Banking and Finances Banking and Finances

Banking and FinancesBanking and FinancesTraditional banking transactions

typically involved people, lots of paper, handing over of cash and standing in queues at bank tellers during lunch!

Due to the advances of IT the landscape of banking and commerce has changed dramatically.

Traditional Teller

Electronic bankingElectronic banking Most people view electronic

banking as a way to access their cash/funds 24/7 through an automated teller machine (ATM).

However, electronic banking involves a variety of transactions and is known as electronic fund transfer (EFT)

Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose.

Some use other forms of debit cards such as those that require, at the most, your signature or a scan."

Automated Teller Machines Automated Teller Machines (ATM)(ATM)

EFT “ uses computer and electronic technology as a substitute for checks and other paper transactions.

EFT’s are initiated through devices like cards or codes that let you, or those you authorize, access your account.

Electronic Fund Transfer Electronic Fund Transfer (EFT)(EFT)

Transactions include : Automated Teller Machines: where you

can withdraw money, make deposits, or transfer funds between accounts. Usually in other currencies depending on where you are

Direct Deposit: is where your salary can be directly deposited to your account. Also, you can set up your account for automatic withdrawals or transfers to other accounts (even other banks locally or off shore) such as credit cards, mortgage repayments, etc.

Transactions include :Tele-banking: allows you to call your

bank and conduct the desired transactions.

Personal Computer Banking (online banking): access your accounts and take care of transaction via the internet.

Point-of-Sale Transfers: making purchases using a debit or ATM card at the point of sale, i.e.. a shop.

Inquiry: such as balance inquiries. Administrative, such as changing PIN

numbers or account details.

Internet banking (Online banking)Internet or online banking is a term

used for carrying out EFT and transactions over the internet through a bank's secure website.

Visit your banks web site for online

banking. Disadvantage : Online banking fraud is

on the rise.Electronic fraud costing millions for

companies.

Electronic cash Often termed digital cash or

electronic money. Electronic cash is just exactly that,

it is way of representing debit and credits within a corporate value system through the use of IT.

It can be in the form of EFTs, direct deposits, or private currencies such as e-gold or Second Life money that can be converted to USD.

Electronic cash : ExamplesSingapore Government utilises E-

Z link for its public transportation system. E-Z link by companies for its customer base. The Card technology is what has led to the success of this system.

Smart cards in Japan. E-points in Zain

brokerageA broker is a person who mediates

between a buyer and a seller. They often have a firm/company

that is called a brokerage. Most people associate a broker and

brokerage with stocks and the stock market.

In order to buy shares in a company usually one needs to go through a broker.

brokerageTraditionally, the buyer would have

to meet the seller at an exchange and then would buy shares in that company.

The buyer would receive a stock certificate from the seller.

Now, the buyer can go through an online brokerage (such as Sharebuilder and buy/sell shares whenever they wish without having to consult a broker or receiving a stock certificate.

InsuranceInsurance

Customers can now shop online and purchase any type of insurance (health, life, theft etc. ).

Check out this example of an insurance company :

http://www.einsurance.com/

AdvantagesAdvantages

EFT is safe, secure and speedy. Improves payment delivery

service. Reliable method for performing

transactions. Convenient: carry out banking

after hours (don't need to rush out at lunch).

Cheaper than traditional methods.

AdvantagesAdvantages

Paperless. Customer service can be improved

through email and web pages. Information can be kept up to date

and presented at any time. Access to global markets. Reduces service and product costs. Supply and demand can be easily

monitored.

DisadvantagesDisadvantages E commerce fraud. Attitudes toward banking

electronically need changing. Reliance on IT.