1.1 Origin of the Study

The idea of this study came into mind when some clients of the Citibank N.A. as well as of other local banks expressed their painful experiences with the services provided by their banks. They were saying that the services were not of standard quality and in some cases many of them are dissatisfied. They think the foreign banks are much ahead on the track but are very much costly for people. These problems intrigued the need for finding out ways to improve the services provided by the banks to its various clients. Modern banking requires modern and sophisticated facilities for its clients and these modern issues were absent in many local banks including the Citibank N.A. The following primary things were identified to improve the bank’s reputation among the people:


  • Prompt cash checking
  • Prompt check clearing
  • Improving decoration
  • Improving Computerized system
  • Using email in transferring money
  • Introducing online banking
  • Introducing e-banking


Among the above ones e-banking was considered most important because in our country Internet system is in its early stage. Besides, in going e-banking system it requires a huge amount of initial investment. So it needs to be properly decided whether it will be profitable or not; because people may not have interest in e-banking or they may not be capable of using the system. These problems require a research on the topic to find out the actual picture of the city regarding the acceptance by the people and prospect of e- banking.


1.2 Objectives of the study


The specific objectives for the project were as follows:

Pointing out the prospective clients of e-Banks.

  • Finding Product and Services that can be made available on e-banking
  • Finding the degree of awareness by people about e banking
  • Finding target segments’ Internet access position and their attitude towards the Internet service in our country
  • Finding bank customers attitude towards e-banking.
  • Finding the merits and demerits of e- banking.
  • Finding preferred ways to communicate the benefits to prospective clients
  • Finding the important factors which affect the choice of a bank by the target segment(s)


1.3 Scope


This study covers only CitiBank N.A because of possible complexity and difficulty in covering whole country and because of shortage of manpower required for the survey. Corporate clients and individual customers are the main population of the study.


e-banking is defined in this study as that banking which is accessible through only Internet. Those banks have web sites at which a client can perform any kind of transaction just by using the PC anywhere in the world. For example, if a person has an account in American Express, which offers e-banking, he can pay his bill or transfer money to another account while sitting at her/his house in front of the computer having Internet connection.


Since the Internet is at its early stage in Bangladesh, not all even know the name of e- banking. On the other hand, no study on this topic was available. Therefore, limited secondary data was used for the study. The prime secondary source was “Online Banking Report”, an USA based monthly magazine available on the Internet. Some information was collected from the Internet from various web sites of different banks operating in Bangladesh and in other countries. Some of these are Arab Bangladesh Bank Limited, Standard Chartered Bank, American Express, First Citizen National Bank in USA etc.


1.4 Methodology


For the project both secondary study and primary study was undertaken.


1.4.1 Secondary Study


A monthly business magazine on banking named “Online Banking Report” published in the USA was extremely helpful for the study. A recent issue of the magazine was collected through the Internet as a free copy. The magazine company usually sent a free copy to the stranger to their web site. This study could be more informative if more issues of the magazine could be collected. The magazine focuses on the online banking all over the world. The address of the web site is


1.4.2 Primary Study


The questionnaire has been used as the tool for collecting most of the data regarding the awareness and probability of using e-banking. Thus most of the data was based on the primary data.


1.5 Data Collection


In most of the cases meeting with the desired persons were done after making prior appointment and the questionnaires were filled up with their responses in face to face phenomenon.


1.6 Data Analysis


No complex analysis was performed in this study because this topic needs a primary research in our country. May be this primary study will then show the ways to go for in-depth study which may require more complex analysis of data. Some statistical analysis like frequency, percentage was used to achieve the objective of the study.

1.7 Limitations

  • The most elementary limitation of this study is the limited number of respondents interviewed.
  • Communicate with the selected respondents because they were very busy with their regular jobs.
  • Rareness of adequate secondary source of information was another limitation for the study.


2. Citigroup Worldwide

2.1 Citigroup

Citigroup is a renowned global financial service company with some 200 million customer accounts in 104 countries across six continents. It is the first financial service company to bring together banking, insurance and investments under the same name. It provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, security brokerage and asset management. BBC has declared it the largest profit making company of year 2002. Citigroup ranked the world’s 10th most respected companies has the most diverse array of products and the greatest distribution capacity of any financial firm in the world. The asset base of the group and net profit of 2002 were US$ 1.1 Trillion and US$ 15.2 Billion respectively. Globally there were 270,000 employees in2002.


2.2 Citibank at Early Days


Citibank was formerly (1967-74) known as the First National City Corporation, American Holding Company incorporated in 1967, with the City Bank of New York, National Association (a bank tracing to 1812), as its principal subsidiary. The latter’s name changed successively to First National city Bank in 1968 and to Citibank, N.A. (i.e., National Association), in 1976. Citicorp was holding company’s popular and trade name from its inception but became the legal name only in 1974.


In 1811 the U.S Congress refused to renew the charter of the First Bank of the United States, the countries central bank, which had branches in such cities as New York. Thus on June 16, 1812, some of the First Bank’s New York shareholders and other investor’s secured state incorporation of the City Bank of New York, which was later established in the branch banking rooms of the old First Bank. The bank grew as New York City became the nation’s commercial and financial capital, and in 1865 it was chartered under the National Bank Act and renamed the National City Bank of New York. In 1897 it became the first large American Bank to open a foreign department, and in 1915 it became America’s Leading international bank upon the purchase of International Banking Corporation (founded 1902), which had overseas offices in 13 countries and territories.


Other mergers and acquisitions in the United States and overseas expanded the bank. Notably, in 1931 it acquired the Bank of America, N. A. (another descendant of the First Bank of the United States and no relation to the California-based bank), and in 1955 it merged with the First national Bank of the City of New York (founded 1863). Upon the latter merger, the consolidated company took the name of First National City Bank of New York. In 1967 the holding company Citicorp was created to hold the stock of the First National City bank of new York- renamed City Bank of New York- and to hold the stock of the subsidiaries to be newly acquired or split off from the bank, such as a finance company, a traveler’s check company, and other related financial operations.


The holding company setup improved the company’s long-range conglomerating possibilities. In the late 1970’s Citicorp pioneered the installation of a network of automated teller machines throughout its branch offices. The company secured an important share of the American credit card business by purchasing Carte Blanche Corporation in 1978 and Diners Club Inc., in 1981. In 1982 and 1983 Citicorp made three major acquisitions- fidelity savings and Loans Association of San Francisco, First Federal Savings and Loan of Chicago, and new Biscayne Savings and Loan Association of Florida- which increased its assets by more than $8,500,000,000 and expanded its interstate banking operations significantly. By the late 20th century Citicorp was the largest American Bank and one of the largest financial companies in the world, with about 3,000 branch offices worldwide.


2.2.1 Formation of Citigroup


The merger of Citicorp and the Travelers Group – creating Citigroup- combined for the first time in the U.S. a major banking organization and an insurance company. The merger took place in 1998 in response to the global financial crisis and intense efforts to prepare for the introduction of the European Union common currency (the euro) and industry wide consolidation both within and across national borders in order to reshape the financial services landscape.


Before the merger took place in 1998 Citicorp had a number of organizations under it, of which Citibank constituted of 90% of the business. Owing to a banking rule that not more than 10% of deposits can be invested in Equity, Citibank was restricted in such ventures. Citibank Investment Ltd. was there for equity investments.  Other than these, the group also included some other organizations: Citibank Overseas Software limited, I-flex that served other than Citibank units, Citibanking Corporation etc. The Citicorp-Travelers merger included one of the largest American investment banks, Salomon Smith Barney Inc.


At the time of the merger, it was not legally allowed that a bank and insurance company merges. The legal framework has changed now though and the entire merging process took one and a half years to smoothly take place. The transaction value for this was over

US$ 140 billion.


2.3 Background of Citicorp & Travelers Group


Citicorp is the parent company of Citibank, which serves consumer and corporate customers in over 100 countries around the world. Its Global Consumer Business is the world’s largest issuer of credit cards with 60million bank cards and provides financial services through more than a thousand Citibank branches in over 40 countries. Through its international network of offices, Citibank also provides funding and transaction services for global corporations and local growth companies in emerging markets.


Travelers Group is a diversified, integrated financial services company engaged in investment services, asset management, life insurance and property casualty insurance and consumer lending. It operating companies include Salomon Smith Barney, Salomon Smith Barney Asset management, travelers Life & Annuity, Primerica Financial Services, Travelers Property Casualty Corp and Commercial Credit


The merged company is named: Citigroup Inc. and its uses the trademark Travelers red Umbrella as its logo. The principal thrusts of the company are in traditional banking, consumer finance, credit cards, investment banking, securities brokerage and asset management, and property casualty and life insurance. The combined company serves over 100million customers in 104 countries around the world.


Citigroup is composed of four discrete business divisions- Citigroup Corporate and Investment Bank, Global Investment Management and Private Banking Group, Consumer Group and Emerging Markets.


2.4 The Units Operating Under the Red Umbrella


Signifying the unity under the same parent group includes:


2.4.1 Citibank


Citibank has presence in more that 104 countries worldwide. It delivers a wide array of banking, lending and investment services to individual consumers, as well as to small businesses with up to $10 million in annual sales. Citibank offers a full range of financial services products to serve the needs of small and large corporations, governments, and institutional and individual investors. The Financial Center Network of Citibank is wide and comprises of local offices complemented by electronic delivery systems, including ATMs and the World Wide Web.


Specific products and services include basic banking accounts, investment services through Citicorp Investment Services, CitiTerm® life insurance, CitiPhone® banking, and Citigold® accounts, which integrate banking, borrowing, and investing services. Client Financial Analysts are available in our Financial Centers and trained to use Citipro® and CitiBusiness® Solutions Review – financial needs analysis tools that enable Citibank to bring tailored solutions to every customer. These tools allow our analysts to assess customer needs and diagnose their financial situations.


2.4.2 Travelers

Travelers are a leading provider of a full range of insurance products and services. Through Travelers, Citigroup has become the principal source of homeowners and auto insurance for consumers with more than 5.3 million policies in force. Travelers Commercial Lines offer a broad range of insurance for commercial markets, including workers compensation integrated disability, property, liability, specialty lines, surety bonds, inland/ocean marine, and boiler and machinery.


2.4.3 Salomon Smith Barney


Salomon Smith Barney counts among its client base affluent individual investors, small-to-mid-sized businesses, as well as large corporations, non-profit organizations and family foundations. Through its team of more than 12,000 Financial Consultants in more than 500 offices, the firm services more than 7.1 million client accounts representing nearly $1 trillion in client assets. It is also one of the nation’s leading providers of defined benefit and defined contribution plans, as well as corporate stock plan services and administration.


2.4.4 Primerica

With more than 100,000 full and part-time representatives, Primerica is the largest financial services marketing organization in North America. Primerica offers consumers an array of financial services and products, including term life insurance underwritten by Primerica Life. The company also markets other Citigroup Products, including Smith Barney Mutual Funds, Travelers Insurance Company annuities, and CitiFinancial loans and mortgages.

2.5 Citigroup Market Segments


Other than these, Citigroup is organized according to the market it is catering to; the groups are as follows:


2.5.1 Consumer Group


The Consumer Group businesses comprise the financial service sector’s most diverse consumer product offerings — banking services, credit cards, loans and insurance.

  • Citibanking: Banking, lending and investment services to individual consumers, as well as small businesses with up to $10 million in annual sales.
  • Cards: Credit and charge cards such as MasterCard®, VISA®, and private label.
  • CitiFinancial: Consumer finance and community-based lending services across North America, Europe and Japan.
  • Travelers Property Casualty : Commercial and personal property and casualty insurance products — along with coverage for special circumstances such as umbrella liability, personal articles, boats and floods — for businesses, government units, associations and individuals.
  • Diners Club: Worldwide Diner Club cards are issued in more than 60 currencies and accepted in more than 200 countries. Diner Club acquires new card members via direct sales on the corporate card side, and via Internet and direct marketing on the personal card side.
  • e-Consumer: e-Consumer offers a comprehensive suite of consumer financial products and services available and accessible anywhere, on any device, at any time, in a secure and private manner. It extends the reach of Citigroup’s products and services to new customers via the internet.

2.6 Citigroup Corporate & Investment Bank


Citigroup’s Corporate & Investment Bank has emerged as the premier organization for meeting all the financial services needs of corporations, governments, and institutional and individual investors around the globe.

Global Relationship Bank/Salomon Smith Barney


Under this segment, corporate clients use the investment banking services, including M&A advisory, debt and equity capital rising, and commercial banking services such as lending, treasury services and foreign exchange. Also, top-ranked trading capabilities are offered for institutional clients. The Global Relationship Bank’s mission is to serve global customers around the world. GRB has a focused target market that deals with Corporations that have revenue of $1B or more with growing international sales. Additionally GRB targets financial institutions in the Organization for Economic Cooperation and Development (OECD) that are large public, private and government owned operations that are growing in cross border capital needs and trade flows.


  • Capital Structuring
  • Asset Finance
  • Treasury Service
  • Foreign Exchange
  • Derivatives
  • e-business (cash management service)
  • e solutions ( web enabled solutions
  • Security Services
  • Core Corporate Banking Service
  • Project Finance
  • Structured Trade Finance
  • Global Equipment Finance
  • Structured Loans
  • Bank/Bridge Financing
  • Securitizatio


Global Relationship Banking (GRB) in the OECD Countries, Global corporate Banking has a specific target audience of around 1800 clients.


Top Tier Local Corporate (TTLC) serves the top-tier companies in more than 60 emerging market countries, amounting to a client base of over 25,000 companies

Emerging Local Corporate (ELC) offers emerging local corporate companies a range of banking services that include loans, cash management and international trade finance. ELC includes 6000 clients.


CitiCapital This includes truck, construction, material handling, healthcare and office equipment finance, as well as franchise and municipal finance.

2.7 Global Investment Management & Private Banking Group


Citigroup Asset Management provides investment management and related services to a broad spectrum of clients around the world, from beginning investors to wealthy individuals to large institutions, both public and private. It has one of the most impressive research teams on Wall Street and some of the most well known brands in money management- Smith Barney, Salomon Brothers and Citibank. With offices in 59cities around the world, it is one of the world’s most global private banks.


2.7.1 Citigroup Asset Management


Citigroup Asset Management includes Smith Barney Asset Management, Salomon Brothers Asset management, and Citibank Asset Management along with the pension administration business of Global Retirement Services. It was formerly known as the SSB Citi Asset Management Group and Global Retirement services. These businesses offer a broad range of asset management products and services from global investment centers around the world, including mutual funds, closed end funds, managed accounts, unit investment trusts, variable pension administration, personalized wealth management services catering to the need of every class of investor.


2.7.2 CitiInsurance


CitiInsurance is Citigroup’s international insurance business, which currently distributes insurance products in 43 countries and manufactures insurance six countries. CitiInsurance focuses on life and retirement-related products, including variable and fixed annuities and other unit-linked products; an array of credit related products, including personal accident and health; term, whole and endowed life insurance. In many countries, Citigroup also distributes property and casualty products.


2.7.3 Citigroup Private Bank


The Citigroup Private Bank provides personalized wealth management services for affluent clients through more than 90 offices in 31 countries and territories. Clients include many of the World’s most influential entrepreneurs, families, and senior corporate executives. The Private Bank provides trust services, structured lending and banking, Foreign exchange, equity derivatives and private equity.


2.7.4 Global Retirement Services


Global Retirement Services (GRS) provides pension and retirement that includes defined benefit, defined contribution and health and welfare services to large and small businesses and organizations worldwide.


2.7.5 Travelers Life & Annuity


The Institution is specialized in life insurance and individual and group annuity products that address the asset protection, retirement planning, corporate owned life insurance and estate preservation needs of the customers. Travelers Life and Annuity offers individual annuity, group annuity, individual life insurance, and COLI. The individual products include fixed and variable deferred annuities, payout annuities and term and universal life insurance.

2.8 Emerging Markets


Citigroup, principally through Citibank, provides financial services throughout the world – this includes 80 emerging market countries in Asia, Latin America, Central and Eastern Europe, the Middle East and Africa. Bangladesh belongs under the Asia Pacific region. The Emerging Markets (EM) brings together both consumer and corporate businesses, delivering a full range of banking services to corporations, financial institutions, the public sector, and individual customers. The customers are offered personal service and the advantages of a local bank, while the global platform continuously introduces a stream of new and innovative products quickly and more cost-effectively than the competitors. The EM has more than 90,000 employees around the world, providing services to 32 million customers and 10million pension fund participants.


  • Worldwide Securities Services

Worldwide Securities Services (WWSS) is a global leader in cross-border transaction services for leading investors and issuers. With a leadership position in virtually every market served, WWSS offers clients a full spectrum of custody, trust and safekeeping services.


  • Citibank e-Business

Citibank e-Business provides solutions that empower corporations and financial institutions globally to connect to the Web, transform their business using Internet-related technologies and extend their reach to new markets.



3. e-Banking


3.1 Why e-Banking?


Technological evolution has brought the people worldwide closer and closer. The recent development of information technology and its rapidly growing popularity and acceptance have brought the people together and made the world very small. Now we can send a letter to another end of the world in just seconds, meet people sitting there (video conference), chat with people from deferent corners of the world, can participate in any kind of communication. All these have been possible through Internet.


Since communication is a major component of business and information is considered as an important input of production by modern business managers, Internet has brought a great advantage to the business world. The efficiency of businesses can be increased even more than ever before. Many banks today are also started to take the advantage of Internet including some banks in Bangladesh. If the client does not have to go to the branch of a bank to pay the bill, if he can do this task while sitting before his personal computer, the client can save his time, money and get rid of physical tiredness. Certainly, the satisfaction level of the client will be increased. This will create loyal customers who are actually like asset of the organization. The e-banking can do this for the customers as well as the bank.


3.2 e-banking defined


Before defining e-bank, we need to know what a bank is. A bank is traditionally defined as a financial intermediary who borrows money from the surplus households / businesses and lends the money to the deficit households / businesses. Modern banks are somewhat different. Today’s banks act as a financial intermediary between any clients or groups of clients. They perform almost all kind of transactions for all of their clients.


E-banking does the same things through the Internet system. In this system physical need for branches are not necessary but can be used for marketing of the products and services of the bank. e–banking involves four parties to make effective transactions:


1. The banker

2. The Internet service provider

3. The telephone service provider

4. The client of the banker


First of all, the banker opens a web site in the name of his bank and let prospective clients know about it, may be including its offered products and services. The prospective client has Internet connection from the Internet service provider and a phone line which is a pre-requisite to use Internet. The person feels interest about the e-banking and browses its web site using his Internet connection wile sitting before the computer. There he finds an option to open an account in the bank and clicks his mouse to explore more. Once he has opened the account, he has started using the e-bank. Then he can do any kind of transaction he wishes but within the power awarded by the bank. At the time of opening the account he will be given a log in name and a pass word to enter into the virtual bank. This is just a simple description. L/C, money transfer, remittance etc. are among the very common e-banking products some banks of Bangladesh are already providing through e-banking.


3.3 Products and services that can be made available on e-banking


Most of the products and services offered by traditional banks can be made available in the e-banking. After browsing the web site of different e-banking, the study found the following products and services:

  • Checking: The client can open a checking account that fits his needs
  • Check orders: The client can order check
  • Person to person payment
  • Debit card: The client can spend his deposited money by this card, enables cash withdrawal from ATMs
  • Savings: The client can save money for a certain period of time
  • Certificate of Deposit: This has Flexible investment terms
  • Loans: Personal loans, Auto loan, home equity loan etc.
  • Mortgages: the person can mortgage his property to the bank
  • Credit cards: This card make the purchase easy, enables identification
  • Insurance: Life insurance, Auto, Home etc can be done by the bank for the client
  • Brokerage service: The bank can serve you as broker
  • Investment and trust services: the e-Banking services also give these services.


3.4 Merits of e-banking


E-banking certainly has some merits. These are as follows:

  1. Prompt action
  2. No need for physical branches
  3. Accessible anywhere in the world
  4. Time saving
  5. Quick loan sanction
  6. Better for conservative people who do not go outside
  7. Robbery, theft is less likely to occur
  8. Quick remittance of fund


3.5 Advantages of using e-Banking


  • Easy Access, Total Control – Banking applications on your desktop, no matter where you are.
  • Cost Saving: e-banking saves the transportation cost for going to the bank.
  • Fast, Efficient and Easy to Use – Transacting business is easier than ever. By using e-banking service, a customer do not have to stand in the long queue to obtain simple service from the bank personnel.
  • Banking Your Way – The banks can customize the service for their valued customer.
  • Leading Edge Security – Banks are capable of providing critical financial data behind rigorous, parallel security processes.
  • Online Support – e-banking is easy to learn and use, with extensive online help.
  • Account Information- A customer can view & download Real time Account Balances, DetailedAccount Statement, Transaction advices, Back Value Position Report, Consolidated balance report of all accounts across all branches & countries in any predefined base currency.


  • Payments: The follwingservices can be made available on-line
  • Payment reports can be delivered by secured e-mail on a scheduled basis.
  • File Import for Manager’s Check / Demand Drafts/Account Transfer.
  • Templates for frequently made Payments.
  • Detailed Online Payments report with status of transactions.
  • Remote Authorization possible due to Web based architecture.
  • Other information – Tours, reference guides, and other materials enable users to learn at their own pace.
  • Self Service and Information – Initiate and view status of investigations from your desktop.  FAQs, Release Notes and Service Contacts are all available online.

3.6 e-banking for Cash Management and Trade


Two of the vital service a commercial bank provides to its customer is Cash Managements and Trade service. e-banking service is most effective for these two lines of banking service. Apart from that SCB, Citibank etc. are providing Corporate banking and Consumer banking service online. But for these two departments, the customers prefer to initiate the banking relation with the bank after talking face to face with the bank personnel. The follow up or maintaining the accounts are comparatively easier and often require human decision making. But Cash Management and Trade (L/C related issues) sections are comparatively critical to maintain and e-banking can be most effective for these service.


3.7 Installation Requirement


For the prospective customers those who wish to use e-banking facility need to have the following configuration of the pc, software and other accessory mentioned in the table. This is a general scenario. These tools obviously need to be changed or add something more depending on the service the client want to use or the software the bank uses.


3.8 Connectivity


Connectivity or how the system connects a client to the e-banking service can be well described with the example of a client and Citibank’s e-banking service. Citibank workstation is connected to a modem and a phone line. When customer dials to Citibank system, it automatically connects the customer to Citibank’s global system in New York where L/Cs are delivered for onward advising L/C related messages are received from overseas branches. The connectivity is maintained 24-hours a day, seven days a week and costs only the amount of a local telephone call. The system is similar for other e-banking systems


3.9 Security Feature


Security is a key feature of the e-banking service. The prospective customers need to be well understood and ensured about the level of security the service holds in order to pursue them for using e-banking service. It is mandatory for Invariably all the banks those who are providing this service or wish to start this service to emphasize on the maximum possible security they could offer to the clients and protect their system from hackers. For example, CitiDirect uses stringent, leading-edge security technology to protect customer’s data during preparation, transmission and processing.  It employs a four-tiered approach to security:

  • User identification and authentication with dynamic passwords
  • User entitlement and authorization to limit the functions accessible to each user
  • Data protection using Secure Sockets Layer, 128-bit encryption, digital certificates, and Method Authentication Code verification.
  • Audits and alerts inform you when unauthorized access attempts are made.

We should keep one thing in mind-if people can trust and adopt ATM service to deposit and withdraw their money, then e-Banking supposed to earn faith of people and thus attract them to get the service.



3.10 Problems of e-banking


e-banking also has its problems.

The Online Banking Report has found the following problems with e-banking.



3.10.1 Some other problems


  • The log-on process may be very lengthy which can offset e-banking’ advantage of efficiency.
  • Server is often very slow.
  • Sometimes the security features are set so high that it becomes clumsy and time consuming to use it because of putting password or safety pin code many times. The companies have to continuously transact a lot of money and there is no time to wait for the web page to open while the executives are pressed for time. Usually due to the slowness of the server it takes more than half-an-hour to download which is a nuisance as a result it does not serve the purpose of instant information at the touch of a button.
  • Some software has to be downloaded or updated every month.
  • Limitation on the amount that can transfer using the service.
  • The loss of L/C related information has been reported to many banks.
  • Many banks are reluctant to provide any customized service even to the privileged customers.
  • Lack of skilled workforce to improve even handle the trouble of the service.



3.11 Satisfaction of the e-banking users


The customer satisfaction of a product is of crucial importance to the company providing it. It is of no use to either party to just buy or sell a product. The purpose of a sale should always be repeat sales that are a quality sale. The situation is also similar for a service provider- the ultimate goal is increased amount of usage. Selling a product or a service is just the beginning of a relationship where you maintain and build over the years to create loyalty and ultimately customer satisfaction. Customer satisfaction is not built in a day neither is it built very easily. It is like building a pyramid of cards where one false move can destroy the whole relationship unless backup and recovery actions are taken very fast.


All the clients of the e-banking product have followed almost the same steps but depending on the client’s user capability or the client’s purpose the satisfaction varied.



3.12 e-Banking and comfort


e-banking is a sign of modernisms which can bring comfort to the clients. Since the number of web users is growing rapidly this banking system has a big opportunity to make a tremendous business. To introduce it by our local banks is definitely tough and may be risky without knowing the motive of people. This study is just a primary study and implementation of e-banking requires more in-depth research. If the banker can decide correctly, it will be possible to make higher profit without being harmed by the associated risk.


4. Findings & Analysis


4.1 Present Scenario


Bank industry is booming in Bangladesh. Existing banks are increasing their number of branches and new banks are emerging at a pacing rate. The competition is getting stronger and stronger. To survive in this competition banks will have to differentiate itself to the customers by providing extraordinary services for a lower price. It should attract customers by means of better offers, new products, new concepts and ideas. It also should have extensive marketing program to convey the benefits to its customers.


4.2 Factors affecting the choice of a bank by clients


By the method of rank order, the most important factors that plays important roles in choosing of a bank by the clients. If the banker knows these factors and their relative roles, she/he can give special emphasis to improve the most important one so that the customers can select his/her bank.

In the following table it is evident that the quality of bank’s service is the number one factor that guides the choice of a bank by different employees of different organizations. The first four factors in order of importance to the bank clients are:

  1. Quality of bank service
  2. Location of the bank branch
  3. Reputation of the bank
  4. Personal relationship with the bank employees



In case of organizational customers the result is somewhat different. Two new factors have come within the top four and these are the quality of bank management and the time needed to stand up in the queue to get the service. The organizations are bigger clients than individual clients. They are usually acquainted to the bank management. The quality of this bank management, they think, affects their decision regarding choice of a bank by the organization. Again, organization people often need the banking service on a very quick service. But it is not possible for the well reputed banks mainly where there is huge customer to provide prompt service to everyone. In many cases, the people might need consultation with the bank person in face to face basis. But surely, many services (especially trade and cash management) can be provided to the client through e-Banking.



The best four factors here are:

  1. Quality of bank services
  2. Location of branch
  3. Quality of the bank management
  4. Time needed to stand in the queue


The following table also shows the total accumulated point which is the sum of the rank value for each factor. The lowest accumulated point represents the rank number one.



4.3 Possession of bank account


All of the respondents, individuals and organizations, have some sort of bank accounts in different banks. Therefore the prospect of banks is great because every person and organizations are dependent on some bank. If these customers of the banks are satisfied in terms of their needs, wants and demands, it is possible for the banks to increase its credibility, reliability and reputation among the customers.


In the following table it is shown that all the respondents are banking with Citibank. Individual customers as well as organizational customers are using bank accounts for their required transaction for running businesses.


4.4 Types of accounts held


Individual and organizational clients differ in maintaining accounts. There are different types of bank accounts. Individual clients prefer to have savings accounts whereas organizational customers prefer Currents account. Accounts are important because the bank has to know which products should be included in the Internet web site.


The following table shows that 66.7% individual customers are maintaining savings accounts and 25.6 percent people are maintaining current accounts. A few people are maintaining DPS (Deposit Pension Scheme) accounts. So here the savings account is more popular.


4.5 Frequencies of transaction


Frequency of transaction is also important because every transaction involves cost for the customer. If the frequency is higher the customers will expect very sophisticated environment and convenience of transaction. On the other hand, high number of transaction is profitable for the bank.


In the following table, we can see that, individual bank clients are tend to transact 3 – 6 times in every month, because highest portion of the respondents (41 percent) falls within this categories. 28.2 percent of the customers perform transaction less than three times each month through their bank accounts. Savings accounts holders usually do not transact more than 8 times in a month. The study found that only 7.7 percent do so.

In case of organizational customers, the frequency of transaction is much higher than that of individual customers. Most of these customers (90.6 percent) perform transaction through their bank accounts more than 8 times in a month. Therefore this is a good scope for the bank because if the bank can provide special services to these customers, the profitability of the bank will increase through more investment and financing in those organizations. On the other hand organizations are the clients with big chunks of deposits for the bank


4.6 Cost of each transaction for the customers


Cost of transaction is also an important factor for the customers. If the cost is too high the customer may switch to another bank where the cost is lower. The study found that the transaction cost differs from individual to individual and from organization to organization. 41 percent of the individual customers cost of each transaction is between Tk. 10 to 20. On the other hand 59.4 percent of the organizational customers have this cost higher than Tk. 40. If the bank can provide e-Banking system to these customers, the cost can be lessened and the customers will be more satisfied. The following two tables summarize the situation.



4.7 Are Bank Clients Satisfied with Services of the Bank?


The satisfaction level of the customers with the bank service provided by the commercial banks is a very important factor in creating loyal customers. If this satisfaction level can be increased, a bank’s no. Of accounts will also be increased, which will then increase its profit.


In the following table satisfaction level of bank customers are shown. Highest portion of the customers (35.9%) is neutral in terms of satisfaction. 33 percent of them are moderately satisfied. But 15.4% and 5.1% are moderately and highly dissatisfied respectively. So the bank will have to implement strategy to turn this 20.5% dissatisfied customers into satisfied ones. It can also try to increase the satisfaction level of the currently neutral customers.


4.8 Customers awareness about e-Banking


e-Banking is a new concept in our country. Many people have not yet heard of this term. The level of awareness was found out in this study, because before making a marketing plan of e-Banking, the bank has to know the level of awareness about the product.


In the table below, we see that 69.2% of the target individual customers are not aware of e-Banking system. But in this early stage of e-Banking in our country, 30.8% awareness level is not insignificant. It can be expected that this awareness level will rise very rapidly. The next table shows the percentage of people who have performed some sort of net transaction. Since the awareness level is very low, the e-Banking service requires an extensive marketing plan for its customers.


In case of organizational customers, 59.4% are not aware of the new concept. Again only 15.6% of this segment had net transaction. A strong marketing plan is also needed here.


So, we can see that organizations are more aware of the e-Banking services concept and have more such transactions. Therefore, this segment may be the most potential customers of the e-Banking services.


4.9 Complements of e-Banking


Since e-Banking involves three types of service providers, i.e., the e-Banking services, the Internet service provider, and the Telephone Company, all of these parties should be considered before launching the product. If there are problems with phone services and Internet access is limited, the e-Banking will be definitely a futile project. So first of all, we have to find out whether the telephone services and the Internet access are available in the country.


4.9.1 Internet access


In the following table it is evident that 64 percent of the individual customers have access to the Internet. This news is positive enough for the e-Banking services. On the other hand, 87.5 percent of all the organizations have Internet access. Therefore it is also positive. In addition to that, from our practical experiences we know that, digital phone service is pretty available in the city and it is heard that, T&T is going to offer another two Lac digital phones in the country. Current phone network is good enough for making a good business by e-Banking services.


The study also reveals that those who have not Internet access at present are going to take connection immediately. Therefore there is a possibility of increasing the Internet account holders in the country.

4.9.2 Customers perception about cost of Internet account


Cost of maintaining Internet connection is also important because high Internet cost will indirectly increase the total cost of e-Banking. Thus the demand for the new banking system may not be as expected. At present different ISPs are offering various types of connection facilities at different rates.

In the survey, 43.6 percent of the individual customers think that Internet cost is average, i.e., it is affordable. But 20.5% considers it to be extremely high and 35.9% think it is moderately high. 


If the government allows having own VSAT by the private companies, and take fiber optic facility which can increase the speed of data transfer, there is a good possibility that the cost of Internet account will go down. As a result, it will be easier for people and organizations to access the Internet. Then, the e-Banking services will be able to take this advantage. In fact, the scope at present is not very low and good enough to make money by e-Banking services because 43.6% of the individual customers are willing to maintain connection at current charge.


In case of organizational customers, the scenario is somewhat different. As they have to subscribe internet line for other official purpose, it would not be an additional cost for them to use e-Banking service. Keeping that in mind 40.3% of perceive the internet cost is average related to this issue and 20.6% think the cost is actually cheap. However about 30% of the respondents still think the cost is high. The table below is showing their details response. Here the bottom line is internet cost should not be an obstacle to pursue customer to use e-banking service.

4.10 Customers attitude towards e-Banking

What customers think about this very new e- banking is very important to know because if the product is not well accepted, it will be a futile project for a bank launching e-banking. In most of the cases the study found positive indication regarding this matter.


4.10.1 Which banking system is more convenient?


Organizations are also at the positive side of e-Banking. Only 12.5 percent of organizations under study disagree that e-Banking is less convenient than traditional banking process. But the major portion of this segment thinks the opposite. Therefore there is a high possibility that e-baking will be widely accepted by various customers if everything is on the favorable track. The following two tables show it clearly.


But we have to keep in mind that all type of banking services cannot be made available on e-Banking. The respondents were asked to answer about the service those are already available or can be available in both e-Banking and traditional banking. From there response, it is clear that majority of them are possessing opinion in favor of e-Banking.


4.10.2 e-banking and cost savings plus efficiency

Two basic features of e-Banking that can convince the prospective customers to accept it are cost savings and efficiency. It has been discussed before that it can save the cost of transportation and courier service for going or sending papers to the bank or to get obtain other information or task which can be conveniently done by the e-banking service. Again, e-Banking can save the time for going to the bank in person and stand in the queue to get the service. e-Banking can offer the customers prompt service than human personnel of the bank in many cases. And this is really an attractive feature either for the organization or individual those who want to increase efficiency.

4.11 Promotion


Since this is a very new concept and most of the customers are not aware of the banking through Internet, the bank offering this system needs extensive promotion program to convey the benefits of e-Banking to the prospective customers. The bank should decide on the most effective media as well as promotional tools for this marketing program.

As promotional tools the bank can use training on using e-Banking and performing transaction through net account and related topics. It should arrange workshop on it either in the bank or in the organization which is a prospective client. It can also have its home service department for giving home service to the customers facing problems with the entire system.


4.12 Customers’ attitude toward training


The study found that 45.9 percent of the individual customers strongly agree that they require training on e-Banking transaction. 22.1 percent agree moderately agree. It is showing how vital the training is to them to understand the process and thus use it. Actually this is a very usual reaction from the respondents who perceive the system very difficult and complex.


The same condition is found in the organization. While talking to these respondents, they informed that though their organization has IT experts, even though they require training to a great extent as e-Banking is not supposed be the software limited to only IT professional if used by the organizations. The following table is showing the responses.



5. Recommendations


The following things deserve consideration in light of the findings and analysis of the study


  1. Training: Training should be provided to deal with the nitty gritty technical problems like password problem, safeword-pincard handling. Many clients are also interested to know the reasoning behind the command that they use for handling the e-banking product.


A workshop of two or three days could be held in the banks for the individual clients. It should be also done in the organization for organizational clients. The first two days should deal with the basic handling and reasoning behind the products and on the third day the new product feature and their advantages and uses should be introduced.


  1. Personnel: If possible part time or full time additional personnel should be hired to cater to the prospective clients of e-Banking service. The person should be technically adept at handling the product problems too otherwise an inept employee can result in more dissatisfaction.


  1. Clear & Customized Statement of Accounts: More proper breakdown of Accounts Statement and clear explanation should be used so that no human interface is necessary to make the clients understand the statement. If the client requires a human interface to explain things then the advantages of e-products become negated.


  1. Promotion: Strong promotional campaign should be undertaken by the banks those who wish to launch e-banking. They can make corporate presentation to different business organizations and universities describing the advantage, security and user friendly aspects of their e-banking service. Also the customers should be educated about the fact that the internet cost to get the e-banking service is offset by the cost savings from transportation cost and time cost needed in traditional banking.


  1. Customized service: Customized service should be provided to the big clients which would provide them the products they require, special help line and less time consuming service. The account could also be customized to the need of the clients so that the client gets to see the account as is useful to him rather than having to go into a lot of manipulation to get to the format they desire.


  1. Cost analysis: The set up cost is also important, so before launching e-Banking services the manager should assess the benefit from this and weight it against the cost. The banks can make it free in the initial stage and then charge for it when it will become a common practice in the business world.



  1. One stop solution and providing helpline: The bankers should provide one stop solution package to for the customer to have all necessary hardware, software and user guide to use the service. They should also helpline for any kind of problem or troubleshooting which may arise while using the service. They should also be prepared to provide home service or personal service to the organization by sending their expert to help the customers in case of very complicated problem.


6. Conclusion


All the member of the target market has relationship with banks. They are the customers of bank service. These customers include public limited companies, private limited companies, small and medium sized enterprises, professionals government bodies, employees of different organizations, and even students and housewives. Today bank is a very important role player in the economy of the country as well as in the world. These customers are transacting through the banks several times every month and each transaction involves them some monetary cost and time cost. A large part of the target market is not satisfied with the bank’s service.

e-Banking services are defined earlier in this report as a bank where a client can get service for low cost and less time. He will not have to go to the branch, rather he can transact while sitting in front of his PC by simply clicking the mouse. This banking has a good opportunity to operate profitably in Dhaka city although most of the people are not yet aware of this banking.

Since Internet and phone is a prerequisite for banking on the Internet, the banker should also know how many people of the city are having Internet. A large part has this facility in our country and many are willing to take connection very soon. Some customers also think that e-Banking system is complex and difficult to get service but a moderate part of them think it is OK.


Since e-Banking is not well known by most of the people, it needs to be advertised heavily through newspapers, magazines, televisions and even on the Internet. People like daily newspaper the most as the advertising media of e-Banking services. For effective promotion the banker can provide home service initially to the clients and give short training on using the web site of the bank.













  1. Citibank E-banking Software


  1. Citibank Accounting Information System