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Digital technologies, including the Internet and other related technologies, and extensive explosion of data, commonly referred to as big data, are changing the way the companies do business (Peitz & Waldfogel, 2012). Digital or electronic business (e-business) usually refers to a business conducted over the Internet, but in general, any network, public or private, can be included. Thus, Internet and related technologies are more than just new delivery channels: they are a completely different way of providing financial services. Electronic finance (e-finance) is a part of e-business and provides financial services through electronic channels (Allen, McAndrews & Strahan, 2001; Shahrokhi, 2008; King, 2010; Yablonsky, 2014a,b). There are several branches that come from e-finance. They cover the sectors of e-banking, e-brokerage, e-payment and some other activities. Both financial organizations and customers (individuals, companies or government) benefit from the use of electronic channels and e-banking services (Claessens S., Glaessner T. & Klingebiel D., 2002). These services offer consumers a great deal of convenience, saving time when managing financial matters, and also lower costs, reducing service charges.
E-finance is identified as an area with an inherent need for reusing and exchanging information. The financial services industry is one of the most data-rich environments on the Web today; however access to this data is often inhibited by the lack of adoption of standards by the industry. The current standards activities that are likely to be of interest for the financial services industry include (A Discussion of the Role of Standards in the Financial Services Industry, 2011):
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Accredited Standards Committee X9 (ASC X9), who is accredited by American National Standards Institute (ANSI), and also acts as the secretariat for International Organization for Standardization Technical Committee 68 (ISO TC 68), who is working on standards in the areas of payments, securities and related security technologies;
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North American Security Standards Productions Organization (NASPO), also accredited by ANSI, about work they are doing in the areas of identity proofing and verification and fraud countermeasures;
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Payment Card Information (PCI) Security Standards Council about their work on setting security standards to secure card-related data;
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The Santa Fe Group about the Shared Assessments Program which provides standards and tools for assessing IT outsource vendors; and
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World Wide Web Consortium (W3C) about their standards activities in Web technologies, with emphasis on the emerging semantic web. There are several technologies being used by the e-finance providers in delivering their e-finance services: Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT)
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Electronic Benefits Transfers (EBT), Electronic Trade Confirmations (ETC).
Key Terms in this Chapter
E-Trading: The facility that provides some or all of the following services: electronic order routing from users to the system; automated trade execution—translating orders into trade; electronic dissemination of bid/offer quotes and depth; post-trade information (transaction price and volume data).
E-Insurance: The application of internet and related information technologies to the production and distribution of insurance services. In a narrower sense, it can be defined as the provision of an insurance cover whereby an insurance policy is solicited, offered, negotiated and contracted online.
E-Acquiring: The service payment carried out using credit cards over the Internet.
Taxonomy: Taxonomy is comprised of a hierarchy of concepts linked by a transitive subsumption relation (often called isA or subClassOf) whereby each instance of a class can be inferred.
Digital or Electronic Business (E-Business): Digital Business usually refers to a business conducted over the Internet, but in general, any network, public or private, can be included. E-business is a term which includes servicing customers, collaborating with business partners and conducting electronic transactions within an organization, as well as buying and selling.
Electronic Banking (E-Banking, Internet Banking, Virtual Banking, or Online Banking): All forms of banking services and transactions performed through electronic means. E-banking includes the systems that enable financial institution customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the internet.
Electronic Finance (E-Finance): E-finance is a part of e-business and provides financial services through over the Internet, but in general, any network, public or private, can be included.
E-money: The monetary value which is stored on electronic devices and which is acceptable as a means of payment by undertakings other than the issuers.