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The banking industry is expected to be a leading player in e-business. While the banks in the
developed countries are working primarily via the Internet as non-branch banks, banks in the
developing countries use the Internet as an information delivery tool to improve their relationship
with customers. Banks have established an Internet presence with various objectives. Most of
them are using the Internet as a new distribution channel with the help of Information and
Communication Technology (ICT). In India, approximately 1% of high and middle-income
group bank customers conducted banking on the Internet in 2000, compared to 5 to 6% in
Singapore and South Korea.
Financial services, with the use of the Internet, may be offered in an equivalent quantity
with lower costs to more potential customers. There may be contacts from each corner of the
world at any time of the day or night. This means that banks can expand their markets
without opening new branches. The banks in India are using the Web for three different purposes:
to market information, to deliver banking products and services, and to improve customer
relationship.
In 2001, an RBI survey revealed that more than 20 major banks were either offering
e-banking services at various levels or planned to do so in the near future. This included some
of the private banks like ICICI Bank, HDFC Bank, IndusInd Bank, IDBI Bank, Citibank,
Global Trust Bank, Bank of Punjab and UTI Bank. In the same year, out of an estimated 0.9
million Internet user base, approximately 17% were reported to be banking on the Internet. The
above statistics reveal that India does have a high growth potential for e-banking. The banks
have already started focusing on increasing and improving their e-banking services. As a part of
this, the banks have begun to collaborate with various utility companies to enable the customers
to perform various functions online (Boyes and Stone, 2003). According to Harris (2000), over
50% of the banks in the US were offering e-banking services.
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