online banking

Executive Summary The assignment provides

an overall view about the online banking system of ONE Bank, a

private commercial bank in Bangladesh. The bank started its journey in 1999.In2007, at an age of 8 years, the bank started its online services and at present, all the branches of ONE Bank Ltd. are ready to provide online banking services to their clients at anytime, from anywhere. The bank has a well developed networking system through which all the branches are connected to the head office by routers. As a result all kind of transactions and information transformations are controlled by the head office. The bank also has a strong protection system and it use very costly and high technical electronic devices for preventing hackers besides it also have duel server network so if any server does not work for any technical problem, the other server is always ready for providing backup. In a very short time, the bank has launched almost all online facilities, like E-Banking, ATM, and BFTN etc that makes banking procedures like fund transferring, bill payments very easy for consumer. The main aim of ONE Bank Ltd is to meet the needs of their consumers and be pro active in fulfilling responsibilities. The bank has already fulfilled their target by providing various kinds of services to their consumers; they are also planning to add many more services in future so that they can constantly better serve to thir consumers.

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Introduction Generally by the word “Bank” we can easily understand that the financial institutions deal with money. Banking sector is expanding its hand in different events every day. At the same time the banking process is becoming faster, easier and the banking area becoming wider. As the demand for better services increases day by day, they are coming with different innovative ideas and management. In order to survive in the competitive field of the banking sector, all banking organization are looking for better service opportunities to provide their fellow clients. Since in recent years, internet has established it‟s far reaching impact in every sector of our life, even it also has entered in the field of banking which is known as „online banking.‟ The main purpose of a bank is serving their clients and keeping their money safe. Besides this they also let their clients to earn a certain amount of interest on the money deposited with them. Traditional banks have been doing this, and internet banks continue the same function. The only difference is in the way the transactions are made. Today, many banks are internet only banks. Unlike their predecessors, these internet only banks do not maintain brick and mortar bank branches. Instead, they typically differentiate themselves by offering better interest rates and online banking features.

Like other countries online banking has also become popular in Bangladesh. Today many banks in Bangladesh provide their clients online banking facilities. Online banking allows us everything that we can in your regular banking institution besides it also provides more facilities than regular banking like the ability to transfer money from one account to another and to payees for bill payments, check history, reorders, and stop payments, check credit card balances and Statements, complete online loan applications, secure interactive messaging with staff, and much more.

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Defining Online Banking “In the 21st century there will be a lot of banking, but there will be no banks.” - Bill Gates. Online banking is now a global phenomenon. It is an invaluable and powerful tool driving development, supporting growth, promoting innovation and enhancing competitiveness (Kamel, 2005 and Nath, Shrick and Parzinger, 2001). Technological innovations have been identified to contribute to the distribution channels of banks and these electronic delivery channels are collectively referred to as electronic banking (Goi, 2005). The evolution of banking technology has been driven by changes in distribution channels as evidenced by automated teller machine (ATM), Phone-banking, Telebanking, PC-banking and most recently internet banking (Chang, 2003; Gallup Consulting, 2008). The term "online banking" or "internet banking" covers both computer and telephone banking. Using computer banking, a customer either uses his computer to dials directly into its bank's computer or gains access to the bank‟s computer over the internet. Using telephone banking, the customer can controls its bank accounts by giving the bank instructions over the telephone. Both computer and telephone banking involve the use of passwords which give access to the customer‟s accounts.

Using these methods, banking transactions can be actioned 24 hours a day. Online banking allows the person, for instance, to view recent transactions, print out statements and transfer funds between accounts and make payments. Many banks also have the facility for someone to set up, amend or cancel standing orders. Internet banking also allows payments to be made to the customer, i.e. acceptance of credit card The term "online banking" or "internet banking" covers both computer and telephone banking. Using computer banking, a customer either uses his computer to dials directly into its bank's computer or gains access to the bank‟s computer over the internet. Using telephone banking, the customer can controls its bank accounts by giving the bank instructions over the telephone. Both

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computer and telephone banking involve the use of passwords which give access to the customer‟s accounts.

One Bank Profile OBL is a private sector commercial bank dedicated in the business line of taking deposits from public through its various saving schemes and lending the fund in various sectors at a higher margin. However, due attention is given in respect of risk undertaking, risk hedging and if not appropriately hedged, reflection of the same in pricing. In the financing side, the bank's major concentration is in trade finance covering about 20.88% of total financing as on YE2006 which is mainly a short-term investment. The banks financing concentrate in both, working capital finance and long-term finance. OBL has major concentration of financing in medium and large industries. Since the short-term finance carries low risk compared to long-term finance; the financing strategy of OBL will assist the bank to keep the risk at minimal.

While financing the industrial sector, the major concentration of the bank appeared to be in the textile and RMG sector; both the above sectors cover 30.89% of the total portfolio. OBL also involved in cement construction and transport sector financing. In the investment portfolio, OBL have substantial investment in quoted and non-quoted shares of different organization including some very prospective financial institutions. The bank has shown its acumen in reducing its exposure from ship scrapping sector, steel rerolling where they had investment earlier. With the increase in exposure to RMG, the bank has increased its non-funded business income substantially. With an age of only 8 years, the OBL has taken initiative to launch IT based banking products like ATM facilities, E-banking etc that are praiseworthy.

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Networking System of One Bank LTD A computer network, often simply referred to as a network, is a collection of computers and devices connected by communications channels that facilitates communications among users and allows users to share resources with other users. Networks may be classified according to a wide variety of characteristics.

There are different types of networks. One Bank LTD. Use WAN (wide area network) for performing their online activities.

Wide Area Network (WAN)

A WAN is a geographically-dispersed collection of LANs. A network device called a router connects LANs to a WAN. In IP networking, the router maintains both a LAN address and a WAN address. A WAN differs from a LAN in several important ways. . WANs tend to use technology like ATM, Frame Relay and X.25 for connectivity over the longer distances.

One Bank Limited use WAN network that is based on Wireless Technology and star topology. Basically they used wireless technology for wan network. All branches of one bank limited and their ATM are connected with a central host server. All the activities are maintained from this server and all the branches create networking systems with this server by wireless WAN network. One Bank Limited use WAN network for – 1. E-Banking 2. ATM 3. Direct Deposit 4. PC Banking

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5. Paying bills on line One Bank use Wan for those purposes. But One Bank also use LAN within a branches and those are wire based. But they don‟t use LAN for online banking

Fig: Diagram of using network by One Bank

This Diagram shows One bank regional offices are connected with the head office central server by using internet that is WAN network.

Central Host Server controls all of the activities of remote computer of one bank. That mean all the node are connected with a central server and it is used basically wireless technology. One bank Limited Using Internet (mobile internet) for Wans.

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Connection method of One Bank Limited One bank networks can be classified according to the hardware and software technology that is used to interconnect the individual devices in the network, such as optical fiber, Ethernet, Wireless LAN, HomePNA, Power line communication or G.hn. Ethernet uses physical wiring to connect devices. Frequently deployed devices include hubs, switches, bridges and/or routers. Wireless WAN technology is designed to connect devices without wiring. These devices use radio waves or infrared signals as a transmission medium. ITU-T G.hn technology uses existing home wiring (coaxial cable, phone lines and power lines) to create a high-speed (up to 1 Gigabit/s) network.

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Network architecture of One bank

WAN technologies generally function at the basis for standardizing all layers in network architecture; the international standard organization (ISO) has devised a model network architecture. This model is known as the reference model of open systems interconnection (ISO). The OSI model has seven layers. From lowest to highest, and it includes the following:

1. The physical control layer: This is the level of electronic connections, signal transmission and data in raw binary form.

2. The data-link layer: Is the level at which data is transmitted in units using suitable protocols to control and check correct transmission. The units of data are called “Frames” i.e. synchronously transmitted characters or synchronously transmitted blocks of characters,. sing, error contr

3. The network layer: Is the level that provides he control between adjacent sending and receiving points in the network. The sending and receiving points that are able to switch transmission are “nodes” in the network.

4. The transport layer: Is the level that handles an end-to-end service between the host computers it deals with address and regulated data transfers.

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5. The session layer: Is the level handle the establishment of connections between hosts and the management of the dialog. Messages crated at this level are addressed by the transport layer and split into packets at the network layer.

6. The presentation layer: Is the level that handles the standard forms for presenting data e.g. the layouts used for VDU displays. 7. The application layer: Is the level that the user has control over in determining what data is to be transmitted and how it is to be sent or received.

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Security technique of One bank Limited for Online banking and their networking

One Bank Limited make a secure path for their online banking .They also make regular backup their Sensitive data is protected from unwanted access by user‟s appropriate technology and implementing strict user-access criteria. Facility of unique user number and Password in such a way that unauthorized user cannot log in. Operational rights for each user/terminal can be defined. Thus, a user can have access to specific terminals and specific Online Banking uses the SSL (Secure Socket Layer) protocol for transferring data. SSL is encryption that creates a secure environment for the information being transferred between customer browser and Bank. One bank Online Banking uses 128-bit digital certificate from VeriSign for encryption of the Secure Sockets Layer (SSL) session. SSL is the industry standard for encrypted communication and ensures that customer's interaction with the Bank over the Internet is secure. Secure Socket Layer (SSL) protects data in three key ways:  Authentication ensures that you are communicating with the correct server. This prevents another computer from impersonating Bank.  Encryption scrambles transferred data.  Data integrity verifies that the information sent by customer to Bank wasn't altered during the transfer. The system detects if data was added or deleted after customer sent the message. If any tampering has occurred, the connection is dropped.

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Online Banking offers a wide range of online services which makes consumers banking accessible anytime and from anywhere.

Features of Online Banking of One Bank 1.

Internet Banking

Internet Banking lets customer handle many banking transactions via ones personal computer For instance, a customer may use his computer to view his account balance, request transfers between accounts, and pay bills electronically. Internet banking system and method in which a personal computer is connected by a network service provider directly to a host computer system of a bank such that customer service requests can be processed automatically without need for intervention by customer service representatives. This includes the following features.

Account Services Under this section customers can, view their account information, download the account statement, request for a cheque book, request for an account statement by mail, create a new fixed deposit, ascertain the status of their issued cheques and check on the remittances received.

Fund Transfers Here consumers can make fund transfers, be it, an account to account transfer, a telegraphic transfer or a draft and cashier order. They can also set-up standing orde Make utility payments, credit card payments and make a draft or cashier order payment. Customers can also maintain their utility payment details

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Bill Payments

Make utility payments, credit card payments and make a draft or cashier order payment. Customers can also maintain their utility payment details.

Investments View customers investment portfolio, analyze their risk, buy or sell investment products or switch between investment products.

BFTN (Bangladesh Electronic Fund Transfer Network): One Bank Ltd.has also launched the electronic fund transfer network for their clients. The BFTN system, initially allow people make online money transactions with other banks. Besides it also allows them to transfer of funds (account to account).

Personal update In this section, Online Banking offers customers the facility to manage their personal information their password, address and all other personal information related to the services.

Loan services Under this section customers can access details on their loan account.

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OPERATE AN ACCOUNT (One Bank)

DEPOSITS

System



WITHDRAWALS

Customer

Click account to operate

FUNDS TRANSFER



STATEMENT OF ACCOUNT

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2.

AUTOMATED TELLER MACHINES (ATM):

These are electronic terminal that permit banking transaction almost anytime by one bank. To withdraw cash, make deposits or transfer funds between accounts, the user generally insert the ATM card, enter the personal identification number (PIN). The use of the ATM is increasing over the years.

Fig: Automated Teller Machines (ATM)

3.

Credit Card

A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. 4.

DEBIT CARD:

Debit cards are also known as check cards. Debit cards look like credit cards or ATM (automated teller machine) cards, but operate like cash or a personal check. Debit cards are different from credit cards. While a credit card is a way to "pay later," a debit card is a way to "pay now."When customers use a debit card, their money is quickly deducted from their saving account. 5.

SMS Banking:

In this cyber era Information is the business. Information about customer‟s bank accounts is something they always need in their day to day business. One Bank makes it simple to give their bank's information at consumer‟s finger tips. ONE Bank SMS Banking is a smart new way to access consumers account information whenever they want, whenever they are - what is more simple, immediate and secure. Through SMS banking the following services can be obtained:

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Balance Enquiry:

SMS Format:

B

Example:

Example:

Changing PIN: SMS Format:

C 0010000110000 1234 9421

Example:

Fig: SMS Banking Services

Future Services One Bank Ltd also has a plan to introduce „mobile banking‟ into their online services. Besides this, they are also ready to accept if any advance technology will come into the field of online banking.

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Online Banking Software in One Bank LTD: Software is a set of instructions that makes computer to perform tasks. Software, by definition, is the collection of computer programs, procedures and documentation that performs different tasks on a computer system. The term 'software' was first used by John Turkey in 1958. At the very basic level, computer software consists of a machine language that consists of groups of binary values, which specify processor instructions. The processor instructions change the state of computer hardware in a predefined sequence. Briefly, computer software is the language in which a computer speaks.

Banking Software:

Software is necessary in every financial organization, especially in banks. The banking software is made for the purpose of easing the transaction processes and account maintenance. Banking software differs based on the factor for whom it is made; to the bank or customers. The functionality of the software varies with respect to the fact whether it is for bank or customer. The bank software‟s is designed such that it can manage much number of accounts and transactions that happen at various banks. This is because a customer may have accounts in many banks and so the software helps simultaneous record maintenance. Usually big banks develop their own software for performing online banking. The own software can be developed by outsourcing the work to some software developing company. One Bank use micro banking software for performing their online banking activities

Features of Software in Online Banking: A network operating system (NOS) is the group of programs that manages the resources on a network. One Bank Use those network operating systems for PC-based networks include: •

Microsoft Windows NT Server

•

Microsoft Windows 2000

•

Microsoft Windows 2000 16

Network used For One bank ATM service and ATM configuration

One bank operating some ATM both for Online or remote transaction. Those ATM both are controlled by host server and it is based on wireless WAN network. There is some Technical configuration of ATM Other Features:

Micro Banking Software is also a comprehensive Internet-based solution that addresses the core banking, treasury, wealth management, consumer and corporate e-banking, mobile banking and web based cash management requirements. The main features of micro banking software includes: account operating, efficient facilities to issue payment instructions, detailed information on incoming and outgoing transactions, Enhanced ordering of currency in required denomination etc.

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Architecture Diagram of One Bank

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Conclusion: Online banking services have grown from simply allowing customers to check balances, to trading assets. Today, many commercial banks are functioning entirely online, with no brick and mortar building. With the costs saved by requiring fewer employees and the lack of facility expenses, these virtual banks can often offer higher interest rates than their traditional counterparts. Internet banking gives their consumers the power to control their finances completely. Consumers are no longer tied down to managing their money during the hours the bank is open. If they want to transfer a balance after business hours, they can! If they have access to the Internet and have a number of recurring monthly bills, then they should use Internet banking to make their life easier.

Bibliography 1.

2. 3. 4.

“Introduction to Computers”, 6TH Edition PETER NORTON”S Copyright 2006 by the MCGRAW-Hill Companies, All rights received www.Ask.com www.Google.com www.ONEBANKLtd.com

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