E-Banking

3 Pages 868 Words

E-Banking
E-banking (electronic banking) is the wave of the future. It provides enormous benefits to consumers –in terms of the ease and cost of transactions– and banks –in terms of new business opportunities. However, it also poses new challenges for country authorities in regulating and supervising the financial system and in designing and implementing macroeconomic policies. E-banking has been around for some time in the form of automatic teller machines (ATMs) and telephone transactions. More recently, it has been transformed by the Internet. This newest channel for banking services is the focus of this report. With e-banking access is fast, convenient, and available around the clock, whatever the customer’s location. Plus, services are provided more efficiently and at substantially lower costs. Comparing bank services and products is made easier and therefore competition is increased, allowing banks to penetrate new markets. It is even an opportunity for countries with underdeveloped financial systems to leapfrog developmental stages. The flip side to this technological boom in e-banking is the exacerbation of some of the risks involved in traditional banking, particularly governance, legal, operational, and reputational.
Trends in E-banking
E-banking is rapidly gaining ground; with more and more banks operating websites through which customers are able not only to inquire about account balances and interest and exchange rates but also to conduct a range of transactions. To date, most banks have combined the new electronic delivery channels with traditional "brick banks" creating "brick and click banks". However, a small number of banks offer their products and services predominantly, or only, through electronic distribution channels. These "virtual" or "internet-only" banks do not have a branch network but might have a physical presence, for example, an administrative office or non-branch facilities like kiosks...