Electronic banking

Electronic banking

Electronic banking is no longer just credit cards and automated teller machines

It has been said that banks can be faceless institutions and, taken literally, with the progression of electronic banking, this may not be too far from the truth. Electronic banking is no longer just credit cards and automated teller machines (ATMs). Now the Internet has the technology to radically transform banking procedures, and financial institutions are taking heed with the development of the web site.

Initially, the web sites of banking institutions consisted of static web pages with no interaction between the user and the web page. The site was mainly an outlet for displaying information about the bank, its locations, and the services that it provided. Many banking web sites have evolved recently and now allow customers to perform certain transactions via the Internet, for example bill paying and checking bank balances. These advanced services have proved very popular with customers, and now with the development of new banking software applications, electronic banking will be able to account for all customers' banking needs.

BroadVision's One-To-One? Financial and One-To-One Billing applications are examples of software packages that can allow financial institutions develop highly interactive web sites. It provides every customer with their own personalized web content, through a combination of business rules and customer profiles based on current and past web activity. This new approach to electronic banking has obvious advantages to both the customer and the financial institution.

The customer will now have a full suite of banking options, including bill payment transactions, customer-defined alerts, and financial management services. Financial institutions will also see the benefits of electronic banking. The new personalized service allows users to interact directly with the web site, and enter personal information and feedback. The financial institution can analyze and compile this information to learn more about their customers, and to provide a better service, leading to higher customer satisfaction. The interactivity of the site also means that customers will spend more time browsing the web site, giving financial institutions the opportunity for upselling and/or cross-selling. It will also be possible to shift certain transactions from higher-cost business channels, such as branch offices, to the low-cost Internet channel.

Security is a major concern for customers who are contemplating Internet banking. The use of firewalls, virus-protection and intrusion-detection software, and authentication has made electronic banking more secure. Data encryption has also been introduced, which guarantees that customer information is coded at all times and can only be interpreted by the relevant personnel.

In the future, electronic banking will cover all aspects of banking

In the future, electronic banking will cover all aspects of banking—even mortgages will originate online. There are already several banks that operate online only, for example Telebanc and Net.Banc, while several of the established banks, like Citibank and Chase Manhattan, have developed their electronic banking systems. Whether or not the new online banks will be able to compete with the established banks remains to be seen.