Role of E-Business in Banking Sector in India

Abstract

The liberalization and globalization necessitated the need for bringing measures to cut down cost, to increase efficiency and to provide services to the customers in all the sectors of the economy. The best tool to provide this was e-initiative and this led to the development of various E-Business models. Factors for a successful e-Business venture have been identified with an illustrative example of banking sector. The technique used for banking sector can also be ex tended to other sectors such as education . ICICI bank which was the first bank in India to launch website in 1996 and internet banking in 1997 also led the way by being the first bank in India to launch online bill payment in 1999. In the process it also became the second largest bank in the country after SBI. To study the sweeping changes brought about bye-initiative measures in the banking sector some banks like SBI and BOB were chosen from public sector and like ICICI and HDFC from private sector . The performance of the banking sector has improved profitability and customer satisfaction and many other parameters show a market improvement. In the new millennium the internet based way of doing business has certainly changed. It has changed the shape of whole set of industries and market and has already had a great impact on consumers and is all set to have a very exciting future. E-business can be described as the process of buying and selling or exchanging of products. services and information generating demand for them through marketing and advertising, servicing customers and conducting electronic transactions within an organisation via computer networks including the internet. In banking communication and records keeping are prime activities and so the application of e- business should be both natural and useful. Advances in IT and data processing are rapidly changing the methods of communication and transaction processing procedures used by banks . Banks that are able to make use of this technology are able to provide better services to customers at a reduced cost. Banks adopted customer relationship management too ls to improve their customer retention and to help up-selling and cross selling new product combinations and services such as ATM , Internet use etc. Many of the better bank customers appear to use website and the se could be important for the success of banks . In this paper the banking sec tor has been chosen for study because of its unique potential to be a very large user of e-Business.