Analysis of Online Banking Industry
According to King, McKay, Marshall, Lee and Viehland (2008) online banking or electronic banking (e-banking) includes various banking activities conducted via the Internet from home, business, or on the road opposed to at a physical bank location. This paper shall compare and contrast both the online and offline retail environment for banking services.
Internet banking offers great opportunities to the financial-services industry, including:
• a huge potential customer base
• large economies of scale in investment
• the possibility for services to be delivered using standardised modular software
• easy management of software
• a common browser front end
• the possibility to be equipped with good security protocols
• the easy application of pre-packaged communications software, enabling customers to communicate directly with the bank
• instant access to the bank for all connected customers
• significant prospects for development and for adding value cheaply.
Source: Keynote Report (2009)
Online banking presents many advantages in comparison the ‘bricks and mortar’ offline environment. In terms of placement consumers can access banking facilities from the comfort of their own home or workplace as opposed to visiting a branch on the high street. Online banking is extremely time-saving providing instant access to online services. It reduces and in some cases even completely eradicates the need to contact a local branch to make transactions. Consumers can use ‘e-banking’ to check their accounts, pay bills online, transfer funds from one account to another and in some countries even secure a loan electronically. In today’s fast moving society time is money. Customer not only saves valuable time by avoiding a trip to the branch but also may save on any travel expenses they may have incurred embarking on a trip to the local branch.
Another benefit of e-banking is that’s the system is accessible 24 hours a day, 365 days a year. Funds can be transferred at any
Internet banking offers great opportunities to the financial-services industry, including:
• a huge potential customer base
• large economies of scale in investment
• the possibility for services to be delivered using standardised modular software
• easy management of software
• a common browser front end
• the possibility to be equipped with good security protocols
• the easy application of pre-packaged communications software, enabling customers to communicate directly with the bank
• instant access to the bank for all connected customers
• significant prospects for development and for adding value cheaply.
Source: Keynote Report (2009)
Online banking presents many advantages in comparison the ‘bricks and mortar’ offline environment. In terms of placement consumers can access banking facilities from the comfort of their own home or workplace as opposed to visiting a branch on the high street. Online banking is extremely time-saving providing instant access to online services. It reduces and in some cases even completely eradicates the need to contact a local branch to make transactions. Consumers can use ‘e-banking’ to check their accounts, pay bills online, transfer funds from one account to another and in some countries even secure a loan electronically. In today’s fast moving society time is money. Customer not only saves valuable time by avoiding a trip to the branch but also may save on any travel expenses they may have incurred embarking on a trip to the local branch.
Another benefit of e-banking is that’s the system is accessible 24 hours a day, 365 days a year. Funds can be transferred at any
References: • Bradley, L., Steward, K. (2002), "A Delphi study of the drivers and inhibitors of internet banking", International Journal of Bank Marketing, Vol. 20 No.6, pp.250-60. • Ciancutti, A.R. & Steding. T.L. (2000), Built on Trust: Gaining competitive advantage in any organisation, McGraw-Hill, United States • Key Note Report 2008, Internet Banking, [online resource] available at: www.keynote.co.uk • King, D., McKay, J., Marshall, P., Lee, J. & Viehland, D. (2008), Electronic Commerce 2008: A Managerial Perspective, Prentice Hall • Porter, M. (2001) “Strategy and the Internet”, Harvard Business Review. • Moules, J. (2006), “Online Banking Giants Popularity”, Financial Times, October 14th • Rempel, J.K., Holmes, J.G. & Zanna, M.P. (1985). Trust in close relationships. Journal of Personality and Social Psychology, 49, 95-112. • Saleh, Z. I., (2003) “An examination of the Internet security and its impact on trust and adoption of online banking”, Capella University