
more time and cost, and in addition, they save more man-hour for the bank.
As customers are spared long queues in the bank and the trouble they have
to take in going through heavy traffic and long distances to reach their
bank, corresponding, and the pressure on traditional banking outlets are
reduced thereby improving services for a fewer number of customers.

3. What kind of feedback do you receive from your customers on online
banking services?
Answer: According to respondents, customers have a mixed reaction about
online banking services. Some are satisfied with existing online services
and some are not. They want more services. Some complain about slow
uploading of banking website and links. A recent event depicts a clear
picture of the mixed reaction of customers. According to respondents, their
PSS (Pension Savings Scheme) account was not online. But recently they
transform the account into online product. A new customer will get this
facility from the first day of account opening. He or she can deposit his
or her money into a savings account in any branch of the bank. Every month
a certain amount of money (written in A\C opening form) will be deducted
from their saving account to PSS account. They don't need to come to bank
every month to deposit money, they don't need to remember the date of
depositing money, they don't need to go to a branch where they opened the
account, need not to worry about late fees etc. This online product (PSS)
surely comes with solution of many problems. Whenever any customer come to
open a PSS account and know that he has to open a saving account also, many
of them become happy to know that they can enjoy the benefits described
above. But some are not interested to this new online product. They are
alright with the problems that can be solved by this online PSS. In case of
old customer, the respondents face more problems. Whenever they asked their
old PSS holder that they have to open a new account to transfer their PSS
into online product, some are happily ready to do that to enjoy the
facilities of online banking. But most of the customers become very angry
and not ready to do that. Some argued that the bank should tell the
customer about all the rules before starting a new account not after
opening an account. If any new system emerges, that should not apply on old
customers – a customer said that.

4. What products/services do you plan to introduce into the online
banking in the future?
Answer: The bank is going to introduce more online products and services to
their customers. These include:
Mobile banking
Card Cheque
Deposit in ATM
Fund transfer from one account to other accounts
Paid utilities bill
Adding some extra features in internet banking

5. What are the challenges that your bank is facing in providing online
banking services?
Answer: The responses to this question are itemized as follows:
The respondents said that high cost of establishing on line banking
system is one of the main challenges for the bank in providing online
banking services. Because the bank has to be sure that the savings
from online banking technology is more than the cost of conducting
business in cyberspace.
Poor telecommunication systems and technological infrastructures etc.
The interviewees reveal that there is a clear sense of misgiving
about online banking among some customers who were offered online
services. Some of them use internet only in office and some of them
never do.

DATA COLLECTED FROM ONLINE BANKING CUSTOMERS FROM THE QUESTION POSED IN THE
QUESTIONNAIRES

[I asked about 100 people. Many of them don't use internet, so they can't
enjoy the full benefit of online banking. They use cards which is also an
online product. But they are unfamiliar with many other online
products/services. Here the entire 50 respondents who participate in this
study use internet banking (a part of online banking) that means use
internet either in office or home or both place.]

I first present the distribution of online banking customers based on sex,
account type and age distribution. 50 customers participate in it and among
them 27 were male respondent and 23 were female respondent. 25 respondents
run a saving account, 10 current account and 15 respondents run both
current and saving account. 18 were below 25 years, 25 were above 25 years
and 7 were above 50 years.

Figure 02: Sex of Respondents

Figure 03: Account type of Respondents

Figure 04: Age Distribution of Respondents

1. Why did you subscribe online banking? And what are the
products/services that you access online from your bank?
Answer: Respondents indicated that they subscribed online services because
they use the internet at home or office, or because they perceived it as
modern. Some customers use it because their bank introduces it.

Regarding the question on the kinds of products and services that the
respondents access from online banking, they enumerated all the products
and services that the banks offer online confirming what I gathered from
the interviews, websites, brochures and advertisements.

2. How do the online products and services differ from traditional banking
products and services that you know?
Answer: The respondents did not perceive much difference between online
products and services and those of traditional banking except in the self
service dimension of online banking and the vast information that were
readily available online. They also focused on the time and cost saving
advantage of online services. But some customer added that in spite of
using online banking they like traditional banking more than online
banking. Because in traditional banking they can inquiry a matter from bank
staffs until it becomes clear to them. In online banking everything depends
on customer to understand a matter by himself. They also prefer to feel
their money with their hand not virtually.

3. How reliable or good is your internet connectivity and how does online
banking save you in terms of monetary and time costs?
Answer: Many of the respondents have problems with internet connectivity.
Nonetheless all respondents felt that they were saving costs from using the
internet in terms of time and money. They explain that for many banking
activities they don't need to go bank, it saves both money and time.

4. What benefits do you get or problems do you encounter with online
banking?
Answer: Respondents reiterated the benefits of saving time and cost. Some
mentioned about self service advantages. In case of problem they mentioned
about slow connectivity, downloading of web pages.
5. Do you suffer any security and privacy threat in accessing online
banking?
Answer: On the whole, respondents had had no security threats or privacy
violation. But some expressed that in near future privacy can be violated
as technology is enhancing day by day and practice of online banking is
also increasing.

6. What kind of additional online products/services would you wish were
provided by your bank?
Answer: Respondents wish they could carry out full transactions with their
online banking with adequate security and also cross transaction with other
financial institution. They felt that the present services provided by
their bank is limited compared to what pertained in other parts of the
world.

7. Do you have any message to your bank regarding online banking?
By this question I tried to understand customers' satisfaction or
dissatisfaction on their bank regarding online banking.
Answer: Most of the customers run account in more than one bank. They
complained that they get more online services facility in another bank than
IFIC Bank.
In case of ATM, some customers complain about unavailability and some
customers about network.
After any kind of transaction, customers want sms notification. But their
banks sms notification alert is irregular. Some feel insecurity for that.

Some customers mentioned that in case of balance transfer to some branches
of the bank out of Dhaka city, the bank takes a online charge, it should be
free.

Introducing new rule after opening an account is also disliked by most of
the customers. They think in case of introducing any new rule the bank
should consider about old customers. Some customers' requirement is small
and they are quite happy with their bank.

8. To what degree has your expectations and requirements been met? How
satisfied are you?
a. Extremely satisfied
b. Satisfied
c. Somehow satisfied
d. Dissatisfied
e. Extremely dissatisfied
Answer: The chart below gives the satisfaction distribution of the
respondents:

Figure 05: Satisfaction Level of Respondents
Chapter 5
Description of Results

5.0 INTRODUCTION

In this chapter, I discuss the result of the data I collected in relation
to the frame of references, concept and theories that underpin the study.
The discussion is presented in three parts according to the research
questions.

5.1 RESEARCH QUESTION 1

What are online banking products and services that IFIC Bank Ltd offers to
their customers?
Online banking becomes a way of attracting new customer and also impresses
the existing customer. Many researchers view customer value as a key
element in achieving company success. This study tries to identify the kind
of product and services IFIC Bank Ltd is offering to deliver customer value
and also the upcoming product and services that are coming to increase
customer value and finally the customers' perception who access such
product and services.
The study revealed that online banking is a complementary service to
traditional banking in Bangladesh. In indentifying the products and
services, we took a number of approaches. I examined the website of the
bank, read through their brochures and other advertising devices,
interviewed bank staffs and matched the information gathered with
customers' responses regarding the product and services. Short list of
online products and services is listed below:
Several Deposit Product
SMS Banking
POS: Point of Sales
Card Transaction
Cash and Cheque Deposit and Withdraw
Internet Banking:
View Statement

The services that are not offered by the bank include full transactions
such as Fund transfer from one account to other accounts, bill payments
etc. Cross-selling is one of the key models of the internet platform. The
present product and services provided by the bank is limited compared to
what pertained in other parts of the world even in some other banks of
Bangladesh. Thus, the bank has a wide range of offering they can offer as
they consolidate existing product and services.


What are the upcoming online banking products and services that IFIC Bank
Ltd is going to offer their customers?
The bank staffs said that in case of providing online banking services
their bank faces the challenge of high cost. We also saw in case of online
banking the main challenge is to make sure the savings from online banking
technology more than the costs and risks associated with conducting
business in cyberspace. So, the bank could not offer full rang online
banking products and services till now. But the existing online products
and services is also attracting new customers and in recent time the
customer increase rate is 300%, according to respondents. The bank has
about 4, 60,000 accounts, among those accounts 1, 75,000 are active
account. The bank staffs think that online banking is one of the reasons
behind this increase in account number. As the customers are the driver of
a bank asset, the bank is now ready to introduce some more online products
and services to its customers very soon. Including:
Mobile banking
Card Cheque
Deposit in ATM
Fund transfer from one account to other accounts
Paid utilities bill
Adding some extra features in internet banking


What is the perception of customers of online banking?
It indicated already that the essence of online banking increase customer
value. Although the full range of online banking facilities is not yet
available but it is available to some extent. But all the customers are not
using it. One of the main problems is lack of awareness. People still think
that their money is safer in their hand than online. When I described the
benefit of online PSS A/c to some client, I found different point of view
of them. Online PSS A/C has many advantages including: a customer need not
to come to bank every month. One customer who was a housewife said that she
loved to come to bank every month. She also felt secure to deposit her
money physically. This is not her point of view only; many customers shared
the same statement. It is very hard to change such mentality.

Some customers said that traditional banking is easy to carry out. Some
internet banking users also support that traditional banking is easy to
carry out than online banking because they are not much familiar with these
services.

A huge number of customers taking banking services does not capable to bear
the cost of additional equipments like computer, computer accessories ,
Internet etc. from their own organization or at home. Using Internet
facility still very costly and people has little knowledge in operating
computers. A few numbers of cyber café is available but for banking purpose
customers do not feel safe to use these facilities. As a result total
numbers of customers who are habituated in on line banking systems are
limited.

Some customers come and asked the bank staff to write the deposit slip for
them because they can't write properly. It is very difficult to take those
customers under the umbrella of online banking.

A different picture is also available. Some customers said that they need
to inquiry their account statement frequently and it is difficult to visit
the bank so frequently. Now they can get their necessary information from
their home or office through internet. They enjoy all the available
services provided by their bank. Moreover, they want the additional
services available in other banks and not yet available in their bank.

At one point, all the customers are agreed that in case of introducing any
new rule (whether it for online banking or traditional banking) the bank
should be careful. It should take right decision so that the old customers
do not suffer for that new rule.

As the customers have a mixed reaction of online banking, the bank's latest
product online PSS A/C also gets a mixed reaction. Some customers adopt it
happily. And some customers close their account because they don't want to
grant the new rule. They don't want to open another saving account to make
their PSS A/C online. It is clear that for them the benefits of online
banking is less worthy than other factors.

Chapter 6
Summary, recommendation and conclusion
6.0 INTRODUCTION

This discussion will now turn to summary, conclusion and recommendation.

6.1 SUMMARY

The study revealed that online banking is a complementary service to
traditional banking in Bangladesh. Because customers till depend on
traditional banking more than online banking. For many reasons they prefer
traditional banking. They like to feel their money with hand. They think it
is more secure form than virtual form. The sense of security is of great
importance. In Bangladesh most of the people are illiterate and obviously
they are technology ignorant. Again, among the literate portion many of
them have computer phobia. So these people can't trust on the online
banking services. To gain the confidence on online banking the overall
computer literacy must be developed. With that goal government has taken
initiative even in the root level to develop it literacy in the country.
This would be a perfect ground for the development of online banking.

Bank must also create the environment that will encourage customers to hook
up. Many potential customers who cannot purchase personal computer can be
encouraged to acquire them through special bank loans payable through small
monthly deduction from the customer's account.

Nonetheless, some customers enjoyed the advantages of the online services
and expressed the desire for more services online.

6.2 RECOMMENDATION

Online banking became "an impossible to survive without" for all banks. In
mission statement the bank states that it wants to provide better service
to their clients with the help of a skilled and dedicated workforce. To do
so, the bank must give more concentration on online services. Here, I have
come up with some recommendation which IFIC Bank Ltd can use for their
advancement. These are:
If it is feasible for bank than online charge (i.e. for balance
transfer) should be removed.
Make sure that sms notification system is working properly.
Some important online services (like mobile banking) that are already
introduced by other banks should be started as early as possible.
Otherwise valuable customers can be switched to another bank.
As the number of customers is increasing, the number of ATM booths
should increase.
Before introducing any new product or service, train your staffs
about that product or service. It will make staffs performance better
and quick. Therefore, the customer service will improve.

6.3 CONCLUSION

It is reasonable to predict that online services will improve; many more
banks will go fully online and competition will increase in this area. Wu
et al (2006) strongly suggest from their findings that online banking will
prove disruptive to traditional banking and therefore core competencies and
new ways of serving the customer must be developed. Hope that this work
will set the stage for a rigorous approach to online banking.

Appendix – A
INTERVIEW QUESTIONS FOR BANKING STAFF

[N.B. This questionnaire is fully designed for academic purpose. Your
unbiased and valuable response will be effective for the study. Your all
answers would be kept as a confidential.]

Name of respondent: …………………………………………..
Designation:
Job experience in this bank (in year):
Sex: Male: Female:

1. What are the major online base products / services your bank provides
to its customers?
Answer:

2. How has online banking improved your bank's productivity?
Answer:

3. What kind of feedback do you receive from your customers on online
banking services?
Answer:

4. What products/services do you plan to introduce into the internet
banking in the future?
Answer:

5. What are the challenges that your bank is facing in providing internet
banking services?
Answer:

Appendix – B
QUESTIONNAIRE FOR CUSTOMERS

[N.B. This questionnaire is fully designed for academic purpose. Your
unbiased and valuable response will be effective for the study. Your all
answers would be kept as a confidential.]

Age: below 25 above 25 above 50
Sex: Male: Female:
Account type: ……………………………………………………

1. Why did you subscribe internet banking? And what are the
products/services that you can access online from your bank?
Answer:

2. How do the online products and services differ from traditional
banking products and services that you know?
Answer:

3. How reliable or good is your internet connectivity and how does online
banking save you in terms of monetary and time costs?
Answer:

4. How do you find the internet banking website or portal you use in
terms of accessibility, appeal, navigation, content and
responsiveness? Have your expectations been met?
Answer:

5. What benefits do you get or problems do you encounter with internet
banking?
Answer:

6. Do you have any concerns regarding your security and privacy in
accessing online banking?
Answer:

7. What kind of additional online products/services would you wish were
provided by your bank?
Answer:

8. Overall, to what degree has your expectations and requirements been
met? How satisfied are you?
Answer:
a. Extremely satisfied
b. Satisfied
c. Somehow satisfied
d. Dissatisfied
e. Extremely dissatisfied

APPENDIX -C
ACRONYMS
A/C : Account
FDR : Fixed Deposit Receipt
IT : Information Technology
IFIC : International Finance Investment & Commerce Bank
Limited
PO : Payment Order
SB : Savings Accounts
SME : Small & Medium Scale Enterprise
CD : Current Account
PSS : Pension Savings Scheme

Project report on Customers Perception of Online Banking

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