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E-banking = Banking + Internet

E-banking = Banking + Internet ATTF Sarajevo H. Van de Vyver February 6-8, 2006 Banking on the Internet World Wide Web Global village International products and services Banking on the Internet Local banking Human interface Cash transactions Banking on the Internet

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E-banking = Banking + Internet

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  1. E-banking = Banking + Internet ATTF Sarajevo H. Van de VyverFebruary 6-8, 2006

  2. Banking on the Internet • World Wide Web • Global village • International products and services

  3. Banking on the Internet • Local banking • Human interface • Cash transactions

  4. Banking on the Internet Offered products • Electronic products and services e.g. banking software, financial information, mortgages (simple products in complex category) • Physical products and services with electronic support e.g. Bond lending, bearable certificates of deposit, credit cards

  5. Banking on the Internet e-banking is: - transactions 24 h a day, 7 days a week - for people on the move - access through browser (no software) - acceptable level of security

  6. Advantages for the bank • Surfers: commercially interesting market segment • Reduced local distribution or less branches • Information: quickly updated • Selective sales strategy • Non-material products

  7. Advantages for the bank • Major return on investment by investing in online financial services (% of banks in survey) • 27 % : cost savings • 22 % : customer retention • 19 %: cross selling of services • 15 %: customer acquisition and additional revenues (fees and interest) Source: Celent Communications, oct. 2005

  8. Pitfalls for the bank (1) • no human interface • slow connections • imprecise laws • client’s acceptance

  9. Pitfalls for the bank (2) • cost of development and maintenance of website and transactional tools • lower customer switching costs • products digitally non deliverable • high step in costs for starters (marketing, promotion, computing)

  10. Pitfalls for the bank (3) • Entry barriers • Reputation to attract clients (higher rates) • Fund raising to pool risk (e.g. Sony’s branch of electronic bank: objective to raise 10.6 billions euro)

  11. Overview of the seminar 1. Introduction 2. Situation of e-banking 3. Strategic choices and new channels 4. New payment methods 5. Practical e-banking 6. Prudential approach

  12. Overview of the seminar 7. The client and the market place 8. Hold back the invisible enemy 9. Upcoming technology 10. Training 11. Operations 12. Direct access to ... 13. General summary

  13. Test Which banking products and services • need to be handled through a branch • can be treated by phone and fax • can be offered through the Internet or by e-mail • can be handled using a Call Centre ?

  14. 1. Introduction

  15. 1. Introduction

  16. 1. Introduction • Branch network and ATM • Internet Banking • Mobile Banking • Wap and I-mode • Web Spaces • Point of Sale (POS) • Phone and Fax Banking

  17. 1. Introduction

  18. 1. Introduction • Branch network and ATM • Branches • Reduce and upgrade • More ATM’s inside • New services • ATM’s • Security and recognition • More services offered • Communication tools • Outside branches, new places

  19. 1. Introduction • Internet Banking • After the Internet bubble • New generation of clients • Bare necessity • Huge success

  20. 1. Introduction • Mobile Banking • Payment via celular phone • Small transactions • Alerts for orders • SMS (payments/alerts)

  21. 1. Introduction • Wap and I-mode • Wap: not success as expected • I-mode: Asian countries, DoCoMo

  22. Information messages Incidents / Alerts First implementations (System messages) Off-Site operators & maintenance personnel Mobile communications platform Production environment

  23. 1. Introduction • Web Spaces • Only inside branches • Web access, bank access • ATM’s + Web Branch

  24. 1. Introduction • Point of sale (POS) • cards • terminals • network

  25. 1. Introduction • Phone and Fax Banking • Banking over the phone from everywhere • No screen • Limited possibilities • Free phone number for good clients • Fax Banking: for more complex orders

  26. Summary of first part • A lot of channel in banking, not only branches. • Mostly communication channels: • - over the computer • - over the phone

  27. 2. Situation of e-banking What is electronic banking ? Some interesting figures Some examples of consumer goods. Amazon.com - Dell computing

  28. 2. Situation of e-banking What is electronic banking ? E-Commerce E-Finance E-MoneyE-banking Other online financial services and products- Internet banking- Telephone banking- Other electronic delivery channels

  29. 2. Situation of e-banking • Europeans banking through Internet: • 54 millions in 2002 • 103 millions in 2007 • Main markets: Germany (16 mio), United Kingdom (10,4 mio) and France (6,2 mio) Source: Jupiter Research

  30. 2. Situation of e-banking

  31. Summary of part two Three topics discussed : 1. Situation of ebanking 2. Some figures 3. Non-banking examples

  32. 3.a. Integration of new channels 3.b. Major barriers to deployment of new channels 3.c. Major past challenges for the banks 3.d. Powering multi-brand and multi-channel distribution 3. Strategic choices and new channels

  33. 3.e. Driving online banking to profitability 3.f. Paper focus, what the client requires 3.g. Investment funds via Internet 3. Strategic choices and new channels

  34. Interactive TV Future banking channel Delivering content New technology standards 3.a. Integration of new channels

  35. Technology and standards Customer’s ability Budgets- equipment- marketing Security and scalability 3.b. Major barriers to deployment of new channels

  36. Market competition Client’s requirements Much new technologies 3.c. Major past challenges for the banks

  37. Multiple brands Multiple consumer segments Mutichannel world Changing customer ’s experience 3.d. Powering multi-brand and multi-channel distribution

  38. Stand alone vs. Web enabled huge promotion budget and other costs moderate returns requirements to retain clients get paid for services (normal pricing) 3.e. Driving online banking to profitability

  39. Opening an account (bank) Bank statements (client) Receipt of transactions (POS) Information (client) 3.f. Paper focus, what the client requires

  40. Funds supermarket autonomous and actif clients advantages (access, actuality, compare prices, choice, easy platform) 3.g. Investment funds development via Internet

  41. Summary of part three Mutichannel Banking services are driven by fast-emerging industry trends and accompanying customer pressures. The quickly moving, demanding factors of these initiatives contributed to banks’ ongoing extension of its application and platform infrastructure without clear planning, new developments, new answers to clients’ requirements…

  42. Case Study The Rowe Cos and Merrill Lynch: The ROI Process in Business/IT Planning What is the business value of the ROI methodology required for project planning by Merril Lynch?

  43. 4. New payment methods a. Situation b. e-money offer c. Monetary policy

  44. 4a. Situation E-money: slow take off (past) * Merchants * Regulatory framework * Cost * Number of people * Security * High investments * Compatibility * Multifunctional

  45. 4a. Situation E-money (future) * More liquid * Higher acceptance * Cost of system * Rate of equipment saturation * Transferable * Circulate well * Convenient * Person to person transaction * Security/Confidence

  46. 4a. Situation E-money: types 1. Card based: Smart or stored value card vs notes and coins 2. Cybermoney: Network e-money vs bank deposits

  47. 4a. Situation

  48. 4a. Situation

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