Evolution of Banking Industry
The first electronic banking product was money transferred via telegraph in the mid 1800’s. To answer various questions about the securities and interest of the clients, the banks lend funds to purchase the ideas of innovation of banking industry. The first process in saving money is through the use of passbooks. But the new generation wants a new system that will help them access to their fund in an ease, and at the same time with security. For the busy people, they find it very time consuming to wait in the line just to withdraw or deposit your cash in the teller of the bank. And some of them became so irritated when they were in the last of the long line and they are in hurry.
But the clients don’t have to worry no more because the era for the banking procedure already absorbed the fast life cycle of every individual. The introduction of the ATM (Automated Teller Machine) Card is just like you have a full amount of money in a thin plastic. It is ideal to carry anywhere, anytime. The features of it make the clients live at peace for it also have a security pin to make the card only available to the one who owns it. Plus, there are called Electronic Card or often named Credit or Debit Card which automatically charges the purchased product.
But still there are many unconvinced clients that are daring the bank to take more advantageous in the time where all the people need convenience. So the start for the online banking (or Internet banking) came. This allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.
Advances in microprocessors led to the development of the personal computer which could retrieve both summary and detail bank account information. The personal computer also allowed the user to move funds, which provided greater control of cash. The demand for the kind of obscuring and only few people can access to this kind of banking preferences. Although it is very efficient in those people who spend most of their time facing their expensive computer and locked in a same room. It is also applicable for those who stay at home as long as they have a connection in the internet. And it is called Home Banking procedures, for at the same time, a client can track the transactions via phone or internet services. The purpose of the electronic banking is to let the bank go for you, if you cannot go for it.
Impact of Electronic Banking
For most customers, it is a convenience that they have grown accustomed to the electronic banking. And for the large commercial customer, processing thousands or even millions of payments and/or sales a day – it would be impossible to live without the attachment on it. The banks can become technology providers by spinning off technology resources to start up new business streams, they can become content providers for information regarding products, indices etc, they can become context providers for setting-up e-market spaces, and also enablers by providing back bone systems to support multiple payment system alternatives.
The online channel enables banks to offer low-cost, high value-added financial services and also benefit from the promotional opportunity to cross-sell products such as credit cards and loans. The 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. In saving time and money for users, banks offer online banking as a less expensive alternative to branch banking. In addition, on-line banking enables banks to acquire information on consumer habits and preferences, for later marketing purposes. An expanding customer base and transaction cost savings are major benefits for banks.
Conclusions
The evolution of electronic banking products has made day to day banking operations faster and more efficient. The increased productivity gained through the use of electronic banking products has allowed businesses to do more with less. Businesses that do not use some form of electronic banking products will not grow. With research, cost benefit analysis and appropriate security controls, practically any business can benefit form electronic banking products. The growth of electronic banking has not been limited to advances in information reporting. Electronic payments have become a force majeure. With increased acceptance and advances in technology, the use of electronic banking products will continue to increase. For organizations to stay competitive and to grow, they must embrace electronic banking products.
References:
Electronic Banking [Online] Available at: http://www.gscpa.org/Content/Files/Pdfs/Conferences/SEAS08/B6-Electronic%20Banking.pdf [Accessed 04 Aug 2009].
Electronic Financial Services (n.d.). Principles of Bank Operation [Online] Available at: http://www.accd.edu/sac/business/bbeshea/bnkg1303/intro%20to%20banking%20-%20session%2013.htm [Accessed 04 Aug 2009].
Role of the Electronic Banking Services on the Profits of Jordanian Banks (2006) American Journal of Applied Sciences 3 ISSN 1546-9239 [Online] Available at: http://www.scipub.org/fulltext/ajas/ajas391999-2004.pdf [Accessed 04 Aug 2009]
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