1. B ANKING I NFORMATION S YSTEMS L ECTURE 4

2. E-Banking Services 1. Account Access 2. Balance Transfer 3. Bill Payment 4. Bill Presentment 5. Mortgage /Credit card / Misc. Lending 6. Business Banking Services & Administration 7. Cross‐Selling 8. Personalized Content and Tools 9. Account Aggregation 10. Electronic Fund Transfer

3. 1. Account Access Access online to all of one’s account information (usually checking, savings, and money market), which is either updated in real time or on a daily bath basis.

4. 2. Balance Transfer Transfer funds between accounts: - Between accounts in the same bank - Between accounts in different banks in the same country - Between accounts in different banks internationally

5. 3. Bill Payment Pay any designated bill based on instructions one proves including whether to pay automatically or manually each month.

6. 4. Bill Presentment View billing statements as presented electronically, which allows inter‐ active capabilities such as sorting, drill‐down details, or advertising, in addition to on‐click payments.

7. 5. Mortgage /Credit card / Misc. Lending Search, apply, and receive approval online for various types of loans and then review your statements using online bill presentment.

8. 6. Business Banking Services In addition to all of the basic payment and account access services, merchant can manage their electronic lock box for received payment, accounts receivable posing, as well as initiative payment via networks.

9. 7. Customer Service and Administration While the Web will eventually enable live communication, it is most optimally designed to facilitate interaction with information so that customers can more easily service themselves. In the process, customers receive as good, if not better, service while the bank saves money with each additional transaction as it realizes the scale economies of its largely fixed online investment. Advanced e‐Mail systems with automated replies and intelligent routing are also helping to improve the online customer service experience.

10. 8. Cross‐selling Just as visitors to a branch are being offered new products by tellers and simple signage. In most cases today, banks perform this function online with standard, broadly targeted text offers or by just making their product literature available online. In the future, banks will be able to harness the true power of the Internet by providing targeted offers to Web customers based on a combination of their indicated interests and financial situation. Not only will banks be able to sell banks products, but non‐financial products as well.

11. 9. Personalized Content and Tools As one visits the Web branch, one is instantly recognized and content displayed is oriented toward one’s interests including weather, investment, and hobbies. More importantly, by using the Web, bank customers could use online financial planning tools to better manage their finances.

12. 10. Account Aggregation Accounts aggregation enables a consumer to be presented with all his or her account details (current account, saving account, mortgage account etc.) on a single page. For access to external financial data consumers to provide their account passwords to the aggregator (usually a bank). The aggregator uses the passwords to access automatically the consumer’s accounts. The information is then provided to the consumer on a consolidated basis on a single page so the customer has a full view of his/her financial poreolio.

13. 11. Electronic Funds Transfer Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money changing hands. One of the most widely‐used EFT programs is Direct Deposit, in which payroll is deposited straight into an employee’s bank account. This system may also be used for debit transfers, such as mortgage payments.

14. E‐banking Technologies E-banking relies heavily on information and communication technologies (ICT) to achieve its promise of 24 hours availability, low error rates, and quicker delivery of financial services. When considering e‐banking, bank websites usually come to mind first, but e‐banking requires much more than just a good website.

15. Services and Structure

16. E‐banking and E‐commerce E‐banking may be viewed as one branch of e‐ commerce. The Internet may be the most common and well known medium for e‐commerce, but it is not the only one. In a banking context, ATMs and credit cards are also classified as e‐commerce.

17. The Internet The emergence of the Internet has posed a host of new organizational opportunities and challenges. Other e‐channels such as Interactive Television (iTV) and Wireless Application Protocol (WAP) technologies are available for services delivery, their use is still limited in the provision of financial services. The Internet is a massive global network of interconnected packet‐switched computer networks. Hoffman (2002) offers three (mutually consistent) definitions of the Internet: a network of networks based on the TCP/IP protocols; a community of people who use and develop those networks; and a collection of resources that can be reached from those networks.

18. The Internet A more recent development is web 2.0 which may be described as a newer version of web- based applications(such as wikis, social- networking sites, and blogs) which aim to enhance creativity, collaboration, and interaction between Internet users. These developments on the Internet are expanding beyond the utilization of the Internet as a communication medium to an important view of the Internet as a new market place.

19. The Internet The Internet influences the future services/ products distribution channel structure. Increased competition between suppliers is also likely to result in lower prices for consumers.

20. The Internet Internet technology can make a significant contribution to a company’s value chain. It can improve a company’s relationship with vendors and suppliers, its internal operations and its customer relations, and offers the prospect of reaching an expanding customer base. The Internet also promises to dramatically lower communications costs by eliminating obstacles created by geography, time zones, and locations (Tan & Teo, 2000).

21. The Internet The Internet provides a powerful platform for corporations with home pages to market and advertise their products and services. It has proved an efficient and cost-effective way of distributing information almost instantaneously to millions of potential clients in global markets. Many companies use the Internet to conduct market and scientific research, as well as to source business-related information to improve their products and services.

22. The Internet The rise of the Internet has resulted in the formation of virtual organizations, which have virtually no physical presence in terms of retail outlets but enjoy access to national and international markets. There is a scope for physical organizations to become virtual, as they can leverage their core competencies in primary activities. Physical companies often have a great deal more experience/knowledge of their products and how to sell them than new Internet traders and they usually also have established brands and a large customer base. Owens and Robertson (2000) contend that it takes longer for physical organizations to develop an integrated e-­‐commerce structure than it does for virtual traders to commence trading. This is due to the reduced, simple physical structure of the virtual organizations. They argue that a structure of similar efficiency must be adopted by physical organizations for the provision of Internet services.

23. Mobile Banking Technologies Mobile banking is the newest channel in electronic banking to provide a convenient way of performing banking transaction using mobile phones or other mobile devices. Some banks are making significant investments in mobile systems to deliver a range of types of business value, from increased efficiency and cost reduction, to improved operational effectiveness and customer service to provide a competitive advantage. A factor that has contributed to this development has been the extended availability and capacity of mobile communications infrastructure around the world.

24. Mobile Banking Technology The number of types of mobile devices has been increasing rapidly and the functionality available has also improved. The shrinking costs of data transmission and, due to the intense competition from suppliers, the reduced costs of devices have catalyzed the distribution of mobile technologies and amplified the growth of the worldwide mobile market.

25. Mobile Banking Technology Wireless Application Protocol (WAP): is an application environment and set of communication protocols for wireless devices designed to enable manufacturer, vendor, and platform independent access to the Internet and advanced telephony services. Wireless Internet Gateway (WIG): is a Short Message Service (SMS)‐based service, in which a menu of available banking options is initially downloaded from the bank to the phone device (Brown et al. 2003). This enables users to browse bank accounts and conduct other banking related tasks.

26. Mobile Banking Disadvantages 1. Internet connectivity costs: Although connection costs from mobile phones is steadily declining it is still high enough in many countries to deter customers from using their mobiles for applications such as e‐banking. 2. Difficult user interface: Human Computer Interface (HCI) issues are a key factor in mobile technology acceptance. A general rule is that the easier and more adoptable the interface, the greater is the user acceptance.

27. Mobile Banking Disadvantages 3. Lack of awareness amongst customers: Many banking customers are not even aware of availability of mobile banking or associated benefits. Awareness increases with time and needs considerable promotional efforts. 4. Limitations in functionality of mobile devices: Mobile technologies are still dogged by limitations such as limited battery life, unreliable network connections, volatile access points, risk of data loss, portability, and location discovery.

28. Mobile Banking Disadvantages 5. Security concerns: Mobile technology still suffers from questionable security. So it may not be suitable for transfer of highly confidential financial information. Mobile devices are increasingly becoming a target for virus writers, hackers, and short message service (SMS) spammers. 6. Organizational changes: To offer mobile banking many organizations will need to change their business processes, ways in which information is provided and accessed, working practices and work relationships, working styles and changes in roles, responsibilities and management structures.

29. Mobile Banking Disadvantages 7. Small number of choices: Not all banks offer mobile banking. 8. Technology overload: Fragmented information channels often result in inefficient working patterns as users switch from device to device and between different media (Evans, 2004) which may result in mobile ignorant customers unable to use their devices for day to day tasks such as e-banking.