E-Banking In Pakistan: Current Scenario

INSTITUTE OF BUSINESS ADMINISTRATION

MIIS FIINAL PROJJECT

E-BANKING IN PAKISTAN: CURRENT SCENARIO

FINAL REPORT

SUBMITTED BY:

ADNAN AHMED

ANZAR FASEEH

KAMRAN MEMON

M NABEEL KHAN

10TH DECEMBER 2004 TH DATED:

0

Acknowledgement

First of all we would like to thank ALMIGHTY ALLAH, the most Beneficent and the most Merciful for giving us the courage and capability enabling us to complete this Final Project on E-Banking, Past, Present and Future. .

We would like to thank IT Personal at Union Bank and United Bank Limited for sparing their valuable time from extremely busy schedule.

Last but not the least we would like to our Project Instructor Mrs. Fehmida Hussain for providing us the guidance and ample support in completing this project report.

1

TABLE OF CONTENTS

TOPIC PAGE NO

ACKNOWLEDGEMENT 1

ABSTRACT 3

CHAPTER 1 4

Introduction

CHAPTER 2 6

Literature Review

CHAPTER 3 21

Primary Research

CONCLUSION 34

RECOMMENDATION 37

REFERENCES 40

APPENDIX 41

2

ABSTRACT

This is a research report and an attempt to look into the issues and concerns in the Banking Sector and tries to analyze the views of the consumers and the banking environment.

We have analyzed the current offerings of E-Banking solutions offered by two major Pakistani banks and the consumers' responses to these efforts. The overall research findings have been presented as objectively as possible and it points to the Security concerns hampering the growth of E-Banking within Pakistan. There is also a dearth of awareness in this mode of implementation.

Although E-Banking is one of the major ways to reduce transaction costs for the consumers, the consumers are vaguely aware of that. Similarly, the Banks also have a lot to gain from this platform but there seems to be not enough of an effort in this regard as the IT Department has been reduced to just a support unit of the organization. In this research report we have highlighted the various consumer responses and products being offered to present a view of the various technologies in use within Pakistan.

3

INTRODUCTION

RESEARCH OBJECTIVE:

The purpose of this research is to gauge the current implementation status of E-Banking in Pakistan. We intend to identify major trends and objectives of current E-Banking activities in Pakistan. The basic thrust of the research is that it offers a brief insight into the E-Banking activities being performed. The major flaws and improvements will be highlighted and future prospects for growth will also be outlined. This research basically tries to give a brief look into the E-Banking implementation by looking at the services being offered and their potential usage.

We will now briefly describe our research topic. Our research can prove to be beneficial for the educational institutions and for the Financial sector, as it would provide them with an insight into the various E-Banking aspects in Pakistan.

WHAT IS E-BANKING

With e-banking through the internet, you have your finances under control at all times whether you are making payments, issuing stock exchange orders or simply require account and custody account information.

For many consumers, electronic banking means 24-hour access to cash through an automated teller machine (ATM) or Direct Deposit of paychecks into checking or savings accounts. But electronic banking now involves many different types of transactions.

4

Electronic banking, also known as electronic fund transfer (EFT), uses computer and electronic technology as a substitute for checks and other paper transactions. EFTs are initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Some use other forms of debit cards such as those that require, at the most, your signature or a scan. The federal Electronic Fund Transfer Act (EFT Act) covers some electronic consumer transactions.

RESEARCH METHODOLOGY:

IN our research we followed the use of both primary and secondary research to reach our conclusions. Secondary research will be from literature whereas primary research will be from surveys and questionnaires from various sources. In primary sources we will visit banks and inquire about the current status of implementation and the various technologies in use. We will also endeavor to collect information on customer response to the E-Banking effort.

SOURCES:

The secondary research will consult the following sources:

Ð'* The world wide web

Ð'* Various published articles in local IT magazines and other sources

Ð'* Current Scenario and Future Prospects for E-Commerce and E-Business in Pakistan by Waleed Khalid (December 2003) submitted to the IBA research portal

REFERENCES:

For primary research we will visit the major banks in Pakistan, namely United Bank Limited (UBL) and Union Bank Limited (UNB). We will conduct in depth interviews and meetings with their IT personnel and senior executives for getting all the required information on our research topic.

5

LITERATURE REVIEW

Economic and Financial Implications of Electronic Commerce for Pakistan

This report has been authored by Dr. Irfan Hyder, who at the time of this report was the Chairman, Center for Computer