Improving E-Society through E-Banking

Improving E-Society through E-Banking

Bala Shanmugam (Monash University, Malaysia) and Mahadevan Supramaniam (Taylor’s University College, Malaysia)
DOI: 10.4018/978-1-61520-635-3.ch010
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Abstract

The emergence of e-banking has created a significant transformation towards the services provided by the banks. E-banking provides alternatives for faster delivery of banking services to a wider scope of customers hence creating a major impact towards e-society. Nowadays, e-banking have gained increasing popularity in delivering online services for e-society. However, prior to the implementation of e-banking, several factors and best practices must be identified to ensure a more efficient execution of e-banking services towards the development of e-society. E-banking factors are found to have a significant effect on the success of e-society.
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Background

Driven by the challenge to expand and capture a larger share of the banking market, some banks invest in more bricks and mortar to enlarge their geographical and market coverage. Others have considered a more revolutionary approach to deliver their banking services via a new medium: the Internet. Since the introduction of the Internet in 1969, it has evolved from the sole domain of the computer nerd and the academic to a mainstream channel of communication (Nehmzow, 1997). Recently, it has been rapidly gaining popularity as a potential medium for electronic commerce (Crede, 1995; Ooi, 1999; U.S. Department of Commerce, 1999). The rapid growth of the Internet has presented a new host of opportunities as well as threats to business. Today, the Internet is well on its way to become a full-fledged delivery and distribution channel and among the consumer-oriented applications riding at the forefront of this evolution is electronic financial products and services.

The Internet is now being considered as a strategic weapon and will revolutionize the way banks operate, deliver, and compete against one another, especially when competitive advantages of traditional branch networks are eroding rapidly (Nehmzow, 1997; Seitz, 1998). As “Business Week” noted, “Banking is essential to a modern economy, banks are not” (quoted in Financial Times, 1996). This statement is supported by a recent report from Booz Allen & Hamilton (Warner, 1996) that claims the Internet poses a very serious threat both to the customer base of the traditional banking oligopoly and to its profits. Their belief is that the Internet promises a revolution in retail banking of monumental proportions. High street or brick and mortar banks as we know them may largely disappear.

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