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Running Head: ONLINE BANKING IN BANK MUSCAT Implication and Challenges of Online Banking System of Bank Muscat 1 ONLINE BANKING IN BANK MUSCAT 2 RESEARCH PROPOSAL - TEMPLATE You are required to fill the following: Title of the Research (not more than 15 words): Implication and Challenges of Online Banking System of Bank Muscat 1. Introduction or background to the research (what your research is about – general information) and literature review [secondary sources – references from articles on previous research done – quotations, paraphrasing & summary with Harvard In-text citation style eg. According to Handy (2011) …] Introduction Currently, it's hard to locate a bank that does not conduct online banking. Online banking has increased competition in the banking sector and added to the product range offered by various banks. Despite coming as a channel of growth and improved business for banks, online banking has made customers and banks vulnerable to attacks from cybercriminals. The study explores the benefits that bank muscat has gained from its online banking platform as well as the risk they face from it. The study also captures some aspects of the bank's risk’s mitigation strategy. Literature review The banking sector across the world has developed a heavy competition that comes from banks and non – banking sector. Every financial service provider strives to attract more customers and maintaining the existing ones by adopting technology and using it appropriately. Banks have adopted new advanced software that makes processing of customer needs such loans and withdrawals easier and makes banking paperless as possible. Empirical studies have shown that ONLINE BANKING IN BANK MUSCAT 3 online banking has increased customer satisfaction and intensified customer interactions with banks as compared to ten years ago. Drigă, and Isaac (2014) state that Online banking forms an integral part of the larger online business, in that it helps banks cut cost, raise revenue levels and increase convenience to customers. Besides increasing convenience to customers, online banking has proved beneficial to the formation of a firm to firm relationships. Larger banks like bank muscat have led the way in implementing online banking to the highest levels available. Currently, banks have realized that adoption of online banking increases the opportunity to present more banking products to customers (Drigă and Isac, 2014). Online banking holds customers to services such as online payments, online loan decisions, protection from fraud and fund transfer from bank to bank. Online banking has significantly erased traditional banking, and thus forms the greater image of modern banking. Online banking has widened the scope of banking in that; it provides banks with access to a wide range of employees and customers. Despite the positive implications that come with online banking, the risks have currently increased. The risks come from both operational and strategic point of view. The risks that come from online banking affect both the banks and customers. Legal issues arise as the first challenge to online banking. Because bank Muscat wants to grow and capture a wide range of customers from outside Oman, and online banking makes the best option. Operating with customers from other countries with different policies may lead to a breach of laws without the bank realizing (AlAjam and Nor, 2015). Laws suits come as a consequence of breaking of customer protection laws hence adding expenses to the bank. The increased reliance on technology puts online banking at high risks of ONLINE BANKING IN BANK MUSCAT 4 compromise and breach.