AWARENESS OF ELECTRONIC BANKING IN PAKISTAN

Transcription

1 Awareness of Electronic Banking in Pakistan 1 AWARENESS OF ELECTRONIC BANKING IN PAKISTAN Awareness of Electronic Banking in Pakistan Nouman Anwar Dar MCB Bank Limited

2 Awareness of Electronic Banking in Pakistan 2 Abstract Electronic Banking is an essential sector of banking industry. E-banking services are gaining the attention of conventional banking s customers rapidly. It has brought the revolutionary changes in the Pakistan banking industry in terms of customer and business perspectives. Electronic banking has got popularity in the developed as well as developing countries because it saves people time, reduces costs and people have access to all banking services on the click of a button. More often, the new innovated system allows the customers to touch their accounts at home using a mobile device or electronic terminals. This research paper focuses on growth and awareness of electronic banking in Pakistan. Electronic banking is today s need as it provides easy way to monitor an account. Most of the commercial banks in the country switched to the convenience ways in accessing the accounts of the customers and giving them the freedom for the easy access. The volume of e-banking transactions reached million while the value of these transactions aggregated to Rs 12 trillion showing an increase of 15.5 percent and 19.0 percent respectively as compared to the first half of year Electronic distribution channels provide alternatives for faster delivery of banking services to a wider scope of customers. But despite all the opportunities and benefits created by the e-banking, there are still many challenges that are present in the financial sector. There are also some limitations of e-banking as it requires awareness, knowledge and skills to operate it.

3 Awareness of Electronic Banking in Pakistan 3 Introduction The developments taking place in information and communication technology are increasing competition in financial institutions worldwide. Thus, the deployment of advanced technologies is essential to achieve a competitive advantage. In the world of banking, the development of E-Banking has an enormous effect on development of more flexible payment methods and more user friendly banking services. Recently, the banking industry was highly affected by the technology evolution that transformed the way banks deliver their services, using technologies such as automated teller machines, phones, the Internet, credit cards, and electronic cash. In line with global trends, electronic banking in Pakistan has been undergoing many changes. Electronic banking is a term for the process by which a customer may perform banking transactions electronically without visiting the bank itself. E-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 device. There are many benefits of e-banking as it provides easy way to monitor an account, we can shop, pay bills, buy item, take part in auction e.g. Amazon.com and E-Bay, and transfer money from anywhere at any time, it reduces costs, it saves time, and vice versa. This study focuses on growth and awareness of electronic banking in Pakistan. E-banking systems can vary significantly in their configuration depending on a number of factors. Financial institutions can choose their e-banking system configuration, including outsourcing relationships, based on four factors: Strategic objectives for e-banking Scope, scale, and complexity of equipment, systems, and activities Technology expertise Security and internal control requirements

4 Awareness of Electronic Banking in Pakistan 4 E-banking systems rely on a number of common components or processes. The following list includes many of the potential components and processes seen in a typical institution: Website design and hosting Firewall configuration and management Network administration Security management Internet banking server E-commerce applications (e.g. bill payment, lending, brokerage) Internal network servers Core processing system Programming support Automated decision support systems These components work together to deliver e-banking services. Each component represents a control point to consider. Basic information E-Banking/web sites that just disseminate information on banking products and services offered to bank customers and the general public; Simple transactional E-Banking /web sites that allow bank customers to submit applications for different services, make queries on their account balances, and submit instructions to the bank, but do not permit any account transfers; Advanced transactional E-Banking/web sites that allow bank customers to electronically transfer funds to/from their accounts pay bills, and conduct other banking transaction online. Usually, E-Banking refers to simple and advanced transactional E-Banking. Research Objective This research paper is an attempt to find out that whether the people of Pakistan are well aware of electronic banking and it is also an attempt to look into the growth, issues and

5 Awareness of Electronic Banking in Pakistan 5 concerns in the banking sector and tries to analyze the views of the consumers and the banking environment. It is also an attempt to gauge the current implementation status of E-Banking in Pakistan. We intend to identify major trends and objectives of current E-Banking activities in Pakistan. The basic thrust of the research is that it offers a brief insight into the E-Banking activities being performed. The major flaws and improvements will be highlighted and future prospects for growth will also be outlined. This research basically tries to give a brief look into the E- Banking implementation by looking at the services being offered and their potential usage. E- Banking is one of the major ways to reduce transaction costs for the consumers. In this research report we have highlighted products being offered and the various consumer responses and to present a view of the various technologies in use within Pakistan. Our research can prove to be beneficial for the educational institutions and for the financial sector, as it would provide them with an insight into the various E-Banking aspects in Pakistan. The field of e-banking is rapidly growing and there's no doubt that the automation of banking processes has opened new doors of opportunities for IT sector in Pakistan. But the problem is that the expertise needed by the banks is of the international standard. In this age when everyone is busy and has no spare time, e-banking provide a person time convenience, flawless transactions and also improve economic conditions of bank related fields. Research Methodology In our research we followed the use of primary research and analytical tools to reach our conclusions. Primary Source In primary sources data is collected by using questionnaire as a data collection instrument. In this regard questions were asked regarding internet usage, followed by awareness of E- banking and its types, about the benefits of E-Banking and a few questions regarding the

6 Awareness of Electronic Banking in Pakistan 6 banking services if they were using services of some bank at all. The data was collected from university students, professionals and few people on streets to inquire about the current status of awareness regarding E-Banking. The questionnaire includes close-ended questions and they were on likert scale. We have collected information from websites of major banks in Pakistan, which are providing E-Banking services in the country and State Bank of Pakistan for the detailed analysis. Following are some informative sources: Database of State Bank of Pakistan Quarterly Newsletters of State Bank of Pakistan on Branchless Banking Branchless Banking Conference Literature Review The E-Banking operations are performed through the internet, and ones finances are under control at all times whether you are making payments, issuing stock exchange orders or simply require account and custody account information. For many consumers, electronic banking means 24-hour access to cash through an automated teller machine (ATM) or Direct Deposit of paychecks into checking or savings accounts. But electronic banking now involves many different types of transactions. Electronic banking uses computer and electronic technology as a substitute for cheques and other paper transactions. Electronic Banking is initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and Personal Identification Numbers for this purpose. Some use other forms of debit cards such as those that require, at the most, your signature or a scan. E-banking is also one of the main products of e-commerce that duly provides services to large populations. This advantage is applied among the people who belong in the middle and upper social status. However, the electronic transactions are still part of the regulation due to

7 Awareness of Electronic Banking in Pakistan 7 its heavy technological advancements and its interaction in the public. In addition, because of the continuous development and expansion of the services to the large populations, banking transactions are expected to be more popular because of the lower costs and power to reach thousands of users or customers. From the conventional cheques to modernized cards i.e. ATM, credit/debit cards and other electronic banking instruments that are used to process transactions, e-banking in Pakistan is described as growing. The payment system infrastructure in Pakistan has maintained an overall growth trend for the second half of FY11. As many as 466 more ATMs were added to the population of ATMs bringing the total number of ATMs in the country to 5,200 (Payment Status Department, State Bank of Pakistan) The convenience resulting to e-banking reduced the volume and value of paper-based transactions in Pakistan. Through the evolution of banking system emphasized in electronic mode, the retail payment transactions continuously increase for the foster development. The concept of electronic banking has been defined in many ways (e.g. Daniel, 1999). According to Karja luoto (2002) electronic banking is a construct that consists of several distribution channels. Daniel (1999) defines electronic banking as the delivery of banks' information and services by banks to customers via different delivery platforms that can be used with different terminal devices such as a personal computer and a mobile phone with browser or desktop software, telephone or digital television. Electronic banking consists of any system that uses electronic signals tore place people or paper. Foreign banks in Pakistan are initiators for introducing E-banking practices in mid 1990 s. In late 90 s domestic banks also adopted the technology and e-banking services like ATM cards and debit cards. According to the definition provided by (Abid et al., 2006), Any use of information and communication technology and electronic means by a bank to conduct transactions and have interaction with the stakeholders. Electronic banking provides ease

8 Awareness of Electronic Banking in Pakistan 8 and facilities to their customer. Electronic banking provides convenience to their customer to use bank website for all kind of transactions in secure environment. Customers can interact with bank website 24 hours day and seven days a week. Woodall (2003) suggested the ways a country can adopt e-readiness. These factors are interrelated with country social, economical, political profile and may vary in size and quality depending upon digital facilities and infrastructure available for Information Communication Technology (ICT). He recommended that policy maker have to make environment feasible for ICT and digital services and create awareness among society about associated profit which individuals and business organization can get by linking commerce and societies with these technologies. According to Porter (2005), country e-readiness is measure of facilities and digital connection which counties must have to adopt electronic services. Countries have to adopt these facilities as it an integral contributor for economical development of country. Growth Of Electronic Banking In Pakistan (2008 To 2011) Electronic banking (e-banking) and branchless banking transactions continued to show growth momentum as both the volume and value of these transactions displayed a rising trend in the country during the last quarter of the fiscal year ( ).

9 Awareness of Electronic Banking in Pakistan 9 1. According to the Fourth Quarterly Report on Branchless Banking/ Electronic Banking, the volume and value of e-banking/ branchless banking transactions in the country reached at 44.5 million and Rs 3.9 trillion respectively showing an increase of 11.1 percent in number and 7.8 percent in value as compared to 6.5 percent increase in number and 11.4 percent increase in value in the previous quarter of FY09 (Jan-March 2009). 2. During the fourth quarter (April-June) of FY09, the volume and value of online banking transactions in the country reached at 13.7 million and Rs 3.7 trillion respectively showing a growth of 10.8 percent in numbers and 7.4 percent increase in value as compared to 14.8 percent increase in numbers and 11.7 percent increase in value in the previous quarter. 3. According to the report, during the fourth quarter, the volume and value of ATM transactions in the country reached at 25.2 million and Rs billion respectively showing a growth of 12 percent in numbers and 12.2 percent increase in value as compared to 5.2 percent increase in numbers and 10.2 percent increase in value in the third quarter. 4. During the period under review, the volume and value of internet transactions in the country recorded at 0.6 million and Rs 22.2 billion respectively, showing an increase of 15.4 percent in numbers and 35.7 percent increase in value as compared to 2.8 percent decline in numbers and 2.1 percent increase in value in the previous quarter. Whereas, the volume and value of mobile transactions in the country recorded at 21,733 and Rs 4.9 million respectively showing an increase of 40.6 percent in numbers and 48.2 percent increase in value as compared to 12.1 percent decline in numbers and 15.4 percent decline in value in the previous quarter. 5. According to the report, the total quantity of ATM machines during April-June, 2009 period reached at 3,999 registering a growth of 5.7 percent as compared to 7.4 percent increase in the previous quarter. The volume of Real Time Online Branches (RTOB) during the quarter reached at 6,040 and recorded a growth of 1.3 percent as compared to 1.8 percent

10 Awareness of Electronic Banking in Pakistan 10 increase recorded in the previous quarter. The total quantity of POS terminal reached at 49,715 showing an increase of 2.7 percent in number as compared to 1.1 percent decline in previous quarter. 6. It said that total quantity of cards (debit / credit /ATM only) in circulation during fourth quarter of FY09 reached at 8.9 million which shows an increase of 6.6 percent as compared to 3.1 percent decline in the previous quarter. The quantity of credit cards has decreased by 0.6 percent as compared to 6.2 percent decrease in the previous quarter. The quantity of debit cards has increased by 9.6 percent as compared to 2.5 percent decline in previous quarter and stood at 6.4 million, it added. 7. The report pointed out that paper-based instrument during the fourth quarter of FY09 witnessed a growth of 4.8 percent to 85.6 million in numbers compared with 1.4 percent decline in the previous quarter (81.7 million). The value of transactions decreased by 6.1 percent to Rs 33.1 trillion as against 1.6 percent increase or Rs 35.3 trillion recorded during third quarter of FY09. It said that during the last six quarters the transition from manual (paper-based) banking to e- banking has been gradual, yet consistent, in terms of both volume and value of transactions. The composition (in percentage) of electronic transactions increased to 34.2 percent of the total number of transactions as compared to 32.9 percent recorded last quarter. In terms of value, the same increased by 10.5 percent as compared to 9.3 percent rise recorded last quarter. E-Payment Grow To Rs. 4.1trillion FY 2010 The electronic payments continued to show a rising trend as both the number and value of such transactions increased in the second quarter (Oct-December) of the current fiscal year (FY10).

11 Awareness of Electronic Banking in Pakistan 11 As per State Bank s Second Quarterly Report on Retail E-Payments and Paper Based Instruments released on Friday, the volume and value of E-Payments transactions in the country during the second quarter of FY10 reached 46.4 million and Rs 4.1 trillion respectively showing an increase of 0.2 percent in number and 6.1 percent increase in value as compared to 4.0 percent increase in number and 0.3 percent increase in value in the previous quarter. According to the Report, total number of Automated Teller Machines during the second quarter reached to 4,217 registering a growth of 4.0 percent as compared to 1.4 percent increase in the previous quarter. The volume of Real Time Online Branches (RTOB) during second quarter reached at 6,587 and recorded a growth of 7.6 percent as compared to 1.3 percent increase recorded in the previous quarter. The total quantity of POS terminal reached 50,920 showing a decrease of 1.5 percent in number as compared to 4.0 percent increase in previous quarter. The volume and value of debit cards transactions were reported at million and Rs billion respectively showing an increase of 3.7 percent in numbers and 9.7 percent increase in value as compared to 3.0 percent increase in numbers and 2.2 percent increase in value in the previous quarter. Similarly, during the second quarter of FY10 the volume and value of credit cards transactions were reported to be 3.8 million and Rs billion respectively showing a decrease of 10.0 percent in numbers and 8.7 percent decrease in value as compared to 6.9pc decrease in numbers and 2.6pc decrease in value in the previous quarter. In addition, the total number of cards (debit / credit /ATM only) in circulation during the second quarter reached to 9.95 million which shows an increase of 6.8 percent compared to 4.3 percent increase in the previous quarter.

12 Awareness of Electronic Banking in Pakistan 12 E-Banking Transactions Rose To Rs. 12 Trillion In Fiscal Year 2011 (Jan-July 2011) The value of e-banking transactions aggregated to Rs 12 trillion during the second half of FY11, showing an increase of 19.0 percent as compared to the first half of the year, according to State Bank of Pakistan's Payment Systems Half Yearly Review. The volume of such transactions during the period under review reached million, depicting an increase of 15.5 percent as compared to the first half of FY11, the Review said, adding that payment system infrastructure in Pakistan had maintained overall growth trend for the second half of FY11. The Automated Teller Machines (ATMs), which are the largest channel of e-banking transactions, showed 16.5 percent increase in number of transactions, and 19.0 percent increase in value, raising the share of ATM transactions in total e-banking transactions to 58.8 percent and 5.4 percent respectively, the Review said, adding that the number of Real-Time Online Branches (RTOB) transactions grew by 14.7 percent and the value of transactions increased by 18.8 percent as compared to first half of FY11. "These transactions contributed 31.6 percent in total volume of e-banking, and 93.2 percent in the value of such transactions respectively," the Review observed. According to the Review, 466 more Automated Teller Machines were added in the system, bringing total ATMs in the country to 5,200, while 380 more bank branches were converted into Real Time Online Branches (RTOBs). "A total of 7,416 bank branches (78 percent) are now offering real time online banking out of total 9,541 branches in the country. The number of plastic cards at 14 million also registered an increase of 6.2 percent during the period under review as compared to the numbers during the preceding half year," the Review added. It said that total number of POS terminals at 37,232 depicted a decline of 16 percent as compared to 44,383 terminals in the first half of FY11.

13 Awareness of Electronic Banking in Pakistan 13 "This decline in the number of POS terminals is due to business considerations in terms of which investment in ATMs was considered a more viable strategic option. The volume of POS transactions in the country during the second half of FY11, however, reached 7.2 million showing an increase of 2.8 percent. The value of POS transactions at Rs 33.9 billion registered a 4.4 percent decrease as compared to the first half of FY11," the Review said. The overall increasing trend in payment system infrastructure was also witnessed in the large value payments settled through Pakistan Real-time Interbank Settlement Mechanism (PRISM), which increased by 14.8 percent in volume and 21.9 percent in terms of value as compared to the first half of FY11, it said and added that the major portion of PRISM transactions, in terms of value was of settlements against securities which accounted for 46 percent of the total transactions followed by Interbank Funds Transfers at 37 percent and settlement of retail cheques through multilateral clearing at 15 percent. The Review said that the volume and value of paper-based retail payments during the second half of FY11 were recorded as million and Rs 84.6 trillion respectively indicating an increase of 3.5 percent in the volume of transactions."the value of transactions has increased by 13.3 percent as compared to the first half of Year The contribution of paper-based payments in total retail payment transactions was 58.5 percent in terms of volume and 87.5 percent in terms of value," it added. July to September (2011) Banking institutions are showing tremendous growth day by day. Significant positive changes shown in statistics table: 2 below during the 3 rd quarter of year 2011.

14 Awareness of Electronic Banking in Pakistan 14 Growth of E-Banking in Pakistan Progressive Statistics FY 2011 (January June 2011) Plastic Card Infrastructure Number of ATM\Debit Cards 12, 631, 959 Number of Credit Cards 1, 384, 814 ATM Transactions Number of Automated Teller Machines (ATMs) 5, 200 Volume of Transactions processed through 74, 068, 117 ATMs Value of Transactions processed through ATMs Rs. 654, 449 Million Average value of ATMs per Transaction Rs. 8, 836 Point of Sale Transactions Number of Points of Sale (POS) 37,232 Volume of Transactions processed through POS 7,241, 861 Value of Transactions processed through POS Rs. 33,940 Million Real Time Online Branches (RTOB s) Number of Real Time online branches 7,416 Volume of Transactions 39,744,622 Value of Transactions Rs. 11,214 Billion

15 Awareness of Electronic Banking in Pakistan 15 Mobile Phone Banking Number of Banks providing mobile Banking 11 facility Volume of Transactions 1, 918, 034 Value of Transactions Rs. 5,235 Million Internet Banking Number of Banks providing Internet Banking 23 facility Volume of Transactions 2,584,717 Value of Transactions Rs. 124,837 Million Call Centers Number of Banks providing Call Center facility 21 Volume of Transactions 363,716 Value of Transactions Rs. 3,087 Million Number of Registered Users Call Center Banking 8,071,483 Mobile Banking 933,419 Internet Banking 860,105

16 Awareness of Electronic Banking in Pakistan 16 Pakistan Real Time Inter Bank Settlement Mechanism (PRISM) Number of Direct Participants 42 Volume of Transactions 176, 311 Value of Transactions Rs. 45, 505 Billion July-September 2011 Volume No. of Transactions Transacted (Rs. in millions) Electronic Product/Service Fund Transfers Account-to-Account Fund transfers 188,941 16,093 Person-to-Person Fund Transfers 4,839,090 18,233 Account-to-Person Fund transfers 498, Person-to-Account Fund Transfers 46, Deposit - - Cash-in (Deposit) 785, Cash-out (Withdrawal) 37, Bill Payments & Top-Ups - - Utility Bills Payments 7,631,435 10,400 Merchant Payments 387,512 8,861 Mobile Top-ups 1,267, Loan - - Loan Disbursement - -

17 Awareness of Electronic Banking in Pakistan 17 Loan Repayment 10, Others - - Donations 70,328 2 Others 103,634 3,481 Total 15,866,672 58,711 No. of Transactions jul-sep ,216 70, ,634 1,267, , ,941 4,839,090 Account-to-Account Fund transfers Person-to-Person Fund Transfers Account-to-Person Fund transfers Person-to-Account Fund Transfers Cash-in (Deposit) Cash-out (Withdrawal) Utility Bills Payments Merchant Payments 7,631,435 Mobile Top-ups 498,752 46, ,259 37,012 Loan Disbursement Loan Repayment Donations Others

18 Awareness of Electronic Banking in Pakistan 18 Volume Transacted Rs. in million (Jul-Sep 2011) ,481 8,861 16,093 10,400 18,233 Account-to-Account Fund transfers Person-to-Person Fund Transfers Account-to-Person Fund transfers Person-to-Account Fund Transfers Cash-in (Deposit) Cash-out (Withdrawal) Utility Bills Payments Merchant Payments Mobile Top-ups Loan Disbursement Loan Repayment Donations Others Comparative Growth Analysis-Branchless Banking Branchless Banking Snapshots Key BB Indicators Jun-11 Sep-11 Quarterly Growth Total No. of active BB Agents 15,829 17, % Total No. of active BB accounts 236, , % Total BB Deposits as of Date (Million Rs.) % No. of Transactions During the Quarter (in 000 ) 12,500 15, % Volume of Transactions During the quarter (Million Rs.) 41,000 58, % Average Size of Transaction Rs. 3,280 3, % Average No. of Transaction Per day 138, , %

19 Awareness of Electronic Banking in Pakistan , , , , , , ,000 50, , , , ,889 41,000 15, ,500 58,710 3,280 17, ,867 3,700 Jun-11 Sep-11 Population Research Design In this research, the target population was university students, professionals, age between years. Sample and Data Collection With respect to data collection, we have chosen the students, employees, professional and also get references from database of State Bank of Pakistan. Sample Size: Sample size taken for the research purpose is 50 respondents. The sample size comprise of either gender (28 Males & 22 Females) Tools for Data Collection: In order to measure the growth and awareness of E-Banking in Pakistan, we have used the survey techniques. Based on the above mentioned criterion, this research has distributed 50 questionnaires/statements.

20 Awareness of Electronic Banking in Pakistan 20 Data Collection Procedure: There are a variety of techniques used for data collection purposes. Often the selection of technique involves the trade offs. For instance there is a tradeoff between cost and quality of information obtained. Budget and time constrains also considered in the data collection process. The data collection procedure adopted by us is the questionnaire technique, which is the most simplest and appropriate method of gathering information. Data Analysis Scaling A scale is a measure in which a researcher captures the intensity, direction, level or potency of a variable. For the data analysis, the major technique used by us in the scaling in which, we give scores to different statements and the scaling criteria is as following. A statement would be given 1 to 5 rating used in which 1 represents Strongly Disagree and 5 being Strongly Agree for positive statements. For negative statements the numbering order is reversed. As we are having a total of 25 statements in our questionnaire so the minimum score attained by the questionnaire would be 26 and maximum sore would be 125. Following are samples of gender, age and occupation. Sample Size (Gender Wise) Male Female Total The sample size consisted of 28 males and 22 females.

21 Awareness of Electronic Banking in Pakistan 21 Age Male Female Both males and females were of the age between 20 and 45. Occupation Male Female Student 15 Student 15 Employed 13 employed 7 Below is Table 1 shows gender wise association with research questions. Table 1: Gender association with research question Sr.# Question Gender Male (28) Female (22) 1. Awareness of E-Banking E- Banking is useful Bank provides E- Banking services Awareness of ATM usage Use debit card / credit card for online transactions 6. Perform E-Banking transactions through 6 7 Mobile.

22 Awareness of Electronic Banking in Pakistan Access to ATM Pay bills online Prefer to walk into a branch for banking 8 8 services rather using E-Banking 10. Satisfied with E-Banking Services Will use E-Banking in future The Table No. 1 shows the number of male and female respondents who said YES in response to different questions which were asked in the questionnaire male and 14 females out of a total sample size of 50 responded that they were aware of E- Banking male and 14 females participants that they find E-Banking useful males and 12 females have used debit card or credit card for online transactions. 4. The first important and interesting thing which was observed that very few respondents i.e. 6 males and 7 females had used mobile phones for online transactions males and 16 females said they had access to ATM. 6. The second interesting this which was observed during this survey was that since this young generation was more inclined towards technology use and also spends a lot of time online, very few i.e. 8 males and 8 females responded positively in response to going to a bank branch to obtain banking services. 7. The opinion of both males and females in using the online banking in future is positive. 22 males and 14 females responded that they will prefer using online banking in future.

23 Awareness of Electronic Banking in Pakistan 23 Table 2: Level of Agreement / Disagreement / Neutrality Awareness of E-Banking Strongly Disagree Disagree Neutral Agree Strongly Agree Total Male Female Table No. 2 shows the level of disagreement, agreement or neutrality of the participants in particular areas. When it comes to level of agreement of respondents on E-Banking awareness issue, 26 males and 15 females either agreed or strongly agreed that they were aware of E-Banking. Table 3: Level of Agreement / Disagreement / Neutrality Awareness of E-Banking Risks Strongly Disagree Disagree Neutral Agree Strongly Agree Total Male Female Table No. 3, it has been shown that both males and females express their concerns towards the security risks of E-Banking. 12 males and 9 females either agreed or strongly agreed that E-Banking was risky. Some remained neutral because they weren t aware of what risks E- Banking carried.

24 Awareness of Electronic Banking in Pakistan 24 Table 4: Level of Agreement / Disagreement / Neutrality Awareness of E-Banking through Mobile Strongly Disagree Disagree Neutral Agree Strongly Agree Total Male Female Table No. 4 shows participant s aware of E-Banking through a mobile. 20 males and 11 females either disagreed or strongly disagreed with the notion that they had used mobiles for online transactions. This showed that mobile banking has not flourished in Pakistan yet. Table 5: Level of Agreement / Disagreement / Neutrality Awareness of E-Banking by studying it as a subject only Strongly Disagree Disagree Neutral Agree Strongly Agree Total Male Female Table No. 5 shows participant s awareness of E-Banking by studying it as a subject only. In this table, we observed a mixed reaction from the participants. Half number of males and half number of female participants responded that their knowledge of E-Banking was only

25 Awareness of Electronic Banking in Pakistan 25 because of studying it as a subject. They not only read it as a subject but also practically experienced it. Conclusion And Recommendation Electronic banking is very useful and it has become today s need. Our research has shown that people in generally are aware of the concept of Electronic Banking. Some participants are account holders of different banks, and they have been availing the E-Banking facilities provided by the banks. A few participants also have access to Debit and Credit cards, which they use for point of sale and online shopping. Some participants said that bank s systems are risky and they worry their online passwords can be stolen. Majority of participants said, E-Banking is useful and they shall use it in future. Banks should ensure that electronic banking is safe and secure for financial transaction like as traditional banking. In order to accelerate the pace of E-Banking growth in Pakistan, the SBP should take the following measures: The safety and security of the online banking systems/applications should be enhanced. All banks should make their customers aware of and educate them regarding the possible risks associated while going online for banking services. Pakistan is one of the largest users of cellular phones but awareness regarding mobile banking is negligible. The government should take steps to promote mobile banking in Pakistan.

26 Awareness of Electronic Banking in Pakistan 26 The ATM infrastructure needs to be strengthened. ATM s should always be in proper working conditions. Use of credit cards can be promoted by lowering the bank s interest rates and easy repayment schedules. Special public awareness programs through media, through corporate social responsibility, different public activities, donation etc. Privacy should be maintained, banks should ensure that customer data provided on the website should not be misused. Response time should be improved. Banks/Telco s should join hands to mitigate the wireless risks. Banks should take special measures to prevent from hacking and other such issues. Introduce effective complaint management units. Educational institutions ensure that Electronic Banking must be the part of master program as course to aware the youth for the development. Shortly, In Pakistan consumers are aware of e-banking products and services. But there is room to make more awareness to consumer in order to full make of adoption of e-banking in Pakistan, whereas few consumers are actually using the e-banking products and services.

27 Awareness of Electronic Banking in Pakistan 27 References Abid, H. and Noreen, U. (2006), Ready to E-bank: An exploratory research on adoption of e-banking and e-readiness in customers among commercial banks in Pakistan, Spider, 31 (2), pp Daniel, E. (1999), Provision of electronic banking in the UK and the Republic of Ireland, International Journal of Bank Marketing, 17 (2), pp Amor, D. (1999).The E-business Evolution. 2nd edition. New York: Prentice Hall. Summary of Half Yearly Review, January June 2011, Payment System Department, State Bank of Pakistan, Branchless Banking Newsletter, July to September, 2011, State bank of Pakistan, Pakistan branchless Banking Conference 2010, State Bank of Pakistan, Branchless Banking Guidelines, State Bank of Pakistan,