Internet banking is regarded as a new delivery channel, which if effectively used, can provide competitive advantage in the banking sector. While it promises enormous benefits both to consumers and banks, the question is how bank managers perceive the strategic and operational issues of Internet banking. Therefore, this paper seeks to examine the perceptions of bank managers on Internet banking with respect to strategic and operational issues. This study is based on the responses of 54 bank managers of Northern area of Malaysia. Interestingly, as regards operational issues, this study finds that there is a significant difference between the level of education and years of service. Further, analysis of strategic issues reveals that it is mandatory for banks to implement Internet banking to compete effectively in the future. In operational issues, bankers perceived that Internet banking would help improve their customer service. Hence, this finding suggests that bank managements should continue to offer personalized services to the customers. Thus, the study suggests that Internet banking should be used as an informational and transactional tool to complement and enhance banking operations.

The electronic revolution in Malaysian banking sector is now more noticeable as banks are trying to keep abreast with Information and Communications Technology (ICT). With the rapid spread of the Internet, domestic banking sectors need to be prepared for greater competition and challenges arising from liberalization and changes in consumers' banking behavior and preferences. Indeed, the emergence of Internet banking has prompted many banks to rethink their strategic plans, especially their IT strategies, in order to stay competitive. This is because Internet banking is seen to be transforming fundamental aspects of banking, the environment in which banking services are delivered, the elements of banking business, the product and services delivered by banking institutions, and the systems and technology used by banking institutions.

While many studies in the past covered Internet banking from the perspective of customers, very few studies addressed it from the managers' perspective. What are the perceptions of managers, as providers, regarding Internet banking and the related strategic and operational issues? This study attempts to investigate Internet banking usage from the managers' perspective—an area, which is not widely explored. In fact, there is a paucity in research concerning the perceptions of bank managers on the Internet banking issues, pertaining to banks' strategies and operational values.

Bank Management Journal, Internet Banking in Malaysia, Information and Communications Technology, ICT, IT Strategies, Literature Review, Internet-Based Banking Service, Electronic Networking Applications, Financial Sectors, Products and Services.