Computerization and developments in information technology brought in new trends in banking business. One of the offshoots of this development is internet banking. This facility enables customers to access their accounts and perform a variety of bank transactions from anywhere. This saves time, cost and paper work for the banks as well as the clients. However internet banking has inherent risks such as security risk, technology risk and financial frauds.
Banks also face legal risk since the jurisdiction in which the bank is operating could be different from its registered place of operation. Another development in the banking sector is the introduction of virtual banks that do not have any physical presence and all banking operations are in electronic mode. The bank exists on a virtual ground with the internet address as the only link with its customers. New products have been introduced by the banks to cope with increasing competition and customer needs.
They can be categorized into investment based products and innovative services offered by the banks. Investment products include offer of gold and silver coins, marketing of insurance products and floating of mutual funds, and issue of different types of credit and debit cards.
Innovative services include establishing ATM facilities and providing ASBA (Applications Supported by Blocked Accounts) facility to investors applying for initial public offerings of the corporate sector. Technological developments enable banks to offer electronic fund transfer facility to meet their customer requirements. National electronic fund transfer facility has been created at Mumbai to offer this service.