FINANCIAL MANAGEMENT

1. Problems Faced by Customers
in Using Different Channels of
Banking
(FINANCIAL MANAGEMENT LIVE PROJECT)
Under guidance of Dr. Vineeta Mishra
Submitted By
Ashish Gupta I Shreya Saxena
Ayush Kapoor I Jay Rana
Prerit Jain I Hairis Singla
Komudi Arora I Akash Saxena
IBS GURGAON

3. What challenges do customers & bank face
in India regarding ATMS?
 The biggest challenge that banks face while deploying ATMs in India is the
availability of power. So banks use solar power in certain pockets. Another
challenge is environmental conditions. We have machines which work in even
45 degrees Celsius temperature.
 The other aspect is security. As ATM penetration increases, there will be
chances of frauds and crimes. Even now banks see some rudimentary crime
happening such as thieves picking up machines; so banks now bolt machines to
the ground. We have also seen some sophisticated crime happening such as
card skimming, wherein your card data gets compromised.
 From the technology perspective, banks are coming up with anti-skimming
devices.
 If you look at India today, we have about 74 ATMs per million of the
population. In comparison, China has over 200 machines per million and the
US has 1,300 ATMs per million. So ATM penetration is very low but then even
bank penetration is low in India; 50% of the population is unbanked. This is in
sharp contrast with other emerging economies.

4. MAIN CONCERNS IN INTERNET BANKING
Security concerns:
Security fears have served as deterrents to online growth. Of particular concern
are threats of pharming and phishing. Phishing is an internet fraud, through
which innocent people are enticed to divulge their personal information like
user ID and passwords, which are later on used by scammers in unauthorized
ways.
The most common method of phishing is sending emails claiming to be from your
bank or other financial institutions which are dealing that already has your
personal information and you will be asked to confirm the details by clicking a
particular link (URL) provided in this fake email. This URL will take you to a fake
website which will be similar to your genuine website, and the information
provided by the customer in the forms provided in the fake website will be
gathered and used for committing fraud in their accounts or withdraw funds
unauthorizedly from these accounts.
Pharming is another internet fraud, whereby as many as users as possible are
redirected before they reach the legitimate online banking websites they intend
to visit and they are lead to malicious ones. The bogus sites to which victims are
redirected without their knowledge or consent, will likely looks the same as
genuine site. But when users enter their login name or password, the
information is captured by criminals.

5. FURTHER PROBLEMS RELATING TO NET
BANKING IN INDIA
Given that India is the IT and tech services outsourcing hotspot of the world, it's
surprising that Internet banking has not really taken off. Despite the advent of a
very tech-savvy and vast consumer class in recent years, a mix of industry issues
and unique challenges continue to thwart the expansion of net banking in India.
Technology challenges, IT practices, certain cultural issues, industry lethargy, and
workplace constraints have affected widespread acceptance of Internet banking.
Low Broadband Internet Penetration
India has one of the lowest broadband connectivity penetration rates in Asia as
compared to Japan, Taiwan, Korea and Singapore. While the bigger cities such as
Mumbai, Delhi, Chennai, and Bangalore have relatively better broadband
penetration rates, PC users in smaller cities and towns still use dial-up options to
connect to the Internet. Slow connectivity speeds often dampen the online banking
experience for many customers eager to use such services.
Banks' Ambivalent Commitment Levels
Internet banking did take off in India at the turn of the millennium but soon
faltered due to lack of takers. In the middle of this decade, multinational and
domestic private banks started offering net banking services as a competitive
differentiator. Only recently, state-owned and public sector banks have started
doing likewise. However, banks' ambivalent commitment levels and their
reluctance to allocate huge budgets for net banking branding initiatives, as well as
a lack of industry advocacy efforts, have resulted in poor acceptance levels of
Internet banking by customers.

6. Customers' Preference for Traditional Branches
There are thousands of highly active traditional bank branches in India's crowded cities and major
towns. Office workers take longer lunch breaks to finish banking activities and transactions at these
branches rather than conduct them online. Most customers prefer the personal touch and customized
service offered by staff in brick-and-mortar bank branches. Many Indians are also averse to calling call
centers and banks' customer contact lines to address issues related to online bank accounts.
Fear of Online Threats/Scams
Ubiquitous and prevalent online threats about hackers, identity theft, stolen passwords, viruses,
worms and spyware tend to make customers wary just like in any other country. Conservative Indian
bank customers used to years of saving in an erstwhile mixed-socialist economy are always fearful of
losing hard-earned savings in online scams. These customers are also not sure about the efficacy of
banks' websites and their commitment to allocate funds for reliable encryption mechanisms and
robust back-end technologies and systems.
Other Problems
Workplace constraints and corporate policies about using external websites or pursing personal
activities such as online banking have affected its expected fast-paced acceptance among the growing
affluent class in India. Cultural issues, such as parents giving priority use of the home PC to their
children rather than using it themselves, stifle the potential growth of home access to Internet
banking services. Public sector banks with vast customer bases also don't tend to invest money in
training personnel for e-banking initiatives, resulting in poor customer service levels.

7. Questionaire 1- Bank Customer
 Q1. Do you have a bank account A. Yes B. No
 Q2. Type of Bank Account A. Saving B. Current C. Recurring
 Q3. What type of ATM Card do you use
A. VISA B. MASTERCARD C. MASTERCARD D MAESTRO E. RUPAYE
 Q4. Which Banking channel do you prefer to transact with & why?
A. Physical Branches B. ATM C. Phone Banking D. Internet: Online Banking
 Q5. What is your priorities towards channels of banking ?
* Please suggest in ascending order of your priority

8. Questionaire 2- ATM Guard
 What are the kind of people you usually deal with mostly?
 What are you to suppose to do when ATM is not working?
 What do you do when a person is not able to operate an ATM?
 Do you get any training to operate the ATM?
 If Guards are outsourced then what is the name of company?
 On what basis you are appointed as an ATM Guard.
 In which bank did you previously work for before?