Online and Traditional Banking System in the UK

by

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Background of the research1

Problem definition3

Purpose of the Research4

Research Question5

Rationale5

Significance of the Research6

REFERENCES7

CHAPTER 1: INTRODUCTION

Background of the research

By using internet one can easily communicate globally, several heterogynous systems around the world facilitate internet connections for communication. Today the way of doing business has been revolutionized because of the internet. Information technology has a positive and constructive impact on banking system like it does on every other business organizations. By the use of internet services bank can increase the number of customers as customers are keenly interested for using the services of online banking. To adopt the internet banking banks have to face technological challenges (Yilmazer Widdows 2005 10). Banks that can withstand the competition must become learning organizations and must align information technology with business strategies. Since 1995, banks have adopted the Internet technology by introducing online financial services. However, there is a dearth of empirical data about the profitability of adopting Internet banking services (Ciciretti Cristiano 2009 81). Adopting Internet technology introduces new vulnerabilities and threats that expose online banks to unprecedented security risks. Non-bank companies that offer online financial services are challenging banks that do not adopt Internet banking (Uppal 2008 10). The equation is how banks could balance between their core business and the newer online banking services.

In the recent years by offering the online banking services banks can leverage the advantage. Apart from the safety issues related to the online banking, the benefits and advancements because of internet cannot be avoidable. From the customer's point of view, online banking has rendered them the bill paying facility, managing their accounts, and does online shopping from their homes (Uppal 2008 10). The traditional banking services like transferring money from accounts, checking account balance, keeping complete knowledge about the transactions have replaced by the electronic checks and digital money. These advancements have created feasibility for customers globally.

Online banking can be defined as supplying the information regarding the bank and banking services through its home page, and that home page starts with www i.e. World Wide Web. This e banking services facilitates the customers by providing access to their accounts online. The customers not only access their accounts but also they can transfer money between different accounts (Koskosas 2008 56). The customers can also do payments trough online banking. The differences between the physical market place and the virtual market place are that, in the physical marketplace, the person should be presented there and do the transaction in the physical form but, in the virtual market place, the person does not have to present physically, he can do the transactions through internet (Yilmazer Widdows 2005 10). In the linguistic context of online banking, electronic delivery of services means a customer carrying on transactions by employing online electronic channels like the internet, Many banks and other organizations are eager to use this channel to deliver their services because of its comparatively lower delivery cost, higher sales and potential for offering ...