fem 3204 : 3 (2+1) perancangan kewangan dalam pasaran global financial planning in a global market...

FEM 3204 : 3 (2+1)FEM 3204 : 3 (2+1)Perancangan Kewangan Dalam Perancangan Kewangan Dalam

Pasaran GlobalPasaran GlobalFinancial Planning in a Global Financial Planning in a Global

MarketMarketHUSNIYAH BT. ABD. RAHIMHUSNIYAH BT. ABD. RAHIM

BILIK A2-14BILIK A2-14Jabatan Pengurusan Sumber & Pengajian Jabatan Pengurusan Sumber & Pengajian

PenggunaPenggunaFakulti Ekologi ManusiaFakulti Ekologi Manusia

Chapter 8Chapter 8

Financial Services Financial Services Development and its Development and its Impact on Individual Impact on Individual

and Organisationand Organisation

E-banking DefinedE-banking Defined

Electronic banking simply known as e-banking or Electronic banking simply known as e-banking or

electronic fund transfer (EFT) is the use of electronic fund transfer (EFT) is the use of

computers & telecommunications enabling computers & telecommunications enabling

banking transactions to be carried out by banking transactions to be carried out by

telephone or computer instead of through human telephone or computer instead of through human

interactioninteraction

Thus it is an automated delivery of banking Thus it is an automated delivery of banking

products & services directly to customers through products & services directly to customers through

electronic, interactive communication channelselectronic, interactive communication channels

Use of E-bankingUse of E-banking

Used by financial institution customers, Used by financial institution customers,

individuals or businesses for retail purchases, individuals or businesses for retail purchases,

automatic teller machines (ATMs), automatic automatic teller machines (ATMs), automatic

payroll deposits and bill paymentspayroll deposits and bill payments

Other than that to access accounts, transact Other than that to access accounts, transact

business, or obtain information on financial business, or obtain information on financial

products and services through a public or products and services through a public or

private network, including the Internet.private network, including the Internet.

E-banking SystemE-banking System

Uses computer & electronic technology as a Uses computer & electronic technology as a

substitute for checks & other paper transactions. substitute for checks & other paper transactions.

Initiated through devices like cards or codes that Initiated through devices like cards or codes that

enable individuals or authorized personnel to access enable individuals or authorized personnel to access

the account. the account.

Eg. ATM cards or debit cards, Personal Eg. ATM cards or debit cards, Personal

Identification Numbers (PINs), account holders’ Identification Numbers (PINs), account holders’

signature or a scan are used for this purpose. signature or a scan are used for this purpose.

. .

Medium of TransactionMedium of Transaction

Electronic channels involved are Electronic channels involved are

personal computer (PC), via landline & personal computer (PC), via landline &

mobile phone connections, automated mobile phone connections, automated

teller machines (ATMs), teller machines (ATMs), personal digital personal digital

assistant (PDA), kiosk, or Touch Tone assistant (PDA), kiosk, or Touch Tone

telephone. telephone.

Benefit of E-bankingBenefit of E-banking

For services such as home banking, whereby a For services such as home banking, whereby a

person can make transactions via personal computer person can make transactions via personal computer

or via a direct connection or by accessing a Web or via a direct connection or by accessing a Web

site., transactions could be made anywhere, & any site., transactions could be made anywhere, & any

time including at home & not only during the day.time including at home & not only during the day.

Vastly reduced the physical transfer of paper money Vastly reduced the physical transfer of paper money

& coinage from places to places or from persons to & coinage from places to places or from persons to

personspersons

Benefit of E-banking (cont.)Benefit of E-banking (cont.)

It facilitate retail paymentsIt facilitate retail payments

Consumers could appreciate the 24-hour Consumers could appreciate the 24-hour

access to cash through an automated access to cash through an automated

teller machine (ATM) or Direct Deposit of teller machine (ATM) or Direct Deposit of

paychecks into checking or savings paychecks into checking or savings

accounts. accounts.

Type of E-banking ServicesType of E-banking Services

1. Automated Teller Machines (ATM) or 24-hour Tellers:1. Automated Teller Machines (ATM) or 24-hour Tellers:

Electronic terminals allowed anytime banking Electronic terminals allowed anytime banking

transactions. transactions.

To withdraw cash, make deposits, or transfer funds To withdraw cash, make deposits, or transfer funds

between accounts, using an ATM card & PIN number.between accounts, using an ATM card & PIN number.

Some charge or fee will be required for interbank Some charge or fee will be required for interbank

transactions, from one bank to another bank (eg CIMB transactions, from one bank to another bank (eg CIMB

to RHB Bank). ATMs will tell that a fee will be charged to RHB Bank). ATMs will tell that a fee will be charged

at the terminal screen before completing the transaction. at the terminal screen before completing the transaction.


2. Direct Deposit 2. Direct Deposit

Authorized individuals with specific deposits, Authorized individuals with specific deposits,

such as paychecks & Social Security checks, to such as paychecks & Social Security checks, to

your account on a regular basis. your account on a regular basis.

Individuals can pre-authorize direct withdrawals Individuals can pre-authorize direct withdrawals

so that recurring bills, such as insurance so that recurring bills, such as insurance

premiums, mortgages, & utility bills, are paid premiums, mortgages, & utility bills, are paid

automatically. automatically.


3. Pay-by-Phone Systems:3. Pay-by-Phone Systems:

Individual can call the financial institution Individual can call the financial institution

to instruct on bill payment or to transfer to instruct on bill payment or to transfer

funds between accounts. funds between accounts.

A pre -agreement with the institution is A pre -agreement with the institution is

needed prior to the transfers. needed prior to the transfers.


4. Personal Computer Banking:4. Personal Computer Banking:

Enables individuals to handle many Enables individuals to handle many

banking transactions via personal banking transactions via personal

computer. computer.

Eg. viewing the account balance, request Eg. viewing the account balance, request

transfers between accounts, & pay bills transfers between accounts, & pay bills

electronically.electronically.


5. Debit Card Purchase Transactions :5. Debit Card Purchase Transactions :

Enable ones to purchases with a debit card, Enable ones to purchases with a debit card,

which also may be the ATM card. which also may be the ATM card.

This could be at a store or business, on the This could be at a store or business, on the

Internet or online, or by phone. Internet or online, or by phone.

Similar to the process of using a credit card, Similar to the process of using a credit card,

with some important exceptions., with enough with some important exceptions., with enough

fund in your accountfund in your account


6. Electronic Check Conversion:6. Electronic Check Conversion:

It converts a paper check into an electronic It converts a paper check into an electronic

payment in a store or when a company receives payment in a store or when a company receives

the check in the mail. the check in the mail.

In a store, the check given to the cashier is run In a store, the check given to the cashier is run

through an electronic system that captures the through an electronic system that captures the

individuals banking information & the amount of individuals banking information & the amount of

the check. the check.

One has to sign a receipt & have a copy of it. One has to sign a receipt & have a copy of it.


6. Electronic Check Conversion (cont.):6. Electronic Check Conversion (cont.):

The check is handed back to the individual with The check is handed back to the individual with

certain mark on it by the merchant so that it certain mark on it by the merchant so that it

can’t be reused.can’t be reused.

The merchant electronically sends information The merchant electronically sends information

from the check (but not the check itself) to the from the check (but not the check itself) to the

financial institution & the funds are transferred financial institution & the funds are transferred

into the merchant’s account. into the merchant’s account.


In cases where a check is mailed to a merchant , they In cases where a check is mailed to a merchant , they

may electronically send information from the check may electronically send information from the check

through the system, & funds are transferred into their through the system, & funds are transferred into their

account. account.

For a mailed check, an advance notice should be send For a mailed check, an advance notice should be send

by the merchant. The notice might be included in the by the merchant. The notice might be included in the

monthly statement or under its terms & conditions. monthly statement or under its terms & conditions.

It should also state if the merchant will electronically It should also state if the merchant will electronically

collect a fee, in cases of insufficient funds . collect a fee, in cases of insufficient funds .

Choice of E-banking SystemChoice of E-banking System

Financial institutions may choose their e-banking Financial institutions may choose their e-banking

system configuration based on four factors:system configuration based on four factors:

Strategic objectives for e-banking Strategic objectives for e-banking

Scope, scale, & complexity of equipment, Scope, scale, & complexity of equipment,

systems, & activities systems, & activities

Technology expertiseTechnology expertise

Security & internal control requirementsSecurity & internal control requirements

E-banking Support SystemE-banking Support System

Financial institutions may outsource in Financial institutions may outsource in

supporting their e-banking services through supporting their e-banking services through

the following hosts:the following hosts:

Another financial institutionAnother financial institution

Internet service providerInternet service provider

Internet banking software vendor or processorInternet banking software vendor or processor

Core banking vendor or processorCore banking vendor or processor

E-banking Support SystemE-banking Support System

Financial institutions may outsource in Financial institutions may outsource in

supporting their e-banking services through supporting their e-banking services through

the following hosts (cont.):the following hosts (cont.):

Managed security service providerManaged security service provider

Bill payment providerBill payment provider

Credit bureauCredit bureau

Credit scoring companyCredit scoring company

E-banking ComponentsE-banking Components

Website design & hostingWebsite design & hosting

Firewall configuration & managementFirewall configuration & management

Intrusion detection system or IDS Intrusion detection system or IDS

(network & host-based)(network & host-based)

Network administrationNetwork administration

Security managementSecurity management

Internet banking serverInternet banking server

E-banking Components (cont.)E-banking Components (cont.)

E-commerce applications (e.g., bill E-commerce applications (e.g., bill

payment, lending, brokerage)payment, lending, brokerage)

Internal network serversInternal network servers

Core processing systemCore processing system

Programming supportProgramming support

Automated decision support systemsAutomated decision support systems

In the late 1990s, the concept of electronic banking was In the late 1990s, the concept of electronic banking was

heavily promoted heavily promoted

Even in the first wave of the application of the Internet, Even in the first wave of the application of the Internet,

banks were advised to change from the traditional banks were advised to change from the traditional

transactions to the one supported by electronic, electronic transactions to the one supported by electronic, electronic

money was introducedmoney was introduced

E-banking Marketing & its Effect on financial management of

individual

E-banking Marketing & its E-banking Marketing & its effect on financial management effect on financial management

of individual (cont.)of individual (cont.)

Singapore may be the first place to Singapore may be the first place to

operate using mostly electronic money operate using mostly electronic money

by 2008. by 2008.

The bank Nordea in Scandinavia has a The bank Nordea in Scandinavia has a

significant proportion of customers who significant proportion of customers who

bank electronicallybank electronically

E-banking Marketing & its E-banking Marketing & its effect on financial effect on financial

management of individual management of individual (cont.)(cont.)

In promote heavily this technology, customers In promote heavily this technology, customers

did not really want this technology. did not really want this technology.

Instead, many require a friendly & efficient Instead, many require a friendly & efficient

service.service.

A research was conducted for this Market A research was conducted for this Market

Assessment report by BMRB Access in April Assessment report by BMRB Access in April

2004. 2004.



Although a significant proportion of the 977 Although a significant proportion of the 977

respondents claimed to use their bank respondents claimed to use their bank

electronically, however very few of them showed electronically, however very few of them showed

any enthusiasm for electronic banking services. any enthusiasm for electronic banking services.

This indicates that people are not very interested This indicates that people are not very interested

in automated telephone services, nor in being in automated telephone services, nor in being

advised on their financial affairs by their bank. advised on their financial affairs by their bank.



In addition, they are even less interested in In addition, they are even less interested in

using electronic purses/ cashpoint for all their using electronic purses/ cashpoint for all their

financial affairs,financial affairs,

They are not at all interested in interactive They are not at all interested in interactive

television banking or downloading cash to their television banking or downloading cash to their

mobile telephones. mobile telephones.



In fact, a considerable proportion of the In fact, a considerable proportion of the

respondents believed electronic banks to be respondents believed electronic banks to be

insecure & would not trust them to handle insecure & would not trust them to handle

their affairs. their affairs.

Even though many of these respondents were Even though many of these respondents were

elderly & in the lower social grades, it would elderly & in the lower social grades, it would

be unwise to disregard their opinions.be unwise to disregard their opinions.



In Scandinavia, Nordea bank does not face such In Scandinavia, Nordea bank does not face such

problems & has a large, international clientele of problems & has a large, international clientele of

remote customers of the wide range of services. remote customers of the wide range of services.

In Singapore, the introduction of electronic smart In Singapore, the introduction of electronic smart

cards has been pioneered by the road charging cards has been pioneered by the road charging

system & there is a consensus (85%) in favour of system & there is a consensus (85%) in favour of

these cards.these cards.


management of individual management of individual (cont.)(cont.) In the UK, consumers are more cautious bank branches In the UK, consumers are more cautious bank branches

are critical to a multichannel distribution system. are critical to a multichannel distribution system.

Cashpoints are being upgraded, although providers are Cashpoints are being upgraded, although providers are

gaining benefits from this. gaining benefits from this.

In addition, plastic cards are being used increasingly In addition, plastic cards are being used increasingly

for both payments & borrowing. for both payments & borrowing.

Debit cards are more popular than credit cards, leads Debit cards are more popular than credit cards, leads

to a long-term decline in margins on card operations.to a long-term decline in margins on card operations.

E-banking Marketing and its E-banking Marketing and its effect on financial effect on financial

management of individualmanagement of individual Banks need to show that they have mastered Banks need to show that they have mastered

electronic banking technology, can offer full security electronic banking technology, can offer full security

& that they can provide a service that meets & that they can provide a service that meets

customer's needs.customer's needs.

When this happens, customers in the world will be When this happens, customers in the world will be

ready to accept the technology that is already ready to accept the technology that is already

accepted in such countries, eg. Singapore, Hong Kong accepted in such countries, eg. Singapore, Hong Kong

& South Korea. & South Korea.

fem 3204 : 3 (2+1) perancangan kewangan dalam pasaran global financial planning in a global market...

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