Upload
ramberg
View
229
Download
0
Embed Size (px)
Citation preview
8/3/2019 A Framework for Analyzing & Comparing
1/8
179
A FRAMEWORK FOR ANALYZING & COMPARING
E-BANKING CAPABILITIES
Arwa F. Al Saud and Ali E. AbdallahInstitute for Computing Research
London South Bank University
103 Borough Road,
London SE1 0AA - U.K.
ABSTRACT
E-banking offers crucial services for e-society. Without e-payment most e-commerce and e-business services wouldnt
have existed. The state of e-banking greatly varies depending on a number of criteria such as country, brand and culture.The aim of this paper is to introduce a conceptual framework for understanding, analyzing, evaluating and comparing e-
banking capabilities. The framework identifies key qualitative factors for analyzing e-banking services targeted at a
specific market together with appropriate quantitative methods for providing useful measurements of these factors. Much
of the e-banking studies can be seen as specific instances of applying this framework.
KEYWORDS
E-banking, e-commerce, e-capabilities, measure, comparison, evaluation methods, mathematical models.
1. INTRODUCTION
The Internet has opened new opportunities in all walks of life, particularly in e-commerce, e-business, e-learning and e-banking. In this information age, it has become seamlessly possible to conduct business
transactions online without having to physically visit an actual store, bank, or an organization. Indeed, the
store, business or organization with which the electronic transaction is performed could be geographically
thousands of miles away and possibly in a completely different country. The rate of growth in
communications reflects the extent that people, businesses and organizations are relying on the Internet in
their daily life. Hence, businesses in many sectors are eager to offer services which exploit current and future
e-capabilities to gain a competitive edge in the global market. This is indeed the case in the financial sector:
many global players currently provide a range of on-line banking facilities to cater for the requirements of
their clients.
Several studies aiming at providing a better understanding of e-banking have been made and numerous
research papers have been published [1--8]. These papers address different issues of e-banking and can be
usefully classified according to their primary objectives: discussion of the impact of information technology
on the banking sector [3], assessment of opportunities and threats by emerging organizations devoted toonline banking (such as egg.com) [4,5,6], evaluation of e-banking services provided by specific
organizations, and country-specific studies of current trends in e-banking.
1.1 Objectives
There is lack of methodologies for understanding, analyzing and evaluating e-capabilities in the banking
sector . This problem is the main focus of this paper. The aim of this paper is to introduce a conceptual
framework for understanding, analyzing, evaluating and comparing e-banking capabilities. There are several
separate objectives of this study:
8/3/2019 A Framework for Analyzing & Comparing
2/8
IADIS International Conference e-Society 2004
180
to identify factors that affects the evaluation of e-banking services and capabilities to design appropriate measures for each of these factors to provide an overall assessment method which combine the measurements of the individual factors
(for example by proposing an appropriate weight for each factor) in order to give a useful overall
evaluation of the case under consideration.
As a result of this framework, a general methodology for measuring e-banking capabilities is constructed.
The evaluation of specific e-banking case studies can then be seen as systematic (step by step) applicationsof this methodology. The main benefit of this framework is in its generality. It does not make a specific
infrastructural, technological, economical, or cultural assumption. Hence, it will be possible to use it for
global comparisons. For example, to compare e-services provided by different bank in a specific country or
to compare e-banking facilities provided by a single bank in several different countries. The result of this
kind of studies will enable banks to critically assess their services, their competitor services, determine the
extent of matching key factors in Internet customer expectations, and identify areas and means for possibleimprovements.
1.2 Related Work
The main research objective of a number of studies is to assess the threats and the benefits of e-capabilities
in the banking sector [3,16]. Other studies focus on specific geographical areas [8, 9] or specific
organizations[8]. Because of the financial sensitivity, a significant number of studies are privately
commissioned by banks and businesses and not usually publicly available.
Some research addressed the services provided by e-banking [5]. The main emphasis is on presenting
bundled e-banking services and new products to customer via the medium of the internet. The main objective
is to provide customized solutions that carefully match customers profiles[4, 10]. Other area of research
addressed e-banking by adapting existing tools, that were created to assist e-commerce applications, to
measure some aspects the e-capabilities. One of the tools [11] is extended web assessment method
(EWAM), which is based on three criteria: usefulness, ease of use and trust.
One particular organization specific case study [8] involves HSBC. It considers four relevant areas:
Infrastructure (hardware, software, telecommunication backbone), Info-structure (communication
protocols and conventions), Info-culture (user background knowledge), and Info-integration (capabilities for
integrating online and offline organization practices). The emphasis of this study is only on the business and
marketing aspects of e-banking.
A typical country specific case study is exemplified by [9]. It focuses on evaluating the state of the art of
e-banking in New Zealand from a customer centered perspective. It concluded that New Zealand banks have
a range of desirable transaction facilities and protection measures but they would benefit from improvements
in user interfaces and download times.
1.3 Organization
Section 2 introduces high level factors which form the basis of the framework. It also decomposes each factor
into a number of primitive elements which influence the factor. A case justifying the inclusion of each
element in the consideration is made. Section 3 provides quantitative methods for measuring each elementand for evaluating each factor. Section 4 concludes the paper.
2. IDENTIFYING KEY FACTORS
The central aim of this paper is to construct an abstract framework for analyzing and comparing e-banking
capabilities. To develop this framework we have to first identify key qualitative factors which affect the
overall evaluation of e-banking. To help this process, we outline several high level considerations whichinfluence the choice of these factors.
8/3/2019 A Framework for Analyzing & Comparing
3/8
A FRAMEWORK FOR ANALYZING & COMPARING E-BANKING CAPABILITIES
181
The first high level consideration in the development of this framework is to ensure that the chosen factors
are cohesive and as logically independent as possible. This property is often referred to as modularity. It will
enable the effective incorporation of up to date results of other researchers studying aspects relevant to e-
banking (such as infrastructures and interfaces). Therefore, it is greatly beneficial to follow the separation of
concerns principle and clearly distinguish generic components in the framework that are common to all e-services/e-society applications from those components which are specific to e-banking.
The second high level consideration is to strive for generality. This property will enable the framework to
be applicable to a wide range of studies emphasizing geographical, organizational, or cultural aspects. One
effective mechanism for achieving generalization is parameterization. This allows specific instances of the
framework in which certain parameters are fixed to be used. In these cases the studies will be relative to the
fixed values of these parameters.
At the highest level, it is useful to classify these factors in the following categories:
Provisions (functionality) User E-capability Pre-requisites Usability Effectiveness
A detailed explanation of each of these factors is given in the following subsections.
2.1 Functionality
To understand the factors underlying the provision of e-banking services, we need to identify the key
qualitative functionalities being provided. This is done from the service provider (bank) perspective. The
incentive for offering a richer set of services is the reward of attracting new customers and maintaining
current ones. For example, bank A may offer facilities for checking account balance whereas bank B may
provide additional useful facilities such as money transfer to other accounts. Based on existing e-banking
services, we propose the following classifications of e-banking transactions:
Read only transactions, such as querying account balance and reading account statements, thatdo not alter the state of the account and the stored information about any relevant account details.
Read and Request transactions such as requesting a change of address and ordering a chequebook but again disallow changes in the state of the account.
Inter-accounts Modify transactions within the same bank among a set of accounts held by thesame person, for example t transferring money between current, saving and mortgage accounts.
Intra-bank Modify transactions within the same bank that permit, in addition to the abovefacilities, the modification of account information such as balance and statement. Typical such
operations include withdraw, standing orders and transfer to accounts held at the same bank.
Inter-bankModify transactions that permit transferring money to other account in differentbanks (nationally or internationally).
2.2 E-capability Pre-Requisites
When developing online banking services, it is often the case that implicit assumptions about the intendedcustomers are made. These assumptions stretch from infrastructure, customer resources and interfaces in the
intended market. When analyzing e-banking capabilities. Therefore, it seems important to do the analysis
relative to the intended market and to make explicit all the implicit assumptions about the capabilities of the
intended customer. Therefore, we propose the following components for understanding this factor :
Infrastructure : such as telecommunication networks and IP service providers. Most servicesassume the availability of this pre-requisite. Without it, almost all e-services would not exist.
Customer Resources
8/3/2019 A Framework for Analyzing & Comparing
4/8
IADIS International Conference e-Society 2004
182
o hardware such as computers, mobile phones and digital television, oro software such as operating systems (Unix, Windows), communication protocols (http or
SSL) and conventions (key encryption).
For example, the customer pre-requisites of an e-banking service provided through digital TV include theavailability of a digital television infrastructure, digital television device and appropriate software
This abstract view will enable generality in the framework
2.3 Usability
The customers first contact with the e-banking system occurs via the user interface. Because customers
come from various backgrounds, this feature is crucial in the comparison. For example, some key user
requirements on a web site include:
Interfaces for example languages and cultural considerations in the intended market. For example,if Korean is the interface language, the service may be unusable by users who do not understand
Korean.
Understanding provided features. This is the fundamental component. If the provided features arenot understood, the whole service will be obsolete from a users perspective.
Locating required information. The ease of navigations to retrieve required information. Thisinvolves site design, menus , navigation tools, icons, site map and graphics.
Ease of performing transactions This involves the user ability to correctly perform intendedoperations. It will also take into account provisions to prevent making unintentional mistakes, for
example issuing a dialogue box to confirm amount and account number in order to complete an
account transfer operation.Many websites use graphics in order to have a fancy interface which results in slow download and
significantly affects performance. To keep the interests of customers, the interface has to strike a balance
between visual attractiveness using graphics and time performance. A website might have a good design in
term of graphics and colours, but makes it difficult to find the required information. Not all customers using
e-banking services are multi-lingual. As such, the languages of the site could be chosen in such a way that the
majority of the targeted potential customers can understand it. Good interface design recommendations
include a clear layout, conservative use of colours, limited use of graphics, inclusion of site map, search and
help facilities, interoperability with different browsers and in different resolutions and provisions for multi-
lingual interfaces .
2.4 Effectiveness
The effectiveness of a service involves its efficiency, reliability, and security from the users perspective.
These factors underlying effectiveness can be captured by two aspects: performance that covers efficiency
and reliability and trust that covers security issues. Bank needs to earn customer confidence and trust in thequality of the service that they are providing. This involves ensuring accuracy (integrity and completeness)
of customer information and transactions and ensuring protection against threats. Thus, any e-banking system
ought to support mechanisms that ensure confidentiality, integrity, reliability, and efficiency. Performance: aims at ensuring that authorized customers have timely and uninterruptedaccess to
their accounts, and that committed transactions are successfully completed within acceptable times.
Access to e-banking databases may be slow (depending on the connection speed) and may result in
time out (disconnecting from the server). Banks are often subject to denial of service attacks by
hackers who attempt to flood the system with requests until a breaking point is reached. In order to
ensure availability, it has become a standard practice to take appropriate precautions to detect thiskind of security attacks and recover quickly from disruption!
Trust: Moneyis one of the most valuable customers assets. In order to use e-banking services, thecustomer must have a high degree of trust in the bank providing the service. Trust is usually earned
due to the confidence of customers in the security mechanisms deployed by the bank to protect their
assets. There are two major elements of trust
8/3/2019 A Framework for Analyzing & Comparing
5/8
A FRAMEWORK FOR ANALYZING & COMPARING E-BANKING CAPABILITIES
183
o Confidentiality: deals with preventing unauthorized disclosure of information. Forexample in year 1999, Egg and Barclays e-banking systems suffered from major breaches
of privacy [23]. Customers were able to access the accounts of other customers to which
they were not authorized. Customers transmit their account details over un-secure Internet
connections. In order to ensure data confidentiality, Secure Socket Layer (SSL)communication protocol is normally used.
o Integrity: aims at ensuring that only authorized users can modify data. For example onlyauthorized customers can modify their account detail and only bank manager can modify a
transactions. The well known secure communication protocols SSL and TSL are often used
to provide data integrity over the Internet.
Summary:
The following table summarizes the components of all the high level factors.
Table1. components of the high level factors
3. MEASURING KEY FACTORS
In order to classify and compare e-banking services it is important to develop appropriate quantitative
methods for measuring the fundamental e-banking factors outlined earlier. In this Section we propose
numerical methods for separately evaluating each individual component, then combining the values of the
components to produce an appropriate evaluation of each factor. The evaluation of the whole service is then
obtained by combining the individual measurements of the four factors.
Features Elements
Functionality Read operations
Read & Request
Inter-account Modify
Intra-Bank Modify
Inter-Bank Modify
E-capability Pre-Requisites Infrastructure
Customer ResourcesHardware /Software
Usability Interface
Understanding information
Locating information
Ease of use
Effectiveness Performance
Trust (Confidentiality, Integrity, Liability)
8/3/2019 A Framework for Analyzing & Comparing
6/8
IADIS International Conference e-Society 2004
184
3.1 Measuring Functionalities
In e-banking there is a strong correlation between offering certain type of transactions and accepting a certain
level of risk usually associated with these transactions. Offering a set of e-banking services is therefore a
business decision based on a tradeoff between level of risks and corresponding financial benefits. Therefore,the natural quantitative indicator of the functionality of the service provided is the level of the associated
security risk . A service with more functionality has usually a higher level of security risk than services with
less functionalities. Here is a summary of the levels:
Level0: No transactions, lowest risk level Level1: Read only, there is a risk to information confidentiality but not to its integrity. Level2: Read and Request, additional risks to previous level due to processing requests. Level3: Inter-accounts Modify, risk to information integrity but limit to possible damages
because the only beneficiary of the transactions is the same account holder.
Level4: Intra-bank Modify higher risk to integrity than previous level because a known thirdparty can be a beneficiary.
Level5: Inter-bankModify highest risk level because of beneficiary can be a third party in adifferent bank and in a different country.
3.2 Measuring User E-capability Pre-Requisites
In order to use an e-service, the user must have certain e-capabilities. The focus of this section is on how to
measure these capabilities. The proposed measure of these e-capability is generally applicable to all e-
commerce/e-services and not specific to e-banking. To measure infrastructure, several methods have been
proposed which combine the communication bandwidth, frequency of faults, and cost[14]. With regards to
the measurement of customer hardware resources, it is useful clearly distinguish two categories: multi-
purpose resources, such as computer and mobile phones, and special-purpose resources, such as specific
hardware boxes or encryption devices. A similar approach can be used to measure software. The more
platform dependent the software is, the less likely its availability among users (for example, a program which
runs only on Unix machines). The more inter-operability between platforms (Internet browsers, SSL) thesoftware is the more likely its availability.
Infrastructure: combination of communication bandwidth, frequency of faults and cost. Customer Resources
o hardware generality of the purpose of the hardware and its likely availability among users.o software platform independence, interoperability, and likely availability among user.
For example, an e-banking service that requires Internet Explorer version 7 or above with Macromedia
running on Windows NT is less likely to be available among users than a service which just requires any
Internet browser
3.3 Measuring UsabilityThis is a user-centric activity. The common methods for achieving this involve empirical measurements
based on user surveys for performing a number of benchmarking tasks such as: locating privacy policy,
changing a password, reading an account balance, understanding whether it is possible to transfer money to
another account and if so being able to correctly perform this transaction. Here is a summary of
benchmarking tasks for each components:
Interfaces: Understanding the meaning of specific words, and icons and evaluating the appeal of thedesign and layout to the user.
Understanding provided features. Typical tasks test whether a specific operation is possible andthe outcome of a certain scenario is correctly predicted.
8/3/2019 A Framework for Analyzing & Comparing
7/8
A FRAMEWORK FOR ANALYZING & COMPARING E-BANKING CAPABILITIES
185
Locating required information. Typical tasks include locating privacy policy, interest rate, bankcharges, a past statement and using online help.
Ease of performing transactions. Typical tasks include querying account balance and transferringan amount of money to another account.
Each of the above benchmarking task can be associated with a score, say a number in the range 0 to 5, which
reflects how successfully the task is performed. Rate 0 indicates complete failure but Rate 5 denotes a total
success.
3.4 Measuring Effectiveness
Performance is a topic which has been extensively studied in Computer Science, especially in connection to
communication networks and Internet. The most used methods involve empirical measurements of carefully
selected benchmarking tasks as outlined in the previous Subsection 3.3. Here is a list of typical benchmarking
tasks for each factor:
Performance: download time, speed of performing transactions, frequency of time out. Trust: Trust is implicitly measured by the current standing, reputation and possibly size of the bank.
Customers often trust a large bank because millions of others do! The record of breaches of e-
banking security and the degree of their graveness is important and can swiftly affect customer
confidence and trust in the e-banking services.
o Confidentiality: use of encryption, strict authorized reading access control policy, securecommunication protocols such as SSL.
o Integrity: strict writing access control, how rich is the functionality of the service. The risklevel analysis described in Subsection 3.1 provides a suitable assessment which can be
taken into account when analyzing Integrity.
4. CONCLUSION
Banking sector is continuously making significant advances towards exploiting the opportunities offered
through e-capabilities and Internet technology. E-banking is the cornerstone of many services important to e-
society. In this paper we have introduce a general framework for analyzing, evaluating and comparing e-
banking services and capabilities. The framework generalizes many of the studies conducted by other
researchers.
REFERENCES
[1] Christopher P. Holland and John B. Westwood, Product-Market and Technology Strategies in Banking ,
Communication of the ACM, Vol. 44, No.6, June 2001.
[2] John Skipper, Electronic Banking And Payments, 1988 The institution of Electrical Engineers, published by the
IEE, Savoy Place, London WC2R 0BL, UK.
[3] Ziqi Liao and Michael Tow Cheung, Challenges to Internet E- Banking, Communication of the ACM, Vol. 46,
No.12ve, December 2003.
[4] Yoram (Jerry) Wind, The Challenge of Customerization in Financial Services, Communication of the ACM, Vol.
44, No.6, June 2001.
[5] Kemal Altinkemer, Bundiling E-banking Services, Communication of the ACM, Vol. 44, No.6, June 2001.
[6] Don Sciglimpaglia and david Ely, Internet Banking: A Customer- Centric Prespective, Proceedings of the 35 th
Hawaii International conference on system sciences-2002 IEEE.
[7]. Magda M. Ismail, Determining the E-future of the south: Risks and opportunities, Proceeding of Inet2000, Japan,
2000. http://isoc.org/int2000
8/3/2019 A Framework for Analyzing & Comparing
8/8
IADIS International Conference e-Society 2004
186
[8] Jonathan Menuhin, Shan L. Pan, John McGee, Generating E-capability: The Case of HSBC in the UK, Proceeding
of the 2000 IEEE International Conference on Management of Innovation and Technology (ICMIT2000), Singapore,
629-633.
[9] Winnie Chung and John Paynter, An evaluation of internet banking in New Zealand, Proceedings of the 35 th Hawaii
International conference on system sciences-2002.
[10] Kemal Saatcioglu, Jan Stallaert, and Andrew B. Whinston, Design of a Financial Portal, Communication of the
ACM, Vol. 44, No.6, June 2001.
[11] Petra Schubert and Walter Dettling, Extended Web Assessment Method ( EWAM)- Evaluation of E-Commerce
Applications From the Customers Viewpoint, Proceedings of the 35th Hawaii International conference on system
sciences-2002.
[12] Muzaffar A. Shaikh, Ali Hamad Al-Badi, A. Hameed Al-Elaiwi, Adel Al- Ameri, James A. Whittaker , E-
commerce need analysis via quality function deployment, 2001 IEEE.
[13] Sung- Eon Kim, Thomas Show, Helmut Schneider, web site design benchmarking within industry groups,
Emerald research journal, volume 13. Number 1.2003. Pp.17-26.
[15] Udaykiran Vallamsetty, Krishna Kaant, Prasant Mohapatra, Characterization of E-commerce Traffic, proceedings
of the 4th IEEE INTl workshop on advanced issues of e-commerce and web-based information systems, 1530-
1354/02, 2002 IEEE.
[16] Sowmyan Raman, E-commerce and globalization- yesterday, today and tomorrow, Proceeding of Inet2000,
Japan2000.
[17] Martin Buchi, The B Bank: A complete Case Study, Turku Center for computer Science, Lemminaisenkatu 14A,
FIN-20520 Turku.
[18] Adriano Bessa Albuquerque, E-commerce Website Quality Evaluation, Preceding of the 28 the Euromicro
Conference, 2002 IEEE.
[19] Kuldeep Kumar, Technology For Supporting Supply Chain Management, Communication of the ACM, Vol. 44,
No.6, June 2001.
[20] William Hudson, The Lost world of E-banking, SIGCHI Bulletin, September/October 2002.
[21] Rajiv Dewan and Abraham Seidmann, Current Issues of E-Banking, Communication of the ACM, Vol. 44, No.6,
June 2001.
[22] Niv Ahituv, The Open Information Society, Communication of the ACM, Vol. 44, No.6, June 2001.
[23] BBC news: http://new.bbc.co.uk/1/hi/business/861353.stm