Thursday, June 12, 2008

Internet Banking Services - Bankers and Consumers Perspective

Information technology becomes a key element for future develops in every industry. Banking industry have transformed into new business model and it allows banks to replace old and outdated process and innovation new business process as well as maintain customer relationship with bank.

The growth of using internet banking is increasing dramatically in the past 10 years. Internet banking in its basic form: access to accounts, statements, transfers, stop payments and clear items.

Internet banking
In order to increase the competitive advantage, the traditional banks starting to implement the new services such as online banking. Online banking is electronic banking through internet transaction as a distribute channel. Beside that, some additional services was offer from the bank such as ATM installment, telephone banking and PC.

Consumer able to access to account and check information via internet by using computer or other devices. By using internet banking, the bank user able to perform:-
• Checking account balance
• Checking transaction history
• Cash management
• Bill presentment and bill payment
• Transferring fund from an account to another account known as Account to Account transfer (A2A).
• Manage stock investment and stock management.

Reason for these internet growth including competitive pressure from other bank, providing better services to consumer and increasing brand awareness. Many studies find out that the competitive pressure from other force bank drive innovation in bank in order to increase the competitive advantage.

Benefit of internet banking to banks
The advantage of using internet banking prevails over than the disadvantage of using internet banking. Base on banker perspective, to develop a internet banking infrastructures, it help bank to reduce the cost and maximize profit. The transaction cost of traditional bank approximately $1.07. By using ATM, it would be reduce $0.27 (Nath, R., Schrick, P. and Parzinger, M. (2001). The result shows that, the cost of using technology in bank sector will be lower than using paper to deliver to the email. Internet banking, help bank to reduce the staff that working in the physical bank A part from that, it help bank to minimize and smaller the demand of the bank structure.

Benefit of internet banking to consumer
With the advantage of no physical structure of bank, the intangible banks can provide lower cost of production. The virtual bank able to offer higher interest rate to the online user compare to the physical bank. Therefore the internet user can gain higher interest rate by the offering from the bank.

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