Online Banking System (MBA): Improving Customer Experience and Growth

This project, titled "Online Banking System (Enhancing every possible Online Services/options/facilities to the customers)", explores the critical role of online banking in modern business development, particularly within the banking industry. The project's primary aim is to analyze how online banking options and services influence the overall growth and success of banks, with specific objectives including determining the impact of online services on customer attraction, the growth of the banking industry, and the importance of these services during a pandemic. The report provides a comprehensive literature review, examining the existing research on the banking industry in Malta, and analyzes the market mix, concepts, and theories. The methodology section outlines the research methods used, including secondary market research and feasibility studies. The project emphasizes the importance of online banking in providing customers with convenient access to financial services, such as account management, fund transfers, bill payments, and loan applications. The study also considers the impact of the COVID-19 pandemic, highlighting how online banking has become essential for banks and customers. The project aims to provide multiple strategies for banking industries to improve online banking services and improve customer service during challenging times.

Online Banking System (Enhancing
every possible Online
Services/options/facilities to the
customers)
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Contents
INTRODUCTION...........................................................................................................................3
Title..............................................................................................................................................3
Overview of the topic..................................................................................................................3
Rationale for the business idea....................................................................................................3
Scenario chosen...........................................................................................................................4
Aim and objectives......................................................................................................................4
Background to the subject area....................................................................................................5
Structure of the report..................................................................................................................6
LITERATURE REVIEW................................................................................................................7
Range of literature on banking industry of Malta........................................................................7
Evaluation and review of Malta banking industry.....................................................................10
Explanation of business idea.....................................................................................................10
Market mix analysis...................................................................................................................11
Thorough knowledge and comprehension of banking industry................................................13
Understanding of relevant concepts and theories about business model...................................14
Discussion of conceptual and theoretical issue.........................................................................14
Conclusion and understanding of principal issues relevant to point.........................................15
METHODOLOGY........................................................................................................................16
Appropriate tools/models/concepts and theories for doing strategic analysis...........................16
Clear aim and objectives............................................................................................................17
Appropriate research methodology............................................................................................17
Theoretical and applied research method knowledge................................................................18
Secondary market research:.......................................................................................................18
Feasibility (Product/service/industry/market/organisational/financial feasibility issues).........18
Critically evaluation of secondary methodology.......................................................................20
Understanding of research limitations.......................................................................................20
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DATA/RESULTS ANALYSIS.....................................................................................................21
REFERENCES..............................................................................................................................31
INTRODUCTION
Title
“Online Banking System (Enhancing every possible Online Services/options/facilities to
the customers).
Overview of the topic
Online banking is also called web banking or internet banking. It refers as an electronic
system that allows customers or clients of a bank or many other financial associations to conduct
a range of financial transactions via the financial institution’s website. In addition to this, online
banking is the effective system that offers the facility or service to the client to conduct the non-
financial as well as financial transactions as of it his net banking account. The customer can
transfer capital from his account to the further accounts of the same or different bank by using
online application or a website (Arnold, 2019). There are different features of online banking
including, customer can view account statement, customer can pay any kind of bill, transfer
funds, recharge mobiles etc.
Along with this, by using online banking system, clients can easily book transport, medical
packages and travel package. Therefore, online banking is essential and important part for the
overall banking industry because it will support them in attraction of large number of customers
and also improvement of their entire growth and success. There are number of facilities of online
banking system to the customers such as its saves valuable time of the customers, immediate
capital transfer supports the client in time of urgent requirement, transaction of highly secure and
safe, users get payment access to their bank anytime and anywhere. In overall, online banking
system is essential part for business development within a banking industry (Banu, Mohamed
and Parayitam, 2019).
Rationale for the business idea
Online banking options or service is a business idea for this project that will be more
beneficial and essential for the customers as well as banking industry. Online banking is
convincing for the customers as well as industry which is a biggest reason for selecting this
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business idea. Basic banking transactions like transferring funds and paying bills between
accounts can more easily be completed in 24 hours a day, 7 days a week or whenever a clients
wishes. Another and biggest reason for selecting such kind of business idea as online banking is
an efficient and fast that will support banking industry in take caring of entire customers banking
life cycle through online. Users can also manage their accounts frequently closely, enabling them
to remain their accounts secure. Around-the-clock access to banking data gives early detection of
fraudulent activity, in that way acting as a guardrail alongside financial damage or loss.
Now a day bank offer additional service of online banking according to which potential
customer can conduct all its financial transaction through online medium. This is very useful at
the time of paramedic situation like currently whole world is facing due to COVID 19, as during
this time an individual can conduct all its financial transaction online by using internet. In online
or mobile banking a person not need to go outside or bank for conducting financial transactions
like transferring money, taking loan and so on (Gao, Melero-Polo and Sese, 2020).
Therefore, all these are major benefits or advantages of online banking system that will
support overall banking industry in development of its growth and success easily.
Scenario chosen
This project is based on the role of online banking services or options for customers as
well as banking industry in normal as well as paramedic situation. For example, COVID 19 is a
paramedic situation where customers are not able to go bank and fulfil their requirements. In
addition to dealing with the direct economic impact of the corona virus, banks need to have a
plan in place to shield employees and users from it spread. Large numbers of banks are already
beginning to promote remote working or online facility of some personnel. Customers, who're an
increasing number of cautious of spending time in crowded public areas, Bank will need to have
a manner to organise banking with no physical interaction. By developing completely digitized
and remote consumer transactions, banks can ensure that both everyday and top notch methods
might be done with restrained disruption. Therefore, in order to overcome impact of COVID 19
from customers within banking sector, development of online banking system is a most effective
and beneficial business idea (Kiplagat, Gesimba and Gichuhi, 2019).
Aim and objectives
Aim:
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Main aim of this project is to analyse the role of online banking options or services on
influencing the overall growth and success of banks. A study on banking industry.
Objectives:
 To determine the role of online banking options or services in attraction of large number
of customers.
 To determine the influence of online banking options over growth and success of banking
industry.
 To determine the importance of online banking options in pandemic situation for both
bank and customers.
 To analyse multiple ways by which banking industry can easily provide online banking
services to their customers.
Background to the subject area
Banking is considered as industry which handles credit, cash and other financial
transactions. Respective industry generally provides a safe place for storing extra cash as well as
credits. They offer several services or facilities such as saving accounts, checking accounts,
certificates of deposit and many more. In addition to this offer services related to the providing
loan to customers according to their requirement and need. There are several types of banks
which offer different services and facilities such as commercial bank, exchange bank, industrial
bank, agricultural or co operative bank, saving banks and so on. While the paramedic situation
such as COVID 19 is making the requirement for digital banking services more vital, users
increasing first choice for digitization or online banking options are nothing new. Neither is their
aggravation with the broken digital journeys they regularly encounter while attempting to done
an online process (Malar, Arvidsson and Holmstrom, 2019). Due to COVID 19, large number of
banks faced certain risks such as increased credit risk defaults and lower recoveries due to
inactive markets for collaterals, Reduced cash inflows from loan, repayment, Increased fraud,
cyber threats, etc. due to relaxed internal controls, Fair value losses because of increased credit
spreads, decreased profit levels and capital depletion, CAR may drop under the regulatory
threshold etc. All these are major risks that have negative effect on overall success and
performance of banking industry. In order to overcome these risks, there is requirement for all
banks within banking industry to implement online banking options. This will helps them in
saving their time as well as getting of better results within a limited time period.
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Structure of the report
This is an important section of the report because it includes entire structure of the report
apart from their purpose for doing research. There are different activities that have been needed
by researcher for conducting this research report. These will be explained as below:
Introduction: This is a first activity of report structure that will be essential in completing
full project effectively. This part of the report includes different sub-sections which are research
aim, research objectives, background to the subject area, rationale, overview etc. All these are
useful in doing of another chapter systematically.
Literature review: This is a main activity that will be required secondary data from number
of secondary sources such as books, journals, articles etc. Main purpose of literature review is to
identify gaps in previous study and after this, research questions will be followed for overcoming
research gaps effectively (Pakhnenko, Druhov and Druhova, 2019). There is different
information that will be included within literature review such as overview of the banking
industry, marketing mix analysis, segmentation, targeting etc.
Research methodology: This is another section which is important for investigator in
gathering of information about the topic from different methods. For this part of report structure,
secondary sources of data collection will be used i.e. books, articles, magazines, publication
research etc.
Data/ results and analysis: This is also a fundamental part of report that will help researcher
in analysing of results with the help of secondary data collected from the resources such as,
books, magazines etc. In order to analysis the secondary data, different themes will be developed
that will help in achieving of main purpose of the report.
Conclusion and recommendation: This is a last section that includes helps researcher in
analysing of aim and objectives are achieved or not. Conclusion is main because it includes
entire information about the report in short way (Park and Tran, 2020).
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LITERATURE REVIEW
Range of literature on banking industry of Malta
 What are the roles of online banking options or services in attraction of large
number of customers?
According to the view point of JUSTIN PRITCHARD, (2020), online banking provides
an ability to customers to manage their bank accounts by using internet on mobile or
computer device. It declines the visit rate of customers on bank as it is easy and
convenient to use even after the completion of banking hours. Moreover, online banking
system is less expensive and time consuming as compare to services given through
offline medium. Due to pandemic situation in the present scenario, people did not like to
prefer go outside and use services as they are in favour of online banking system, which
save them. In addition to this, online banking system provide all the services that is given
to customer while visiting bank such as account open, find transfer, apply for loans, bill
payments, deposit checks and so on. One of the major point that attract people towards
online banking system is lower fees. It is determining that visit a bank occur high cost
and time of people whereas using inline system did not occur cost and give access to
check account at any place and at anytime. In today’s world, people are more
technological friendly and prefer to consume those services that is innovative and new in
market. Online banking system is a new technology enter in market with improved
system and process of bank. Moreover, online applications of bank consist of all
information that is required for customers along with this, it include step by step process
about how to perform such things such as fund transfer, account opening and many more.
It attract large number of people due to which online banking system gain higher growth
and development in market effectively.
 What are the influence of online banking options over growth and success of
banking industry?
As per view point of ANDREW MEOLA, (2019), the usage of internet is increasing
rapidly and continuously that has positive influence on the growth as well as success of
baking industry. With the increase in rate of internet users, the use of mobile banking and
online baking is enhanced in an effective manner. The online banking gain growth across
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a wide demographic that involve income, age and companies as well. One of the aspect is
people are preferring to going paperless transactions, billings in order to save the
environment. This new trend increases the usage if inline banking that has positive
influence on the overall growth of baking industry. Earlier, the people did not like to
deposit money in banks as they are required to go banks for depositing and withdraw
money as well. Due to this, there are less number of people have their bank account.
Establishment of online banking system decline the number of people visit to banks as
they have the option to access account at any time and at aby place. The customers get
every service through this system that leads to increase in number of bank users. It is
determining that increase in number of bank accounts has positive impact on the
development and growth of banking industry. Online banking is becoming popular
nowadays due to the miss happenings take place in the country. In context to banking
industry of Malta, their youth is only preferring to use mobile applications and digital
technology in order to consume any bank services that directly leads to overall growth of
baking industry which in turn has positive impact on economy of country also.
Furthermore, banks offer all the information on its applications and also the usage of
services that is easy and convenient to understand for young age and sometime for elder
people also that has positive influence on growth and success of banking industry at
marketplace.
 What is the importance of online banking options in pandemic situation for both
bank and customers?
According to the view point of Ashwin Adarkar and Paul Hyde, (2020), Online banking
is defined as a service given by banks to customers to access their accounts by using
computer or mobile device. In addition to this, the main motive is to attract people to
consume services by providing account access at any place and at any time. It is analyzed
that online banking system decline the number of visitors in bank due to which managers
and bank staff is able to provide effective service to customers. Online banking plays
vital role in this pandemic situation(Coronavirus) for both the customers and bank as
well. By the assistance of online system, customers can use any services that they have
by visiting at banks. It is analyzed that people are not preferring to go outside because of
difficult situations but also did not avoid using banking services. If a customer visit bank
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them, it is dangerous for both bank and person also as it is a serious issue which may
leads someone to death. Using of online banking system occur less cost and time for
customers along with this, they have advantage to gain information repeatedly if not
easily understand once. Moreover, they can access accounts and perform all services that
has taken place while visiting banks. In context to banks, they also have advantage of
online banking system as they did not interact with customers face to face, there is
decline of paper use along with this, bank employers can also give online services to
customer from their place only and easily decline to go banks and perform their job. It is
determining that increase in the use of internet directly enhance the usage of online
banking system by people that is beneficial for both customers as well as banks also.
 What are the multiple ways by which banking industry can easily provide online
banking services to their customers?
As per the view point of Emily Pribanic, (2019), there are various wats by which banks can
provide online service to customers. One of the most effective way is development of its
own application that include all the information about bank in a proper manner. Nowadays,
most of the banks have their own application that they make it install in customer’s phone.
It is determining that such application involve service along with the steps of using such
services that is easy and convenient for customers. In addition to this, installing of
application is just a single click service for customers that save time as well as cost of a
user. In addition to this, another way is online website, where customer can reach and login
its account by entering ID and password provided by banks. It also involves all the
information about bank but if we compare it to online application then it is less effective
for customers as it takes time and take login at every reach of users. Moreover, application
allows to sae their transaction or see them at a single click whereas in website, users are
requiring to download their data in an appropriate manner. In relation to the banks present
in Malta, almost all the banks have their own application that attract large number of
people towards their service and also risen the level of competition prevailing at
marketplace. It is important for banks to update all the information on their applications in
order to make employees up-to-date about is modern facilities and engage them for longer
time period. Furthermore, all this way of providing online service to customer help
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banking industry to satisfy their customers and attain higher growth as well as success in
the market effectively.
Evaluation and review of Malta banking industry
 Industry size – Malta offers many domicile for international banking business. Along
with this, having a geographical location and benefiting from EU membership & Euro as
a currency, it is determining that country also enjoys efficient, accessible and prompt
regulator that is MFSA (Malta financial service authority). It is analysing that Malta
fiscal regime is also one of the major element in developing an attractive investment
environment. Moreover, The Maltese banking system has found to be top fifteen soundest
and strongest banking system in all over the world as per the World Economic Forum
Report.
 Growth rate – It is analysed that Malta’s economic freedom score is around 70 that make
its economy 42nd freest in 2020. In addition to this, Malta overall score is raised by 09.
Point because of government integrity score. It is ranked 22nd within the 45 countries in
Europe region. Moreover, its score is around equal to regional and above world average
that show how it gain growth in market.
 Major player or competitors – The major competitors of Malta Banking industry are
Bank of Valletta that offers personal banking services and established in year 1974.
Moreover, other competitors are FIM banks, Akbank TAS, IIG bank and many more. It is
important for banks in Malta to maintain good relationship with customers and provide
them quality and on-time service in order to maintain its higher position and strengthen
its market position effectively.
Explanation of business idea
The usage of online banking system is increases day to day and people are shifted towards
traditional approach to modern facilities. The aim of the research is to know how online banking
system enhance every possible online service to customers. It is determining that people prefer to
make use of inline banking system in order to go paperless and to save their time and cost as
well. It is determining that online banking system allows all the services that is given to a
customer while visiting bank. In addition to this, customers have the options to access their
account 24* 7 at any place and at any time by using electronic device such as mobile and
computer as well.
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Market mix analysis
Marketing mix is defined as a set of actions that is mainly used by companies in order to
promote goods as well as service in market. It is determining that marketing mix involve
multiple areas of marketing plan and focuses on relevant things that enable an entity to achieve
its desired objectives within stipulated time frame. The marketing mix includes 4 p’s of
marketing that is product, place, price and promotion as well. This classification was proposed
by E.Jerome McCarthy in the year 1960 and it is determine that all this elements are examined
independently but if we talking about practice then they are dependent on each other. These four
elements are defined below in context to Malta Banking industry:
 Product – It is defined as a commodity that is offered in market in order to develop value
for customers and to earn profit in an effective manner. It is important for an organisation
to offer those products as well as service in market, which is trendy and attractive as well.
In context to the banking industry, it offers secure and convenience online access through
banking applications and websites as well. The banks provide transaction and service at
physical locations or through phone or mail. The products and services that is consider
within the banking industry is account transactions, loan and bill payments, new account
applications, fund transfer, direct deposit, check orders, personal information, money
transactions, helpdesk and many more. Nowadays, banks are shifted to using mobile
application and website in order to provide effective and quality service to customers in a
proper manner. It will help company to give 24*7 assistance to customers and develop
good relationship with them. Providing service through mobile application help
customers to access their account at any place and at any time. At the present scenario,
due to pandemic situation, people are not able to visit bank and using online banking
system they can easily do transactions and get to know about their bank balance or any
other information they required.
 Price – It is defined as an amount that is charge from customers in return of service as
well as product provided to them. It is essential for companies to set price of their product
and service by analysing factors such as competitors price, customer willingness and
many more. In context to Banking sector, pricing and interest rates are mainly governed
by regulatory bodies. In addition to this, the pricing strategy & equation of banks is
varying as per the country and region and the approach of public. Moreover, it is
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analysing that pricing of banking industry is also getting change according to internal as
well as external factors. For example, changes in finance market has direct influence on
pricing policies of bank. Furthermore, it is determining that banks offer various financial
services in order to maintain balance on its value-added pricing policies. Online baking is
considering as an additional free service that is given to customers of bank. Any of the
individual can easily apply to be a client and excising customers sign up their account
that did not occur any additional cost.
 Place – Banking industry is wide and if it is talking about banks under Malta, it has 39
banks that is currently operating. It is essential for companies to choose those place
where customers reach is easy and convenient as well. Moreover, banks have various
ATMs that is located in the Porsche areas and on the places where there is high gathering.
In relation to online banking system, the customers can access website and application at
any place and the only think that they required is good internet connection and well
equipped device also.
 Promotion – It is defined as a way by which companies aware about their goods as well
as services in market. There are various promotional tools that is used by entity for
promotion such as advertising, direct selling, social media applications, public relations
and many more, Nowadays, banking industry is mainly using online applications such as
Facebook, YouTube, Instagram in order to make people educate about its services. It
helps banks to attract large number of people within short span of time and enhance their
customer base level in an effective manner. In context to online banking system, online
services are presumably communicating to customers when they are newly signup for
being a customer. In addition to this, nowadays online banking is also considering as
main focus of homepages of bank. In Malta, most of the banks are using online
applications and print media in order to promote its services and to grab opportunity in
market. The advertisement of banks mainly involve the modern facilities provided along
with positive approach that attract people to use its services in an effective manner.
STP approach: This approach is mainly used by companies in order to segment the whole
market and to decide target market in order to enhance profitability in an effective manner.
Segmentation: It is defined as process of categorising the whole market on the basis of
factors such as demographics, behaviour, geographic and so on. In context to baking industry
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