This chapter includes the problem and its background, statement of the problem, hypothesis, and significance of the study, scope and limitations, and definition of terms.
Introduction During the last years, the banking industry has developed noticeably. The financial services industry is altering rapid and visible. Previous ways of doing business are fading fast. Together with this fast transition is also the rising competition among banks. One of the greatest influences behind all of this is the growing development in information technology. Because of this, costumers have been familiar with the ways of electronic banking services and its systems. Electronic banking is sometimes defined as the provision of retail and small value banking products and services through electronic channels. It is also often used to describe processes in which customers can perform banking transactions without visiting a brick and mortar institution (Jimenez and Roman).
For many costumers, e-banking means 24 hour access to cash through an automated teller machine. In the Philippines, E-banking has made a favorable entrance Page | 1
when automated teller machines (ATMs) were presented in the 1980s revolutionizing how we viewed the standard banking system. Aside from ATMs, electronic banking has also been made through internet connection and mobile phones. These systems provide costumers easy ways of banking and ability to gain access to their money from different locations on a 24 hour basis.
With these innovations, costumers are able to enjoy convenient banking system. However, it can be seen that behind these developments, electronic banking carries risks as well as benefits. There are some people that are having a hard time using this kind of technology. Some people in the rural area don‟t have access in e-banking. Aside from that, ATMs require people to have their bank issued ATM card. The banks which issues ATM cards are usually those large banks. Rural banks do not have the huge ATM networks unlike the bigger banks. Another type of e-banking is through the internet connection; however, this can only be available to those who have internet connection at home.
The quantity of divulging to risks depends mainly on the degree of adopting new alternative electronic means of allotment of services and p r o d u ct s. One possible risk is not being able to achieve the business targets because of insufficient, resources badly chosen approach, or alteration in the economic or aggressive environment. It has something to do with the capability the credit world has in order to attain the operational objectives by exploiting the existing opportunities. The big transition on the banking sector and the embracing of fast paced developing technology also change the Page | 2
traditional strategic risks. A bank that will rush into the acceptance of fresh technologies so that is rendered pioneer is risking losing its investment as information systems lose their value in very short time interval.
This prompted the researcher to conduct a study on the effects of electronic banking system in operation of banks, customer convenience, and improvement of Philippine banking system.
STATEMENT OF THE PROBLEM This study aimed to find out the risks, functions, effectiveness, and usability of electronic banking, its effects on the costumers, the advantages and disadvantages it offers. Specially, it attempts to answer the following questions: 1. What are the profiles of the respondents according to 1.1 Age 1.2 Gender 1.3 Civil status 1.4 Company or Bank employed in 2. What are the risks when taking transactions in electronic banking? 3. How do banks handle large number of customers engaging electronic transactions? 4. What are the advantages of electronic banking over manual banking system? Page | 3
5. What are the disadvantages of electronic banking? 6. How do you maintain the usability and user...