Changing Phase of Banks and Evaluation of Internet Banking in Turkey
Abstract
Banking historically has been a sector based on individual or institutional client service. In today’s browser-based competitive finance world, banks need to flourish this client service viewpoint with web-empowered features for keeping clients and attracting prospective ones. Internet has emerged as a key competitive field for the future of financial services. In a sense, it is almost synonymous with change. Banks, especially commercial ones, are swiftly becoming more aware of the importance of internet banking in this era. This topic was selected to dilate the current developments and implications of internet banking in Turkey, which has been repeatedly cited as an emerging market with its growing sectors, over the period 2005 and 2008.
Keywords: banking; financial innovations; internet banking; Turkey
JEL Classification: G21, G29, O31, O33
© Bora Aktan, Edip Teker and Pervin Ersoy, 2009
INTRODUCTION
The finance world has undergone major changes over the last three decades. Globalization of finance, integration, advances in information technologies and financial innovations in the last couple of decades have deeply changed banking business not only in Turkey but in also other markets and forced the state authorities to deregulate national financial systems. Deregulation allowed banks to flourish their businesses and enter into new markets with new technologies involving both individual and institutional costumer interaction (DeYoung, Hunter and Udell, 2004). In addition, developments of modern computer technology have also enabled banks to lessen the cost of bank transactions by having the client interact with an e-banking facility rather than with a human being. E-banking applications, which include automated teller machine (ATM), telephone banking, mobile banking, digital television, debit and credit cards, internet
JIBC - 3 - banking, etc., became one of the main battlefields of the banking industry. For instance, Hanson and Kalyanam (2007)
Banking historically has been a sector based on individual or institutional client service. In today’s browser-based competitive finance world, banks need to flourish this client service viewpoint with web-empowered features for keeping clients and attracting prospective ones. Internet has emerged as a key competitive field for the future of financial services. In a sense, it is almost synonymous with change. Banks, especially commercial ones, are swiftly becoming more aware of the importance of internet banking in this era. This topic was selected to dilate the current developments and implications of internet banking in Turkey, which has been repeatedly cited as an emerging market with its growing sectors, over the period 2005 and 2008.
Keywords: banking; financial innovations; internet banking; Turkey
JEL Classification: G21, G29, O31, O33
© Bora Aktan, Edip Teker and Pervin Ersoy, 2009
INTRODUCTION
The finance world has undergone major changes over the last three decades. Globalization of finance, integration, advances in information technologies and financial innovations in the last couple of decades have deeply changed banking business not only in Turkey but in also other markets and forced the state authorities to deregulate national financial systems. Deregulation allowed banks to flourish their businesses and enter into new markets with new technologies involving both individual and institutional costumer interaction (DeYoung, Hunter and Udell, 2004). In addition, developments of modern computer technology have also enabled banks to lessen the cost of bank transactions by having the client interact with an e-banking facility rather than with a human being. E-banking applications, which include automated teller machine (ATM), telephone banking, mobile banking, digital television, debit and credit cards, internet
JIBC - 3 - banking, etc., became one of the main battlefields of the banking industry. For instance, Hanson and Kalyanam (2007)
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