“E-Business and on line banking in : an Analysis”

AUTHORS Muhammad Mahboob Ali

ARTICLE INFO Muhammad Mahboob Ali (2010). E-Business and on line : an Analysis. and Systems, 5(2-1)

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businessperspectives.org Banks and Bank Systems, Volume 5, Issue 2, 2010

Muhammad Mahboob Ali (Bangladesh) E-business and on-line banking in Bangladesh: an analysis Abstract E-business has created tremendous opportunity all over the globe. On-line banking can act as a complementary factor of e-business. has recently argued to introduce automated clearing house system. This pushed up- ward transition from the manual banking system to the on-line banking system. The study has been undertaken to ob- serve present status of the e-business and as its complementary factor on-line banking system in Bangladesh. The arti- cle analyzes the data collected from Bangladeshi banks up to February 2010 and also used snowball sampling tech- niques to gather answer from the five hundred respondents who have already been using on-line banking system on the basis of a questionnaire which was prepared for this study purpose. The study found that dealing officials of the banks are not well conversant about their desk work. The author observed that the country can benefit from successful utiliza- tion of e-business as this will help to enhance productivity. Also, monetary gain of both producer and customer may have a feasible and positive impact on raising gross domestic product. E-business, especially with the help of on-line banking, can manage in a better way as customer will be satisfied. Keywords: e-business, on-line banking, ICT, globalization, customer satisfaction. JEL Classification: E42, G21, M31, O33.

Introduction1 progress of the country. On-line banking system is a way of conducting, managing, and executing bank- Bangladesh is still lagging behind to avail the opportu- ing transactions utilizing information and communi- nity of e-business. However, banking sector as a whole cation technology (ICT) and electronic communica- has been introducing on-line banking system which plays complementary role in spreading e-business. tion networks such as the Internet, intranet and ex- Internet has opened a new horizon of e-business, creat- tranet. Environment of electronic banking requires ing immense opportunities for marketing products as authentication procedures for electronic payment well as managing banking organizations internation- system, network environment, computer hardware ally. Gradually, wireless Internet system has been and software, electronic hardware, legal bindings, creating a new paradigm and electronic fund transfer etc. The security and authentication of modern bank- can have a suitable formation. ing are very much dependent on cryptography and its applications. Ramakrishnan (2001) argued that many E-business can improve the quality of the services, banks have assumed that Internet banking primarily save customers’ valuable time, deliver them from the increases information security risks and has not suffi- movement from one place to another and improve ciently focused on the effect on other banking- receiving the goods accurately. E-business brings a specific risks. Risk management disciplines have not new channel of distribution process. But this leads to evolved at the same speed and many institutions, change in the regulatory issues, cross border trade especially the smaller ones, have not been able to through emerging new marketing distribution channel. incorporate Internet banking risk controls within their This reduces transaction time, boundary less trade, and existing risk management structures. accuracy. In developed nations, e-business creates an opportunity to directly selling of the product to the As information symmetry and free flow of infor- customer without using any intermediaries. This proc- mation are gaining more importance due to global- ess occurs mainly in the four systems: business to ization process, Bangladeshi companies have to business (B2B), business to consumer (B2C), business compete in the world market to serve corporate and to government (B2G) and consumer to consumer other clients with round the clock services. Access (C2C). E-business expedites the process of better cus- to computer would be beneficial to Bangladesh like tomer relationship management. It also helps to attain any other country. Social and economic disparity enterprise resource management as well as “e” to “e” and lack of Internet accessibility which creates process. As such, on-line banking system can add digital divide are a great hindrance towards cus- value and value chain can be created in the e-business tomer dissatisfaction of the business organization process. In turn, it helps to raise gross domestic prod- which ultimately results in negative customer rela- uct of the country. tionship management. As a result, it creates a nega- Governments as well as different international or- tive impact on economic development of the coun- ganizations have also identified that underdeveloped try. E-business process creates an opportunity for banking technology creates hindrance on economic doing business through arranging real time sharing business. Organizations can take help of transaction process through e-business solutions from around ” Muhammad Mahboob Ali, 2010. the world where on-line facility can be available. 156 Banks and Bank Systems, Volume 5, Issue 2, 2010

Due to advancement of technology, business proc- ing access to e-commerce systems and the needed ess of the globe is gradually becoming complex for skills. However, what is unique about e- which e-business, especially in the banking sector, commerce over the Internet and the efficiency can supersede the traditional business process. gains is that it promises the premium placed on Through e-business the country can compete with openness. To reap the potential cost savings fully, the changing global business trend and on-line firms must be willing to open up their internal sys- banking can facilitate e-business. tems to suppliers and customers. This raises policy issues concerning security and potential anti com- 1. Literature review petitive effects as firms integrate their operations Buffam (2000) depicted that companies that build more closely. the better e-business solutions will outperform their Uddin and Islam (2005) observed that the multifari- competitors. Companies that build the best e- ous projections of ICT in human life plead a win- business solutions will transform themselves into ning case for institutional integration of ICT related zero-latency enterprises. Companies that choose not components in rural support programs taken by to embrace e-business, or do so ineffectively, will Governments and NGOs. underperform or be driven out of business. Chaffey (2006) dealt with strategy and applica- Turban et al. (2000) argued that following points of tions of e-business and e-commerce in a logical managerial issues are very important: Focus of Elec- but robust manner. He stressed that e-business and tronic commerce management; Sales promotion; e-commerce were very important for management Purchase process reengineering; Just-in-Time deliv- implications as such a bridge to link leading edge ery; New electronic intermediary business; Provi- research and professional practice was required. sion of solutions; and Business ethics. Mia, Rahman and Debnath (2007) observed that the Rahman (2001-2002) observed that issues relating latest development in marketing to electronic fund transfer require security, avail- by banks is on-line banking, where banks have now ability, authenticity, non-repudiability and audibil- put themselves in the World Wide Web to take ad- ity. He suggested for appropriate control and effi- vantage of the Internet’s power and access to cope cient security measures and also for proper utiliza- with the accelerating pace of change of business tion of audit trail in the e-commerce system. environment. Ali (2003) argued that Bangladeshi companies and organizations have several problems to start full Pires and Stanton (2007) commented that policy swing e-business. These include limited resources, wise government must recognize that the ability of backwardness in technology, managerial inefficiency, countries to engage in e-commerce is tied both di- socio-infrastructural problem such as corruption, rectly and indirectly to their attractiveness for FDI. default culture law and order situation, rampant cor- Ahmed and Islam (2008) observed that adopting ruption, strike etc. which penetrate for a long time. e-banking services, banks in developing countries Ali, Mohsin, and Yasmeen (2004) observed that are faced with strategic options between the maximizing e-business efforts to focus on informa- choice of delivery channels and the level of so- tion dissemination, knowledge transfer, and techni- phistication of services provided by these delivery cal assistance is required. Steps need to create ap- channels. propriate knowledge among various procedures of Shamsuddoha (2008) argued that currently in e-business. Bangladesh, banking industry is mature to a greater Huda, Momen and Ahmed (2004) commented that extent than in the earlier period. It has developed the banking sector in Bangladesh is clearly recog- superb image in their various activities including nizing the importance of information technology to electronic banking. Now modern banking services their continued success. have been launched by some multinationals and new local private commercial banks. Electronic Hoq, Kamal and Chowdhury (2005) argued that a banking is one of the most demanded and latest key reason why e-commerce, especially the busi- technologies in banking sector. ness-to-business segment, is growing so quickly is its significant impact on costs associated with in- Ahshan (2009) argued that on-line transaction ventories, sales execution, procurement, intangi- would boost the gross domestic product (GDP) bles like banking, and distribution costs. If these growth and thus, help Bangladesh achieve the reductions become pervasive, e-commerce has the Millennium Development Goals (MDGs). In the potential to be the application that ushers in the era of globalization, the Internet makes the world large productivity gains. Achieving these gains is, smaller and e-commerce facilitates marketing and therefore, contingent on a number of factors, includ- shopping from home. E-commerce facilitates

157 Banks and Bank Systems, Volume 5, Issue 2, 2010 business with customers over the internet. In e- iii) To evaluate customer relationship management commerce, customers can buy goods and services derived from the on-line banking system. over the Internet. iv) To provide some recommendations so that e- business can bring fruitful results in the country. Islam and Yang (2009) observed that service quality satisfaction and informational trust had important 2. Methodology of the study mediating effects on the Balance score card per- The study is based on secondary sources and primary formance process. These two mediating roles ex- sources. As such, the study has reviewed different plain that, when an institution creates and raises the published articles, books, newspapers and websites. levels of service quality satisfaction and informa- However, exact references are mentioned in this arti- tional trust, the results lead to a favorable customer cle. The study will also collect related information interaction relationship and thus, could help the regarding present status of the on-line banking through institution achieve higher levels for Balance score field visit in forty eight banks (forty seven banks after card performance measure. the merger of two banks on January 3, 2010) head Nyangosi, Arora, Singh (2009) argued that banking offices and IT and MIS Department. Moreover, we through electronic channels has gained increasing also visited Central Bank, i.e. Bangladesh Bank to popularity in recent years. This system, popularly collect related information. The study collects data on known as 'e-banking', provides alternatives for faster the following points: services provided by the banks, delivery of banking services to a wide range of cus- software used by the banks, vendor’s name and bank’s tomers. The overall result indicates that customers name (see Table A of the Appendix). in India and Kenya have developed positive atti- Moreover, the study also did a survey through pre- tudes and they attach much importance to the emer- paring a questionnaire. For collecting data from the gence of e-banking. respondents, the study used snowballing sampling Shah and Clarke (2009) focused on human, opera- technique which is also known as a chain referral tional, managerial, and strategic organizational is- sampling type. Snowball sampling technique is used sues in e-banking. They argued that e-banking man- to discover and enlist “hidden populations”, who agement can help to expedite doing business may be difficult to locate. The survey was con- through using electronic medium. ducted on the basis of 500 customers’ comments, Rahman (2010) who is the Governor of Bangladesh those have been using on-line banking system. The Bank argued that Bangladesh Bank has achieved a data on the respondents who are the customers of historic milestone in the trade and business arena, the following banks: Ltd., BASIC Bank departing from conventional banking with the intro- Ltd., Ltd., duction of e-commerce recently; a giant stride to- Bank, Trust Bank Ltd., Prime Bank Ltd., Uttara wards digital Bangladesh. Bank Ltd. are given in Table B of the Appendix. These customers are from and From the aforesaid literature review, it is evident cities. On-line banking is mainly concentrated in the that on-line banking can act as a complementary Dhaka city. However, in Chittagong city on-line towards e-business. With the help of e-business the banking system is also being expanded. Out of 500 country can create opportunities as this will help respondents, 381 are from Dhaka city while 119 both producers and customers. But these theoreti- persons are from Chittagong city. cal observations may not be feasible in this coun- try. As such, the study seeks to evaluate whether Observations through field study were obtained and the country has proper infrastructure for doing e- are being reported at the present status of the on-line business. What are the statuses of e-business and banking system. Time period of the study is up to on-line banking of the country? Does on-line bank- February 2010. This study did not use any sort of ing really works as a complementary to e-business correlation or regression analysis as it is mainly in Bangladesh? The study intends to examine fore- based on qualitative nature. said questions. 2.1. Present status. Bangladeshi companies and Objectives of the study. organizations are facing the problem of starting full swing e-business. Network is a mode of communi- The study has been undertaken with the following cations with the computers. Networks of computers objectives: can be classified in the following way: local area i) To examine infrastructural situation of the country network, metropolitan area network, and world wide to prosper e-business and on-line banking system in area network. Multiple computers are connected Bangladesh. through telephone lines, cable systems, and wireless ii) To observe present status of on-line banking in technology is also required. According to a report Bangladesh. published in The Daily Star (April 4, 2010), Bang-

158 Banks and Bank Systems, Volume 5, Issue 2, 2010 ladesh ranked 118th in the global Network Readi- ment to provide the basic business environment. ness Index in 2009-10 up from 130th a year ago, Rapid growth of ICT is not possible without mas- showing an upward trend in the information and sive investments in ICT infrastructure and human communication technology sector. In South Asia, resource development in the computer and elec- India ranked 43rd, Sri Lanka 72nd, Pakistan 87th tronics and telecommunication engineering and Nepal 124th in the 'Global Information Tech- courses through ensuring quality education. Still nology Report 2009-2010' released by The World now call charge of cell phone is not competitive Economic Forum (WEF) on April 3, 2010. As such, in Bangladesh. Bangladesh Telecommunication Bangladesh has to go long way to develop its net- Regulatory Commission (BTRC) is not playing due work for arranging Digital Bangladesh by the year role in the development process of communication 2021 and public and private cooperations and stra- sector. Infrastructural problems are creating less tegic alliances are required to develop e-business scope to implement e-business successfully. system in the country. Under the private initiative, Internet was started in Electronic Payment Systems for e-business are 1996 by ISN in Bangladesh. ISN is the first ISP op- characterized by broad geographic presence and erator in this country. Still now all the Internet ser- acceptance by a large number of merchants or pro- vice providers have the server abroad, for which they grams. Participants in an electronic payment system are facing competitive disadvantage, as cost remains may include users, financial institutions, business high. Security problem is still high in this country. personnel, industrialists, merchants, third party Lack of digital accessible personnel is the real prob- processors, etc. WiMAX stands for Worldwide lem for the country. Moreover, some software devel- Interoperability for Microwave Access which offers opers of the country aren’t well conversant with the wireless transmission of data via different market demand for which they cannot supply applica- transmission modes, from point-to-multipoint links to tion software with faultlessness. portable and fully mobile internet access. The Fi- Policy makers of the country are not aware of the nance Minister recently argued for trial launching of benefits of e-business. As such, they don’t put sig- operation of the country’s first-ever wireless broad- nificance on proper and systematic development of band technology WiMAX. He commented on that e-business. In this connection it may be stated that entrepreneurs of the telecommunications sector Bangladesh bank is trying to implement automated must reach the digital communications system to the clearinghouse through utilizing MICR (Magnetic doorsteps of the rural people. He hoped that the Ink Character Recognizer) procedure. But in devel- WiMax technology would be available at every oped nations MICR procedure is now replaced by divisional headquarter within a year (Source: more sophisticated technique such as cheque trunca- http://www.bangladeshinfo.com/gadgets/news_inner. tion process. php?nid=2343, July 22, 2009). Total number of banks in Bangladesh is forty seven. Telephone density is awfully little in Bangladesh. It is Banking sector in Bangladesh, on the basis of utili- far much less in comparison with other developed zation of electronic devices, can be subdivided into nations of the world as well as neighboring countries. three groups: i) foreign commercial banks and pri- Kabir (2008) depicted that mobile phones (millions) vate commercial banks, especially 2nd (except for are 36.4, fixed lines (PSTN) (millions) are 1.2, total few banks) and 3rd generation private banks: fully telecom users (millions) are 37.6, teledensity (%) is online banking; ii)1st generation private banks and 26.8 in the year 2008. Outside Dhaka, at present a some 2nd generation private commercial banks: me- few computer network infrastructures have been de- dium range on-line banking system; and iii) nation- veloped so far. Apart from some educational insti- alized commercial banks, specialized banks and few tutes outside Dhaka, observation finds that most of foreign bank branches of this subcontinent: low the LAN setups are Dhaka centric. Bangladesh has grade on-line banking system. been connected to worldwide Internet Super High At present, the banks in Bangladesh are using the Way from 2006 through an under sea submarine limited electronic banking services. It is expected cable. But this single submarine cable frequently that a bank can attain more profit and offer better faces disruption resulting in slow bandwidth. services to its customers by introducing on-line A huge digital divide exists among the city of banking facilities. The foreign commercial banks Dhaka, Chittagong and other parts of the country. operating in Bangladesh like Standard Chartered Private-public partnership is a crucial issue for Bank, Citi Corp. N.A. and the HSBC are the pio- information and communication technology (ICT) neers in introducing the electronic banking facilities. development and application. Private enterprise They provide ATM, debit card, , home and capital can lead ICT revolution in Bangla- banking, internet banking, phone banking, on-line desh. This, however, would require the govern- banking, etc. services.

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Among the indigenous banks, the private banks are For foreign remittances four nationalized banks ahead of the public ones. Prime Bank Ltd., Dhaka and fifteen private banks are working collabora- Bank Ltd., BRAC Bank Ltd., Dutch-Bangla Bank tively with mobile phone service operators. Re- Ltd., Eastern and Mercantile Bank Ltd. have already cently remittance could be sent in Bangladesh by stepped towards electronic banking facilities. Apart banking channel through account transfer (nor- from these banks, Mutual Trust Bank Ltd. also in- mally takes 3 working days) or in the form of troduced ATM service. Among the four nationalized instance cash (takes 24 hours). Foreign residents commercial banks (NCBs), Ltd. has can send their money and PIN (personnel identifi- some access to the electronic banking facilities. cation number) through mobile phones. As a re- Bangladesh Bank, the Central Bank of Bangladesh, sult, money transfer becomes relatively easy, is also trying to formulate the wide structure of elec- quick and hassle free. But this system is also su- tronic banking facilities. All of these private banks perseded by mRemittance system. According to offer limited on-line banking services. Most of these Ahemd (April 15, 2010), in a revolutionary step on banks only offer services by providing ATM card. April 13, mobile remittance service or mRemit- Most of them do not offer wide range of internet tance was introduced in the country opening doors banking facilities which is the main advantage of e- to millions migrant workers to help transfer their banking. Deposit money in any branch and money hard-earned money easily, effectively and most withdrawal from ATM machine can be considered importantly, swiftly. The first ever remittance ser- the best e-banking facilities available in Bangla- vice for Bangladesh was jointly launched by two desh while electronic money transfer starts in a local banks – Ltd. and Eastern Bank limited edition. Sonali and Ltd. is Ltd. – and the country’s second largest mobile also providing on-line banking services on a lim- operator, Banglalink. ited scale. Ltd. is also developing on- Credit card facility can not be extended fully in the line banking. BASIC bank which is 100 percent country, as common gateway between financial public owned but served as private sector banking institutions can not be established. Pricing mecha- has a technological advancement. Detailed types of nism of the products of country is not competitive, banking services offered by various banks are rather it is very volatile. This creates a negative given in the Appendix. impact on the customers. A broad spectrum of Internet banking services, a subset of electronic finance, is available in Bangla- The process of digital divide eradication has been desh with different degree of penetration. The credit started very slowly. Bogora, Kushtia, Barisal and card is available from VISA, MasterCard and Modhupur village of Tangail were previewed in VANIK. Some foreign banks provide electronic terms of Internet banking and a complete virtual fund transfer (EFT) services. It is at an early stage bank which started on May 2, 2000. This will gradu- and used on a very limited scale. Microchips em- ally give the following services: e-marketing, e- bedded Smart Card is also becoming popular in the shopping mall, e-marriage scheme, e-mail, e-tender, country, particularly for utility bill payment. Auto- e-voting/polling, search engine, chat, e-commerce, e- mated teller machine (ATM) is expanding rapidly in stamp, e-Cash, e-music, e-entertainment, e-treatment, major cities. A group of domestic and foreign banks e-Advocacy, etc. E-governance can help us to operates shared ATM network, which drastically achieve good governance of the country. increases access to this type of electronic banking If government doesn’t take proper incentives to service. The network will gradually be extended to spread the computerization process, then there other parts of the country. will be no benefit. The parliamentary members of Last couple of years shows dramatic improvement the country must be aware of the benefits of In- in the awareness situation in the banking sector re- formation and Communication Technology (ICT), garding the comprehensive application of ICT. Lo- otherwise it can not be successful. It won’t bring cal software companies have been starting competi- any dramatic changes in the economy. Entrepre- tion to supply useful complete banking software neurship Development Fund (EDF) of Bangladesh with all the basic features of banking module. How- bank should be utilized properly. Only a few ever, many forms of electronic banking services are companies can avail the fund. ICT related compa- not possible to offer in Bangladesh at this moment nies are trying to develop e-business processes but due to the technology backwardness, infrastructural their activities are limited. If proper procedure of underdevelopment and legal infrastructure. Those e-business can be developed in the agribusiness products would be very useful for export-oriented sector, especially in the rural areas, through utiliz- industry to reduce lead-time in export and keep ing e-technology then it will be beneficial for the comparative advantage in the international market. producers of the agricultural commodities.

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Acute shortages of human resources interested in limited time period (banks’ transaction days), how doing on-line banking business are also one of the long we can survive is a debatable question. main reasons for lagging behind. However, as Bangladesh government should consider this case legistative situation is deteriorating so there is a carefully. positive impact on the e-banking considering the According to a report on “Bangladesh is developing safety of the people. electronic payment infrastructure” (May 20, 2008), From the field visit, it was revealed that banking the Securities and Exchange Commission (SEC) in sector requires rapid modification and adaptation to Bangladesh proposed IT Consultants Limited (ITC), keep harmony with the world business. It becomes a manager of Q-cash brand of ATM and different more obvious by observing the increased number of cards, to raise their paid-up capital up to Tk 500 customers in some modern banks while others are million if the company is to proceed to initial public losing them. In the context of Bangladesh, a country offerings. The Securities and Exchange Commission of more than 150 million people, it is to be realized (SEC) has asked us to raise the company's paid-up that there is no other option for us but to join the capital to Tk 50 crore from the current Tk 37 crore. current trend. In case the company fails to comply with the SEC According to news report published in the New requirements to increase the paid-up capital Nation on August 28, 2009, the government has within the time specified, it will have to gain the formulated a policy on the national information approval of the SEC again. This measure is be- and communication technology as part of its an- lieved to extend the sphere of the company's influ- nounced plan for digitization of the nation. The ence. The company began as a private limited busi- policy has earmarked activities in three phases, in ness in 2001. But now it is the local leader in elec- the short, medium and long-term plans to be im- tronic payment systems which are developing in the plemented within 2021. The government aims at country with increased speed. ITC possesses neces- doubling the gross domestic products (GDP) dur- sary tools to process transactions for banks and re- ing this time to achieve the goal. The policy de- tailers. It has the largest independent network of more tails suggest a number of activities including than 100 ATMs in the country. There is also a wide spreading the use of keyboard by functionaries at network of point-of-sales (POS) centers operated different levels, encouraging the use of standard by the company. (Source: http://www.ecommerce- code by software sellers, developing a national jounal.com/news/bangladesh_is_developing_electron web-portal and popularizing the use of e-citizen ic_payment_infrastructure_0?drgn=1). services, paying service charge through mobile phones or ticketing, etc. Land registration, pass- According to the report published in The Financial port renewal, digitization of police case dairy and Express (November 3, 2009), Bangladesh Bank case position in the court, spreading the use of gave the ground breaking directives to commercial broadband internet throughout the country and banks through a circular issued on November 2009, other such essential services may also be brought saying that from now on their clients can pay power, under the scheme. The new policy will be the water, gas and phone bills from bank accounts and common property of all departments and organs transfer funds within a bank or to other banks. The of the state targeted to develop a digitized nation central bank said that online payments would be within the stipulated time. treated like any other cash transaction although it reminded the banks that these money transfers The most part of the existing banking system in the would be regulated by the country's strict Anti- country outside Dhaka and Chittagong cities is Money Laundering Act. The country had only about manual (paper based), that’s why it is awkward, 400,000 credit card holders at the end of June last slow and error-prone. It, on the one hand, fails to year; according to Bangladesh Bank, payments and meet the customers’ demand and, on the other transactions by credit cards were nearly Tk 11 bil- hand, it causes some significant losses both for the lion in June 2008 – one of the lowest in the world. banking authority and traders. Electronic banking However, banks still need massive ICT backbone to solves the above problems. Furthermore, it opens ensure that online transaction can not be misused. up some other salient aspects such as increased Meanwhile, Bangladesh Bank started Automated foreign trade and foreign investment. At present, Clearing house on trail basis from November 8, weekly bank holiday in Bangladesh is on Friday 2009. Bangladesh Bank also declared that the clear- and Saturday while in rest of the world it is on ing house won’t accept any check from April 1, Sunday. As such, Bangladesh has only 4 banking 2010 if size of the check is not as per the guideline days for foreign exchange transactions. Given the of the MICR system. However, in Bangladesh, digi- preliminary stage of e-business facilities and their tal divide between the Dhaka city and the rest of the

161 Banks and Bank Systems, Volume 5, Issue 2, 2010 country is conspicuous. E-business as a whole is Table 1. Opinions of customers who are habituated confined among very few business organizations in on-line banking system (respondents who ex- and on-line banking business is expediting process pressed “yes” comment) of the e-business of the country. Dhaka (in Chittagong (in Comment 2.2. Field level study. The total number of different percentage) percentage) On-line banking services are relatively better 79% 65% categories of banks is currently forty seven. The than manual system Bangladesh Development Bank Ltd. (BDBL) began On-line banking provides good customer service 72% 61% operations on January 2, 2010 through merger of Just-in-time services in banking can be provided 56% 48% Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Bank personnel behave properly 52% 56% Sangstha. From the field survey we observe that the Dealing officer is well conversant about his/her 48% 47% following banking services are being provided by respective desk work different banks: Banking services have technologically improved 51% 44% but their quality worsened i core banking; i cluster banking; Source: Compiled on the basis of customers’ responses. i phone banking; From the findings above it is observed that impact i SMS banking; of on-line banking has a mixed result though most i Internet banking; of the customers support that it provides good i various cards; customer services. This supports our null hy- i ATM shared (VISA/MASTER); pothesis. But the problem is that customers think that while banking services have technologically i ATM own (VISA/MASTER); improved, their quality worsened. In case of the i EFT; other opinion survey most of the customers are i SWIFT; providing “yes” results which also indicates that i PC banking; null hypothesis is correct. However, in the opin- i POS terminal; ion poll survey there is a question regarding deal- i banking KIOSK; and ing officials of the commercial banks whether i off-line branch computerization. they are well conversant about their desk work. The reply indicates that 52% and 53% customers Details of the field survey regarding software uses, of Dhaka and Chittagong cities think that dealing vendor’s name and services are given in the Appen- officers of the banks are not well conversant dix, Table A. about their desk work. However, foreign commercial banks and private Now we are showing diagrammatic representations. commercial banks are relatively in a better position On-line banking to provide on-line banking services. provides good customer service Moreover, when contacted with Bangladesh Bank Just-in-time it was informed that BACH (Bangladesh Auto- services in bank- mated Clearing House) is yet working in SIT ing can be pro- vided (System Integration Testing) phase. SIT is ex- pected to be completed within the first half of Bank personnel January 2010. In the first phase, only Dhaka will behave properly be under this umbrella and all bank branches in Banking services have technologi- Dhaka region must be part of BACH. Bangladesh cally improved but their quality Bank (BB) in its Dhaka office is using 7 inch * worsened 3.50 inch MICR encoded cheques in BACH. Better e-business Cheque truncation will be done, some banks will environment truncate fully (meaning at branch level) while Fig. 1. Comments of customers who are getting on-line some partially (meaning at a central point). BB banking services will also provide bureau service, if needed by any 2.4. Analysis of the findings. E-business is still not bank initially. Clearing is for inter-bank transac- very much progressed in Bangladesh. Mass aware- tion. It will be settled by BB after t+1 days. ness is not feasible. The country faces problem of 2.3. Customers’ response. Based on the sample developing human-ware. Without human capital of five hundred customers who are habituated in conforming to the international standards, we are on-line banking system, following results have not able to compete in the global market and suc- been gathered. cessful e-business cannot be feasible.

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The field level study observes that still nationalized cafés are available but in terms of banking purpose commercial banks and specialized banks are lag- customers do not feel safe to use these facilities. As ging behind on-line banking services. Moreover, a result, the total number of customers who are ha- customers are not satisfied with the quality of the bituated in on-line banking systems is limited. In services. Also, they are not very happy with the these circumstances investment in establishing e- behavior of the bank personnel. The study also banking facilities seems profitless. reveals that e-business, especially with the help of Although on-line banking has bright prospects, it on-line banking, can manage economy of Bangla- involves some financial risks as well. The major risk desh in a better way as customer relationship man- of on-line banking includes operational risks (e.g., agement increases. security risks, system design, implementation and Local banking software should be developed prop- maintenance risks), customer misuse of products erly and must have greater accessibility within and and services risks, legal risks (e.g., without proper outside the country. Moreover, to produce hardware, legal support, money laundering may be influ- especially computer and its accessories, local entre- enced), strategic risks, reputation risks (e.g., in case preneurs are not taking any sort of strategic plan- the bank fails to provide secure and trouble free e- ning. Bangladesh Bank should adopt latest technol- banking services, this will cause reputation risk), ogy but due to lack of vision they are adopting old credit risks, market risks, and liquidity risks. There- technology, i.e. introduction of MICR for Bangla- fore, identification of relevant risks, and formula- desh Bank automation procedure. MICR system tion and implementation of proper risk management should be substituted by cheque truncation system. policies and strategy formulations and implementa- tions are important for the scheduled banks while The shortage of technology-based human resources performing on-line banking system. Ramakrish- and poor telecommunication infrastructure needs to nan’s (2001) suggestion may be followed for risk be overcome to break low equilibrium trap. Bridg- management. ing the digital divide would provide technology- based human resources, who can contribute to rais- 2.5. Benefits of electronic business and on-line ing gross domestic product (GDP), national savings, banking system. Managers at various organizational investment, creation of employment and moving out levels, especially in an underdeveloped country like from the vicious circle of underdevelopment. Bangladesh, will have to play vital roles in successful Numerous problems have been identified in on-line implementation of e-business. They are the key banking system in Bangladesh. Some of them are forces to initiate dedicated strategy to change from the following: the traditional business processes to the technology driven business processes. This not only involves i Inefficiency and inadequate knowledge of the huge costs as a transition period of organizations but bank management about the on-line banking. also, adaptability of the human being in the new i Lack of proper strategic plan to gain and retain processes to adding values is required. Due to global market share of the indigenous banks. changing environment and in order to succeed in both i Lack of international standard communication world arena and on the domestic market as well as channel. domestic business, organizations are often forced to i High cost of establishing on-line banking system. do business in the electronic ways. Moreover, to suc- i Inadequate back and front office management. ceed over the competitors organizations need to i Lack of integrated plan among the banks and the change their strategies and they gradually become Central Bank authority. bound to adopt e-business. At these stages, successful i Inefficient Clearing House facilities. implementation depends on all the stages of the Hier- i Inappropriate software and less trust by the bank archy of the Management, i.e. from the top manage- authorities on local software. ment level to the level management. i Bias of the bank management towards foreign On-line banking system works as a complementary software. factor of electronic business. Though electronic i Legal barriers and appropriate policy framework. business has a greater set of field, on-line banking can work as a subset of the e-business. Benefits A number of customers taking banking services are derived form the e-business largely depend on suc- not capable of bearing the cost of additional equip- cessful implementation of the business process. ments like computer, computer accessories, Internet, etc. in their own organizations or at home. Biomet- Managing external pressure as well as internal rics should be more strengthened. Using Internet pressure should be coordinated by the manage- facility is still very costly and people have little ment so that e-business can supersede traditional knowledge in operating computers. A few cyber business processes of organizations. Moreover,

163 Banks and Bank Systems, Volume 5, Issue 2, 2010 transformation process requires huge cost, espe- implement e-business at a full swing. But the or- cially it is subject to organizations of Bangladesh. ganizations are not interested in investing because Greater and cautious resource management, espe- they consider huge expenses. cially financial capability, should be handled by In Bangladesh most of the business organizations the management of the organizations. Flexible are being run in a centralized manner. As such, vi- innovative changes processed by the management sions, missions, and goals of the top management of of the organizations are required for the organiza- various organizations are very important. Top man- tions to succeed in the transformation process. To agement should change their mindset and like Bang- manage changing processes effectively, socio- ladesh Bank should encourage e-business process. economic and cultural environment should be con- Top management views are reflected to the mid sidered as well as labor surplus country-business level management and lower level management. process reengineering may be designed with the Unfortunately, most e-business efforts fail due to aim that personnel of the organizations will use the lack of visions, missions, goals and strategic leader- technological functionalities which will lead to ship in the business processes of the organization. further enhancement of the organizations. As such, strong motivations by the management towards all Discussions and conclusions levels of personnel of the organizations are re- With the advent of e-business especially on-line quired. Managers’ functionality to implement e- banking system, the distribution channel is also business is a stressful task for which their mindset changing. But quality of banking services should should be strong and they should not only treat meet international standards. To attain more effec- global considerations but also take domestic condi- tive and efficient business procedure, Bangladesh tions into account. has to produce commodities of global standards. E-business can add value through knowledge man- Ali, Mohsin, and Yasmeen’s (2004) observation agement as it helps customers to attain new services. may be followed to attain e-business efforts through Successful e-business depends on sharing of strate- information dissemination, knowledge transfer, and gic knowledge for which dissemination of the in- technical assistances. However, Bangladesh’s global formation and free flow of knowledge around the Network Readiness Index should be improved. globe is required. On-line banking can provide The respondents’ opinion about the on-line bank- twenty-four hour banking facilities. Through elec- ing customers in Dhaka and Chittagong cities re- tronic data interchange customers are able to draw vealed that null hypothesis is accepted while alter- money from their accounts and transmit money native hypothesis is rejected. It indicates that on- from one branch to another. Letter of credits can be line banking can provide better customer relation- sent through SWIFT and electronic fund transfer ship management. As per findings, behavior pat- from one country to another can be feasible. Actu- tern of the bank personnel should be improved. Not ally, on-line banking provides faster and reliable only technological improvement is desirable but services. Encryption and decryption can be used to also banking service as a whole should be en- send money from one place to another. As such, on- hanced. According to Chandrasekhar and Sonar line bank management handles customers in a far (2008), not only technological progress but also better way. efficiency of the banking services are required In Bangladesh, decision makers are generally reluc- because on-line banking customers are not still tant about advancement of technology. It is difficult fully satisfied with the services. for people who do not have much technical knowl- edge to understand the necessity of new technology Study on customers’ feedback is partially sup- adoption. So, the pace of computerization in various ported by the findings of Nyangosi, Arora, Singh offices, business enterprises and sectors is low. (2009) as they argued that banking through elec- tronic channels had gained increasing popularity Another problem in initiating e-business is that in in recent years. However, policy makers should our country we are reluctant to accept something consider Shah and Clarke (2009) observation. new. As such, management prefers to use current From the customers’ feedback, the study observes business model and they are reluctant to implement that paying attention to human, operational, something new. managerial, and strategic organizational concerns in To benefit from e-business, organizations including e-banking is required. Moreover, bank personnel banks have to invest in software, hardware, infra- should be well conversant about their respective desk structure development, etc. The owners are uncer- work. This is also applicable to other organizations tain about the positive return on investment as trans- which are implementing e-business in the country. formation from manual system to electronic transac- Otherwise, customer relationship management cannot tion involves huge costs. This is a great drawback to be improved. Buffam’s (2000) comment is more

164 Banks and Bank Systems, Volume 5, Issue 2, 2010 practical for the companies of Bangladesh as e- Business sector should be encouraged that makes business will lead to attain competitive advantage their own investment in the application of ICT in as they can outperform their competitors. production, trade and services. Procurement and utilization of funds from national sources, both pub- The study is also done to observe different types of lic and private should be pursued. International de- services and use of software by the banks. From the velopment and donor agencies should be ap- field level study we observe that core banking, clus- proached to provide funds to set up necessary infra- ter banking, phone banking, SMS banking, internet structure and development of human resources, con- banking, various cards, ATM, SWIFT, PC banking, forming to the objectives of ICT policy. Shah and POS terminal, banking KIOSK, offline branch com- Clarke’s (2009) observation about the e-banking can puterization are being provided. From the on-line be transformed for successful e-business policy banking perspective, still foreign banks are provid- formulation as it depends on human, operational, ing more on-line banking services than private managerial, and strategic organizational issues. Is- commercial banks. Then nationalized commercial lam and Yang (2009) rightly observed that service banks and last being on-line banking services are satisfaction and information trust can play positive being provided by specialized banks. role in attaining e-CRM and balance score card Ahshan’s (2009) observation is important for Bang- model which is not only valid for the financial insti- ladesh as it will help to enhance economic develop- tutions but to a large extent, for business process of ment. Creation of appropriate personnel/professional the country. can improve the economic situation in the country. Economy of Bangladesh is still underdeveloped and As such, stress should be given to develop human one of the main reasons for this is that banking sys- ware. E-business can play important role in reducing tem is not properly developed. Technology is one poverty only when it is effectively utilized for spread- part but personnel should be well conversant with ing the business both in rural and urban areas, crea- their respective desk-work and behavior pattern tion of job opportunities, removing middlemen in the should be improved. Government as well as differ- business process and one to one direct selling process ent international organizations have also identified and increasing both income and saving. that underdeveloped banking causes some costly Internet accessibility should be used for poverty reduc- obstacles on the way of the even progress of the tion. Following should keep more emphasis on e- country. Investors are frequently scared of investing business: IT firm; Export/Import traders; Export ori- because of sluggish banking system. Hence, making ented/Potential export business; Facility provided the banking system of Bangladesh as per interna- ISP/Internet; Infrastructure development – Govern- tional standards is of the highest priority. Business ment; Ministry of Commerce, Ministry of Law, Minis- processes should be re-engineered. try of Science & ICT, Export promotion bureau; Tele- communication/Infrastructure; Awareness on IT bene- Banks will have to face stiff competition in the fits among the mass. In this respect, Governor of world market with increasing the globalization and Bangladesh Bank Rahman (2010) rightly points out the banks will be forced to offer twenty-four hour that a holistic approach needs to be taken by all the banking services on-line. Regulatory issues relating stakeholders to reach the ICT facilities to the doorstop to security measures of electronic banking can be of the common people. Actually, e-technology can be improved in the following ways: utilized with other computer peripherals to enhance i analyzing the potential risks in the electronic communication, skills and understanding and provide payments systems; a sound basis for implementing e-business. It can be i tradeoff between the efficiency of the financial helpful to accelerate the learning process, including system and the amount of risk incurred; the acceleration of the development and application i competitive pressures that may encourage the of knowledge and technology. This includes devel- banks to engage in competitive deregulation; opment of the system and infrastructural develop- i effective provision and arrangement for cryp- ment and support where the following are required: tography and its applications; and (a) E-procedure, (b) Browser based system develop- i willingness of more customers to accept e- ment, (c) Web enable of legacy and/or client server business as psychological patterns of the cus- systems, (d) Enterprise application integration, (e) tomers has been changing. Implementation or use of application server technol- ogy. Ahmed and Islam’s (2008) observation should Global financial system is getting stronger day by be cautiously taken to adopt on-line banking services day and it is being strengthened by the e-business. for which banks in Bangladesh can develop strategies Around the globe, consumer market has greater for expediting not only banking business but also potentialities and producers must be active, other- providing customers’ satisfaction. wise they may lose their share in the marketing

165 Banks and Bank Systems, Volume 5, Issue 2, 2010 strategies. Customer retention is feasible through their own strategic plans to implement on-line arranging e-business, otherwise if switching cost is banking system. Creating awareness and con- low and other factors in between two companies are sciousness among the clients of the banks is similar then a customer will switch from one com- also required. pany to another where technological advancement i The country needs to develop e-business with is relatively higher. Moreover, rate of call charge the help of ICT facilities. ICT application and of cell phone should be lowered. Hidden cost in development of software are very much depend- cell phone should be removed. However, on-line ent on the quality of the workforce, and suppor- banking as well as electronic fund transfer are elec- tive infrastructure and environment. Upzilla tronic data interchange and not free from risk. Not level may be considered as the base unit which only security risk, but also cost of transactions may may be connected with district and then connec- also be raised. In this regard, Rahman’s (2001- tivity with the capital of the country can be 2002) observation regarding risk should be cau- done. However, more stress should be given on tiously handled. wire free connectivity for which priority should The country can benefit from the successful utiliza- be given on WiMAX technology. tion of e-business. This will help to enhance pro- i Public and private participation (PPP) for e- ductivity and customers’ satisfaction. Producers business should be encouraged for economic will also be rewarded and monetary gain can be development. Spread of on-line banking is a attained. E-business, especially with the help of on- very good initiative. But it is not only sufficient. line banking, can manage economy of Bangladesh Business sector as a whole should be focused on in a better way as customers’ satisfaction can be using e-business. It should be accompanied with increased. e-governance system and should be moved to- wards other areas of the “e” to “e” system like Recommendations e-tender, e-trafficking, e-ticket, e-learning, etc. To implement e-business in Bangladesh success- More stress should be given to the wireless fully, following recommendations are given below: transactions and working environment due to rapid technological advancement. i Digital Bangladesh may be activated by 2021 to i E-business should be used both for agricultural develop the economy of the country. Successful sector and industrial sector. Equal importance team building with a coherent manner for de- should be given so that domestic trade and in- veloping human ware, hardware, software and ternational trade can be effective. Distortion web ware are required to increase e-business from the market should be driven out and in- process in a systematic way. Moreover, greater formation should be passed systematically. emphasis should be put on security system and i E-business can help to improve total quality on preventing fraud so that any sort of financial management. This can also ensure quality as- transactions including on-line banking payment surance of the business sector. As such, business or any other electronic fund transfer can be policy formulation and strategies are required properly handled. and should be properly implemented. Adequate i Career path of hardware and software engineers training and technological support should be should be properly designed. Otherwise profes- developed so that trained manpower and tech- sionals will be de-motivated and they won’t nology driven organizations can be created with work with job satisfaction. the help of partnership between government and i In Bangladesh, on-line banking systems are yet non-government organizations. at a take off stage. The Clearing House opera- i Quality maintenance of local software should be tion in Bangladesh should be fully automated arranged. Initiatives should be taken to set up system. Banks and business organizations espe- hardware industry so that computer and com- cially corporate houses should have adequate re- puter accessories can be prepared in the country search, skilled manpower and technology driven and easily purchasable for the lower and lower strategies in this regard. middle class people. Quality education and i Initiatives to develop integrated e-banking training in the field of ICT to develop human re- software through in house built may be taken. sources are essential. Moreover, entrepreneur- Preference should be given by the bank author- ship should be improved for developing hard- ity to use local software over foreign software. ware and computer peripherals. Common gateway is required so that interbank i More high-speed fiber optical data communi- transactions can be feasible. Bank can charge cation infrastructures should be well estab- normal profit to enlarge the market size on the lished for speedy data communication for do- on-line banking products. Banks should have mestic and global high speed communication

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system. This will help to attain better e- i BTRC as a regulatory body should work with business including on-line banking system. long-term vision, mission and fulfillment of Competitive situation should be arranged so goal oriented strategies. They should work as a that e-business management can be improved facilitator rather not creating hindrance. VOIP through efficiency and effectiveness of cus- should be legalized after examining and finaliz- tomer services. ing proper rules and regulations in the country. References 1. Ahmed, Feroz and Islam, Md.Tarikul (2008). “E-Banking: Performance, Problems and Potentials in Bangladesh”, Business Review, Vol. 06, No. 1&2, January to December. 2. Ahmed, Nafid Imran (2010). “Encashing mobile remittance”, The Daily Star, April,15. 3. Ahsan, AFM Mainul (2009). “E-commerce in Bangladesh”, The Financial Express, Bangladesh, January 12 4. Ali, Muhammad Mahboob (2003). “E-Business in the age of Globalization: Bangladesh perspective”, The Bangla- desh Observer, September, 13. 5. Ali, Muhammad Mahboob, Mohsin, Chowdhury, Sifat-E and Yasmeen Farzana (2004). “E-Business in the Glo- baized world with special reference to Bangladesh: An analysis’, Business Review, Vol. 4, No. 1&2. 6. Buffam, William J. (2000). E-business and it solutions: An Architectural approach to Business Problems and Op- portunities, Addison-Wesely, USA. 7. Chaffey, Dave (2006). E-Business and E-Commerce Management, Prentice Hall: Financial Times Press, UK, 3rd edition. 8. Chandrasekhar, M. and Sonar, Rajendra M. (2008). “Impact of Information Technology on the efficiency and total factor productivity of Indian Banks”, South Asian Journal of Mangement, Vol. 15, No. 3, July- September, pp. 74-95. 9. Hoq, Ziaul, Kamal, Md. Shawkat and Chowdhury, A.H.M. Ehsanul Huda (2005). “The Economic impact of E- commerce”, BRAC University Journal, Vol. II, No. 2. 10. http://www.bangladeshinfo.com/gadgets/news_inner.php?nid=2343, July 22, 2009 11. http://cnews.canoe.ca/CNEWS/TechNews/NewStuff/2006/05/25/1597447-ap.html 12. http://www.jobsproject.org/content/publication/E-Commerce_in_Bangladesh_status.pdf 13. http://www.ecommerce-journal.com/news/bangladesh_is_developing_electronic_payment_infrastructure_0?drgn=1 14. Huda, Shakil, Momen, Mohammad Abdul, Ahmed, Mushtaque (2004). “On Line Banking System”, Finance and Banking, Vol. 6, No. 1 & 2. 15. Islam, Majidul and Yang, Yi-feng (2009). “Service Satisfaction, Information trust and e-CRM Performance in BSV model in the Empirics of Financial Institutions”, Journal of Business & Policy Research, Vol. 4, No. 1, July. 16. Kabir, Md. Anwarul (2008). Designing ICT Roadmap: A holistic approach, The New Nation, 23rd July. 17. Nyangosi, Richard, Arora, J.S., Singh, Sumanjeet (2009). “The evolution of e-banking: a study of Indian and Ken- yan technology awareness”, International Journal of Electronic Finance. Vol. 3, Issue 2. 18. Mia, Md.Abdul Hannan, Rahman, Mohammad Anisur and Debnath, Nitai Chandra (2007). “Consumer behaviour of On-line Banking in Bangladesh”, Journal of Business Studies, Vol. XXVII, No. 2, December. 19. Pires, Guilherme, and Stanton, John (2007). “Macro Issues in Electronic Commerce and Foreign Direct Invest- ment”, Global Business & Economics Anthology, Volume II, December, 2007. 20. Rahman, Atiur (2010). “Digital Bangladesh Bank”, The Daily Star, January, 13. 21. Rahman, M.Lutfar (2001-2002). “E-Commerce and Concern for E-commerce in Bangladesh”, Journal of The Institute of Bankers Bangladesh, Vol. 48. 22. Ramakrishnan, Ganesh (2001). “Risk Management for Internet Banking”, Information Systems Control Journal, Volume 6. 23. Shah, Mamood and Clarke, Steve (2009). E-Banking Management: Issues, Solutions, and Strategies, Information Science Publishing, UK. 24. Shamsuddoha, Mohammad (2008). “Electronic Banking in Bangladesh”, Journal of Business Solutions, Vol. 1, No. 2, December . 25. The Financial Express (Bangladesh), 3rd November, 2009. 26. The New Nation, 28th August, 2009. 27. The Daily Star, 4th April, 2010. 28. Turban, Efraim et al. (2000). Electronic Commence – A Managérial Perspective, Pearson Education. 29. Uddin, Md.Kamal and Islam, ABM Shahidul (2005). “Contribution of Information and Communication Technology to the Development of Rural Bangladesh”, Dhaka University Journal of Business Studies, Vol. XXVI, No. 2.

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Appendix Table A. Bank’s name, services, software use and vendor’s name

Service Software use Vendor’s name Bank’s name Misys International Banking System Equation AB Bank Limited Ltd. UK STELAR ERA InfoTech Limited Standard Bank Ltd. Dhaka Bank Ltd. Oracle Financial Services Software Eastern Bank Ltd. Flexcube (IBM AIX, Oracle) Ltd., India (Local Representative: Dataedge limited) N.A. (In-house) Dutch Bangla Bank Ltd. First Security Islami Bank PC Bank 2000 Leads Corporation Ltd. Social Islamic Bank Ltd. The Hongkong & Shanghai Banking HUB Core Bank In-house Corporation Ltd. Temonas DataSoft Limited Janata Bank Ltd. Mutual Trust Bank Ltd. Flora Bank Flora Systems Ltd. Ltd. A2Z Multiuser Banking System A2Z Computer Service,BD National Bank Ltd. PC Bank-2000 LEADS Corporation Limited National Bank of Pakistan Core banking Micro Banker VPro/5 Data-edge ONE Bank Ltd. Bank Ultimus Leads Corporation Ltd. Southeast Bank Ltd. eBBS In-house Standard Chartered Bank Millinum Information System Ltd. Al – Arafah Islami Bank ABABIL (MISL) BD Ltd. BRAC Bank Ltd. Finacle Infosys Solution The City Bank Ltd. Ltd. T24 Temenos Switzerland Prime Bank Ltd. Agrani Bank Ltd. National Credit and Commerce Bank Flora UBS Flora System Ltd. Misys International Banking System Equation Branch Server Ltd. UK International Finance Investment and Equation Branch Automation DO Commerce Bank Ltd. Trade Innovation DO Infinity Banking System Rupali Bank Ltd. First Security Islami Bank Cluster banking PC Bank 2000 Leads Corporation Ltd. United Ltd. Tele Banking ERA InfoTech BD Bank Asia Ltd. The Hongkong & Shanghai Banking Call Center Integrated System In-house Corporation Ltd. Flora Bank Phone Banking Flora Mutual Trust Bank Ltd. Phone banking IVR Suprico Standard Chartered Bank Phoenix Soft Switch, International Access BRAC Bank Ltd. Acumen CISCO System LEADS Dutch Bangla Bank Ltd. Telebanking Flora System Ltd. Jamuna Bank Ltd. Management SSL Wireless Limited AB Bank Ltd. SMS Banking ERA InfoTech BD Bank Asia Ltd. Oracle Financial Services Software Dhaka Bank Ltd. Flexcube Ltd., India Dutch Bangla Bank Ltd. SMS banking First Security Islami Bank Ltd. SMS Banking LEADS Corp. United Commercial Bank Ltd. Win2000 LEADS Mercantile Bank Ltd. Flora Bank SMS Banking Flora Mutual Trust Bank Ltd.

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Table A (cont). Bank’s name, services, software use and vendor’s name

Service Software use Vendor’s name Bank’s name Balance query by Cell Phone Business Automation ONE Bank Ltd. Tagged with Banking LEADS Shahjalal Islami Bank Ltd. SMS Banking Upload Systems Southeast Bank Ltd. Mobile Banking In-house Standard Chartered Bank Web Service, Windows Service In-house BRAC Bank Ltd. International Finance Investment and For SMS Banking Software Shop Ltd. Commerce Bank Ltd. Sonali Bank Ltd. O/S WAP M/S S.S.L City Bank Ltd. OmniEnterprise InfrasoftTech Limited AB Bank Ltd. MyBank ERA InfoTech BD Bank Asia Ltd. Dhaka Bank Ltd. Flexcube Eastern Bank Ltd. Dutch Bangla Bank Ltd. The Hongkong & Shanghai Banking HSBCnet Advising In-house Corporation Ltd. HSBC Internet banking Win+SQL Server Desktop Limited Janata Bank Ltd. Flora Internet Banking Flora Mutual Trust Bank Ltd. Web Statement In-house One Bank Ltd. iBank Ultimus LEADS Southeast Bank Ltd. iBanking In-house Standard Chartered Bank Phoenix Soft Access International Acumen BRAC Bank Ltd. CitiDirect USA Citibank N.A. Temenos Holdings Corporation, TIB(Temenos Internet Banking) Prime Bank Ltd. Switzerland BA’s proprietary Debit Card ERA InfoTech BD Bank Asia Ltd. Dhaka Bank Ltd. CARDPRO BEPS National Credit and Commerce Bank Ltd. Trans Master for Prepaid Credit and Tietonator Eastern Bank Ltd. Debit Card Proprietary Debit Card, PC Bank ATM LEADS First Security Islami Bank Ltd. Interface Dabit Card + Credit Card ITCL, BD Janata Bank Ltd. Win + SQL Server, LEADS Mercantile Bank Ltd. CTL Prime & CTL Online TSYS International, USA Mutual Trust Bank Ltd. National Bank Ltd. Cardpro Sungard System, Malayasia BRAC Bank Ltd. Various cards Prime Bank Ltd. VISA Debit Card, VISA Prepaid Card Shahjajal Islami Bank Ltd. (International), VISA Gift Card eCAPS In-house Standard Chartered Bank VISA (Card-Pro) BEPS, Bangladesh Exim Bank Ltd. ACCESS Card Management International Acumen Standard Bank Ltd. Card Suite (AIX, Oracle) Tleto Enator, Latvia Dutch Bangla Bank Ltd. Q-cash ITCL Jamuna Bank Ltd. Probashi Agrani Remittance card Cash Link, BD Agrani Bank Ltd. International Finance Investment and Tranzware card management system IT Consultants Ltd., Russia Commerce Bank Ltd. City Ltd. Finacle CityBank Ltd. Connect24 ITCL AB Bank Ltd. ATM shared (VISA/MASTER) STELAR ERA InfoTech BD Bank Asia Ltd. ITM, Euronet Switzerland local-CASH LINK Bangladesh Dhaka Bank Ltd.

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Table A (cont). Bank’s name, services, software use and vendor’s name

Service Software use Vendor’s name Bank’s name Agrani Bank Ltd. ITCL, Q-Cash Singapore Mercantile Bank Ltd. IST switch of DBBL Mutual Trust Bank Ltd. National Bank Ltd. National Credit and Commerce Bank Ltd. Tranzware, Compass Plus IT Consultants Ltd., Russia International Finance Investment and Commerce Bank Ltd. Sonali Bank Ltd.

City Bank Ltd. VISA, Q-Cash, OMNIBUS & DBBL Shahjajal Islami Bank Ltd. switch & ATM Network Uttara Bank Ltd. Q-Cash Shared ATM Card National Credit and Commerce Bank

Ltd. BRAC Bank Ltd. Cardpro Sun Gard City Bank Ltd. Card Management System (CMS) for Cashlink Bangladesh Ltd. Social Islamic Bank Ltd. PC VISA ITCL Jamuna Bank Ltd. STELAR Bank Asia Ltd. Wincor Nixdorf Protopas ITCL Eastern Bank Ltd. The Hongkong & Shanghai Banking ATMP 6.0 In-house Corporation Ltd. Q-Cash Singapore Mercantile Bank Ltd. Under process - CTL Prime & CTL TSYS International, USA Mutual Trust Bank Ltd. Online, ATM Controller TietoEnator Card Suite Dataedge One Bank Ltd. ITCL Shahjajal Islami Bank ATM own (VISA/MASTER) Switching Software Cynergon Intelisys Ltd. Southeast Bank Ltd. ATM SPARROW/HAWK, CR2 Standard Chartered Bank Ltd. BRAC Bank Ltd. Phoenix Soft International Acumen Standard Bank Ltd. IST 7.5 HMA STARware, India Origin - Canada Prime Bank Ltd. Iswitch Interblocks, Srilanka United Commercial Bank Ltd. IST(AIX, Oracle) FIS, USA Dutch Bangla Bank Ltd. Compass Plus, IT Consultants Ltd., Tranzware City Bank Ltd. Russia Feature available on Internet & SMS Bank Asia Ltd. Banking Dhaka Bank Ltd. Eldorado Interblocks (Sri Lanka) Al – Arafah Islami Bank Ltd. First Security Bank Ltd. Western Union Money Transfer BRAC Bank Bangladesh Commerce Bank Ltd. Ease Limited BD and Desktop Limited, BD Janata Bank Ltd. Through IVR - Servion System DataEdge

EFT Through ATM Own - Phoenix Soft International Acumen Through Internet Banking - Internet BRAC Bank BRAC Bank Ltd. Banking Through Mobile Banking - Mobile BRAC Bank Banking FTI In-house Citibank N.A. Online Remittance s/w In-house Money Gram Agrani Bank Ltd. IME RemitOne

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Table A (cont). Bank’s name, services, software use and vendor’s name

Service Software use Vendor’s name Bank’s name Infinity Remittance Money Gram X-press UAE Exchange, UAE International Finance Investment and Placid Express Plasic N.K corporation, USA Commerce Bank Ltd. Coinstar Money Transfer Coinstar Money Transfer, India Messaging, SWIFT AB Bank Ltd. SWIFT Alliance Service Bank Asia Ltd. SWIFT Syscom Information Systems Limited Dhaka Bank Ltd. Eastern Bank Ltd. One Bank Ltd. BRAC Bank Ltd. SWIFT Dutch Bangla Bank Ltd. Jamuna Bank Ltd. National Credit and Commerce Bank

Ltd. First Security Bank Ltd. Mercantile Bank Ltd. Uttara Bank Ltd. Al – Arafah Islami Bank Prime Bank Ltd. SWIFT Belgium Social Islamic Bank Ltd. Standard Bank Ltd. United Commercial Bank Ltd. International Finance Investment and SWIFT Commerce Bank Ltd. City Bank Ltd. The Hongkong & Shanghai Banking Group Messaging Gateway In-house Corporation Ltd. Janata Bank Ltd. Mutual Trust Bank Ltd. SWIFT Alliance Southeast Bank Ltd. International Finance Investment and Commerce Bank Ltd. National Bank Ltd. Agrani Bank Ltd. SWIFT Alliance Belgium Sonali Bank Ltd. Rupali Bank Ltd. National Bank of Pakistan PC CONNECT NBP Karaci, Pakistan International Finance Investment and Commerce Bank Ltd. Shahjajal Islami Bank SWIFT Alliance Access 6.0 Cambridge Worldwide, India Bangladesh Commerce Bank SAM In-house Citibank N.A. SAA SAM SWIFT EXIM Bank Ltd.

Mercantile Bank Ltd. PC banking PC Bank-2000 LEADS Corporation National Bank of Pakistan Q-Cash Singapore Mercantile Bank Ltd. Under process - CTL Prime & CTL Mutual Trust Bank Ltd. Online Hypercon Aamra Technology, USA National Bank Ltd. POS terminal VISA, Q-Cash, OMNIBUS & DBBL Shahjajal Islami Bank Ltd. switch & POS Network Switching Software Cynergon Intelisys Ltd. Southeast Bank Ltd. TNMS Aamra Technologies BRAC Bank Ltd.

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Table A (cont). Bank’s name, services, software use and vendor’s name

Service Software use Vendor’s name Bank’s name STIS International Acumen Hypercom Aamra (USA) Prime Bank Ltd. Ingenico ATCL (France) Dutch Bangla Bank Ltd.

ITCL Jamuna Bank Ltd. OS/400, Cash Link Agrani Bank Ltd. International Finance Investment and Tranzware Online Switching IT Consultant, BD, Russia Commerce Bank Ltd. City Bank Ltd. ERA- KIOSK-Banking ERA InfoTech Bank Asia Ltd. International Acumen Ltd. Eastern Bank Ltd. Banking KIOSK Colors of Bangadesh Southeast Bank Ltd. Customized S/W International Accumen, BD Dutch Bangla Bank Ltd. Ethics Advance Technology Ltd. E-Bank Bangladesh Shilpa Bank (EATL), BD JBSoft Banking Application In-House Easy Banking Desktop Limited Janata Bank Ltd. Flora Bank Flora Janata Bank Ltd. BexiBank Beximco Computers Sonali Bank Ltd. A2Z Multiuser Banking S/W A2Z Computer Service National Bank Ltd. PCBANK2000 Leads Corporation Shahjajal Islami Bank Ltd. In-house Developed Uttara Bank Ltd. Agrani Bank Ltd. Offline branch computerization BexiBank4000 Beximco Computers International Finance Investment and Commerce Bank Ltd. Rupali Bank Ltd. Agrani Bank Ltd. IBS Infinity Technology Sonali Bank Ltd. Janata Bank Ltd. Krantibank Kranti Associates Ltd. FloraBank Flora System Ltd. Daffodil bank Daffodil Computers Ltd. Agrani Bank Ltd. ABLsofT In-house AgraniSolution In-house Flora Bank Software Flora Bangladesh Commerce Bank Ltd.

Source: Prepared by Filed Observations on 30.12.09. Table B. Respondents of different banks who are habituated in on line banking system

Male respondents Female respondents Serial no. Name of the bank Dhaka city Chittagong city Dhaka city Chittagong city 1. Sonali Bank Ltd. 34 8 24 5 2. BASIC Bank Ltd. 25 9 19 4 3. Dutch Bangla Bank Ltd. 45 11 27 9 4. Standard Chartered Bank 52 17 39 12 5. Trust Bank Ltd. 28 9 21 7 6. Prime Bank Ltd. 23 12 15 4 7. Uttara Bank Ltd. 17 7 12 5

Source: Opinion poll survey.

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