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Comprehensive study of dissemination and

popularity of Canara Banks technological

products (Internet Banking, Mobile Banking and

ATM cum Debit Card) among customers

This project partially fulfills the requirements of 2 years

full time Master of Business Administration course

Submitted by:

Saikat Kumar Bala

MBA/1079/09

Department of ManagementBirla Institute of Technology, MESRA

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I hereby declare that the project A comprehensive study of dissemination

and popularity of Canara Banks technological products (Internet Banking, Mobile

Banking and ATM cum Debit Card) among customers is my own work and it has

been carried out at Canara Banks Doranda branch and Kanke Road branch under

the able guidance of Mr. Anurag Prakash, Marketing Manager, Canara Bank, Ranchi

Circle.

Thank You.

Authorized Signature

Saikat Kumar BalaMBA/1079/09

Mr. Anurag Prakash Dept. of Management

Marketing Manager Birla Institute of Technology

Canara Bank, Ranchi Circle Mesra, Ranchi

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This project would never be successful without the able guidance

and constant support of Mr. Anurag Prakash, Marketing Manager,

Canara Bank, Ranchi Circle. I have tried my best to keep this report

error free. But I will be happy to correct any mistake if brought to my

attention.

I am also thankful to the branch managers and other staffs ofDoranda Branch and Kanke Road branch for helping me collecting

information.

I am also thankful to those customers who have given me their

precious time and information for my research. I must express my

gratitude to my family members and friends for their emotional support.

Saikat Kumar Bala

MBA/1079/09

Department of Management

Birla Institute of Technology

Mesra, Ranchi

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Research Topic:

A comprehensive study of dissemination and popularity of Canara Banks technological

products (Internet Banking, Mobile Banking and ATM cum Debit Card) among customers

Research Objectives:

Distribution pattern of Internet Banking, Mobile Banking and Debit Card among customers Categorizing the users in terms of age, gender and profession Popularity of Internet and Mobile Banking among customers Satisfaction level of customers using i-Banking and Mobile Banking Popularity of Debit Card Barriers (if any) to these new mode of banking

Research methodology:

Research Design:

To prepare the background of our study, we have used exploratory research method

at the initial phase. For this purpose secondary data is used extensively from different

sources. Previous research paper, related articles have been studied.

After this, we have gone through a descriptive research with sample population.

Interview has been conducted with the help of open ended questionnaire.

Source of Data:

Primary data source: Interview and Questionnaire Secondary data source: Companys web site, Financial articles, Previous research

papers

Sample Design:

Sampling:

Since our target population is homogenous in nature, we have used convenient

sampling due to money and time constraint. Sample is selected irrespective of family

background, stream of study and gender.

Target population:

All Saving Bank Account holders of Canara Bank (Doranda Branch, Kanke Road Branch)

above the age of 18 years.

Sample size:300

Scale used:Likert Scale is used to measure the attitude of target population.

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Introduction:

Founded as 'Canara Bank Hindu Permanent Fund' in 1906, by late Sri. Ammembal Subba Rao

Pai, a philanthropist, this small seed blossomed into a limited company as 'Canara Bank Ltd.' in 1910

and became Canara Bank in 1969 after nationalization.

A good bank is not only the financial heart of the community, but also one with an obligation

of helping in every possible manner to improve the economic conditions of the common people -

A. Subba Rao Pai

Founding Principles:

To remove Superstition and ignorance. To spread education among all to sub-serve the first principle. To inculcate the habit of thrift and savings. To transform the financial institution not only as the financial heart of the community

but the social heart as well.

To assist the needy. To work with sense of service and dedication. To develop a concern for fellow human being and sensitivity to the surroundings with

a view to make changes/remove hardships and sufferings.

Sound founding principles, enlightened leadership, unique work culture and remarkable

adaptability to changing banking environment have enabled Canara Bank to be a frontline banking

institution of global standards.

Significant Milestones

Year Events

1st July 1906 Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000

shares of Rs.50/- each, with 4 employees.

1910 Canara Hindu Permanent Fund renamed as Canara Bank Limited

1969 14 major banks in the country, including Canara Bank, nationalized on July 19

1976 1000th branch inaugurated

1983 Overseas branch at London inaugurated Cancard (the Banks credit card)

launched

1984 Merger with the Laksmi Commercial Bank Limited

1985 Commissioning of Indo Hong Kong International Finance Limited

1987 Canbank Mutual Fund & Canfin Homes launched

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1989 Canbank Venture Capital Fund started

1989-90 Canbank Factors Limited, the factoring subsidiary launched

1992-93 Became the first Bank to articulate and adopt the directive principles of Good

Banking.

1995-96 Became the first Bank to be conferred with ISO 9002 certification for one of its

branches in Bangalore

2001-02 Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for catering

exclusively to the financial requirements of women clientele.

2002-03 Maiden IPO of the Bank

2003-04 Launched Internet & Mobile Banking Services

2004-05 100% Branch computerization

2005-06 Entered 100th Year in Banking Service. It Launched Core Banking Solution in

select branches.

Number One Position in Aggregate Business among Nationalized Banks

2006-07 Retained Number One Position in Aggregate Business among Nationalized

Banks.

Signed MoUs for Commissioning Two JVs in Insurance and Asset Management

with international majors viz., HSBC (Asia Pacific) Holding and Robeco Groep

N.V respectively

2007-08 Launching of New Brand Identity

Incorporation of Insurance and Asset Management JVs

Launching of 'Online Trading' portal

Launching of a Call Centre

Switchover to Basel II New Capital Adequacy Framework

2008-09 The Bank crossed the coveted Rs. 3 lakh crore in aggregate business

The Banks 3rd foreign branch at Shanghai commissioned

2009-10 The Banks aggregate business crossed Rs.4 lakh crore mark.

Net profit of the Bank crossed Rs.3000 crore.

The Banks branch network crossed the 3000 mark.

As at March 2010, the total business of the Bank stood at Rs.4,03,986 crore.

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The Bank has gone through the various phases of its growth trajectory over hundred years of

its existence. Growth of Canara Bank was phenomenal, especially after nationalization in the year

1969, attaining the status of a national level player in terms of geographical reach and clientele

segments. Eighties was characterized by business diversification for the Bank. In June 2006, the Bank

completed a century of operation in the Indian banking industry. The eventful journey of the Bank

has been characterized by several memorable milestones. Today, Canara Bank occupies a premier

position in the comity of Indian banks. With an unbroken record of profits since its inception, Canara

Bank has several firsts to its credit.

These include:

Launching of Inter-City ATM Network Obtaining ISO Certification for a Branch Articulation of Good Banking Banks Citizen Charter Commissioning of Exclusive Mahila Banking Branch Launching of Exclusive Subsidiary for IT Consultancy Issuing credit card for farmers Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge as a major

'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in

India and abroad. As at March 2010, the Bank has further expanded its domestic presence, with

3043 branches spread across all geographical segments. Keeping customer convenience at the

forefront, the Bank provides a wide array of alternative delivery channels that include over 2000ATMs- one of the highest among nationalized banks- covering 728 centres, 1959 branches providing

Internet and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere Banking' services.

Under advanced payment and settlement system, all branches of the Bank have been enabled to

offer Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facilities.

Not just in commercial banking, the Bank has also carved a distinctive mark, in various

corporate social responsibilities, namely, serving national priorities, promoting rural development

enhancing rural self-employment through several training institutes and spearheading financial

inclusion objective. Promoting an inclusive growth strategy, which has been formed as the basicplank of national policy agenda today, is in fact deeply rooted in the Bank's founding principles. "A

good bank is not only the financial heart of the community, but also one with an obligation of helping

in every possible manner to improve the economic conditions of the common people". These

insightful words of our founder continue to resonate even today in serving the society with a

purpose. The growth story of Canara Bank in its first century was due, among others, to the

continued patronage of its valued customers, stakeholders, committed staff and uncanny leadership

ability demonstrated by its leaders at the helm of affairs. We strongly believe that the next century is

going to be equally rewarding and eventful not only in service of the nation but also in helping the

Bank emerge as a "Global Bank with Best Practices". This justifiable belief is founded on strongfundamentals, customer centricity, enlightened leadership and a family like work culture.

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Products & Services:

SAVINGS AND DEPOSITS SAVINGS BANK ACCOUNT KAMADHENU DEPOSIT (Re-investment Plan) SB GOLD SCHEME (CBS branches only) CANARA TAX SAVER SCHEME CANARA CHAMP DEPOSIT SCHEME RECURRING DEPOSITS CANARA SARAL SAVINGS ACCOUNT SPECIAL RECURRING DEPOSIT SCHEME CURRENT ACCOUNT ASHRAYA DEPOSIT SCHEME (FOR SENIOR CITIZENS) CANARA PREMIUM CURRENT ACCOUNT (CBS branches only) CANARA AUTO RENEWAL DEPOSIT (CARD) FIXED DEPOSIT CANARA SUPER SAVINGS SALARY ACCOUNT SCHEME

LOANS HOUSING LOAN HOME IMPROVEMENT LOAN CANARA CASH (SHARES) CANARA MOBILE (VECHICLE) CANARA SITE LOAN CANARA BUDGET(FOR EMPLOYED/BUSINESS) CANARA PENSION TEACHERS LOAN SWARNA LOAN(GOLD LOAN) CANARA RENT CANARA MORTGAGE

CANARA GUIDE CANARA JEEVAN DOCTORS CHOICE ONLINE EDUCATION LOAN

TECHNOLOGY PRODUCTS ATM-CUM-DEBIT CARD INTERNET BANKING

MOBILE (SMS) BANKING REAL TIME GROSS SETTLEMENT (RTGS) NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT)

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MUTUAL FUNDS CANARA ROBECO MUTUAL FUND HDFC MUTUAL FUND PRODUCTS

INSURANCE

GENERAL INSURANCE LIFE INSURANCE

INTERNATIONAL BANKING SERVICES CARD SERVICES

CANARA VISA CLASSIC / MASTERCARD STANDARD GLOBAL CARD

CANARA GLOBAL GOLD CARD CANARA CORPORATE CARD

CONSULTANCY SERVICES TAX ASSISTANCE SERVICES ESTATE & WILLS SERVICES TRUSTEE SERVICES PRIVATE AND CHARITABLE DEBENTURE TRUSTEESHIP SECURITY TRUSTEESHIP ATTORNEYSHIP

ONLINE TRADING DEMAT ACCOUNT

ANCILLARY SERVICES SAFE DEPOSIT LOCKERS SAFE CUSTODY SERVICES NOMINATIONS 7 DAY BANKING EXTENDED BANKING HOURS DD SHOPPE

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AN INTRODUCTION TO

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Internet Banking

Internet banking refers to systems that enable bank customers to access accounts and general

information on bank products and services through a personal computer (PC) or other intelligent

device.

Internet banking products and services can include wholesale products for corporate

customers as well as retail and fiduciary products for consumers. Ultimately, the products and

services obtained through Internet banking may mirror products and services offered through other

bank delivery channels.

Some examples of wholesale products and services include:

Cash management. Wire transfer. Automated clearinghouse (ACH) transactions. Bill presentment and payment.

Examples of retail and fiduciary products and services include:

Balance inquiry. Funds transfer. Downloading transaction information. Bill presentment and payment. Loan applications. Investment activity. Other value-added services.

Growth in Internet Banking

Numerous factors including competitive cost, customer service, and demographic

considerations are motivating banks to evaluate their technology and assess their electronic

commerce and Internet banking strategies. Many researchers expect rapid growth in customersusing online banking products and services. The challenge for national banks is to make sure the

savings from Internet banking technology more than offset the costs and risks associated with

conducting business in cyberspace.

Marketing strategies will vary as national banks seek to expand their markets and employ

lower cost delivery channels. Examiners will need to understand the strategies used and technologies

employed on a bank-by-bank basis to assess the risk. Evaluating a bank s data on the use of their

Web sites, may help examiners determine the banks strategic objectives, how well the bank is

meeting its Internet banking product plan, and whether the business is expected to be profitable.

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Some of the market factors that may drive a banks strategy include the following:

Competition:

Studies show that competitive pressure is the chief driving force behind increasing use of

Internet banking technology, ranking ahead of cost reduction and revenue enhancement, in second

and third place respectively. Banks see Internet banking as a way to keep existing customers and

attract new ones to the bank.

Cost Efficiencies:

National banks can deliver banking services on the Internet at transaction costs far lower than

traditional brick-and-mortar branches. The actual costs to execute a transaction will vary depending

on the delivery channel used. For example, according to Booz, Allen & Hamilton, as of mid-1999, the

cost to deliver manual transactions at a branch was typically more than a dollar, ATM and call center

transactions cost about 25 cents, and Internet transactions cost about a penny. These costs are

expected to continue to decline.

National banks have significant reasons to develop the technologies that will help themdeliver banking products and services by the most cost-effective channels. Many bankers believe that

shifting only a small portion of the estimated 19-billion payments mailed annually in the U.S. to

electronic delivery channels could save banks and other businesses substantial sums of money.

However, national banks should use care in making product decisions. Management should include

in their decision making the development and ongoing costs associated with a new product or

service, including the technology, marketing, maintenance, and customer support functions. This will

help management exercise due diligence, make more informed decisions and measure the success of

their business venture.

Geographical Reach:

Internet banking allows expanded customer contact through increased geographical reach

and lower cost delivery channels. In fact some banks are doing business exclusively via the Internet

they do not have traditional banking offices and only reach their customers online. Other financial

institutions are using the Internet as an alternative delivery channel to reach existing customers and

attract new customers.

Branding:

Relationship building is a strategic priority for many national banks. Internet banking

technology and products can provide a means for national banks to develop and maintain an ongoing

relationship with their customers by offering easy access to a broad array of products and services.

By capitalizing on brand identification and by providing a broad array of financial services, banks

hope to build customer loyalty, cross-sell, and enhance repeat business.

Customer Demographics:

Internet banking allows national banks to offer a wide array of options to their banking

customers. Some customers will rely on traditional branches to conduct their banking business. For

many, this is the most comfortable way for them to transact their banking business. Those customers

place a premium on person-to-person contact. Other customers are early adopters of new

technologies that arrive in the marketplace. These customers were the first to obtain PCs and the

first to employ them in conducting their banking business. The demographics of banking customers

will continue to change. The challenge to national banks is to understand their customer base andfind the right mix of delivery channels to deliver products and services profitably to their various

market segments.

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Types of Internet Banking

Understanding the various types of Internet banking products will help examiners assess the

risks involved. Currently, the following three basic kinds of Internet banking are being employed in

the marketplace:

Informational:This is the basic level of Internet banking. Typically, the bank has marketinginformation about the banks products and services on a stand-alone server. The risk is

relatively low, as informational systems typically have no path between the server and the

banks internal network. This level of Internet banking can be provided by the bank or

outsourced. While the risk to a bank is relatively low, the server or Web site may be

vulnerable to alteration. Appropriate controls therefore must be in place to prevent

unauthorized alterations to the banks server or Web site.

Communicative:This type of Internet banking system allows some interaction between the bank ssystems and the customer. The interaction may be limited to electronic mail, account inquiry,

loan applications, or static file updates (name and address changes). Because these servers

may have a path to the banks internal networks, the risk is higher with this configuration

than with informational systems. Appropriate controls need to be in place to prevent,

monitor, and alert management of any unauthorized attempt to access the banks internal

networks and computer systems. Virus controls also become much more critical in this

environment.

Transactional:This level of Internet banking allows customers to execute transactions. Since a path

typically exists between the server and the banks or outsourcers internal network, this is the

highest risk architecture and must have the strongest controls. Customer transactions can

include accessing accounts, paying bills, transferring funds, etc.

Internet Banking In India:

The service industries are mostly customer driven and their survival in competitive

environment largely depends on quality of the service provided by them. In this context, quality of

service furnished by banking sector is very important and profitability of their business is closely

connected to the quality of service they render (Zahorik and Rust, 1992; Rust et al., 1994; Rust et al.,1996).

Businesses seeking to improve profitability are, thus, advised to monitor and make

improvements to their service quality on an ongoing basis (Gerrard and Cunningham, 2005).

Technology plays a vital role in improving the quality of services provided by the business units.

One of the technologies which really brought information revolution in the society is Internet

Technology and is rightly regarded as the third wave of revolution after agricultural and industrial

revolution. Advent and adoption of internet by the industries has removed the constraint of time,

distance and communication making globe truly a small village. Financial sector being no exception,

numerous factors such as competitive cost, customer service, increase in education and income levelof customers, etc. influence banks to evaluate their technology and assess their electronic commerce

and internet banking (i-banking) strategies.

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Internet banking allows banking from anywhere, anytime and is used for transactions,

payments, etc. over the internet through a bank, a credit union or societys secure website. So,

basically, in i-banking a client has one-to-one interaction with the

banks website, and in such a situation it is essential on the part of bank to provide highquality

services over the internet. So, in contrast to traditional banking, i-banking involves non-human

interactions between customers and online bank information system.

Customer satisfaction, customer retention and new customer acquisition are the key factors

in i-banking system. This becomes more important since the acquisition costs in online banking

exceed that of traditional offline business by 20%40% (Reibstein, 2002). Providing i-banking is

increasingly becoming a need to have than a nice to haveservice. The i-banking, thus, now is more

of a norm rather than an exception in many developed countries due to the fact that it is the

cheapest way of providing banking services (Arunachalam and Sivasubramanian, 2007).

Internet banking is a new delivery channel for banks in India. The i-banking channel is both an

informative and a transactional medium. However, i-banking has not been popularly adopted in India

as expected (Ravi et al., 2007). Malhotra and Singh (2007) carried out a study to find the i-bankingadoption by the banks in India. The study suggests that larger banks or banks with younger age,

private ownership and lower branch intensity possess high probability of adoption of this new

technology. Banks with lower market share also perceive i-banking technology as a means to

increase the market share by attracting more and more customers through this new channel of

delivery.

Unnithan and Swatman (2001) studied the drivers for change in the evolution of the banking

sector, and the move towards electronic banking by focusing on two economies, Australia and India.

The study found that Australia is a country with internet-ready infrastructure as far as

telecommunication, secure protocols, PC penetration and consumers literacy are concerned. India,

by comparison, is overwhelmed by weak infrastructure, low PC penetration, developing security

protocols and consumer reluctance in rural sector. Although many major banks have started offering

i-banking services, the slow pace will continue until the critical mass is achieved for PC, internet

connections and telephones. However, the upsurge of IT professionals with growing demands is

pressuring the government and bureaucracy in the country to support and develop new initiatives

for a faster spread of i-banking.

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Mobile Banking

Mobile banking (also known as M-Banking, mBanking, SMS Banking etc.) is a term used for

performing balance checks, account transactions, payments etc. via a mobile device such as a mobile

phone. Mobile banking today (2007) is most often performed via SMS or the Mobile Internet but can

also use special programs, called clients, downloaded to the mobile device.

A mobile banking conceptual model:

In one academic model, mobile banking is defined as:

"Mobile Banking refers to provision and availment of banking- and financial services with the help of

mobile telecommunication devices. The scope of offered services may include facilities to conduct

bank and stock market transactions, to administer accounts and to access customized information."

According to this model Mobile Banking can be said to consist of three inter-related concepts:

Mobile Accounting Mobile Brokerage Mobile Financial Information Services

Most services in the categories designated Accounting and Brokerage are transaction-based.

The non-transaction-based services of an informational nature are however essential for conducting

transactions - for instance, balance inquiries might be needed before committing a money

remittance. The accounting and brokerage services are therefore offered invariably in combination

with information services. Information services, on the other hand, may be offered as an

independent module.

Mobile phone banking may also be used to help in business situations

Mobile banking business models

A wide spectrum of Mobile/branchless banking models is evolving. However, no matter what

business model, if mobile banking is being used to attract low-income populations in often rural

locations, the business model will depend on banking agents, i.e., retail or postal outlets that process

financial transactions on behalf telcos or banks. The banking agent is an important part of the mobile

banking business model since customer care, service quality, and cash management will depend onthem. Many telcos will work through their local airtime resellers. However, banks in Colombia, Brazil,

Peru, and other markets use pharmacies, bakeries, etc.

These models differ primarily on the question that who will establish the relationship

(account opening, deposit taking, lending etc.) to the end customer, the Bank or the Non-

Bank/Telecommunication Company (Telco). Another difference lies in the nature of agency

agreement between bank and the Non-Bank. Models of branchless banking can be classified into

three broad categories - Bank Focused, Bank-Led and Nonbank-Led.

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Bank-focused model:

The bank-focused model emerges when a traditional bank uses non-traditional low-cost

delivery channels to provide banking services to its existing customers. Examples range from use of

automatic teller machines (ATMs) to internet banking or mobile phone banking to provide certain

limited banking services to banks customers. This model is additive in nature and may be seen as a

modest extension of conventional branch-based banking.

Bank-led model:

The bank-led model offers a distinct alternative to conventional branch-based banking in that

customer conducts financial transactions at a whole range of retail agents (or through mobile phone)

instead of at bank branches or through bank employees. This model promises the potential to

substantially increase the financial services outreach by using a different delivery channel (retailers/

mobile phones), a different trade partner (telco / chain store) having experience and target market

distinct from traditional banks, and may be significantly cheaper than the bank-based alternatives.

The bank-led model may be implemented by either using correspondent arrangements or by creatinga JV between Bank and Telco/non-bank. In this model customer account relationship rests with the

bank.

Non-bank-led model:

The non-bank-led model is where a bank has a limited role in the day-to-day account

management. Typically its role in this model is limited to safe-keeping of funds. Account

management functions are conducted by a non-bank (e.g. Telco) who has direct contact with

individual customers.

Mobile Banking Services

Mobile banking can offer services such as the following:

Account Information Mini-statements and checking of account history Alerts on account activity or passing of set thresholds Monitoring of term deposits Access to loan statements Access to card statements Mutual funds / equity statements Insurance policy management Pension plan management Status on cheque, stop payment on cheque Ordering check books Balance checking in the account Recent transactions Due date of payment (functionality for stop, change and deleting of payments) PIN provision, Change of PIN and reminder over the Internet Blocking of (lost, stolen) cards

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Payments, Deposits, Withdrawals, and Transfers

Domestic and international fund transfers Micro-payment handling Mobile recharging Commercial payment processing Bill payment processing Peer to Peer payments Withdrawal at banking agent Deposit at banking agentEspecially for clients in remote locations, it will be important to help them deposit and withdraw

funds at banking agents, i.e., retail and postal outlets that turn cash into electronic funds and vice

versa. The feasibility of such banking agents depends on local regulation which enables retail outlets

to take deposits or not.

A specific sequence of SMS messages will enable the system to verify if the client has sufficientfunds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When

depositing money, the merchant receives cash and the system credits the client's bank account or

mobile wallet. In the same way the client can also withdraw money at the merchant: through

exchanging SMS to provide authorization, the merchant hands the client cash and debits the

merchant's account.

Today, Banks have welcomed wireless and mobile technology into their boardroom to offer their

customers the freedom of paying bills, planning payments while stuck in traffic jams, to receive

updates on the various marketing efforts while present at a party to provide more personal and

intimate relationships. Mobile banking can be classified as Push vs. Pull and Transaction vs. Enquiry

that is briefly given below:

Push vs. Pull Based Transaction vs. EnquirySome of the other features where mobile banking has lent its hand are Fund Transfer & Bill

Payment where the customers have the freedom of maintaining account through mobile. Mobile

banking has also welcomed other financial services like share trading. The latest Information

technology revolution enables sophisticated Enquiry Based banking services for Credit/Debit Alerts.

Push and pull messages

SMS banking services are operated using both push and pull messages. Push messages are

those that the bank chooses to send out to a customer's mobile phone, without the customer

initiating a request for the information. Typically push messages could be either Mobile marketing

messages or messages alerting an event which happens in the customer's bank account, such as a

large withdrawal of funds from the ATM or a large payment using the customer's credit card, etc.

(see section below on Typical Push and Pull messages).

Another type of push message is One-time password (OTPs). OTPs are the latest tool used by

financial and banking service providers in the fight against cyber fraud. Instead of relying on

traditional memorized passwords, OTPs are requested by consumers each time they want to perform

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transactions using the online or mobile banking interface. When the request is received the

password is sent to the consumers phone via SMS. The password is expired once it has been used or

once its scheduled life-cycle has expired.

Pull messages are those that are initiated by the customer, using a mobile phone, for

obtaining information or performing a transaction in the bank account. Examples of pull messages

for information include an account balance enquiry, or requests for current information like currencyexchange rates and deposit interest rates, as published and updated by the bank.

The banks customer is empowered with the capability to select the list of activities (or alerts)

that he/she needs to be informed. This functionality to choose activities can be done either by

integrating to the internet banking channel or through the banks customer service call center.

Technologies employed for SMS banking

Most SMS banking solutions are add-on products and work with the banks existing host

systems deployed in its computer and communications environment. As most banks have multiplebackend hosts, the more advanced SMS banking systems are built to be able to work in a multi-host

banking environment; and to have open interfaces which allow for messaging between existing

banking host systems using industry or de-facto standards.

Well developed and mature SMS banking software solutions normally provide a robust

control environment and a flexible and scalable operating environment. These solutions are able to

connect seamlessly to multiple SMSC operators in the country of operation. Depending on the

volume of messages that are require to be pushed, means to connect to the SMSC could be different,

such as using simple modems or connecting over leased line using low level communication

protocols (like SMPP, UCP etc.). Advanced SMS banking solutions also cater to providing failovermechanisms and least-cost routing options.

Revolution of Mobile phones in banking services:

According to the Cellular Operators Association of India (COAI) the mobile subscriber base in

India crossed the 50 million mark in October 2005, which stood at 50.87 million. The explosion as

most analysts say, the worldwide number of cellular subscribers will surpass 2 billion in 2005 up

from 11M in 1990 and 750M in 2000. Worldwide cellular subscribers are forecasted to reach 3.2B by

the end of 2010.Among the leaders in mobile technologies, most aggressive being Korea which is

now witnessing the roll-out of some of the most advanced services using 3G technologies, like usingmobile phones to pay bills in shops and restaurants. The growth of mobile technology over the last

few years has enriched the progress of the mobile banking services. Technologies like IVR, SMS, WAP,

J2ME, and J2EE & BREW have revolutionized the use the mobile phones in banking services. Though

all the above predictions on cellular base, the Use of mobile technology with respect to banking

services is at a very infant stage.

There are a lot of challenges and issues relating to content, security, coverage, technology

and connectivity speed are to be sorted out with respect to mobile banking technologies.

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Challenges for a Mobile Banking Solution:

Handset operability

There are a large number of different mobile phone devices and it is a big challenge for banks

to offer mobile banking solution on any type of device. Some of these devices support Java ME and

others support SIM Application Toolkit, a WAP browser, or only SMS.

Initial interoperability issues however have been localized, with countries like India using

portals like R-World to enable the limitations of low end java based phones, while focus on areas

such as South Africa have defaulted to the USSD as a basis of communication achievable with any

phone.

The desire for interoperability is largely dependent on the banks themselves, where installed

applications (Java based or native) provide better security, are easier to use and allow development

of more complex capabilities similar to those of internet banking while SMS can provide the basics

but becomes difficult to operate with more complex transactions.

There is a myth that there is a challenge of interoperability between mobile banking

applications due to perceived lack of common technology standards for mobile banking. In practice it

is too early in the service lifecycle for interoperability to be addressed within an individual country, as

very few countries have more than one mobile banking service provider. In practice, banking

interfaces are well defined and money movements between banks follow the IS0-8583 standard. As

mobile banking matures, money movements between service providers will naturally adopt the same

standards as in the banking world.

Security

Security of financial transactions, being executed from some remote location and

transmission of financial information over the air, are the most complicated challenges that need to

be addressed jointly by mobile application developers, wireless network service providers and the

banks' IT departments.

The following aspects need to be addressed to offer a secure infrastructure for financial

transaction over wireless network:

1. Physical part of the hand-held device. If the bank is offering smart-card based security, thephysical security of the device is more important.

2. Security of any thick-client application running on the device. In case the device is stolen, thehacker should require at least an ID/Password to access the application.

3. Authentication of the device with service provider before initiating a transaction. This wouldensure that unauthorized devices are not connected to perform financial transactions.

4. User ID / Password authentication of banks customer.5. Encryption of the data being transmitted over the air.6. Encryption of the data that will be stored in device for later / off-line analysis by the

customer.

One-time password (OTPs) is the latest tool used by financial and banking service providers in the

fight against cyber fraud [4]. Instead of relying on traditional memorized passwords, OTPs are

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requested by consumers each time they want to perform transactions using the online or mobile

banking interface. When the request is received the password is sent to the consumers phone via

SMS. The password is expired once it has been used or once its scheduled life-cycle has expired.

Because of the concerns made explicit above, it is extremely important that SMS gateway

providers can provide a decent quality of service for banks and financial institutions in regards to

SMS services. Therefore, the provision of service level agreements (SLAs) is a requirement for thisindustry; it is necessary to give the bank customer delivery guarantees of all messages, as well as

measurements on the speed of delivery, throughput, etc. SLAs give the service parameters in which a

messaging solution is guaranteed to perform.

Scalability & Reliability

Another challenge for the CIOs and CTOs of the banks is to scale-up the mobile banking

infrastructure to handle exponential growth of the customer base. With mobile banking, the

customer may be sitting in any part of the world (true anytime, anywhere banking) and hence banks

need to ensure that the systems are up and running in a true 24 x 7 fashion. As customers will findmobile banking more and more useful, their expectations from the solution will increase. Banks

unable to meet the performance and reliability expectations may lose customer confidence. There

are systems such as Mobile Transaction Platform which allow quick and secure mobile enabling of

various banking services. Recently in India there has been a phenomenal growth in the use of Mobile

Banking applications, with leading banks adopting Mobile Transaction Platform and the Central Bank

publishing guidelines for mobile banking operations.

Application distribution

Due to the nature of the connectivity between bank and its customers, it would beimpractical to expect customers to regularly visit banks or connect to a web site for regular upgrade

of their mobile banking application. It will be expected that the mobile application itself check the

upgrades and updates and download necessary patches (so called "Over The Air" updates). However,

there could be many issues to implement this approach such as upgrade / synchronization of other

dependent components.

Personalization

It would be expected from the mobile application to support personalization such as:

Preferred Language Date / Time format Amount format Default transactions Standard Beneficiary list Alerts

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Debit card

A debit card (also known as a bank card or check card) is a plastic card that provides an

alternative payment method to cash when making purchases. Functionally, it can be called an

electronic cheque, as the funds are withdrawn directly from either the bank account or from the

remaining balance on the card. In some cases, the cards are designed exclusively for use on the

Internet, and so there is no physical card.

In many countries the use of debit cards has become so widespread that their volume of use

has overtaken the cheque and, in some instances, cash transactions. Like credit cards, debit cards are

used widely for telephone and Internet purchases and, unlike credit cards, the funds are transferred

immediately from the bearer's bank account instead of having the bearer pay back the money at a

later date.

Debit cards may also allow for instant withdrawal of cash, acting as the ATM card for

withdrawing cash and as a cheque guarantee card. Merchants may also offer cash-back facilities to

customers, where a customer can withdraw cash along with their purchase.

Types of debit card systems:

There are currently three ways that debit card transactions are processed: online debit (also

known as PIN debit), offline debit (also known as signature debit) and the Electronic Purse Card

System. It should be noted that one physical card can include the functions of an online debit card,

an offline debit card and an electronic purse card.

Although many debit cards are of the Visa or MasterCard brand, there are many other types

of debit card, each accepted only within a particular country or region, for example Switch (now:Maestro) and Solo in the United Kingdom, Interac in Canada, Carte Bleue in France, Laser in Ireland,

"EC electronic cash" (formerly Eurocheque) in Germany and EFTPOS cards in Australia and New

Zealand. The need for cross-border compatibility and the advent of the euro recently led to many of

these card networks (such as Switzerland's "EC direkt", Austria's "Bankomatkasse" and Switch in the

United Kingdom) being re-branded with the internationally recognised Maestro logo, which is part of

the MasterCard brand. Some debit cards are dual branded with the logo of the (former) national card

as well as Maestro (e.g. EC cards in Germany, Laser cards in Ireland, Switch and Solo in the UK, Pinpas

cards in the Netherlands, Bancontact cards in Belgium, etc.). The use of a debit card system allows

operators to package their product more effectively while monitoring customer spending. An

example of one of these systems is ECS by Embed International.

Online Debit System

Online debit cards require electronic authorization of every transaction and the debits are

reflected in the users account immediately. The transaction may be additionally secured with the

personal identification number (PIN) authentication system and some online cards require such

authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM)

cards. One difficulty in using online debit cards is the necessity of an electronic authorization device

at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is

becoming commonplace for all card transactions in many countries. Overall, the online debit card isgenerally viewed as superior to the offline debit card because of its more secure authentication

system and live status, which alleviates problems with processing lag on transactions that may only

issue online debit cards.

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Offline Debit System

Offline debit cards have the logos of major credit cards (e.g. Visa or MasterCard) or major

debit cards (e.g. Maestro in the United Kingdom and other countries, but not the United States) and

are used at the point of sale like a credit card (with payer's signature). This type of debit card may be

subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from

which it draws funds. Transactions conducted with offline debit cards require 23 days to bereflected on users account balances. In some countries and with some banks and merchant service

organizations, a "credit" or offline debit transaction is without cost to the purchaser beyond the face

value of the transaction, while a small fee may be charged for a "debit" or online debit transaction

(although it is often absorbed by the retailer). Other differences are that online debit purchasers may

opt to withdraw cash in addition to the amount of the debit purchase (if the merchant supports that

functionality); also, from the merchant's standpoint, the merchant pays lower fees on online debit

transaction as compared to "credit" (offline) debit transaction.

Electronic Purse Card System

Smart-card-based electronic purse systems (in which value is stored on the card chip, not in

an externally recorded account, so that machines accepting the card need no network connectivity)

are in use throughout Europe since the mid-1990s, most notably in Germany (Geldkarte), Austria

(Quick), the Netherlands (Chipknip), Belgium and Switzerland (CASH). In Austria and Germany, all

current bank cards now include electronic purses.

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Senior Executive

22%

Junior Executive

22%

Student

20%

Self Employed

10%

Businessman

3%

Small Businessman3%

Housewife

2%

Other

18%

Internet Banking:

Unnithan and Swatman (2001) studied the drivers for change in the evolution of the banking

sector, and the move towards electronic banking by focusing on two economies, Australia and India.

The study found that Australia is a country with internet-ready infrastructure as far as

telecommunication; secure protocols, PC penetration and consumers literacy are concerned. India,

by comparison, is overwhelmed by weak infrastructure, low PC penetration, developing securityprotocols and consumer reluctance in rural sector. Although many major banks have started offering

i-banking services, the slow pace will continue until the critical mass is achieved for PC, internet

connections and telephones. However, the upsurge of IT professionals with growing demands is

pressuring the government and bureaucracy in the country to support and develop new initiatives

for a faster spread of i-banking.

Among the urban users surveyed by JuxtConsult, about one half are involved in business in

some way, and students make up 20% of the total. Three out of four users have a car and 50% have a

credit card. Urban internet users in India by occupation in April 2005 (as a % of total) are as follows:

Urban internet users in India by occupation in April 2005

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1318

3%

1924

29%

2530

32%

3140

22%

4255

11%

55+

3%

Web user according to age group

Over 50% of web users in Indian metropolitan areas are between the ages of 19 and 30, with an

additional 22% between 31 and 40. Users under the age of 18 are rare (e-Marketer, August 2005).

The graph shows that the dimensions such as reliability, accessibility, privacy/security,

responsiveness and fulfillment are rated between 5 and 6 by the customers. This indicates that therespondents rate these dimensions between somewhat agree and partially agree with the facilities

provided by the bankers. The dimensions user-friendlinessand fulfillment are scored below 5 by

the customers. The maximum average score is given to reliability indicating that the customers are

generally satisfied with the service they are getting from the bankers. The least score has been given to

user-friendliness leading to the dissatisfaction of customers and suggests a scope of improvement forbankers in this parameter.

0 1 2 3 4 5 6 7

Reliability

Accessibility

User-friendliness

Privacy/Security

Efficiency

Responsiveness

Fulfilment

Importance of service quality dimensions

for i-Banking

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ATM

53%

Internet Banking23%

Phone Banking

4%

Mobile Banking

2%

Branch18%

Prefered Banking Channel

IAMAIs Report on Online Banking (2006)

According to IAMAIs Report on Online Banking (2006), 53% of their respondents prefer using ATM as

a banking channel; 23% prefer the internet as a banking channel; 4% prefer phone banking and 2%

prefer mobile banking.

35% of the respondents use online banking; 58% do not use Online Banking and 7% have used it

before and stopped. Their sample size was 2240.

Using Online

Banking

35%

Not using Online

Banking

58%

Used Before but

stopped

7%

Online Banking Users

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Among those online banking users, 43% are in the 26-35 years age group, 25% are in the 18-25 years

age group. 19% are in 36-45 years age group; 10% in the 46-60 age group and 2% in 61+ years age

group.

83% of Online Banking users are male and 17% are female.

18-25

25%

26-35

43%

36-45

20%

46-60

10%

61+

2%

Age Group Distribution of Online Banking Users

Male

83%

Female

17%

Gender-wise distribution

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85% of Online Banking users have a Bachelor or Post Graduate degree, 10% of Online Banking users

have some college (Including diploma, but not a graduate) education, 2% have SSC/HSC qualification

and 3% fall in the other category.

57% of Online Banking users are at an executive level (Junior, Senior and mid-level). 12% are

professionals or self-employed; 7% are officers/supervisors; 5% students; 2% are housewives and 2%

are retired.

Bachelor or PostGraduate

85%

College Educated(But not

graduate)

10%

SSC/HSC

Qualified

2%

Other

3%

Education-wise Distribution

Executive Level

52%

Professionals/Se

lf employed

11%

Employee

(Pvt/Govt)

23%

Officers/Supervi

sors

6%

Students

4%Housewives

2%

Retired

2%

Occupation-wise Distribution

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0 100 200 300 400

2009

2012 (Estimated)

301 m

386.2 m

23.5 m

65 m

Urban Mobile Banking Subscribers Urban Mobile Users

Mobile Banking:

Mobile banking in India is set to explode - approximately 43 million urban Indians used their

mobile phones to access banking services during quarter ending August, 2009, a reach of 15% among

urban Indian mobile phone user.

According to a research done by Vital Analytics (sample size: 6,653), Bangalore checkingaccount balances is the most popular banking service used by urban Indians with almost 40 million

users followed by checking last three transactions, 28 million and status of cheques with 21 million

users.

According to a report Published by Celent in Indias urban segment, mobile banking is an enabling

fifth channel, and in the rural segment, mobile banking is a primary mode of financial inclusion. In

both segments, the two fundamental factors affecting the growth of mobile banking are regulations

and technology. Nontransactional users will remain the majority in India because they will continue

to use online banking and other payment mechanisms. Government-to-person (G2P) payments will

be the major growth driver for rural mobile banking. Regulatory changes are also a big driver. Celent

believes that, by 2012, over 60 million rural users will be beneficiaries of mobile banking through

business correspondence.

Checking account

balance

View last three

transactions

Status of cheques

Payment reminders

Request a cheque

book

39.97

28.15

21.06

20.92

19.11

Preferred Mobile Banking Service (In million)

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Less than Rs 1Lakh

18%

Rs. 1 Lakh to Rs.

2.99 Lakh

37%

Rs. 3 Lakh to Rs.

4.99 Lakh

16%

Rs. 5 Lakh to Rs.

7.49 Lakh

17%

Rs. 7.5 Lakh and

above

12%

Income-wise distribution of m-Banking users

Filtering the data further to understand which income groups in urban India use mobile banking

more. As depicted in the chart below, mobile banking is most used by subscribers falling in Rs. 1 Lakh

to Rs. 2.99 Lakhs income bracket followed by less than Rs 1 Lakh income bracket. Therefore it is

observed, mobile banking is more popular among low income group of mobile users than higher

income group of mobile users.

By Vital Analytics Team

A recent study by Shalini Amarnani the main barriers for increased usage would be

1. Easy availability of alternate channels in urban locations2. Security concerns3. Lack of comfort level no human face4. Poor technology smart phones are needed for using the full spectrum of services.

Until then we will be content with banks push based mobile technology i.e. SMS

alerts.

5. Lack of literacy and understanding of the mobile interface amongst the rural andurban poor

6. Lack of bank accounts we have not yet proceeded to a mass usage of P2P paymentslike the MPesa model of Kenya.The increasing cell phone penetration in the country is coming out as a key factor for the

banks to reach out the rural population. The banks can target the market by offering mobile

commerce services like banking services, which can help in expanding the reach. "Mobile banking

offers an opportunity for banks to reach out to the rural population and doing business in rural areas

has become more viable," said Divakar Goswami, Executive Manager, global consultancy firm

Deloitte Research.

According to Goswami, the mobile penetration is much higher as compared to the banks,

which makes the concept of mobile banking easily workable.

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Credit Card Transaction

Debit Card Transaction

13.3

27.2

% Growth of Daily Transaction on Feb 2009 over

Feb 2008

Debit Card:

The current economic turmoil is resulting into the lack of liquidity in the Indian market. Banks

have become more cautious while issuing credit cards to consumers as the lack of liquidity could

result in high delinquency rate and default credit risks. In such a scenario, banks should focus on

strategies that would boost the usage of debit cards in the country, says our new research report,

Indian Payment Card Market Forecast to 2012

The report further says that India has seen remarkable growth in its debit card market over

the past few years. The number of debit cards issued by banks grew at a CAGR of more than 43%

from FY 2006 to FY 2008. However, the usage of debit cards in India is largely confined to instant

withdrawal of cash from ATMs. There were over 102 Million consumers with slight more than Rs. 125

Billion debit card spending during FY 2008 compared to around 27.5 Million consumers who spent

Rs. 580 Billion through credit cards in the same period.

According to an article by Paurush Sonkar published in www.cashcow.in, Indian consumers

use debit cards more than credit cards these days. The findings are as follows:

The number of debit card transactions during February 2009 vis--vis September 2008 saw an

increase of 36.6 per cent as against an increase of 25 per cent for credit cards.

In value terms too, daily transactions through debit cards increased by 27.2 per cent in February

2009 vis--vis an increase of 13.3 per cent in credit card transactions in the period under review.

Credit Card Transaction

Debit Card Transaction

25

36.6

% Growth on FY 2009 over FY 2008

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As per recently released RBI data, the total value of Point-of-Sale (PoS) transactions through debit

cards from April-January 2009 registered an increase of 51.4 per cent over the same period last year,

whereas the increase in value of PoS transactions for credit cards for this period was just 17.4 per

cent.

Even in volume terms, the Indian consumer has used debit cards for 46.8 per cent more PoS

transactions in April-January 2009 than the previous year. PoS transactions through credit cards

registered just a small increase of 17.1 per cent for the same period.

The report further states that, according to RBI information, the number of credit cards in

circulation has declined from 28.3 million cards in April 2008 to 25.8 million cards in January 2009.While the number of debit cards went up by 25.2 per cent for this period, rising from 105 million

cards in April 2008 to 131.4 million cards in January 2009.

Debit Card

Credit Card

51.4

17.4

% Growth of PoS Transaction on 2009 over 2008

Apr-08 Jan-09

28.3 25.8

105

131.4

Number of Cards in Million

Credit Card Debit card

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1. Do you use Canara Banks Internet Banking?

Out of 300 respondents, 97 use Canara Banks internet banking.

2. How did you come to know about Canara Banks Internet Banking?

3. If you are not an existing Internet Banking user, will you like apply for it now?

Out of 203 non-existing users, 116 wanted to apply for i-Banking

Yes

32%

No

68%

Advertisement

29%

Friends

37%

Bank Staff

23%

Other Source

11%

Yes

57%

Not Now

26%

NO

17%

Total 203

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4. Age group of Internet Banking user.

35 respondents out of 97, fall in the age group of 26 to 35 years

5. Gender-wise distribution:

6. Occupation-wise distribution:

18-25

28%

26-35

36%

36-45

24%

46-60

8%

60+

4%

Male

76%

Female

24%

Pvt. Employee

26%

Govt. Employee

17%

Student

22%

Businessman

28% Others

7%

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7. Which mode of Banking you prefer most?

Out of 300 respondents, 152 prefer ATM

8. Which facility you use most in Internet Banking?

9. How will you rate Canara Banks Internet Banking? (A 5 point Likert scale has been used)

60% of Canara Banks Internet Banking Users rated the service as Satisfactory

ATM

50%

Branch

19%

Internet

Banking

26%

Mobile Banking

5%

Viewing A/C

Details

7%

Viewing

Transaction

Details

18%

Making

Transaction71%

e-Payment of

Tax

4%

0 10 20 30 40 50 60

Good

Satisfactory

Average

Not Satisfactory

Poor

3

58

30

5

1

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Yes

66%

Not Now

24%

No

10%

1. Are you using Canara Banks mobile banking facility?

It is found that 168 customers use Canara Banks Mobile Banking facility

2. If No, are you interested to apply for Mobile Banking? (After giving all information about M-Banking)

87 customers of 132 are willing to apply for Canara Banks Mobile Banking

3. Which facility of Canara Banks Mobile Banking you like most?

Yes

56%

No44%

Account

Balance Info

58%

Last 3

Transactions

16%

Balance

Enquirey

6%

TransactionAlert

20%

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4. If you are not interested, please specify the most important reason.

5. Do you use any Pull service in Mobile Banking?

6. Please rate Canara Banks Mobile Banking.

Dont need

A/C info on

Mobile

11%

LessTransactions

13%

Security

32%

Other

44%

Yes

8%

No

80%

Rarely

12%

Good

3%

Satisfactory

13%

Average

55%

Not-

Satisfactory

25%

Poor

4%

Total 168

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1. Are you a Canara Banks ATM cum Debit Card holder?

2. If yes, how many times you use your Debit Card in a month?

3. Which facility of your Debit Card you use most?

Yes

65%

No

35%

Total 300

More Than 15

Times

15%

10-15 Times

21%

5-10 Times

33%

Less Than 5

Times

25%

Not at all

6%

Total 195

ATM Use

80%

Shopping

5%

Online

Shopping

12%

e-Tax Payment

3%

Total 195

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4. Gender-wise distribution of Canara Banks Debit Card.

5. Distribution of Debit Card among different age group.

6. Do you use your ATM cum Debit Card other than in ATM?

Male

77%

Female

23%

Total 195

18-25

22%26-35

31%

36-45

28%

46-60

13%

60+

6%

Total 195

Yes

32%

No

68%

Total 195

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7. Are you satisfied with Canara Banks Debit Card?

8. If no, please specify major reasons.

Yes

31%

No

57%

Some what

12%

Total 195

Less No of ATM

37%

Lack of ATM

Maintenance

47%

Less Facility

13%

Other

3%

Total 112

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Internet Banking:

1. Only 32% Saving Account holders are using Internet Banking facility. So there is a potentialopportunity of growth.

2. Most of the Internet Banking users came to know about Canara Banks Internet bankingfacility from their friends/ peers. Only 23% users came to know about i-Banking from bank

staff. So, there exists a possibility to encourage customers more through bank staffs.

3. Out of 203 non-existing users, 116 customers agreed to apply for i-Banking after beinginformed about internet banking. So, it is clear that awareness of different internet banking

facilities is low.

4. Age group 26 years to 35 years is the major part who uses mobile banking.

5. Female i-Banking users contribute 24% of all i-Banking users.

6. Most of our sample i-Banking users are businessman. They are followed by private employees.

7. More than 50% of our sample prefers ATM as a mode of banking.

8. Making transaction over internet is the most used facility in i-Banking.

9. About 60% of Canara Banks Internet Banking users rated the service as Satisfactory.Assigning value of corresponding level (Poor=1; Not satisfactory=2; Average=3; Satisfactory=4;

Good=5) we get the overall satisfaction level of Canara Banks Internet Banking as 3.58. This

lies between Average and Satisfactory.

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Mobile Banking:

1.

Itis found that 56% of Canara Banks customers are using m-Banking.

2. Here also, 66% of customers who were not using mobile banking previously,agreed to apply for Canara Banks m-Banking. It is proved that there is a lack of

service awareness among customers.

3.Account balance information (a push service) is the most preferred MobileBanking service. It is followed by Transaction alert (also push service).

4. When the most important reason was asked to the customers who were notinterested in mobile banking, 32% of them pointed the security aspects of mobile

banking.

5. Most of the mobile banking users dont use any pull services which arechargeable.

6. Most of the Canara Banks Mobile Banking users rated the service as Average.Assigning value of corresponding level (Poor=1; Not satisfactory=2; Average=3;

Satisfactory=4; Good=5) we get the overall satisfaction level of Canara Banks

Mobile Banking is 2.85. It lies between Not Satisfactory and Average. (Near

Average)

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ATM cum Debit Card:

1. 68% of the customers are already using Canara Banks ATM cum Debit Card. Butthe main concern is that rest 32% customers are not using ATM cum Debit Card.

2. 33% of Canara Banks Debit Card holders use their cards 5 t0 10 times a month.

3.Almost 80% of the ATM cum Debit card holders use their cards in ATM mostly.So, the other services are very much ignored by the card holders.

4. Here also we can see the ratio of Male and female is almost 3:1

5. Most of the ATM cum Debit Card users fall in the group of 26 to 35 years.

6. 68% of ATM cum Debit card users dont use their card other than in ATM.

7.As per as the satisfaction is concerned, 0nly 31% of users are satisfied. Andsurprisingly 57% ATM cum Debit card holders are not satisfied.

8.As per as 47% of Canara Banks ATM cum Debit card holders, the main reasonbehind their dissatisfaction is Lack of ATM Maintenance. Less number of ATM

is also a major issue behind customer dissatisfaction.

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According to a recent study done by e-commerce firm First Data and

consultancy company TowerGroup on 34 banks in 10 countries, most of the banks are

not sure that they are making profit from their e-commerce activities. Some of the

banks are not able to calculate accurately the cost of their technological services. Most

of the banks are operating in loss or at near break-even as far as debit card is

concerned. Then where is the rationale behind promoting them?

The reason is that they are not meant for making profit. Rather they save the

cost of a branch operation. As we all know that banking sector in India is very

competitive in nature, the only option to a bank to attract customers is to differentiate

their services. Walking on the way of technological services is a good mean of service

differentiation. Furthermore falling behind in this techno-service may result customer

dissatisfaction and hence may cost switching-over.

In Canara Bank it has been seen that the penetration of i-Banking is still very low(about 32%). As we have seen that these techno-services are not directly profitable, a

mass advertisement is not a wise idea. Rather, the bank staffs can give customers

information about their latest technological services while interacting with them.

Besides, the exposure of the customers to internet plays a major role for the

success of a techno-product like i-Banking. Here the penetration level of internet is

itself low. So, local market acceptance of e-commerce and the penetration level of

internet among customers are two major barriers to these electronic modes of

payment.

It has also been seen that most of the internet banking users fall in the age

group of 26 to 35 years. So more facilities focused on this particular group should be

introduced. The gender ratio of internet banking users approximately matches the

gender ratio of overall customers. Thus there is no need to take a huge initiative to

increase the female i-Banking user ratio.

Most of the i-Banking users are businessman. So, there exists a scope forintroducing new facilities in i-Banking, focusing this potential segment of users.

Most of the customers prefer ATM as a mode of banking. The popularity of i-

Banking is highly dependent on the overall technological growth and acceptance of e-

commerce in the area where the branch is located. As far as Doranda and Kanke Road

branch is concerned, acceptance of e-commerce is very low.

Compared to Canara Banks i-Banking, its mobile banking is more successful.

Account balance information is the most preferred service in mobile banking, which isa free of cost service. So, it is clear that most of the customers are not willing to pay

for any mobile banking services.

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The security aspect is one of the strongest barriers for the mass acceptance of

mobile banking. Limited free-of-cost services in mobile banking (compared to other

nationalized banks) leads the users to rate this service as Average.

In case of Canara Banks Debit card, major parts of the users use it only 5 to 10

times a month. Almost 80% of debit card holders use their card in ATM mostly. Thelocal market acceptance of debit card is one of the major reasons behind ignoring all

other facilities but using it in ATM. The main causes of dissatisfaction of 57% debit card

users are less number of ATM and Lack of ATM maintenance. Hence these two fall in

the major barriers of using Canara Banks ATM cum Debit card.

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1. In order to cut the operation cost of a branch and attract customer in this highlycompetitive industry, Canara Bank must concentrate on the popularization of its

technological services.

2. As mass advertisement is not a wise idea for this non-profitable product,awareness of Canara Banks techno-product among customers should be

through bank staffs.

3. To attract more customers in i-Banking, Canara Bank must introduce someintegrated services (Mobile recharge, Ticket booking etc.)

4. In case of Canara Banks mobile banking, special focus should be made on thesecurity issues of SMS banking. Developing Mobile applications supported on

JAVA enabled phone increases the security of mobile banking as well as it

provides the facility of using more services.

5. Pull based mobile banking services are rarely used. It should concentrate onfree-of-cost mobile services more.

6. As the main barriers ofATM cum Debit cards popularity are less number ofATM and lack of ATM maintenance, the bank should consider these points.

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There are several limitations of this research. These limitations should be

considered while taking any decision depending on these research findings. The major

limitations are given below:

1. We have considered only the Saving Account holders. As SBaccount holders are only a part of total customers, the findings

may not be generalized for all type of bank accounts.

2. Our data is based on Canara Banks Doranda branch and KankeRoad branch. For time constraints, it was not possible to collect

data from more branches.

3. Both of the branches are in semi-urban area. So, the researchfindings cannot be generalized for all areas.

4. The usage of Canara Banks techno product is based oncustomers word-of-mouth. The accuracy of such data is always

verifiable.

5. Account holders with Zero-balance account, i.e. CanSaralAccount are not included this study.

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Internet Resource:

www.canarabank.in

www.wikipedia.com

www.moneyindia.com

www.cashcow.in

www.banknetindia.com

www.arraydev.com

www.indianmba.com

Books:

Marketing Management Philip Kotler

Marketing Research G C Beri

Research Methodology C R Kothari