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1 Introduction Within the change in the time the rise of the new internet era has contributed a lot in the life style of the people living on the earth. Internet is bringing so much changing in peoples life that they can get whatever they think by sitting at home and without making any efforts. This is the benefit of using internet. As we can see everything from home accessories to beauty products, brands, services, consultants, gaming to online selling are done through internet. People only need to type the key word which require and get the results at glance. Same is the case with banking. Almost all the banks in the world are providing the online facility that includes from day to day transactions to account opening, issuing credit cards paying and getting the loans and debts and providing customers facilities to shop online. Some banks are also providing the facilities to draw cash from their bank accounts online and they can pay their bills online. Now this is what I call the revolution because the online banking is the best part about using the internet. With the use of online banks, consumers feel secure and by sitting at home doing their monetary transactions and do not need to go to bank time after time. One of the few contributions of modern technology in this era is online banking. Online banking that may also be known as Internet banking or Electronic Banking has brought changes in the finance industry as well as the Business Industry. Online Banking allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union orbuilding society. This has brought drastic changes and improvements in the Banking Industry. It has eased the transactions made in the actual bank and gave access to depositors or money savers to their deposits anytime and anywhere with security and convenience. Online banking in the world is widely used specially in foreign countries. It was first developed in United States wherein four of the biggest banks in the 1980¶s have offered home banking, but it was much later on when Online Banking became popular. It offered convenience and flexibility to money savers and consumers even though there was a little issue about security and system hacking. In spite of these issues, Online Banking was still pursued and the Bank owners pays huge amount of money to keep the system intact and secured. Primarily, the main goal the study is to show the different effects of Online Banking to consumers and institutions that offer this service. This was conducted for further understanding and explanation of what Online Banking is and its effects to consumers and institutions that use
online banking as one of its marketing strategies or modes of payment. Different innovations and evolutions have risen in this era, and we must cope with the rapid speed its running. The researchers aim for its readers that through this study, people in the world, especially Filipinos open their minds in this kind of technology, hold it and embrace into it.
1.2 Background of the Study
Banking activities are as almost as old as the earliest civilizations. The earliest bankers were moneychangers or money lenders. These people had strongboxes in which to keep money, and people left money with them for safekeeping or borrowed money from them in exchange for fee. As early as A.D. 534 the ancient Romans had laws and regulations concerning money lending and banking activities. Banks are owned by stockholders who have invested money in the banks. Parts of a bank¶s total assets are the funds invested by these stockholders. But most of a bank¶s assets come from money that people have deposited and from interest paid on loans. Internet banking has emerged for at least two crucial reasons. Firstly, it serves as a new alternative channel other than traditional branch network for customers to contact banks. Nowadays, more and more customers, especially younger ones who are quicker to accept new technology, are accessing remote channels-telephone banking; computer banking and other virtual banking-to transact their financial affairs. These on-line customers demand even more control over their personal finances and value ³anytime, anyplace, anywhere´ customized access to financial services (Jordan & Katz, 1999). The other reason for the emergence of Internet banking is the increase of electronic commerce, which generates a corresponding demand of electronic payment processes offered by financial institutions and banks. Furthermore, other follow-up activities such as viewing account balances and transaction records, paying bills, transferring funds between accounts, and credit card soled transactions need to be processed online (Bielsi, 2001). Banking on the Internet is not the same as banking via online service. Internet banking allows customers to conduct banking business directly from their Web-enabled computers. By maintaining a direct relationship with end users via the Web, banks can offer additional services and provide a personal feeling to the interface without seeking the cooperation of a software company. Online services require customers to purchase proprietary software, store data on their computers, and back up needed information for specific services (Winter, 2001). -sources-
The concept of online banking as we know it today dates back to the early 1980s, when it was first envisioned and experimented with. However, it was only in 1995 that Presidential Savings Bank first announced the facility for regular client use. In the beginning, its inventors had predicted that it would be only a matter of time before online banking completely replaced the conventional kind. Facts now prove that this was an overoptimistic assessment - many customers still harbor an inherent distrust in the process. Others have opted not to use many of the offered facilities because of bitter experience with online frauds, and inability to use online banking services. Be that as it may, it is estimated that a total of 55 million families in America will be active users of online banking by the year 2010. Despite the fact that many American banks still do not offer this facility to customers, this may turn out to be an accurate prediction. The number of online banking customers has been increasing at an exponential rate.Initially, the main attraction is the elimination of tiresome bureaucratic red tape in registering for an account, and the endless paperwork involved in regular banking. The speed with which this process happens online, as well as the other services possible by these means, has translated into a literal boom in the banking industry over the last five years. Nor are there any signs of the boom letting up - in historical terms, online banking has just begun. ( http://ezinearticles.com/?History-of-OnlineBanking&id=270075 )
Today, almost all banks are offering more convenient and accessible way of giving services to consumers. One of these is offering online services. Online banking allows for the consumer to bypass the time consuming processes of traditional paper based banking as well as actually having to visit a bank branch in order to complete a transaction. Most people have still not embraced online banking because they have grown to feel comfortable managing their money through face-to-face interactions with people they have grown to trust. It makes sense then that online banking is definitely more popular with the young 20 something crowd rather than the retirees. Online banking has not completely replaced traditional banking, but there are signs that that may be what the future holds. The origins of online banking are directly connected with the advent of the internet. Even prior to the time when the internet became widely used, banks were using computers to help to automate the daily routine transactions that they would handle. Adapting these transactions to simply be able to be made online was not too far of a leap. Banks that offer both physical branch locations and online banking access are called brick-to-click banks. These banks are definitely more trustworthy as you are assured there will be actual bank locations and employees available to help you in person if you have trouble banking online. There is also an issue of security with online-only banks. Online banks with physical locations are much more trustworthy as online banks without known physical locations can easily be created by scam artists. (http://www.improvingyourworld.com/finances/online_banking_006332.html#more)
The Bachelor of Banking and Finance is a bachelor degree program that aims to equip its students with sound and relevant knowledge and skills in Banking and Finance. intending to provide the students foundation in banking operations, investments principles and policies geared towards producing key executives and personnel in banks and other financial institutions. Students of the program are exposed to practical training, case study analysis and researches in the field of banking and non-banking operations and practices. Furthermore, student¶s skills in financial analysis and decision-making are sharpened to meet the challenges of the times. Students should be equipped with all the process involve in banking operations, same as on online banking, the newest innovation on banking industry, which is the focus on this study. The research study will provide a publication outlet for theoretical as well as empirical issues in the fields of banking and finance.
1.4 Statement of the Problem
The primary research question that the researcher aims to answer is: What are the effects of online banking on the lives of bank customers or consumers in Philippines? Specifically the research aims to answer the following questions: 1. What are the effects of online banking to consumers? 2. What features of online banking are being used by bank customers or consumers in Philippines? 3. What are the benefits of online banking to bank customers or consumers?
1.5 Assumptions and Hypothesis
Online Banking has greatly affected the ways of Conventional Banking, resulting to consumers more convenient and easier way of performing their bank transactions and buying online goods and services. In light of new innovations, the consumers have now access to their accounts in any place at any time using the internet access. Furthermore, the consumers have now the ability to engage themselves in activities that may be done easily in the internet conveniently than the usual traditional way of acquiring goods and services
1.6 Significance of the Study This study will be a significant endeavour for customers to conduct financial transactions on a secure website. Some of the participating operators are retail or virtual banks, credit unions, and building societies. Marketing officers, account officers and business development officers of other banks who wish to further improve their service and competence with existing clients. Hence, this gives every client the convenience of making transactions wherever he may be located. Moreover, this research will provide online-banking consumers to do well by doing good, improving financial control while eliminating the paper bills, statements and checks. Other Financial Institutions will provide financial services to their clients or members, bankers, who meet the customer¶s, needs while giving environmental benefits. Prospective individuals and company employees may use this study as a reference and a guide in looking for alternative sources of financing and to improve relationships with existing bankers. Business academias, other students and researcher may use this as a guide in their further study of other banking systems. Overall, by offering better interest rates and other related features, online banking has proven to be very convenient. Therefore, make sure that your website is secure enough before you make any online transaction to avoid the hassle of losing considerable amounts of money.
balance inquiries. and other businesses.An organization of workers joined to protect their common interests and improve their working conditions.1. The term is frequently used to describe someone who is currently connected to the Internet. Account information can be accessed anytime. such as account transfers. Credit card. loans. Consumer. and can be done from anywhere. Depositor. Some online banks are traditional banks which also offer online banking. and some even offer online loan and credit card applications. savings and loans.which collects funds from the public and places them in financial assets. Online banking through traditional banks enable customers to perform all routine transactions. day or night. bill payments. . retail stores.an aggregated commodity item with little individuality other than that expressed in the buy/not-buy decision. while others are online only and have no physical presence. and stop-payment requests.is the condition of being connected to a network of computers or other devices. and bonds. Financial Institution . via the internet.Any card that may be used repeatedly to borrow money or buy products and services on credit issued by banks. rather than tangible property.7 Definition of Terms Online banking -A system allowing individuals to perform banking activities at home. such as deposits. Union. Online .A person or a company that places money in a bank.
The most prevalent is the TRA (Theory of Reasoned Action) and its derivatives.9 Theoretical Framework There are a number of Socio-Cognitive models that predict and explain end user behaviour such as Online Banking. This study tackles the awareness of consumers to Online Banking.8 Scope and Limitation of the Study This research study deals with the different effects of Online Banking to consumers. and some articles citing the Philippines status¶ in Online Banking. Davis (1989) introduced TAM (Figure 1) as an extension of the TRA but with more focus on computer usage context. The online context requires a model that considers computer usage. TAM has proved valid both inside and outside the organization context. its difference against Conventional Banking. TAM (Technology Acceptance Model) and TPB (Theory of Planned Behavior). The researchers have decided to focus on the effects of Online Banking to consumers. User acceptance is the biggest barrier to the success of new Information Technology ±IT.Behaviour paradigm that suggests that actual behaviour is declared through intention toward the behaviour. As this study is conducted. attitude and intention. as of trade and banking. It is capable of explaining user behaviour across a broad range of enduser computing technologies and user populations. it also cited some articles about the comparison of Online Banking and Conventional Banking. O'Cass and Fenech (2003) suggested that TAM¶s robust and parsimonious structure allow applications in other technological adoption situations with the right adjustments. Moreover TAM provides bases for tracking the impact of the external factors on internal beliefs. These models follow the Attitude . 1. The convenience and flexibility that Online Banking offers compared to the conventional way of banking or trade is what the researchers want to let its readers realize. and the features and benefits that consumers may have when Online Banking is concerned. TAM has become popular. the researchers aim to open the minds of its readers to new innovations and technology. The model specifies the casual linkages between the key . and it might be contrary to some beliefs and customs but it is rest assured to be safe and useful. though the responses of those who are directly affected of Online Banking are prioritized. A wide range of consumers may be considered in this study. innovations are made for the good of people. Intention is influenced by attitude and finally salient beliefs influence attitude.1. Because of its parsimony and the wealth of recent empirical support for it. Nowadays. though this study is limited only to its effects and the factors that might have caused the assumed effects.
the first part. or they could still follow the same conventional way of payment. The two subparts will be both considered in the attitude of the consumer. reliability. We will test the strength of the hypothesized relationships embedded in the theoretical model and the robustness of the model in predicting customers intention to adopt online banking in Isfahan province of Iran. or even paying their monthly bills. and also users' attitudes. is the representation of innovations in the technology in our world and the customs that accompany the conventional ways of banking. It is connected in two subparts. The theoretical model is graphically shown in Figure 1. The second subpart is the Perceive ease of use. transferring money from one account to another. TRA. we will now move on to intentions. Online Banking is a more convenient mode of doing their transactions whether depositing. or the services that are offered in Online Banking which will be later on elaborated. perceive ease of use. TAM and TPB for the research framework that will prepare a comprehensive model in order to examine the consumer¶s intentions towards and adoption of online banking. intentions and actual use. There are 6 constructs in the model which includes external variables. These are some of the external variables that affect the behaviour of consumers in accepting Online Banking. In the figure. PERCEIVED USEFULNESS EXTERNAL VARIABLES PERCEIVED EASE OF USE ATTITUDE INTENTIONS ACTUAL USE Figure1. the external variables.beliefs: Perceived Usefulness (PU) and Perceived Ease of Use (PEOU). the consumer¶s decision is later affected by their intentions or purpose. security and convenience of Online Banking. in which it represents the flexibility. intention and adoption behaviour. attitude. First. Technology Acceptance Model In this study we integrate three related theories. perceived usefulness. From Attitude. . whether the consumer will be willing to use or accept Online Banking as a new mode of payment in some goods. the Perceived usefulness of Online Banking.
scientific procedures that all the gathered data have gone through. A long process is needed to analyze this information and make something out of the collected data. In this figure. The statements of the problem is regarded as the input. After the long. to the Actual Use of Online Banking. all of these results to the end product of this study: The effects of Online Banking to consumers. their usual mode of payment to establishments and their awareness in Online Banking. taking into consideration the consumer¶s buying habits their preference between conventional ways of buying or Online Banking. with the help of frequency distribution and weighted mean the results are thoroughly examined and analyzed.Which all of these would result. The end of the theory defines how the consumer will come up with the decision of using Online Banking or not. 1. All of these information in input are necessary to continue with this study. and the following variables that may depend on the chain reaction from the first. The figure represented below is an illustration of the Input. and in the process which was earlier elaborated showed the effects and other factors that affects the consumer¶s decision. throughput and output of the research. .10 Conceptual Framework The Conceptual Framework devised to represent this study is derived from related researches and studies examined by the researches to support this inquiry. wherein each sub type depending on the external variable may turn positive or negative. The researchers have found these details to be basic in this study. it also shows that the external variables directly affects the perceived usefulness and perceive ease of use. In which these two are directly connected to attitude. Taking these data into process using a survey questionnaire.
Conceptual Framework . Consumer s awareness on Online Banking. Frequency Distribution Weighted Mean Effects of Online Banking Usage of Online Banking Data Analysis and Interpretation based from the Feedback Figure 2.Conceptual Framework INPUT PROCESS OUTPUT SURVEY QUESTIONAIRE Respondent s preference STATISTICAL TREATMENT Consumer s usual mode of payment.
your signature or a scan. entertainment. A person looking for an online bank should take time to research a few online banks to see if it contains the features that will work best for what they are interested in using for their online bank. Bankus. Some local banks offer online services as well. Some use other forms of debit cards such as those that require. All of these online banks have some similar features as well as some different features. In this chapter.com.com.com. or those you authorize. at the most.com. EFT¶s are initiated through devices like cards or codes that let you. this study is tackling one of its advances in the past two decades. The newer online only banks have identified early that the internet provided this low entry to market business opportunity. Chase. technology has greatly affected the lives of every individual. Bankofamerica. The federal Electronic Fund Transfer Act (EFT Act) covers some electronic consumer transactions. gadgets and a lot more. access your account.com.CHAPTER 2 REVIEW OF RELATED LITERATURE AND STUDIES Nowadays. the following related literature and studies are included for further understanding of the readers.com. Nonetheless. notwithstanding the dot-com boom . Citibank. from household choirs. These newly advances in technology has only started. and internet banking. Hsbc. Some of the best online banks include: Wellsfargo. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. By having an online bank account everyone can access it at your convenience. a Business World Online-commissioned study by Hunter Consulting showed that banks in the Philippines were cautious adopters of technology. Traditional banks have been putting a lot of functionality and information into their web sites as this is a far cheaper way for them to do business than their traditional bricks and mortar branches. New inventions that help each human to improve their way of living. but they are governed by the same regulations as the traditional banks are. and Firstnational. In 1999.1 Foreign Literature Electronic banking. People should look into banks that are located in their home city and see if their online services will work for them.etrade. also known as electronic fund transfer (EFT) or online banking.com. phone lines. The information is standardized and this takes out the human error factor.com. new inventions of the decade or this century might come inevitable and bring drastic changes to our way of living. 2. Since online only banks have lower costs than the traditional banks consumers will find them having lower fees and offering higher interest. These banks do not have the history of the traditional banks. Usbank.com. uses computer and electronic technology as a substitute for checks and other paper transactions. Huntington.
The survey results could be disappointing. Even big commercial banks won¶t join the e-banking fray. how far do they plan to go in the next few years? With these questions in mind. that more and more Filipinos have been using the internet to transact with their banks. Only handfuls have dared to venture into new technologies in the late 1990s. . considering that an informal survey conducted by BusinessWorld Online reveals that the market could just be ready for the new technology. for instance. simply because it¶s the trend.at that time. And so we look at other side of the equation: are banks just as ready to cater to Filipino online users¶ banking needs? Will at least some banks in the Philippines test the boundaries by venturing into advanced use of technology to serve clients? And if so. A survey conducted in June 2003 of 21 banks belonging to the Business World Top 1000 Corporations reveals that the Philippine banking industry is just as cautious as it was years back. among other things. but the survey shows that they only started transition to new systems at the beginning of the century. Business World Online embarked on a special report on the Philippine banking industry with a special focus on their information technology (IT) practices and trends. An online survey conducted in the first half of last year by ACNielsen showed.The 21 banks in the survey represent almost 50% of the 44 banks listed in the Business World Top 1000 Corporations 2002 edition. Interviews with the banks¶ e-banking point persons reveal that some banks are waiting for market responses. But they did say they are going to make some IT investments starting the year 2000. Some have ventured into newer types of applications. Another survey conducted in the second half of 2002 revealed that internet banking is expected to drive e-commerce in the Philippines in the next few years. Most of the banks are focused on traditional IT banking applications and systems. such as e-banking and e-commerce.
issues like access and security are still prevalent among reader-respondents. Even then.2 Non-Traditional Banking Appilications CALL CENTER ELECTRONIC CATALOGS C2C B2B BILLS PRESENTMENT PHONE BANKING ATM 0 Online Poll The online poll of Business World Internet Edition readers reveal that they are using the internet to bank. The bad news is that BSP may not be quick enough to respond to "e" trends. their solutions providers and regulatory bodies like the BangkoSentralngPilipinas (Central Bank of the Philippines. Whether the banks are ready or not. solutions providers assure that the solutions are readily available. The good news is that these issues are being addressed by the banks themselves.1 Traditional IT Banking Applications Treasury Securities Trust loans Security EFT Check Warehousing 0 5 10 15 20 pte Fig. some critics say. 2 4 6 8 10 12 14 16 . or BSP). They are just waiting for the market to mature.Fig.
as well as a discussion of ebanking strategies.Interestingly. and even ecommerce applications starting this year up to 2005. this online report also includes a Web site review of five internet banks. Even thrift banks are aggressive in going into e-banking. majority of the survey respondents said they plan to install new e-banking. the e-banking survey also reveals that while Philippine banks are focused on traditional banking applications. This online report focuses on results of the informal online poll. readiness of Philippine-based solution providers to meet banks¶ requirements. and regulatory issues. . To help internet users use internet banking. One bank said it is even making a "major IT systems upgrade" and is allotting 90% of its budget to this upgrade. The survey shows that many of them have adod new computer platforms Also. they are not tied down to old solutions.
Further.7 million users in 2007.3 million Sq km.7% between 2003 and 2007. with an annual growth rate of 1. China. to reach respective values of $14. In comparison. averaging a YoY growth of 45% over the last 5 years. The size of B2C e-commerce Industry for the year 2006±2007 was computed to be around Rs. the number of mobile phone subscribers in India is estimated to be 260 million at the end of March 2008 as compared to 262 million in the US. with US$ 3 trillion GDP in terms of Purchasing Power Parity (PPP) after USA.147.904). As per IMRB the cybercafé market has grown at higher rates. which had about 540 million connections at the end February. India has a population of 1. LLC 2010 Internet and E-Commerce development in India Sridhar Vaithianathan The Republic of India is the fourth largest economy.15 billion (exact figures²1. Some of the key indicators of Internet growth in India in comparison with China and US are given. In comparison the Chinese market accounts for 33.3% for the 2007±2012 period.995. 2008 ). the Indian Internet access market generated a total revenue of $2.1 billion and $13. agriculture sector and Industry sector contribute 22% each. India may now be second only to China. to reach a total of 108.8% of the regional market revenues.6 billion in 2007. As of 2008. 7080 crores.Published online: 21 February 2010 © Springer Science+Business Media. The market is expected to reach the mark of Rs.2% for the period spanning 2003±2007. and Japan. services sector contribute 56%. 9210 crores by the end of 2007±2008. the Chinese and Japanese markets grew with CAGRs of 19. Indian economy¶s Real GDP growth (on an expenditure basis) is forecast to slow from an estimated 7. a growth of about 30% over the current year. .3% share of the Asia-Pacific Internet access market. representing a compound annual growth rate (CAGR) of 38.4 million users by the end of 2012.1 It is the seventh largest country in the world and covers an area of 3.7 billion in 2007. respectively.3 In terms of GDP-composition by sector. over the same period. The market¶s volume is expected to rise to 322. As per datamonitor report. the market consumption volumes have increased with a CAGR of 55.7% and 18.7%. India has 28 states and 7 union territories.6 percent in 2008 and the population as on July 2008 is 1.8% in fiscal year 2007/2008 (April±March) to an annual average of 7. Besides. the GDP per capita (PPP) of the country stood at US$ 2900. representing a CAGR of 24. It is further estimated that India generates a 6.5% in 2008/2009±2012/2013. The total number of wireline and wireless telephone connections in India has also crossed 300 million connections.028 billion in 2001.
Hence it is very important for a developing country like India to examine the issues encompassing EC adoption. with teledensity increased by 18% in the past decade comparing to the growth of mere 1. Information Technology (IT) software and services) grew by 34. ICT related service exports (NASSCOM definition of ICT related services includes Business Process Outsourcing (BPO) services.3 million in 2005. by FY2010.com/content/c702423h07882w25/) .9 With the positive climate for ICT growth. which would help the widespread adoption of EC across the country and reap the benefits there of.6 billion respectively. and it is nearly 1. Regarding software and services exports. USA.7 The ICT industry has been an important driver of India¶s economic growth in recent years and will continue to be so in future. with an annual growth of 20. but so far have not realized the potential. .000 professionals in 1999 to 1. and expected to cross USD 73±75 billion in overall software and services revenues.4 With an impressive growth in Information and Communication Technology (ICT)5 sector mainly after liberalization in 1991.(http://www. Indian IT Sector revenue is aggregated at USD 64 billion in FY 2008.India also has achieved growth in leaps and bounds in telecommunication sector. It is estimated that the export value could reach US$ 60 billion in 2010. The ICT industry has already contributed 5.92% in 50 years from 1948 to 1998. Gartner industry research firm has estimated India¶s Information and Communication Technology (ICT) market to reach $24.3 billion by 2011.springerlink. India is struggling to make inroads in terms of successful EC adoption. from US$ 4 billion to US$ 23.3 per cent. India¶s exports are expected to cross USD 40 billion and the domestic market is expected to touch USD 23 billion in FY 2008 (NASSCOM6). the number of ICT professionals employed increased from 284.4 percent of GDP in 2006. India now has the fourth largest telecom network after China.8 According to NASSCOM.6 per cent (CAGR) annually between 2000 and 2006.8 per cent in 2005. and Russia with lowest tariff.6 million in 2007. Indian firms were well poised to reap the benefit of the e-commerce applications. up from 4. The ICT sector is also a major source of employment in India.
1). in US 53 million people or 44% of nternet users and one-quarter of all adults. NetBanker defines as a ³true Internet bank´ one that provides account balances and some transactional capabilities to retail customers over the Web.end 2004.K. Yahoo has reported 4921 banks on the Web. households by year. Spain.banking accounts will continue to have double digit growth rates over the next couple of years. Moreover. During 2004. 13 million Americans are having banking tasks online. According to the Pew Research Center (2005). in Europe the number of e.pdfqueen. on a usual day online. especially in Italy. According to the Online Banking Report. Some Internet banks only exist on the web and have no brick-and-mortar branches (Furst et al 2002). currently say they use online banking. and the U.The Growth of Internet Banking Andreas-Nikolaos Papandreou Internet banking is the situation under which an individual performs common banking transactions over the Internet by using a browser.com/html/aHR0cDovL3d3dy5idGguc2UvZm91L2N1cHBzYXRzLm5 zZi9hbGwvNWExOTNlYTU5YTE1ODQ4YmMxMjU3MWEwMDA1ODRmYzMvJGZpbGUvQW5kc mVhc19OaWtvbGFvc19QYXBhbmRyZW91X1RoZXNpc19GSU5BTC5wZGY=) . (http://www.9 millions came from Western Europe (see table 3. instead of going to his local branch to carry them out. a 58% increase from late 2002 (Pew Research Center 2005).S. online banking will be an essential requirement for European banks that want to add the Internet channel to more traditional channels for their businesses. It is expected that over the next 5 years. Moreover.3 million users of Internet banking 57. from the 122. Internet banking is growing faster today than most financial institutions had ever expected and the number of banks on the Net is continuously increasing. According to International Data Corporation (2004). online banking penetration continues to climb reaching 34% of all U. an Internet bank is a bank that has established a presence on the WWW to facilitate customers to perform these bank transactions. which corresponds to an increase of 47% over the number of Americans who werehaving Internet banking in late 2002.
9 20. Country UK Germany France 1999 2004 * 1999 USD 99 bn USD 88 bn USD 69 bn 2004 USD 395 bn USD 243 bn USD 271 bn Banks spent almost $1 million per day on e-banking 4-fold increase in e-banking spend.com 2006) According to Datamonitor (2005).0 34.3 3. European banks are spending more on electronic banking channels (see table 3.1 122.4 19. as the Internet is becoming an increasingly effective revenue generation tool.8 21.6 22.7 5. Evaluation and Perspectives Andreas-Nikolaos Papandreou Region (millions of users) Western Europe United States Japan AsiaPacific (excluding Japan) Rest of the world Total 1. There are over 1000 million persons that have Internet access .com 2006) Is Electronic Banking a good idea? There are various reasons for the rapid growth of Internet banking.4 6.8 9.6 6.8 18.1 11.9 2.1 102. First of all.7 55. European banks are going into e-banking technology to improve the functionality and usability of their websites as well as levels of integration with other channels.8 13.4 billion $850 million of this total will go on external contractors Table 3.6 28.4 4.0 37.1: Growth of Internet Banking from 2000 to 2004 (ePaynews.9 2000 2001 2002 2003 2004 Table 3. to $1.7 57.4 1.2: European Spending on Electronic Banking Channels (ePaynews.2).8 47. Moreover.7 6.1 76.5 17.3 2.Internet Banking In Greece: Development.8 9. Internet usage has become very popular.5 14.
Improvement of risk management systems. Aided by improved telecommunication and technology. There is a high number of people that have made a purchase on-line. GLOBAL CHALLENGES IN BANKING 1. which is increasing fast.worldwide. Technological . particularly public sector banks. The entry of new private sector banks and foreign banks equipped with latest technology and technology -driven product lines have really sensitized the ordinary customers of the banking services to the need for quality in terms of innovative products as well as delivery process These banks are aggressively targeting the retail business and consequently grabbing the market share of public sector banks. ELECTRONIC BANKING In the future. 2. a number that is increasing every day. technological developments and customer acceptance encourage electronic commerce. Public sector banks have made rapid strides in product innovation and delivery. Banks in India also need to face them. thereby improving quality of customer service. Moreover. Enhancement of customer service. more banks and other financial institutions are realising the advantages that on-line banking offers and are developing a presence on the WWW that includes both brochureware and transactions. Globalisation challenges are not restricted only to global banks. Diversifying products. Overcoming these challenges makes them more competitive and will also equip them to launch themselves as global players. Innovations in technology.pdfqueen. (http://www. banking will be driven more of technology and telecommunication systems. In order to compete with new entrants effectively commercial banks need to posses strong balance sheets which indicate the real strength of the bank. has brought about revolution in the structure of banking environment. liberalization has intensified competition in the banking industry by opening the market to new foreign and private sector banks. 4. Finally. 3. While deregulation has opened up new opportunities for banks. COMPETITION Globalisation has brought fierce competition from international banks. Declining interest rates and reduced lending margins have thrown up new challenges to banks.com/html/aHR0cDovL3d3dy5idGguc2UvZm91L2N1cHBzYXRzLm5 zZi9hbGwvNWExOTNlYTU5YTE1ODQ4YmMxMjU3MWEwMDA1ODRmYzMvJGZpbGUvQW5kc mVhc19OaWtvbGFvc19QYXBhbmRyZW91X1RoZXNpc19GSU5BTC5wZGY=) GLOBAL CHALLENGES IN BANKING INTRODUCTION Financial Sector reforms initiated in the country as a part of the economic reforms since the year 1991.
banks are able to reduce the transaction cost and handle a large number of transaction in no time. but banks can also manage compliance risk by putting in place compliance functions that are in consistence with compliance principles. Increased capacity due to a new technology could result excess capacity in the financial institution. which are swelling their fee-based income in the total income. To mitigate this risk. TECHNOLOGY With the help of innovative information technology. Liquidity risk arises when banks unable to meet their obligations when they become due. Another problem banks face with implementation of latest technology is integration of existing system with the new one. RISK MANAGEMENT Globalisation and liberalization are forcing banks to take more risk to compete effectively in the global market place. Innovative technology not only brings benefits. corporate banking and retail banking. The booming housing loans market positively affects many industries. Now banks can provide customized products easily and customers could access many services through internet by sitting at home. One of the important risks is compliance risk.Internet banking will enable three profit centres. So to provide impetus to any economy. booming housing market is vital. banks should analyse the accounting data both on static as well as dynamic basis. Major impediments and risks associated with the implementation of innovative technology are. To provide better services to their customers. banks should develop compliance culture in their organization. treating customers fairly. rules and standards such as market conduct. Banks benefit from higher security .' banking-anytime anywhere. To manage the mismatch of assets and liabilities. Banks could face cost overrun or cost control problems. Innovation is technology is also helping banks to cross sell the products of insurance and securities firms. It is the risk to comply with laws. but risks too. anyhow banking . Deposits of higher value are the most important item to be . etc. Innovative technology has brought new risks like daylight overdraft risk INNOVATIONS IN HOUSING LOANS Housing loans are one of the products that banks are concentrating more.low risk weights and reasonable margins. Cost associated with adoption of new technology might not bring cash flows required to cover that cost.changes have brought about paradigm shift in the process today's banking may be redefined as 'Triple A. It is not only the duty of compliance specialists. to launch new products and provide quality service to a wider customer base. banks are embracing Customer Relationship Management [CRM] facilitated by the availability of conductive technology. namely treasury.
Cost management. . Therefore Indian banks need to restructure themselves. perceive threats. Anywhere banking. CONCLUSION Given the new environment. A self. Internet banking facility etc. INNOVATIONS IN CUSTOMER SERVICES Satisfied customer is the best guarantee for stability of the organization in the long-run. Therefore.http://www. Greater professionalism. Greater emphasis on diversification and sources non interest income.regulatory organization to monitor the activities of banking With the increasing levels of Globalisation Liberalisation. Consultancy services. Also incentives to these deposits in the time of falling interest rates could create strain on liquidity. cost effective and timely services .html#ixzz1BV8tgsBg .With the help of technology banks are able to provide plethora of products and services to their customers which suit them. show high degree of professionalism and dynamism in their functioning and respond promptly to the market needs would survive and prosper. Banks can satisfy their customers only by providing customised. Global ATM and Credit Cards. anticipate volatility. Major services provided by the Indian banks that are of international standards are Any time banking. Equipping themselves to operate in the deregulated environment.com/banking-articles/global-challenges-in-banking1013673.articlesbase. the banks who understand the market dynamics. The following practices need to be adopted on urgent basis. Privatisation and new reforms of the Indian banking sector. as sudden withdrawal of these deposits might cause liquidity problem for the bank. Necessary changes in the legal stipulations. Indian banks can't remain unaffected by the changes round and challenges before them. competition will intensify further. Bench marking of service standards to improve productivity and Proficiency.monitored regularly.
2. Traditional banks have been putting a lot of functionality and information into their web sites as this is a far cheaper way for them to do business than their traditional bricks and mortar branches. Most of the banks interviewed for this special report are one in saying that they have to have compelling reasons to embrace technologies. since number crunching is routine to them. even before the Bangko Sentral ng Pilipinas (Central Bank of the Philippines. and only after more versatile sectors have tried them. Banks were one of the first to embrace technologies. These banks do not have the history of the traditional banks. 2003 E-banking strategies: Why banks go online By Helen A. The banking industry has traditionally been viewed either as a leader or a cautious follower. drive down costs. Sub-editor If the initial steps made by a few pioneering local banks to offer their products and services electronically are considered. . or BSP) issued regulations in 2000 to monitor e-banking activities in the country. The information is standardized and this takes out the human error factor. we find that e-banking in the country is barely two years old. particularly computer technology. But does the same observation hold true for the business sector? Arguably.A. By having an online bank account everyone can access it at your convenience. local banks are taking measures to make sure that their adoption of new technologies would improve operations. Union Bank of the Philippines and Citibank N. treading only very carefully on new trends.2 Local Literature Filipinos have time and again basked in the distinction of being some of the most technology-savvy people in the world. A Business World Online-commissioned study in 1999 revealed that banks were cautious adopters of technology. Still. Since online only banks have lower costs than the traditional banks consumers will find them having lower fees and offering higher interest. When we look at how most of the other banks have started to embrace internet and mobile technologies for their services. some banks were already offering e-banking. Examples are Bank of the Philippine Islands. For instance. and allow them to serve their customers better. e-banking in the Philippines is about five years old. PHILIPPINES | Monday. readily snapping up and testing new ways of doing things. Jimenez. Leader or laggard. MANILA. the banking industry form one of the most conservative sectors in society. however. some other banks are recognized leaders by their peers and independent groups. August 04. but they are governed by the same regulations as the traditional banks are. The newer online only banks have identified early that the internet provided this low entry to market business opportunity.
Lapuz. However. Hongkong and Shanghai Bank Corp. said Manuel C. Thus. "Most of the internet banking right now is being driven by personal business internet banking in most of the countries. the ultimate motivation that pushes the bank forward is its strong commitment to customer service." said Mary Anne D. BPI said it wants to give its clients options for self-service channels because these are cost-efficient to the bank. HSBC has already been offering its customers e-banking since 1989 via a proprietary network dubbed as Hexagon. (But) we go where the market takes us and now there¶s a growing demand for businesses to have an internet base. in turn. is the initial cost savings it derives because the bank is able to make its operations more efficient. (HSBC) has noted the overwhelming response of its customers to its personal internet banking." Mr. The evolving needs of its clients will always be the driving force for coming up with new products and services. . the bank¶s e-banking services come as a long-sought answer to the need to do banking transactions conveniently yet securely. "It is where the demand was originally. That¶s why you have to make channels available to everyone. assistant vice-president for BPI¶s e-banking. However. "With the increasing globalization and sophistication of our corporate and consumer markets." said James Benoit. Tolentino."E-Banking services are aligned well with the bank¶s goal to enhance its business relationship with clients and maintain financial stability through operational efficiency and cost effectiveness. Metrobank introduced its mobile banking services for retail clients in 2002 while it started internet banking in May 2002 for retail and in October 2002 for corporate clients. Tagaza. HSBC¶s senior vice-president for personal financial services. allows the bank to offer their clients the best products and services. banks also recognize that the retail market potentially offers the volume needed to make e-banking pervasive in the country. require them to educate the market that still mostly favor face-to-face over-the-counter (OTC) transactions. Lapuz added. banks are also making it a point to make electronic channels available to retail clients." said Metropolitan Bank (Metrobank) senior vice president and e-banking committee chair Bernard M. however. SELF-SERVICE BPI¶s strategy is different. vice president and head of BPI¶s B2C E-commerce Division. Such moves. Cost-efficiency. The immediate return on investment for its e-banking initiatives. But prior to this." HSBC is expected to launch its internet banking for companies in the Philippines this third quarter and its global internet banking by the fourth quarter. "We would like to focus on good customer experience.
The bank hopes to migrate 100% of its clients using its proprietary system to its web bank." said Mr. For most of the banks interviewed for this report. one of the top government banks." the bank said."HSBC has been one of the early banks to offer e-banking services and offers a comprehensive range of services. In the case of Security Bank. ATMs are good alternative ways of channeling our distribution network. Landbank¶s technology management head Allan V. which was installed in the workstations of its customers. HSBC has always been customer-driven and continues to upgrade e-banking capabilities according to customer needs and requirements. majority of the budget is going to add more automated teller machines and improve its phone banking services. . NOT NEW But not all that the market requires are based on new technologies. It is now in the process of evaluating the merits of developing an internet-based platform for retail customers. Instead. whose mandate is to develop the countryside. Landbank has allotted PhP401 million for IT this year but bulk of this is not necessarily going to cutting edge or state-of-the-art technologies. others are very much aware of what competition is doing and their e-banking strategies are geared towards improving its position in the industry. an internet banking facility introduced in the country in the early part of 2002. Bornas said Landbank won¶t venture into new technologies unless the bank¶s business unit and the technology group are convinced of a good business case for the new venture. Industry competition within a relatively small market serves a key driver that pushes banks to enhance their e-banking offerings. A case in point is Land Bank of the Philippines (Landbank). "We are not going to open up more branches. Brornas. International bank Standard Chartered Bank started offering electronic banking services as early as 1996 but it was only via a proprietary system." Landbank president and chief executive officer Margarito B." he added in the vernacular. "We are not going to lag behind when it comes to ATM installations. However. COMPETITION Still. Corporate clients have more pressing needs to do e-banking because competition and globalization require better financial management. it is now aggressively pushing its "web bank". corporate banking currently serves as the more lucrative market for e-banking products and services. "We are expanding our ATM (network) because it has a huge impact in the countryside. the decision to offer cash management services online was due to the demand of its corporate clients. Teves said it is benchmarking itself against the other top banks in the country.
Anyone who has a mind to can intercept an SMS message and use it for whatever purpose they want. The bank said that they have not reached the stage wherein people would just use alternative channels over the OTC service." Mr. "We do not want to be at the bleeding edge." explained Mr." said Mr. Banco de Oro started its e-banking operations when it launched its phone banking and internet banking in May 2000 for retail customers. does not want to be at the "bleeding edge" of technology. It launched internet banking for corporate clients in March 2002 to drive cash management products via the internet. One bank that is taking e-banking further into the future is Unionbank of the Philippines. Landbank is also investing to improve its phone banking service. but we make sure that what we are going to base an installation on will work. the bank is carefully studying between short message service (SMS) or wireless application protocol for mobile banking. Jovic Dianco. Banco De Oro has a similar experience. For instance. Taub further explained that Citigroup chooses a computer platform based on proof that it works. It observed that a large segment of its clients still want to use OTC services although some have already shifted slowly to electronic banking. "We¶re a bit farther." Landbank officials explained that for people in the countryside. Thus. said the bank had to shape up because it noted that its customers are moving to other banks because they cannot provide the services their customers require. Aside from ATMs. Taub explained Citigroup¶s philosophy on new technology. we¶re going to invest heavily on this so that ratio should be a bit more than 1:1. . Teves. Another bank which carefully studies technologies is United Coconut Planters Bank (UCPB) which has a research and development group to address the emerging needs of its customers. In an interview last year with CNET. Citigroup¶s chief technology officer Melvin B. UCPB assistant vice-president for strategic innovations. Dianco. BLEEDING EDGE Even global bank Citibank N.A. "We believe that the technology is not secure because the link between the bank and the user is intermittent. We want to be leaders. Landbank has ATMs in far-flung North as Batanes and East like Camiguin island."The figure given to me was (this bank) probably has two ATM machines per branch. it is not continuous.com . a favorite tourist destination because it is remote. But neither is the bank jumping into the bandwagon for bandwagon sake. seeing an ATM that is online is already something important.
Silva and Ellen C. August 04. what is now called "e-banking" will simply be "plain vanilla banking" in the future. Sanchez. Reporter Technology may be the monster that is dragging the Bangko Sentral ng Pilipinas (Central Bank of the Philippines. Ortiz. current BSP regulations cannot adequately address the risks that attend the adoption of technology in the local banking system. said Mr. It may take a few more years before e-banking flourishes in the Philippines and banks have a lot more work to do to convince both corporate and retail clients that it makes better sense to do e-banking. their main challenge is to make sure that their products and services are available to all possible channels. In other countries such as South Korea. It downplays the kinds of access devices such as mobile phones or Internet-connected computers used to do e-banking but rather focuses on how banking transactions are made through so-called electronic channels. particularly the electronic channels. PHILIPPINES | Monday. While problems in the country¶s communications infrastructure are not the responsibility of the banks. the limited penetration of personal computers and Internet connection in the Philippines deter the growth of e-commerce and e-banking in the country. Sanchez. cost-efficiency and improving services.com/OnlineExclusives/ebank/inside. the wide availability of broadband internet has driven the pervasive use of internet-based services. Like a gap-toothed tiger guarding a raging bull that is only beginning to reach its prime. It is forcing the regulatory body to play catch-up at a pace faster than it was used to in the past. UnionBank maintains that its so-called e-banking strategies at present are imperatives to becoming a relevant financial institution in the 21st century. Ensuring the security of e-banking transactions is foremost to this end. But the industry as a whole has far greater challenges than just addressing customer needs. There is no separate strategy for e-banking. As often cited. Different banks have different menus for their different customers. -. Veronica C.php?id=005) MANILA. This is achieved not just through software and hardware investments but also through the banks¶ multilevel verification processes. or BSP) by the scruff of its neck into the 21st century. This explains why UnionBank is quite strict in what it would classify as e-banking.bworldonline. (http://www. One of the recognized pioneers of electronic banking in the Philippines. Ortiz.with reports from Pamela Y. Ong. 2003 Regulatory issues in Philippine e-banking By Ellen C. .For UnionBank chairman and CEO Justo A.
A case in point is the issuance of BSP¶s guidelines on e-banking as contained in Circular 269 in 2000. The source added that this has precluded a considerable number of banks from adopting technology and slowed down the development of e-banking services in the country. Panlilio. a good two years after the e-banking products and services started to pop up in the Philippine internet landscape. "The BSP is reactionary. They cannot grasp the concept of the internet and they think that data networks are bad and cannot be secured." the source observed." However. sales manager for financial service institutions Edler R. the BSP e-banking committee said that it has plans to create more specific regulation on disaster recovery systems. The official posited that the Is the BSP catching up with the "e" trends? inefficiency stems from a severe lack of understanding of technology in the said agency. their technology partners were more forthcoming in their views of the BSP¶s perceived shortcomings when it comes to policing cyberspace." observed Sun Microsystems Philippines. the official added that the committee is prioritizing its . "Many of the people in Central Bank are still stuck in the (increasingly obsolete) client-server era.While most of the banks that have been approached for this report opted to keep mum on regulation issues. More recently. Moreover. A member of the committee explained that the proposed regulation was in response to concerns over the adequacy of data backup that emerged after the terrorist attacks on the US in 2001. Similarly. dubbed 9-11. companies became more conscious about the need to implement adequate data back-up facilities to ensure continuous operations when disasters hit. They are afraid of it. Consequently. The presentation was made as part of the application process for the e-banking permit. Inc. a ranking official from a financial technology firm who requested anonymity noted that the BSP has been slow in processing e-banking permit applications. a technology officer from a commercial bank recalls having to orient BSP officials on basic internet concepts during a presentation of their e-banking strategy back in 2000. It seems that it just puts out regulation after the banks have started using a particular technology. caused extensive damage to the operations of some of the world¶s largest corporations. The attacks. A top official from the same committee added that the BSP plans to implement the regulation in the "near future.
I don¶t think any bank will get customers. Still. the ebanking committee official said that indeed it is. Furthermore. the US congress passed a data privacy law that has become one of the focal points of e-banking regulation in the US. BUREAUCRACY However. Right or wrong. For instance. In contrast. they are also the function of the general lack of understanding of technology in the Philippine government and the persistent ills that keep the bureaucracy from efficiently responding to change. Circular 269. he said. United Coconut Planters¶ Bank assistant vice-president for strategic innovations Jovic Dianco said that the rule is not out of place." When asked if this guideline is an act of arm twisting on the part of the BSP. the gaps in protective regulation may not be the result of the BSP¶s inadequacies alone. The official noted that there are banks that have started adopting more comprehensive disaster recovery facilities on their own post 9-11. whether it uses the internet or not. which has been recognized as the benchmark of e-commerce activity across the globe. E-BANKING PERMITS Perhaps another indication of its lack of understanding of technology¶s role in the banking sector is the BSP¶s use of e-banking permit applications to keep delinquent institutions in line. the financial technology firm executive believes that the BSP should separate e-banking applications from the banks¶ other obligations to the regulatory body. Without that certification of stability. "Banking is a business of trust. the official further explained. Local regulation and guidance pale in comparison to that of the United States." he added. Such measures. and is possibly stunting the development of e-banking in the country. Rather.processing backlog of e-banking permits. says that the BSP shall "pre-screen the overall financial condition as well as the applicant bank¶s compliance with (its non e-banking) rules and regulations. This could be a clear case of the cart coming before the horse. could be necessary to ensure the integrity of banking services offered on the electronic channel. The new regulation is meant to ensure that other banks follow suit. and thus cannot tackle the additional task of formulating the said policy just yet. only a "subtler" form of it. it may take some time before the effect of this policy becomes apparent on the local e-banking industry. issued in May 2000. the executive noted that this particular rule is slowing down the banks¶ adoption of technology. A significant portion of the . as early as 1999. so I think it is only right that a bank prove its financial health before it is allowed to go into e-banking.
Computers and the internet leave an audit trail. We just have to follow that to catch them. and encourage technology adoption in the public sector. It is mandated to ensure the development of the IT industry. who also spoke on condition of anonymity. But it would also make it easy for the government to catch them. and now a top official of the agency. The ILOVEYOU virus brouhaha. the following month. E-COMMERCE ACT Congress passed the E-Commerce Act." the source added. ITECC A case in point is the Information Technology and E-Commerce Council¶s (ITECC) seemingly stymied lobby for laws that will increase protection against pernicious internet-aided activities.its borderless nature and the anonymity it lends to users put banks and their clients at the complete mercy of people who choose to wield it for malicious ends. which has been languishing in its chambers. Philippine officials found it had no law with which to exactly nail down the culprit. tighter laws and regulations may take a long time in coming given the snail¶s pace at which Philippine Congress passes legislation. "Technology would make robbing banks easier. The body is composed of both government officials from relevant agencies and industry leaders and practitioners. opinions and interpretations generated by US banking regulatory bodies are based on the said law. The risks of using the internet are nothing to sneeze at -. It can be argued that the hyper-paranoid social culture in the US begs for such stringent protective measures. but we would also need policies that recognize these risks as valid.reams of guidelines. specially in a sector as sensitive as the banking industry. said that defrauding banks is as easy as taking candy from babies. . a former financial fraud investigator of the BSP. added that in most cases. When international law enforcers finally tracked down the perpetrator of the homegrown virus. The source. it is the officers and insiders themselves who pilfer from the banks¶ vaults. which left a trail of more than $1 billion in damage in May 2000 proved the need for forward looking policy. ITECC is the highest technology policy making body in the government. It may take a disaster of similar proportions to get the government to get off its bum and take a more proactive regulatory stance to address the risks of using technology. For instance. but the need for laws that anticipate possible issues emerging from the use of new tools in banking cannot be questioned either. However.
However. Mr. the firm said that e-banking was the most popular e-commerce activity last year. ITECC is exploring alternative Ingemar R. Increased use translates to increased exposure to risks. ITECC internet security and privacy subcommittee private sector co-chair Albert P. ITECC is studying data privacy protection models to draft a proposed law on the same. The latest figures from market research firm AC Nielsen said that one-fourth of the four million internet users in the country regularly avail of e-banking products and services. For instance. which coincide with the yearly overall health checks performed on banks. These initiatives could be most significant to the banking industry since the ripening Philippine internet market is showing a penchant for e-banking services. The e-banking committee itself is composed of 10 members originally tasked to perform bank audits. It taps the BSP¶s pool of information technology (IT) professionals to conduct technology risk management audits. Internal Issues Aside from broad bureaucratic challenges. was endorsed to Congress this May. but it has dropped the deadline.Currently. Simpliciano) ways of protecting citizens against illegal internet activities. he explained. the BSP e-banking committee reported that most if not all of the local banks have at one point applied for permits to deploy mobile banking services. In addition. Dela Cruz said that ITECC was hoping it will be passed into law this Banks see a wealth of opportunity year. Dela Cruz said the creation of a data privacy law is urgent because popular mobile technology is driving the use of electronic commerce and banking services. Presumably. in tapping the 15-million strong As its chances of getting a Congressional hearing mobile phone market (Photo by dims as election year nears. these banks see a wealth of opportunity in tapping the potential business value that resides in the 15million strong mobile phone market in the country. the cybercrime bill. even previous IT-related bills have yet to progress . which took two years to draft. Furthermore. the Central Bank¶s three year old e-banking committee is struggling with the lack of funding and manpower resources. The top official from this committee said that it is building capability in its ranks by sending members to various training activities in the country and abroad. .
as well as anticipate possible issues resulting from their use. to going to the bank physically to transact business. To its credit. August 04.It also retains the services of a full time information technology consultant. Thus. the BSP is showing signs of proactivity by watching for the possible impact of electronic currency on the country¶s money system. having members who are just learning the ropes of IT and one consultant may not be adequate to deal with the technological innovations that inundates the banking industry. increasing market and financial pressures to cut costs and remain competitive are forcing banks big or small to take the technology option. the sales zeal of vendors can only be expected to accelerate adoption in this sector to warp speed. These agencies achieved this by recognizing technology¶s presence and effect on the banking industry in the first place.php?id=009) MANILA. The question of competence aside.com/OnlineExclusives/ebank/inside. the committee seems to still lack in-house technology expertise needed to study emerging technologies and how they will apply to Philippine market conditions. if not a better one. and META Group have tagged the financial services industry as the only sector expected to spend on technology given the slow economic situation this year. US agencies such as the Office of the Comptroller of Currency and Federal Financial Institutions Examination Council have produced progressive guidelines that are able to keep up with technology¶s ephemeral nature. PHILIPPINES | Monday. 2003 Survey says: Internet the most preferred means to e-bank By Pamela Y. However. Local banks are now starting to adopt emerging technology tools to respond to these pressures. it would surely benefit the country¶s e-banking industry to have a regulatory body that is always attuned with the times. it has yet to address the issues that attend the use of hardcore technology to enable e-banking. . the banking sector is not insulated from developments in the technology sector. Multinational market research firms such as Gartner. Ong Online banking has now become an alternative. retired military officer Rolando Cabanlig. While the still basic and limited e-banking implementations may not yet merit the same strict rules the said agencies have produced. As with any industry. In addition. Forrester. (http://bworldonline. Despite best efforts.
assesses the most common practices of Philippine banks. They were made to choose either the internet. 5. The online poll defined e-banking as the different channels which enable users to transact with the bank.421% said they prefer phone banking. In contrast.841% of the respondents said they still prefer to transact with their bank physically. automated teller machines (ATMs) were included in the online survey. The poll is an attempt to get banking customers¶ preferences for e-banking.327% said they prefer to transact through the internet. on the other hand. over-the-counter or the ATM. Not surprisingly. A total of 194 out of 428 respondents or 45. The online poll supports another BWIE survey of banking practices in the Philippines. BusinessWorld Online conducted an interactive poll from June 4 to July 4 on the e-banking preferences of customers of banks in the country.43% of respondents said they still prefer the ATM to transact while another 15. 22. The next most convenient means for the respondents to transact is through mobile phones. with a special focus on e-banking. CHANNELS The online poll asked BusinessWorld readers to choose the "most convenient" means for them to transact with their bank. By this definition. or over the counter. The banking survey. or to "e-bank". Through its online newspaper. Cruz . the BusinessWorld Internet Edition (BWIE).A BusinessWorld Online poll shows that more than 70% of the respondents are using internet banking. the online poll is an informal study involving readers of BusinessWorld Online web sites. QUESTION: Do you e-bank? Graphics by Crecencio I. While the banking survey attempts to be a scientific study. The number of users who use the internet for banking outnumbered users who opt for other e-banking channels such as telephone and mobile phone. telephone. mobile phone.
Jenny said she uses the ATM. Online banking users interviewed by BusinessWorld Online find online banking convenient instead of queueing in a bank branch. BSP also authorized seven banks to participate in the electronic tax filing and payment system (EFPS) of the Bureau of Internal Revenue (BIR). BusinessWorld Online¶s poll results support government data which indicate that internet banking is the most preferred type of e-banking services offered by Philippine-based banks. show that as of March 2003. 23. except when he has to deposit money. The report indicated that 21 out of the 30 banks which have been approved by BSP to offer e-banking services offer these through the internet. Respondents were asked how they use e-banking and given choices . he uses the other e-banking channels to transfer funds between accounts and pay his bills. The same is true for Jenny (not her real name) who works for a top international bank. EFPS makes available online the filing of quarterly income tax return for corporations and partnerships as well as payment of tax due for every fiscal year. She said the only time she goes to the bank is when she has to deposit funds. Mauricio banking service offered by Philippine banks is internet banking. To withdraw money. Yu. Other than this. However. PAYMENT OF BILLS MADE EASIER Most BusinessWorld Online respondents who already e-bank say that they use the facility to pay for their bills.QUESTION: Which is the most convenient way for you to e-bank? Graphics by Crecencio I. 17 offer electronic banking services through fixed line telephones. Data from the Bangko Sentral ng Pilipinas (BSP) Regular e-bank user: Carter G. general manager of a video production firm and a regular e-banking user. Cruz Carter G. the most common type of e. without having to queue and make the effort to travel to her bank branch. said he hardly ever goes to the bank. Meanwhile. and 16 through mobile phones. internet banking is the most convenient way for her to pay her bills and transfer funds.YuPhoto by Michelle S.
000 of all regular internet users in the country. Fund transfer is similar to the bills payment procedure where bankers can move funds from one account to another without having to physically write an instruction to do so. in terms of access availability and frequency of use.380% said they use e-banking channels to check their account balances. a college graduate is already banking electronically through the internet. An estimated 34% or 330. Cruz Another 14. MIS director of AC Nielsen said in an earlier email interview that regular internet users are ready.880% or 25 of the total respondents said that they use e-banking to transfer funds. She said she uses internet banking to pay her bills and online purchases. bills payment. Meanwhile. banking transactions can be made from home. A total of 46 or 27. WHY E-BANK? Many e-banking users prefer to use the electronic means because of convenience and mobility. in conducting activities online.548% said use e-banking to pay for their bills. bank accounts can be accessed by users more often. Less than 10% of the respondents said that they use e-banking channels to reload their pre-paid cellular phone subscription. . at their own convenience. or those who log online at least once a week. Caryl A. 20. are also online bankers. A study by AC Nielsen Consult confirmed growth in the number of online bankers. Aglian. loan application and investments. QUESTION: How do you e-bank? Graphics by Crecencio I. Currently.between transferring funds. Through e-banking. Elena P. This feature of e-banking allows users to pay for their bills instantly without having to go the bank or write checks. pre-paid card reloading. The online poll indicates that 53 out of 168 respondents or 31. only a few banks offer this kind of service to their banking clients. Van Tooren. office or even abroad. balance inquiries. many e-banking users also use the channels to inquire about their accounts. More so.
an office clerk said that she will only use e-banking services when the need arises and if it is convenient for her. In some cases. a businesswoman feels that banking through the telephone is more secure than using the internet.493% or 97 out of 308 respondents said that they do not trust e-banking. other e-banking channels are preferred over the others because of perceived levels of security. multiple firewalls and user IDs with passwords to ensure safety of transactions. Mr. Poll results also show that 31. security assurance will make her decide to finally start to e-bank. Similarly. 23. Aglian. 24.428% of the respondents confirmed that their most valid reason for not banking electronically was that they do not have access to ebanking. Lesley T. Kryzchelle A. QUESTION: What is the most valid reason why you have not tried ebanking? Graphics by Cresencio I. She added that most importantly.Despite this. He said the phone has lesser chances of getting hacked compared to the internet. She points out that data can only be retrieved by the account holder in the phone banking channel while the internet is subject to hacking. The BusinessWorld online poll results show that 46. bank customers interviewed by BusinessWorld Online said that they prefer to use other channels than the internet because of fear of failure in the security measures that online banks take. while mobile phones sometimes fail because of network problems. E-BANKING SECURITY Still. Yu has similar apprehensions about the internet and prefers to use phone banking. Chuayap. Cruz OTHER REASONS . many people have qualms about banking electronically because of security. a large percentage of the online poll respondents still do not have e-banking access. Standards have been placed in many online banks such as 128-bit SLL encryption.
Currently. Goco. these safety measures are not fail-proof and will need to be looked into as computer technology and even hacking techniques become better in the future. Christina B. PHILIPPINES | Monday. security and assurance are still issues that banks need to address. Some banks. Niven Dioquino. 2003 E-banking 101 for newbies Queuing for teller services or even going to the bank branch itself are no longer necessary since one can do banking transactions anywhere and anytime.com/OnlineExclusives/ebank/inside. taking steps to secure online transactions is not enough. (http://bworldonline. have made it a policy to inform their customers of security measures they have undertaken.The online poll shows that 13. The AC Nielsen online banking summary indicates that 15% the regular internet users who are not yet banking online can not wait to try it out while 56% are willing to try it in the future. Some bank executives interviewed by BusinessWorld Online said they are aware of these issues raised by their customers. Some e-banking customers interviewed said they do not feel that they are well informed about the services that their banks are offering. Still. August 04.169% said that e-banking is not available at their banks. The BusinessWorld Online poll shows bank customers use online banking becuase they value convenience and mobility. literally at the touch of a finger. Even with the security measures taken by online banks.php?id=012 MANILA. When the need arises however.311% of respondents said that they do not have enough funds to start e-banking. Only a small percentage of the respondents or 6. Vice President for product management-wholesale bank of the Standard Chartered Bank said the said bank runs intrusion tests for their online banking web site. some bank customers can not help but be paranoid with the idea of transacting through the internet. video editor. . 25. Some banks even employ teams of computer specialists to try to hack into their systems to make sure that security measures that they have taken do not fail. online banks are using industry standards such as 128-bit SSL encryption technology and firewalls to prevent any unauthorized access to bank accounts online. said that he feels that his funds are not enough to start e-banking. However. he said that he is willing to try all three channels for ebanking. banks will need to take information disemmination further to keep customers confident with online banking . for instance. With this.
It is open to bank and credit card customers. if it¶s an online bank.ph) is best in design. to start banking." Accessibility or the degree of difficulty in navigating the internet bank. Some banks reviewed share common features such as online bills payment. Those who are not familiar with icons are helped by straightforward buttons and commands such as "Log on" and "Register. Five banks offering internet banking were studied based on the following criteria: ¢ ¢ Design.com. including range of products and services available and user-friendliness. Ease of use is clearly HSBC¶s advantage over the other Web sites reviewed here. and. users can try the online demonstration. the icon Online@HSBC is prominent enough not to confuse first-time users. ¢ ¢ ¢ Security features and technical requirements. . Features. credit card or phone banking number and PIN. Registration is done in three easy steps: Enter your ATM. HSBC account holders are automatically enrolled in the e-banking facility. the expectation is most.A BusinessWorld Online poll shows that respondents use the internet to bank more than other e-banking channels available. But navigating around an e-banking Web site is not a walk in the park. Newbies (newcomers) are best advised to be guided by some of the best practices in and pitfalls of internet banking. create your own internet banking password. bank transactions can be done online. All the banks use standard SSL (secure socket layer) protocol. and user name or ID and password. fund transfer and account balance inquiry. HSBC makes it easy for its clients to use online banking. For instance. They only need to use their existing card number and cash advance personal identification number (PIN) to avail of the service. ONLINE@HSBC Hongkong & Shanghai Banking Corporation (HSBC) Web site (at http://www. After all. firewalls. particularly to "newbies. including unique products and services offered online. create your own unique internet banking user name." Or.hsbc. This criterion includes the degree by which transactions can be done fully online or if physical "contact" with the bank is still required. HSBC started offering internet banking to its retail customers in 2002. A number have online demonstrations of internet bank features. finally. if not all. The overall design is uncluttered and straightforward--no unnecessary bells and whistles that take time to download or settle. automatic logoff.
Instead of being hassled with documentation in a bank branch. Oliver Jones. such as showing a valid ID. said internet banking was always oriented first for the personal customers.bpiexpresslink. Saves time.bpiexpressonline. All that a new customer has to do to consummate the banking relationship is to physically go to the bank to deposit the money. online forms are available from the HSBC Web site. "That¶s where the demand was originally. The advantage of applying online is the paper work is accomplished prior to depositing the money. James Benoit. are also available from the site. and BPI credit card holders. Club members receive latest information through e-mail about HSBC-sponsored events and special promotions. Technical requirements. Aside from the industry standard security features. BPI EXPRESS ONLINE The Bank of the Philippine Islands (BPI) offers a comprehensive assortment of products and services from different Web sites. And even while the bank customer is banking. Many of HSBC clients find out about their new products and services through the online site. security information and advertisements are displayed prominently every step of the way. It is offering internet banking to corporate clients starting this third quarter. Accounts can be opened online with the online application forms. clients will just have to request for a brochure online or make an appointment through the internet. HSBC e-marketing manager. The bank also has an online club that is open to non-HSBC clients. HSBC also has a third party fraud agreement which compensates clients for direct loss up to full amount in the event of an unauthorized transaction.com). said product information is available online to generate sales leads for the company. the bank doesn¶t stop there.Bank officials noted the overwhelming response of the Philippine market to internet banking. After pre-enrolling customers to online@HSBC. Of course. Displayed prominently on the HSBC main page are the banks security policy and features. Security and Technical Requirements. But HSBC also noted the demand for internet banking for corporate clients. thrift bank BPI Family. To get more information. The bank uses the Web site as a point of contact with customers and to generate more leads to prospective customers. Corporate clients use BPI Express Link (www.com is for consumer banking clients of BPI." he told BusinessWorld Online. Features. BPI Express Online at www. without having to make an extra effort of calling or going to the branch itself. HSBC senior vice-president for personal financial services. the usual identification procedures. are required. . such as what browser to use.
Examples are phone banking. multi-earner accounts. you¶ll have a difficult time choosing which link to click first. BPI Direct (at www.ph. Security and Technical Requirements.5 and 6. The maintenance schedule is found on the bank¶s security page. Upon sign in. But not all accounts may be accessed through the internet. BPI requires account holders to go to their bank branch. Accessibility. "All information" includes other BPI products and services that are somehow related to ebanking. The application form is linked from the main page. Accounts that can be enrolled for e-banking services are individual. www. BPI conducts regular system maintenance checks everyday at different times. Furthermore.com. The password can be changed online. buttons and links to download. mobile banking. leads to the Express Online site which provides links to the other BPI sites. users will be not be able to access their accounts.75 or higher version. users are also reminded of the last transaction period they had with the e-bank.An online-only service. During this time. However. the bank still requires account holders to go personally to the bank to submit the form with their signature. For other online services. BPI requires users to change their passwords every 180 days. The bad news is if you¶re doing other activities aside from banking.com) offers not only paperless transactions but also higher rates. BPI¶s corporate Web site.0. and even promotions. The BPI site requires Netscape Navigator 4. As added protection. sole proprietorship and joint (and/or) accounts. The beauty of this is you can access products and services from one Web site. The BPI e-banking Web site is cluttered because almost all of the information are available from the splash page. online banking is not available. Links to anti-virus software downloads are also located on the security page. an application can be submitted online. BPI also uses large ads in the e-banking pages that add to download time. Activation of the internet banking service will be upon the receipt of the bank¶s confirmation through e-mail. to enroll some merchants or third-party accounts for fund transfer.75 or higher. Otherwise. Netscape Communicator 4.bpidirect.bpi. Email confirmation alerts are sent to clients whenever a transaction is completed. The system will prompt the users to change their password. or Microsoft Internet Explorer 5. passbook-based accounts. joint (and) accounts. Users with lower versions are warned that they will be redirected to the log-on page if their browsers are not compatible. . Accounts not eligible for application are peso-denominated. Design. BPI Gold Savings and BFB Super Savings accounts. BPI clients have to enroll first to use the e-banking service. For instance. it takes time for the graphics. e-mall shopping.
The PIN is prepared by Citibank once the application has been approved and sent to the customers. For instance. it offers e-commerce services like an e-mall and automatic reload of credits for prepaid cellular phones. .ph. Information on how to do this is available from the Web site.citibank.Features.citibank. Thus. the Ayala group is also into retail. The BPI offers other online services aside from accounts management.citibank.ph is redirected to www. CITIBANK ONLINE Citibank also lets consumer and corporate customers e-bank through its Web site. Aside from banking. telecommunications and other financial services.com. These may be printed out to be faxed or mailed to the bank. Currently. For Citibank corporate clients. the password can be retrieved by calling the CitiService hotline. can access their accounts online by using their card number and cash advance PIN on the log-on page. contact telephone number and the recommended time to call. It is not clear from the Web site if the reply will be given by email or letter or fax. The Web site www. Later. Citibank corporate users can access CitiDirect through a link from www. customers have the option to change their cash advance PIN by visiting a Citibank branch.com. All Citibank account holders. Clients can also avail of other products and services from other companies of the Ayala group.citibank. If this link is not available. to which BPI belongs. clients can reload their Globe or Touch Mobile pre-paid phones. users can go to www. information is available online.citibank.ph. Globe and Touch Mobile are affiliate companies of Ayala-owned BPI. He is also given a system-generated reference number. www. BPI officials said they are currently working on linking with other mobile phone service providers to provide the same service. BPI customers can also buy stocks from BPI Trade and insurance from BPI/MS Insurance Corporation. Customer service agents will contact the applicant and give them instructions on how to send other requirements. whether credit card or ATM card holders. The online system notifies the applicant that he will be contacted within three banking days. For other bank products and services.com. Accessibility.com. One can also open a savings or checking account online by submitting the following information: name. Applying for a credit card is can be done online without ever needing to go to the bank.com and look for the link to Philippines. Request forms are available online. real estate.
Citibank officials said the e-statements look similar to the paper statement. As of press time. however. is mainly text-based. Even information provided. Aside from viewing e-statements." are still very much text-based. ATMs and phone banking facility. pay bills and transfer funds. Users are prompted if they are inactive for some time. Aside from not having to enroll for the service. Transfers and Payments. Information on security features are located on the Citibank Web sites¶s main page. Users have the option to save these "sign-on information" in the computer that they are using. This makes the presentation boring to some. the three basic services that users can do online are to check balances. Links to where these internet browsers can be downloaded are available in the site. No fancy design or icons. can be changed to one uniform code for easier access. Design. the information you need are there. the page that appears after login.Additional inquiries can be made through CitiPhone. The e-statement is something unique to Citibank. what¶s clear from the Citibank Web site is its promotions for its credit card. An online demonstration is helpful to newbies. In an interview. such as "Account Details and Activity. Even then. A new window will open to allow users to key in their card number and PIN. The "log-in" link is clearly visible at the left-hand part of the Web page. Users need to drill down through these four icons to get to the services. Features. There are only a few icons. Users may log in at Citibank¶s main Web page." Security and Technical Requirements. Customer Service and Information Center. identified as: Account Information. the bank¶s fixed-line e-banking service. As an added precautionary measure. These codes. officials of Citibank¶s consumer retail group said its credit card promotions is highly visible because of the bank¶s large base of credit card customers. that¶s all that matters. Citibank uses the standard SSL encryption and firewalls. METROBANK DIRECT . Citibank also launched a mobile banking service but it was available only to Smart Communications subscribers. and for some. users are always prompted to go to the Citibank Online user agreement every time they sign in. the design of the e-banking site is not confusing nor cluttered.6. The minimum requirement of Citibank Online is Internet Explorer 5. Citibank gives its customers three different PIN codes for their credit cards. Citibank¶s consumer group said the service with Globe Telecoms is "temporarily discountinued. Citibank Online.01 (SP2) or Netscape Navigator/Communicator 4.
is also available.7. BANCO DE ORO eBANKING Design.metrobankdirect.metrobank. The pages are well organized and easy to understand. The bank uses the generic User ID and password to login.com. Information on how to enroll for these services are found in a separate link from the main page. For joint accounts and corporate users.com.ph) will lead to the e-banking Web site.com. no matter what the client¶s level of internet experience is. Alternatively. not only about the bank but general financial news. applications must be submitted to their branch of account. An automatic log-out feature is also used for computers idle for 20 minutes. The bank also conducts transaction logging to ensure that a transaction cannot be denied by the bank or the client. branded as Metrobank Direct.Metrobank¶s internet banking. Features. The Metro Direct online demonstration takes time to download.ph. is very easy to use and even includes a glossary of banking terms. Be warned. Security and Technical Requirements. This lets users apply for two services just by filling out one form. and the design is not cluttered. The two services allow users to make their payments to the government through the internet. customers will have to wait another 20 minutes to log in again. Accessibility. Clients can only enroll at the bank branch where they maintain their savings account. Enrollment forms have to be filled out and submitted there. The icons and links for the various web pages are easily readable. Metrobank also offers phone and text banking services. A link from the corporate Web site (at http://www. The log-in link is easily located on the bank¶s main page.0 or Netscape Communicator/Navigator 4. A news sidebar where one can view articles on banking. The BDO Web site. One advantage of BDO over the other banking Web sites is that only one application form is needed to be filled out for enrolling to both the "eBanking" and phone banking service. found at www. Registering for the internet banking facility is inconvenient because customers have to go the bank personally to apply. The bank suggests that a Windows operating system be used with at least a Microsoft Internet Explorer 5. is available to both consumer and corporate banking clients at www. features that are not found in all other banking Web sites.Metrobank allows users to access the Tax Direct and Bancnet EDI-SSS egovernment services. Accessibility.bdo. .
Technology providers are always up on their toes. or Internet Explorer 4.Pamela Y. like chicken ready to catch the early worm. Design. wanting to take the first-mover advantage. here we come Veronica C. Either firms wait for the market to mature until customers are ready for the products and services.0 or higher.06 or above. or wait for the egg to hatch into a chick. but armed nevertheless just in the case the market takeup suddenly increases. hoping that their customers will catch on soon. Banking executives interviewed by BusinessWorld Online have different ways of resolving the issue. PHILIPPINES | Monday. BDO has all the basic features that the other e-banks reviewed have. The window displays some useful information.and continue to emerge -. A downside in BDO¶s e-banking is the pop-up window that comes out every time the e-banking link is clicked. August 04. Netscape Navigator version 4.Existing bank clients of BDO can avail of the internet service. but can be a nuisance when you want to start using the e-banking facility straight away. The internet banking facility of BDO allows users to access their accounts. Or.7 is not recommended. firms can go ahead and offer the products and services. Whether first-movers or latecomers. Security and Technical Requirements BDO deploys the industry standards for security such as User ID and password. The processing of the application takes two banking days. Others would wait in the sidelines. Ong BusinessWorld Online is not responsible for the content of external Websites.com/OnlineExclusives/ebank/inside.php?id=016) MANILA. Silva It has always been a chicken-and-egg dilemma in business. there is one partner in the e-banking game that is not waiting for the chicken to lay the egg. It requires Netscape Navigator version 4. transfer funds. BDO also has online demonstration that can be used as a guide for new users of the facility. Applicants have to go to a bank branch to receive their password and PIN in order to be able to start e-banking or phone banking. The same is true for new products and services that have emerged -. Some would go ahead with new ideas. Features. . (http://bworldonline. pay bills and apply for new accounts. A link from the main page lets users go to the log-in page. 2003 Opportunities in e-banking: Ready or not. firewalls etc. -.in the world of electronic banking (e-banking).
This is where the large number crunching is done. The company said it has also been implementing e-banking solutions in the Asia Pacific region although e-banking is still a growth area. software and services solutions that enable banks to offer e-banking products and services to their clients. for computer giant IBM Philippines. Laud said that among IBM¶s mainframe clients are big banks mainly for their backend operations. IBM Philippines country manager for the financial services sector. In terms of ebanking in particular. the sector represents about 40% of company revenues. Think number crunching and expect Big Blue¶s mainframe computers to be behind every . Technology providers in general noted that prospects for e-banking in the country depend on two factors: the aggressiveness of the banks and the acceptance of the local market. ready to offer the e-banking services whenever the market is ready. For instance. Interviews by BusinessWorld Online indicate that these technology providers are simply waiting for the Philippine market to take up the habit of e-banking. HP Phils. are just waiting in the sidelines. they said.Technology providers include companies who provide the hardware. Competitor Hewlett Packard Philippines is not to be outdone. both IBM and HP claim they have readily available solutions to enable local banks to offer e-banking. EARLY ADOPTERS Technology executives said they count the big to medium-sized banks as some of the early adopters of e-banking. Felix Cua. Some banks. Technology providers are ready with the technologies for ebanking. manager for financial services. Mr. market. said Peter Laud. The Philippine banking industry recognizes IBM as one of the companies gaining an early foothold in the local centavo transaction happening in the background. The banking sector is one of the major industry sectors for some technology providers. told BusinessWorld Online that his company is currently beefing up its financial services team in anticipation of growth. These providers are either computer companies or infrastructure providers like telephone companies.
Globe Telecoms head of wireless value added services marketing.501 million mobile phone subscribers as of the first quarter this year. "E-banking is a growth area and banks need to embrace it. Most of the subscribers are clients of Globe Telecoms and Smart Communications. said large banks in the country have expressed plans to expand into mobile banking." he added. 2001. A survey of BusinessWorld Online involving 21 top banks in the country reveal that 10 banks offer internet banking. Rufino Ruiz. nine of the 21 banks said they plan to install e-banking applications within the next two years." said Mr. Mr.He added that IBM is even gaining in market share despite reduced spending of banks on IT. Mr. MARKET UPTAKE Big banks are among the early adopters of e-banking . This reduced spending has been noted ever since the dot-com crash in early 2000 and the global economic soon after September 11. This is due to the high penetration of mobile phones in the country. Data from the National Telecommunications Commission indicate that there are 16." said Mr. "IT provides the bank a competitive advantage. There are several opportunities in e-banking. eight offer mobile banking and 12 offer phone banking. he added. Cua said it is the bigger banks that see the need for e-banking solutions because of the volume of transactions and clients they cater to. The banking sector is seen as one of the leading industries that need to regularly upgrade their information technology (IT) investments. Laud. "For financial institutions. Cua. Cua noted that banks are competitive and this is one of the reasons why they invest in cutting edge technologies like those related to e-banking. two of the country¶s top mobile telephone operators. a constant investment in IT is a given. Most of these opportunity areas are focused on offering alternative channels to different types of clients. Efficiency is one of the reasons why they invest in IT. Meanwhile.
It may not take that long to convince banks to put their resources behind e-banking and for bank customers to get into the habit of e-banking. mobile banking is still considered a niche market for Globe Telecoms. we expect it (mobile banking) to be catch on quickly because of trends in mobility and efficiency." said Mr. A study conducted by AC Nielsen recently also showed the growing number of internet users who are interested to try out internet banking. the technologies are just waiting to be tapped.But what¶s keeping banks from proceeding with their mobile banking initiatives is the lack of market uptake. he added. "Down the road. said voice calls and short message service (or text messaging) are still top revenue earners for the company. When that time comes. Ruiz. "With the trend towards mobility and efficiency. (Photo by Ingemar R.com/OnlineExclusives/ebank/inside. Simpliciano) should banks and bank clients decide. Smart Communications senior manager for e-Services. Ruiz. Technology providers said it is just a matter of time before banks realize that their clients would want the convenience and efficiency offered by different e-banking channels.php?id=017) . The online poll. showed that 70% of the respondents are using internet banking. banks will most likely invest and examine how they can extend their products through new channels and challenge Mobile banking is expected to themselves on product differentiation." he added. such as e-banking. Mobile phone subscribers are only beginning to see the value and convenience of the service. said Mr. Globe is ready to deploy the necessary solutions within a year. Because of this. an integral contributor to value-added services.Veronica C. Dennis Gatuslao. conducted in June 2003. to increase because of the go up in the number of online users. Nevertheless. (http://bworldonline. A BusinessWorld Online poll showed that the market could just be ready for the new technology. Silva. But he hesiates to give a time frame. The research firm said they expect ecommerce-related activities. -. The number of users who use the internet for banking outnumbered users who opt for other e-banking channels such as telephone and mobile phone.
The researchers have known that Online Banking is already a global trend. it has already started to spread out. even though mst of the Filipinos are not yet acquainted with Online Banking. . Most of the big banks that are operating here in our country have already made used of POnline Banking for their transactions. the researchers have known more about Online banking not only its state here in the Philippines but also its global status. It is only a matter of time that Philippines can also cope up with this technology. A number of banks in the Philippines are now promoting Online Banking. Different countries across the world have opened up their systems to accommodate this new innovation. Even though the Philippines is not as modernized as other countries.In the previous articles. the Filipinos are not yet too late.
1 Research Method The method of research employed to answer the general and specific questions of this is survey studies. 3. Data-Gathering procedure.Descriptive methods assists researchers in knowing how to accomplish desired purposes in the shortest available time (Consuela at el 1992).2 Research Design The Research design applied is descriptive research. the tools used in this study. Survey studies are employed to measure the existing phenomenon without inquiring into why it exist (Consuela at el 1992). This study will certainly apply survey to know the effects of online banking to consumer. 3. The main purpose of this study is to evaluate and describe the effects of online banking to consumers. the method used in conducting this study.The researchers used this method because they consider the data collected in this study helpful in meeting the daily conflicts among and between the students. Gay (1976)Defined descriptive research as involving collection of data in order to test the hypotheses or to answer questions concerning the effects of Online Banking to consumers. the detailed process of which the data has been gathered is specified and research instruments. This methods has been because it is more expansive and coves greater aspect of the problem than any other methods of investigation .CHAPTER 3 RESEARCH METHODOLOGY This chapter presents the following: Method of research. Statistical technique in analyzing the data is also included. This section includes information on the research methods used and the techniques utilized in gathering and analyzing the data. .
This instrument has been utilized because it can cover greater population of potential respondents in a shorter period of time. The questionnaire aims to know the demographic profile of the respondents and . 3. businessmen or women. businessmen and women who engages themselves in IT and Banking.5 Research Instrument The researchers used survey questionnaire in this study.3. it is impossible to access the possible sampling error.3 Population and Sample Size The Non-probability Quota Sampling Method was used in this study in determining the respondents of the study. The researchers believe that the Quota Sampling is he most appropriate sampling method to be used in this study since the researcher want to present the effect of online banking to consumers. A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. the frequent bank customers or depositors who conventionally deposit their savings in the bank or those who uses online services of their bank. 3.4 Description of Respondents The researchers have decided to conduct a survey among respondents that are probably familiarizes with Online Banking. The researchers have decided to ask the responses of students and professors that are more likely users of online banking in their University. Lastly. A number of 150 respondents characterized. and bank customers or depositors and probable respondents. professors. Since the sample is non-random the disadvantage of this sampling method is that. which consists of students. Secondly. The Questionnaire will be composed of 20 questions all based in the aims and objectives of this study. The researchers developed their own instrument for this study based on the questionnaire of the related studies they have read and other relevant articles.
The questions include the respondents¶ sex. it will be submitted to the adviser for further corrections and revisions. 3. They were given sufficient time to fill out the questionnaire. the researchers formulated their own instrument. After the questionnaire is formulated. The edited and revised copies of the self-administered questionnaire were distributed personally by the researcher to the respondents. and the probable organization¶s which they belong to. course.6 Data-Gathering Procedure After reading related studies and examining different questionnaire results used in validating previous research. This aims to discover the effects of online banking not only to consumers but also to bank customers and the financial institutions profiting from it.some basic information about them. civil status. They guaranteed that the questionnaire is not too long or too short as to keep the truthfulness and interest of the respondents. . The researchers then gathered all completed survey forms for tallying and interpretation of data. They made sure that the questions and options are relevant and will produce information that will validate the study. age. The type of data being collected is a primary data which is gathered directly from different type of consumers using Online Banking. This study promotes the behavioural dealing of consumers through new modes payments like Online Banking and the like. The questionnaire also aims to know the respondent¶s way of acquiring goods and services. The instrument was devised making sure that all aspects of the problem are properly covered and all the specific questions under the statement of the problem are answered. The conventional way of acquiring goods or services in which when the consumer buys a good and gives the payment to the store or the institution in its actual time of transaction while in Online Banking wherein the mode of payment is through their bank accounts or credit cards.
the researchers have used the weighted mean following the formula indicated below: Where as: This is the weighted mean variable This is the allocated weighted value for the given data. To be able to compute for this.7 Statistical Treatment of Data In this part of the study. .3. showing the equivalent weighted percentage of the answer. This is the observed values for the given data. it illustrates the mathematical computation of percentage of the tallied answers.
CPA . April 2011 Online Banking: The Effect of Prior Experience on Online Banking Acceptance in Mongolia Padsuren Oyungerel' Using Quick Books Limited Edition Gail. Perry. Danburg. Torres. Connecticut DBF and Selected PFI¶s: Rationalizing Wholesale Banking Bernadette G.Claro E-Books Friedr.Bibliography Books: The New Book of Knowlegde Scholastic Inc. Vieweg et al Electronic Banking: The Ultimate Guide to Business and Technology of online banking 1st Edition.
32PM http://www.com/?History-of-Online-Banking&id=270075 Thinking made easy Business. 2011. 2011 11.html#ixzz1BIRBLkrc Online Banking: Personal Finance January 17. 2011 9. 2011 8:00PM http://ezinearticles. 9:23am http://www.Internet Materials Websites History of Online Banking January 10.bworldonline.htm Online Banking Articles January 18.html#more Weighted Mean January 18.com/term_paper_topics/2010/11/research-report-on-perception-andcustomer-satisfaction-towards-internet-banking-of-wing-hang-bank-o.com/OnlineExclusives/ebank/photos/figure10_bg.typepad.gif .improvingyourworld.org/stats/definitions/weightedmean.childrens-mercy.com/finances/online_banking_006332. 9:30am http://www. 2011. marketing and management January 10.15PM http://ivythesis.