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Awareness of Electronic Banking in Pakistan 1 Proceedings of 2 nd International Conference on Business Management (ISBN: 978-969-9368-06-6) AWARENESS OF ELECTRONIC BANKING IN PAKISTAN Awareness of Electronic Banking in Pakistan Nouman Anwar Dar MCB Bank Limited

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Page 1: Awareness of Electronic Banking in Pakistan Nouman · PDF fileAwareness of Electronic Banking in Pakistan 1 ... Abstract Electronic Banking ... focuses on growth and awareness of electronic

Awareness of Electronic Banking in Pakistan 1

Proceedings of 2nd

International Conference on Business Management (ISBN: 978-969-9368-06-6)

AWARENESS OF ELECTRONIC BANKING IN PAKISTAN

Awareness of Electronic Banking in Pakistan

Nouman Anwar Dar

MCB Bank Limited

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Proceedings of 2nd

International Conference on Business Management (ISBN: 978-969-9368-06-6)

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

125.9 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

2011”. 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.

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Proceedings of 2nd

International Conference on Business Management (ISBN: 978-969-9368-06-6)

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

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Proceedings of 2nd

International Conference on Business Management (ISBN: 978-969-9368-06-6)

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

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International Conference on Business Management (ISBN: 978-969-9368-06-6)

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

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International Conference on Business Management (ISBN: 978-969-9368-06-6)

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

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Proceedings of 2nd

International Conference on Business Management (ISBN: 978-969-9368-06-6)

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

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International Conference on Business Management (ISBN: 978-969-9368-06-6)

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 (2008-2009).

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International Conference on Business Management (ISBN: 978-969-9368-06-6)

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 189.0 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

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International Conference on Business Management (ISBN: 978-969-9368-06-6)

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 2009-10

fiscal year (FY10).

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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 29.98

million and Rs. 235.25 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. 17.0 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.

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Proceedings of 2nd

International Conference on Business Management (ISBN: 978-969-9368-06-6)

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 125.9 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.

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Proceedings of 2nd

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"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 177.3 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 2011. 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 3rd

quarter of year 2011.

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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

ATMs

74, 068, 117

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

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Mobile Phone Banking

Number of Banks providing mobile Banking

facility

11

Volume of Transactions 1, 918, 034

Value of Transactions Rs. 5,235 Million

Internet Banking

Number of Banks providing Internet Banking

facility

23

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

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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

No. of

Transactions

Volume

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 498,752 646

Person-to-Account Fund Transfers 46,528 260

Deposit - -

Cash-in (Deposit) 785,259 569

Cash-out (Withdrawal) 37,012 73

Bill Payments & Top-Ups - -

Utility Bills Payments 7,631,435 10,400

Merchant Payments 387,512 8,861

Mobile Top-ups 1,267,965 73

Loan - -

Loan Disbursement - -

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Loan Repayment 10,216 23

Others - -

Donations 70,328 2

Others 103,634 3,481

Total 15,866,672 58,711

188,941

4,839,090

498,752

46,528

785,259

37,012

7,631,435

387,512

1,267,9650

10,216 70,328 103,634

No. of Transactions jul-sep 2011 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

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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 17,448 10.23%

Total No. of active BB accounts 236,464 357,598 51.23%

Total BB Deposits as of Date (Million Rs.) 146 187 28.03%

No. of Transactions During the Quarter (in

„000‟) 12,500 15,867 26.93%

Volume of Transactions During the quarter

(Million Rs.) 41,000 58,710 43.20%

Average Size of Transaction Rs. 3,280 3,700 12.81%

Average No. of Transaction Per day 138,889 176,296 26.93%

16,093

18,233

646

260

569

73

10,400

8,861

73

023

2

3,481

Volume Transacted Rs. in million (Jul-Sep 2011) 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

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Research Design

Population

In this research, the target population was university students, professionals, age

between 20-45 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.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

15,829

236,464

146 12,50041,000

3,280

138,889

17,448

357,598

187 15,86758,710

3,700

176,296

Jun-11

Sep-11

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International Conference on Business Management (ISBN: 978-969-9368-06-6)

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

28 22 50

The sample size consisted of 28 males and 22 females.

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Age

Male Female

20-45 20-45

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 24 14

2. E- Banking is useful 24 18

3. Bank provides E- Banking services 24 17

4. Awareness of ATM usage 25 16

5. Use debit card / credit card for online

transactions

21 12

6. Perform E-Banking transactions through

Mobile.

6 7

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7. Access to ATM 21 16

8. Pay bills online 16 14

9. Prefer to walk into a branch for banking

services rather using E-Banking

8 8

10. Satisfied with E-Banking Services 19 9

11. Will use E-Banking in future 22 14

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.

1. 24 male and 14 females out of a total sample size of 50 responded that they were aware of E-

Banking.

2. 24 male and 14 females participants that they find E-Banking useful.

3. 21 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.

5. 21 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.

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Table 2: Level of Agreement / Disagreement / Neutrality

Awareness of E-Banking

Strongly

Disagree

Disagree Neutral Agree Strongly

Agree

Total

Male 0 1 1 15 11 28

Female 2 0 5 8 7 22

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 5 3 8 8 4 28

Female 1 6 6 5 4 22

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.

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Table 4: Level of Agreement / Disagreement / Neutrality

Awareness of E-Banking through Mobile

Strongly

Disagree

Disagree Neutral Agree Strongly

Agree

Total

Male 10 10 4 3 1 28

Female 3 8 4 5 2 22

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 3 9 6 9 1 28

Female 4 5 9 3 1 22

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

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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.

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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.

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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. 1-31.

Daniel, E. (1999), “Provision of electronic banking in the UK and the Republic of Ireland”,

International Journal of Bank Marketing, 17 (2), pp 72-82.

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, www.sbp.org.pk

Branchless Banking Newsletter, July to September, 2011, State bank of Pakistan,

http://sbp.org.pk/publications/BranchlessBankingNewsletter.pdf

Pakistan branchless Banking Conference 2010, State Bank of Pakistan,

http://sbp.org.pk/MFD/PBBC.htm

Branchless Banking Guidelines, State Bank of Pakistan, www.sbp.org.pk