Internet Banking – Experiences of International markets
In the days of virtualisation where working mothers and travelling sales-team prefer to use flexi-time and remote jobs profile; Internet is being adopted as a parallel medium of communication, transaction, and social networking. Internet banking is fast gaining momentum across the globe for its convenience and ease of conducting transactions at a speed and service levels never dreamt of, a decade ago.
In-spite of its multiple advantages, there is a need to step back and re-think on perceptions it carries with the masses. Is Internet Banking truly replacing the layers of branch banking in a big way? Is Internet Banking a definitive future of how world people will transact over net?
There are enough evidences of Internet Banking gaining considerable adoption in developed and to a lesser extent in developing countries. However ample evidence exist to suggest that Internet banking has been highly is accepted in only specific line of services and yet global bankers have to fight a fierce battle when Internet Banking will be a truly serious and parallel banking channel, complementing offline banking in a big way.
Developing and deploying Internet Banking is a extremely tough call for a modern day banker. At one side the cost and efforts of maintenance of e-banking infrastructure may not necessarily justify the benefits to every bank. And at the same time, intangible cost of not providing internet banking channel is also huge and may affect the opportunities loss for banks. Having said that, in today’s context, providing full-fledged Internet banking services is more of “when and not if” and the benefits are comparable to “chicken or egg” theory”.
In the first generation of Internet Banking, i.e. pre Y2K era, banks in the developed world provided basic facilities such as view balance, e-statements, check-book request, stop payment instructions, Electronic bill payment (EBP) etc. In Post Y2K era banks aggressively adopted various services such as Electronic Bill Presentment and payment (EBPP), customized reporting, account aggregation over multiple bank accounts, Investment banking, also portfolio / investment management, comprehensive money management, and trade finance etc. Y2k was also an era when few “Internet only” banks were established, and out of which these only Japanese have truly survived by now. Rest of the world is struggling to keep this “internet only” concept alive.
In the present regime of 2006 and beyond, the banks are concentrating on targeting the incremental service-level in online banking value-chain e.g. developing creative ways of countering security threats, targeting comprehensive supply chain management for entire life cycle of a transaction utilizing straight through processing (STP) , aligning internet banking with multiple channels to offer the best-in-breed technological upgrades to the customer including Electronic Fund Transfer (EFT) / bulk transfers using RTGS, mobile banking services etc, Targeting Internet banking as a medium to generate new business and attracting either offline or fresh customer through effective ways of cross-selling, establishing cross border services for various corporate as well as consumer segment. Internet Banking is also been used as mode to create profile driven marketing campaign for various banking products.
Research suggesting Internet Banking growth story
As per Pew Internet & American Life Project in 2005, around 53 million Americans conduct majority of their banking online. This is approximately a quarter of all adults and this has risen over 47% since 2002. Ø
Forrester predicts this online number to reach 74 Million household in USA by 2011. The major factor promoting this number is Generation Y (those born after say 1980), as this segment of online banking is expected to grow by 136% in next 5 years timeframe. EBPP is expected to be a major driver for achieving this envisaged...
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