Abstract:
With the current uncertainty in the economic climate, banks are focusing on how to
reduce costs, target untapped market and increase efficiency in their distribution
channels. Banks diverge the customers into alternate delivery channels to reduce the
maintaining or expansion cost of branches, reduces cost on hiring more trained
personnel, and demonstrably improves service quality standards. From these cost
cutting approaches, banks are able to trim down its product cost and offering value-
added services for customer acquisition and retention.
Internet Banking is an alternate delivery channel which flourished rapidly due to the
high-speed Internet, improved and reliable infrastructure and consumer preference to
manage transactions through the internet rather than visiting physical bank branches.
This thesis focuses and narrates the importance of alternate delivery channels specially
internet banking in banking sector of Pakistan. It describes the company’s core
objective and reasons for incorporation of Internet Banking into their business model.
The research is conducted while considering four key variables: market structure,
Bank’s perception on internet banking, Customer’s perception on internet banking, and
HMB’s Technological Frame Work.
Literature review enlightens the benefits of Internet banking to the internal structure and
efficiency of routine banking through local and foreign literature. Market structure is
considered as moderating variable whereas bank perception, customer perception and
technological frame work are dependent variables.
