Banks and financial institutions in Nepal are in the process of Web, to enabling their services in order to offer Online banking to its customers. Online banking is the practice of making bank transactions or paying bills via the Internet. Online banking allows an account holder to make deposits, withdrawals and pay bills all with the click of a mouse. It doesn’t get much more convenient than that.
Benefits of Online Banking
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.
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.
Online Banking Types
Fundamental Level: In this level, websites broadcast information on different products and services to customers, and it may get and reply to customers’ queries through e-mail or online chatting.
Second Level: Banks maintain easy transactional websites that permit their customers to submit their instructions, application for different services, and queries on their account, balances. In addition they do not allow any fund-based transaction on their accounts.
Third Level: Banks offer their customers online fund-based and transactional services. These are kinds of fully transactional websites and allows internet banking customers to transfer their funds, defray bills, and subscribe to other offerings of the bank and to carry out purchase and sale of securities.
Internet Banking: Facility Vs Security
Internet banking overcomes geographical barriers thus extending its reach across geographical boundaries. For the banks internet banking minimizes the operating costs and for the shareholders, it maximizes value of their investment. In a world of global banking where fierce competition exists among banks to provide hassle free banking facilities to the customers, internet banking proves vital. In the mean while, internet banking exposes the banking sector to online security threats. The banks and the customers are becoming more and more concern about safety of their online transactions and confidential banking information. Some security concerns can be highlighted as:
Authentication: The guarantee of individuality of the person in a deal
Authorization: A party doing a business deal is endorsed to do so
Privacy: The privacy of data and information associating to any transaction
Data integrity: It is the assurance that the deal has not been changed
Non-repudiation: A party to the transaction cannot deny that it developed the communication or details
If these issues are not addressed, the bank may undergo operational peril, status risk, legal risk, money-laundering risk and strategic risk. The technology and security standards for Internet banking are TCP/IP, the OSI Layers, and application architectures. There are strategy for backup and recovery, and the ways in which they can compromise a method like sniffer attacks, DoS, and e-mail bullets.