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The Evolution of E-Banking

Revolutionizing Financial Transactions

E-banking encompasses all financial transactions conducted between companies, organizations, individuals, and their respective banking institutions. In the mid-1970s, some banks conceptualized E-banking, while others introduced electronic banking services in 1985. However, the growth of Internet banking faced challenges due to limited internet users and the associated costs of online banking.

The Internet’s Transformative Impact

The landscape changed dramatically in the 1990s with the internet’s explosive growth, making people increasingly comfortable with internet banking and online transactions. Simultaneously, the dot-com boom fueled the expansion of E-banking and the internet.

During the mid-1990s, many financial institutions took steps to introduce E-banking services. However, consumer apprehensions about internet-based transactions prevailed. Companies like America Online, Amazon.com, and eBay played pivotal roles in encouraging electronic commerce adoption by enabling customers to make online payments for their purchases.

E-Banking Comes of Age

A significant cultural shift occurred after concerns related to the Y2K problem subsided. Among the national institutions, Bank of America made history by reaching 3 million online banking customers. Online customers proved to be more loyal and profitable compared to traditional customers. In 2001, Bank of America set a record for processing millions of electronic bill payments, emphasizing the growing trend of online banking among adults.

During the late 1990s Internet revolution, ICICI Bank led the way by introducing internet banking to its customers in 1996. The evolution of internet banking ranged from basic web pages offering information about a bank’s products and services to advanced capabilities such as account access, fund transfers, seamless sales processes, and broader access to financial services, including investments and insurance (Diniz, E 1998).