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Published by: em-tech on Mar 22, 2009
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E-Banking(EM-TECH Research Paper)ALBITOS, Mark ChristianESPERANZA, MarcGARCIA, Carlos Jr.MALOLOS, Patrick GabrielleMARANAN, AdelbertS13mark_albitos@yahoo.commac_esperanza@yahoo.combotong09@yahoo.compatrickmalolos@yahoo.comadel_maranan@yahoo.comDE LA SALLE UNIVERSITY – MANILA
1. Abstract
E-banking nowadays is the common trend here in our country. No more falling in line in banks, no more waitingtons of hours in the bank, no more days and weeks of waiting. All can be done with one card, one gadget. It’seasy, it works, and most importantly, people like it. Butstill, some people are having a hard time using this kind of technology mostly people who are used to do things the oldtraditional way. With the use of advertising, people are nowmotivated to use E-banking because again, it eliminates thehassle encountered when using the old process of banking.
In this paper, the group will cover security issuesand different impacts regarding the traditional bankingmethod. The group is concerned about the issues presented because the group thinks that these issues are veryimportant and relevant today, a lot of people save moneyand really trust banks with their money. In addition, thegroup wants this research paper to be read by manystudents who are in no knowledge about certain issuesabout banking. Lastly, the group will provide andrecommend different solutions about the issues regardingE-Banking.
2. Introduction
The advancement of electronic banking or commonlyknown as e-banking, began with the use of automatic teller machines (ATMs) and has included telephone banking,direct bill payment, electronic fund transfer, online bankingand other electronic transactions. For many people, they believe that the e-banking will go to the direction of mobile banking. Also, some people believe that online bankingwill be the most popular method in the future.In order for users/customers to use their banks onlineservices, they need to have a personal computer and anInternet connection. Also, their personal computers will betheir assistant who will assist them in their transactions andservices. Examples of those transactions are paying bills,attaining information about accounts and loans, and etc. Inaddition, those transactions offered by different banks arecontinuously changing and are being improved because of some banks wants to attain competitive advantage withother banks. The banking industry should always adapt tothe new technology today and basically make the necessaryadjustments to gain competitive advantage with other competing banks.Figure 1. Mobile Banking
3. Electronic Banking in the Philippines
Electronic banking is sometimes defined as the provision of retail and small value banking products and servicesthrough electronic channels either through mobile devices,Automated Teller Machines, or even the internet. It is alsooften used to describe processes in which customers can perform banking transactions without visiting a physicalinstitution. In the Philippines, e-banking made anauspicious debut when automated teller machines (ATMs)were introduced in the 1980s revolutionizing how weviewed the usual, brick-and-mortar bank structure. Today,ATMs have become a common customer delivery channelthat is mainly in urban centers and sometimes even in thecountryside. Aside from ATMs, other innovations havetaken place such as phone and internet banking which again provide customers the ability to access banking servicesfrom various locations and at a 24-hour by 7- days basis.With these developments, customers are able to enjoy themany conveniences and lower costs that are offered by thesaid innovations. However, it can be seen that the poor andlow-income segment is still underserved or do not fullyenjoy the benefits of such innovations. For example, ATMshave a nationwide presence but there is a concentration inurban areas, which are not easily accessible to thoseresiding in the countryside. In addition, ATMs wouldrequire that you have a bank issued ATM card. The banksthat typically issue ATM cards are the larger banks withwhich poor and low income individuals do not transact.The smaller banks like rural banks do not yet have the vastATM networks as the bigger banks. Another example isinternet banking services, which has significantly increasedconvenience for clients, as they are able to perform certaintransactions without leaving their home or workplace.
However, this service is available only to those who haveinternet connection or are, at the very least, computer literate. In the same manner as ATM services, the poor andlow-income clients will not be able to fully enjoy the benefits of this service.
3.1. Issues in E-banking in Rural Areas
The e-banking system in rural areas also bringsnew issues and challenges, such as the imbalance betweenthe capacity and workload. For instance, rural bank of Biñan currently has about 750 customers who signed up for the E-banking services with about 1200 total accounts.While the online services save customers time and effort,the bank discovered that offering E-banking services isvery labor concentrated on the administrative end. That is,though the inputs from traditional teller services are cut in a big way, the transactions must still be processed right alongfrom the teller stations. Another challenge is about how tokeep its traditional high quality services into its new E- banking system. Being in the service industry forces the bank to compete using higher quality and greater levels of customer service. The quality of bank services is highlydependent on the training and actions of each employee,due to the fact that most banking services offered from bank to bank are very similar, with only the customer service and employees differentiating them. Asknowledgeable employees with accurate transaction skillsare the key to the success of the bank, Rural Bank of Biñanhas worked closely with its outsourced online service provider to provide high quality E-banking services.Currently, providing E-banking services has not been viewed as a really high priority to the management of Rural Bank of Biñan, as the bank believes that its e- banking now is costing more than savings, so far has notsignificantly contributed to the banks success in themarketplace. On another hand, while the bank has beensatisfied with its current e-banking services, suggestionsand recommendations have been made to improve andstreamline the system:other issues that are within E-banking in rural areas were,the bank has asked for its main page to be updated moretimely and formatted in a manner of more user friendly; Amore persuasive promotion of the E-banking should beconducted more regularly; A company-wide training andcustomer service for E-banking initiatives should beimplemented; The bank should integrate more services intoE-banking operations and search the areas where E-bankingoperations could further cut its daily operating cost; The bank should provide more useful links on its e-bankingwebsite to its business partners; The large ‘dead space’ of its current website should be used to add more eye-catching pictures to make it more appealing to consumers surfing thenet; Finally, the bank should consider to take over itswebsite from its current online service provider andrunning it ‘in-house’, so that the bank could have totalcontrol of its website and be able to make necessarychanges more quickly and effectively.
4. Impact of e-banking on traditional services
One of the issues currently being addressed is theimpact of e-banking on traditional banking players. If thereare advantages in venturing to E-banking, there are alsodisadvantages. Even the pioneers of E-banking are not sureof what this technology can bring in the future.Here are some of the issues/arguments:
E-banking is much cheaper than thetraditional way.
This could be a great competitive advantageespecially in our country. It does require physical branches for their transactions.
E-banks are easy to set up so lots of newentrants will arrive.
So with this issue, companies especially the Telecom Networks have the greater advantage because it’smuch closer to the people. Having a cellular phone isvery essential nowadays, and it is currently the trend.Companies use this as a way to attract consumers.According to Rogelio Encinas, 43% of Filipinos (36million) use mobile Phones. He also said that heestimates that 90% of rural bank clients have access tomobile phones.
Traditional banks will find it difficult toevolve.
With this issue, it’s very simple, even though theconcept of E-banking is about doing transactions withease, trying to evolve into one is difficult. It reallyrequires study, and analyzing competitors and usingadvertising as a main weapon to attract consumers.
E-banking is just banking offered via a newdelivery channel. It simply gives consumersanother service.
E-banking is still the same banking, the only thingthat changed is the process that’s why is much faster and more responsive than the old way.
The start-up costs of an e-bank are high.
 Starting this kind of technology requires a largeamount; this covers the advertising expenditure, andthe purchasing of the said technology.

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