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Internet Banking Key Issues

Internet Banking Key Issues. Internet Banking Working Group May 14, 1998. Presentation plan. Key issues for European banks International co-operation Next steps. Key issues for European banks. From online banking to Internet banking Cyberfinance and eurofinance Standards Infrastructure

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Internet Banking Key Issues

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  1. Internet BankingKey Issues Internet Banking Working Group May 14, 1998

  2. Presentation plan • Key issues for European banks • International co-operation • Next steps

  3. Key issues for European banks • From online banking to Internet banking • Cyberfinance and eurofinance • Standards • Infrastructure • Smart cards • Regulatory environment • Competition versus co-operation

  4. On-line banking and Internet banking • Opportunities and threats • Online banking experience • Limited competitive impact • Distribution channel complementarity • Internet banking anticipation • Major cost reduction • Value chain upheaval • Internet • a channel • ..or a placenta ?

  5. On-line banking and Internet banking • How reliable are channel transaction costs data ? • Hidden Internet costs • Who will benefit from cost reduction ? • Existing players • Newcomers • Service pricing • What coverage? • What service offerings? • Bundle or unbundle?

  6. Internet banking • Opportunities • New services • Lifecycle asset management • Transaction management • Trust infrastructure management • Threats • Lack of competitive differentiation • Diminution of customer loyalty • Disintermediation • …or value displacement

  7. Internet and Euro • Coping with a large-scale system overhaul • What is the combined impact ? • On technology deployment • New architecture • On marketing approach • On the market structure From national to transborder retail banking

  8. Standards • Adopting US standards ? • OFX • Integrion • SET • Adapting US standards ? • How to organise input • The future of national standards • HBCI • Etebac

  9. SRT SET OFX OTP EDIFACT,(SWIFT?) OBI SSL HBCI Integrion Transaction Standards Free Choice Free Choice Content Confidentiality/Integrity SSL SSL SSL Authentification Free Choice:- PIN/TAN - Dig. Certif.- Smartcard Merged in the future Source: Brokat Internet banking standards

  10. Standards • Which forum ? • The role of traditional standards bodies • CEN very active in electronic commerce • The role of financial industry bodies • ECBS • Which scope ? • Technical • Business • User interface

  11. Infrastructure • What are the requirements ? • Geographical coverage • National or European • Basic architecture • Intranets or extranets ? • Integration or interconnection ? • Project development and ownership • Public, private or cooperative ? • Who should be responsible for • Development? • Operations? • Conflict resolution ?

  12. Smart card use • How critical ? • Optional • Integrated • What services ? • SET Enhancement • Generic security • Stored value • Which standards ? • How useful is EMV ?

  13. Regulatory environment • Transborder regulation • Trust infrastructure oversight • Customer protection • Treatment of new players • Virtual banks • Technology providers and system integrators • New risks • Remote banking • System reliability

  14. Co-opetition Competition Co-operation Competition and co-operation • New rules of the game • Banks and other financial services suppliers • Banks and technology providers • Banks and their customers

  15. International co-operation • Banking Information Technology Secretariat (BITS) • Part of The Bankers Roundtable • 125 largest bank holding companies in the United States, represented by their senior executives • Created to ensure banking sector input into • Standard setting • New payment architecture design and implementation • Public policy discussion of remote banking and related issues • Organisation • High-level board • Small secretariat • Working group network

  16. International co-operation BITS Structure Board of Directors Catherine Allen CEO BITS Staff BITS Advisory Group Security & Risk Assessment Steering Committee Research & Communic- ations Steering Committee de novo Meta- Architecture Working Group Industry Review Working Group Standards Steering Committee Legal and Public Policy Working Group Privacy Working Group

  17. International Co-operation • BITS: Selected Initiatives • Privacy • Security • Certificate Authority Business Case Analysis Global Security Architecture White Paper • Meta Architecture • Standards • OFX/Gold Process - Draft II • Smart Card Standards White Paper • Legal and Public Policy • Digital Signature Legislation • White House Electronic Commerce Strategies

  18. International Co-operation • BITS and FIWG • Several informal meetings • Mutual interest in co-operation • Priority areas • SET • Smart card integration • Governance • Trust infrastructure and Security • Standards development • Next step • High-level meeting late June/early July

  19. Next steps • Common projects • Transborder projects • Common infrastructure • Standards

  20. Next steps • Is there a need for an Internet banking forum ? • Bringing together • Financial institutions and technology providers • Traditional players and newcomers • Public authorities and private sectors • Allowing a sharing of data and experiences • Developing consensus on critical issues

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