Most of the industries in the world are driven by one single term i.e. ‘innovation’. The technological barrier to connectivity has been solved with the advent of internet in the 20th century. According to Kalakota & Whinston (cited in Aladwani, 2001) the last few years have witnessed profound technological changes among which is the advent of electronic commerce (IEC) or the exchange of products and payment via telecommunication systems. Internet technology holds the potential to fundamentally change.
The banking industry allows the individual banks to easily offer products and access new customers (Sullivan, 2000). New technologies helps banks to reach customers and provide them with not only general information but also the opportunity to perform interactive services like offline banking transactions like payment, receipts and transfer of funds (Aladwani, 2001).
However Sullivan (2002) is critical of the technology and advises the banks that adopt internet banking to develop different methods of conducting business. He speculates that the internet will destroy old models and concepts of banking and will have profound influence on the banking industry.
Online banking, though offers a variety of services resulting in better customer satisfaction (Karjaluoto, et al, 2002). Online banking is often accompanied by risk factors which is why there is always a need to carry out a research to study how the online banking has affected the banking industry.
The article is authored by SM Fahad who is a business graduate from Bahria University Karachi.
