E-banking. Content. What is E-banking? Development of E-banking Advantages of the E-Banking Disadvantages and Risk of E-banking Precaution of risk and security Persecutions. What is E-banking?. Definition:
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Content • What is E-banking? • Development of E-banking • Advantages of the E-Banking • Disadvantages and Risk of E-banking • Precaution of risk and security • Persecutions
What is E-banking? Definition: The provision of banking service through electronic channels and the customer can access the data without any time and geographical limitation.
Development of E-banking 1980s : - Rapid development of the Internet - TCP/IP system (communication system) - E-commerce
Development of E-banking Early 1980s : - Access to their accounts with the computer of the bank .
Development of E-banking May 1995 : Wells Fargo - the first bank in the world to offer customer access to their accounts over the internet . • Allows customer to see their accounts online
Development of E-banking Hong Kong (September 1999 ): Bank of East Asia - first launched Internet banking • Mortgage applications , personal loans and stock trading • Basic banking functions
Distribution of Three Types of Internet Banking • 35 institutions • 80% of total customer deposits - 60% of total assets of Hong Kong banking sector
Growth of Internet Banking Accounts • Personal internet banking accounts grew 12.5% • Business internet banking accounts grew 53.3%
Distribution of Internet Banking among 35 Institutions • Six major institutions are serving : • - 78% of all personal internet banking accounts • - 66% of all business internet banking accounts
Advantages of E-banking • Benefits for Banks • Benefits for Small to Medium Businesses • Benefits for Customers
Benefits for Banks • Larger customer coverage • Reducing the costs of operations • Promoting their services and products internationally • Increasing the customer satisfaction and providing a personalized relationship with customers
Benefits for Small to Medium Businesses • To run its operations more effectively • Lower cost than traditional financial management mechanisms
Benefits for Customers Convenience • 24 hours a day, seven days a week Cost • Reducing transfer fees Speed • Faster circulation of assets Competitiveness - Fostering competition in financial market
Benefits for Customers Communication • communicate easily Environmental • Abolishing the uses of paper Others - Offering one-stop-shop solutions
Brokerage Services • To create a group of investment to observe • To learn about companies’ financial performance online
Automatic Teller Machine( ATM ) • First electronic channel introduced to HK • Accepting deposits and dispenses cash • Convenient in handling accounts
A Demonstration of Paying Tax Online of HSBC Step 1 - Click “Add New Merchant”
- Choose the category, merchant and bill type - Insert the bill payee account number A Demonstration of Paying Tax Online of HSBC
Choose the account that you want to transfer from Insert the amount of fund that you would like to transfer Choosing the date of transfer A Demonstration of Paying Tax Online of HSBC Step 2
Disadvantages on E-banking A need for customer skill to deal with computers and browsers. E.g. Elderly, Housewives → Inconvenient Site change it will make the customer have some confusion or delay. Security Risk
Security Risk • Increasing number of fraudulent bank websites • Fake emails purporting to be sent from banks • Use of Trojan Horse programs to capture user IDs and passwords
Fraudulent Bank Websites • A suspicious bank website:www.onlinebea.com • Original bank websitewww.hkbea.com • The website was believed to aim to trick persons into disclosing their sensitive personal information.
Fake Emails • Email send fromFraudulent bank • Verify the personal information • Guide customerenter the fraud link • Disclosing their ATM card numbers and their passwords
Viruses and Worms-Trojan Horse Program • When we open some suspiciouswebsites or email • Trojan Horse Programwill install our computer secretly • Hidden in the computer • When you access bank websites • Capture our account andthe password
Persecutions For Bank: • Should provide specific guidance to their customers
For Customers : • Should not disclose their customer IDs (e.g., account numbers) or passwords to anyone else. • Periodically change their passwords • Should promptly log out from the service • Should regularly check their account balances and statements to identify unusual transactions.
Do not access Corporate Cyberbanking through public terminals. • To safeguard your computer from any other hacker attack, install anti-virus and anti-spyware software on your computer and update it regularly.
Don’t use the hyperlink to login to the website of banks Should deeply check the postscript of the website Observe that is it have the encryption and compare the login account of encryption cert is equal to the bank. Case From Newspaper
Step 1 • Unique ID and PIN to login
Step 2 • Unique Singer PIN to authorize transaction
Step 3 • 128-Bit SSL & java applet guarantee end-to-end encryption
Step 4 • Optional use of digital certificate to login and sign transaction