e-commerce influence on the banking sector presented by: ying shen, shan huang, ilya bibik, patricia...

E-commerce influence on the banking sector

Presented by: Ying Shen, Shan Huang, Ilya Bibik, Patricia Chalco

Supervised by : Professor Jacques Robert

In the Course: Économie numérique 4-870-00

2004/12/7

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Introduction

Relationship with Customers

Relationship with Partners

Relationship with Employees

Case Study

Conclusion

Q&A

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What is Electronic BankingWhat is Electronic Banking

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“Electronic banking is

the process by customer who

perform banking transactions

electronically

without visiting a brick-and-mortar institution.

” -----Hussam Al-Abed

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Introduction




Case Study

Conclusion

Q&A

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OpportunitiesOpportunities

The advent of the Internet and the developing of technology are both opportunity and challenge for the banking industry.

The opportunity for the e-banking WHY?

The challenge for the traditional bank WHY?

“Online transaction costs can be as low as 1 % of an equivalent off-line transaction, rapidly increasing the popularity of the online option with consumers, as well as banks” (Turban et al. 2002).

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AdvantagesAdvantages

Costs reduce: accounts: much less time to set up and use. favorable terms, including free accounts, free transfers and free

payment cards. interest: several percentage points higher

Convenience: No time and place limitation. “24 x 7”

access and manage accounts all at online bank sites and generally execute ,confirm transactions even quicker than ATM processing speeds.

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Example: Bank of chinaExample: Bank of china

http: //www. bank-of-china .com

E-Corp : “Cybergiro, Group Inquiry, Real-time Inquiry and other services .”

Focus on both group clients(B2B) and individual clients(B2C)

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WeaknessesWeaknesses

Security is a big issue. there are potential risks that you need to pay attention to.

The major service that is not provided is cash in and cash out.

The other problem is that you may make mistake when you are doing your own banking online. Therefore, there are reports of customers sending money to the wrong account. Banks also make mistakes but when they do it is comforting to have someone other than oneself to blame. That means the customer have to be responsible for their mistakes.

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Security Quick Tips

(the solutions are from bank of Singapore) Security Quick Tips

(the solutions are from bank of Singapore)

Never use the same Internet Banking PIN for other financial or non-financial web-based services such as for email, online shopping, digital identity and other online subscription services.

Protect your PC from viruses and malicious programs.

Avoid using shared/public PCs for Internet Banking.

Check your account and transaction history details regularly.

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Relationship with customers conclusions

Relationship with customers conclusions

Electronic commerce technologies affect individual financial institutions in a number of ways, which together push them to alter the mix of services they offer.

Developing of technologies and lower transactions costs allow Banks to treat clients individually. Such as, online mortgage applications and stock trades, banks can retain their relationships with clients by creating bundles of service unique to the needs of individual clients.

Increasingly demanding customers mean that banks must continually enhance the services that they offer and more suitable for all kinds of clients.

The expectation of what technology should be able to exceed what it currently can do. The big issues of security and trust.

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Introduction




Case Study

Conclusion

Q&A

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Bank needs partnershipBank needs partnership

The value of partnership is highly recognized by both bank managers and customers

Source :http://www.co-operativebank.co.uk/partnership1997/97_customers_social.html

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Who is bank’s partnerWho is bank’s partner

Suppliers: Bank is supported by diverse suppliers. Such as • IT Service Provider (e.g. IBM)• Information Service Provider (e.g. Reuter)• Others ( e.g. Newsagents,)

Various categories within the financial industry itself

(eg. Insurance companies, broker companies, other banks)

Cross-industry partners: Bank can cooperate with the service

provider in other industry to create new service product.• Online payment service • Mobile banking

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SWOT AnalysisSWOT Analysis

Strengths

• Gaining customer base– Case: alliance between Royal bank and AOL

• Significant cross-sell opportunities– Case: Alliance between China bank and Sunlife insurance

company, Canada• Gaining economies of scale or scope

– Case: bank for banks project by UBS• Procurement cost reducing

– Research by Xerox shows the cost reduced from $150 per order to $25 per order

Weakness

• Security concerns • System failure of partners brings troubles

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SWOT AnalysisSWOT Analysis

Opportunities

• Mature B2B technology • High acceptance of partnership value (especially for small bank)

Source: «Networking partnership» by USB news letter 2002

Threats• Fast changing technology tendency • Legal concerns

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Introduction




Case Study

Conclusion

Q&A

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Relationship with employeesSWOT analysis

Relationship with employeesSWOT analysis

The new reality of new virtual banking way of doing things has significant impacts on the relation between employer and employees. It changes the employees’ responsibilities and employees’ importance values.

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Strengths Strengths

What advantages industry has? What do changed industry do well? What relevant resources industry has access to? What do clients see as industry strengths?

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Weaknesses Weaknesses

What industry does badly? What could be improved in the industry? What should industry avoid?

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Opportunities Opportunities

Where are the good opportunities facing industry? What are the interesting trends for the industry?

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Threats Threats

What obstacles industry face?

Is changing technology threatening industry position?

Could any of industry weaknesses be serious threat?

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Relationship with employees conclusion

Relationship with employees conclusion

Work places

Professional level

Security and Control

The quantity to the quality

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Introduction




Case Study

Conclusion

Q&A

Case studywww.netbank.com

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Source: www.netbank.com

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Business modelBusiness model

Source: Managing the Digital Enterprise, Professor Michael Rappa.http://digitalenterprise.org/models/models.html

Virtual Merchant o e-tailer, is a retail merchant that operates solely over the web

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RegulationRegulation

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Value creation Value creation

sharing its operational cost savings by paying

more deposit rates and collecting lower

fees

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Products and servicesProducts and services

DepositDeposit LoanLoan OthersOthers

Checking accounts Residential Mortgage Loans Wireless banking services

Certificates of Deposit (CDs) Checking Overdraft Protection accounts

Foreign currency exchange

Individual Retirement Accounts (IRAs)

Vehicle Loans

GeorgiaSaves ProgramATM debit cards Credit cards

Small business banking products

Leasing

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How to open an account and make a deposit?How to open an account and make a deposit?

wire transfers direct deposits automated teller machines external funds transfers by mail

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How to have cash?How to have cash?

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Introduction




Case Study

Conclusion

Q&A

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ConclusionConclusion

Relationship with Partners Relationship with Employees


TechnologyTechnologyInnovations Innovations

from e-commercefrom e-commerce

TechnologyTechnologyInnovations Innovations

from e-commercefrom e-commerce

Reducing cost

Enhancing User Experience

Creating new service and market

Source: «e-solutions pour l’entreprise»

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Introduction




Case Study

Conclusion

Q&A

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Thanks!

Q & AQ & A

e-commerce influence on the banking sector presented by: ying shen, shan huang, ilya bibik, patricia...

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