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E-commerce influence on the banking sector. Presented by: Ying Shen, Shan Huang, Ilya Bibik, Patricia Chalco Supervised by : Professor Jacques Robert In the Course: Économie numérique 4-870-00 2004/12/7. Introduction Relationship with Customers Relationship with Partners - PowerPoint PPT Presentation
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E-commerce influence on the banking sector
Presented by: Ying Shen, Shan Huang, Ilya Bibik, Patricia Chalco
Supervised by : Professor Jacques Robert
In the Course: Économie numérique 4-870-00
2004/12/7
2
Introduction
Relationship with Customers
Relationship with Partners
Relationship with Employees
Case Study
Conclusion
Q&A
3
What is Electronic BankingWhat is Electronic Banking
3
“Electronic banking is
the process by customer who
perform banking transactions
electronically
without visiting a brick-and-mortar institution.
” -----Hussam Al-Abed
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Introduction
Relationship with Customers
Relationship with Partners
Relationship with Employees
Case Study
Conclusion
Q&A
5
OpportunitiesOpportunities
The advent of the Internet and the developing of technology are both opportunity and challenge for the banking industry.
The opportunity for the e-banking WHY?
The challenge for the traditional bank WHY?
“Online transaction costs can be as low as 1 % of an equivalent off-line transaction, rapidly increasing the popularity of the online option with consumers, as well as banks” (Turban et al. 2002).
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AdvantagesAdvantages
Costs reduce: accounts: much less time to set up and use. favorable terms, including free accounts, free transfers and free
payment cards. interest: several percentage points higher
Convenience: No time and place limitation. “24 x 7”
access and manage accounts all at online bank sites and generally execute ,confirm transactions even quicker than ATM processing speeds.
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Example: Bank of chinaExample: Bank of china
http: //www. bank-of-china .com
E-Corp : “Cybergiro, Group Inquiry, Real-time Inquiry and other services .”
Focus on both group clients(B2B) and individual clients(B2C)
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WeaknessesWeaknesses
Security is a big issue. there are potential risks that you need to pay attention to.
The major service that is not provided is cash in and cash out.
The other problem is that you may make mistake when you are doing your own banking online. Therefore, there are reports of customers sending money to the wrong account. Banks also make mistakes but when they do it is comforting to have someone other than oneself to blame. That means the customer have to be responsible for their mistakes.
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Security Quick Tips
(the solutions are from bank of Singapore) Security Quick Tips
(the solutions are from bank of Singapore)
Never use the same Internet Banking PIN for other financial or non-financial web-based services such as for email, online shopping, digital identity and other online subscription services.
Protect your PC from viruses and malicious programs.
Avoid using shared/public PCs for Internet Banking.
Check your account and transaction history details regularly.
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Relationship with customers conclusions
Relationship with customers conclusions
Electronic commerce technologies affect individual financial institutions in a number of ways, which together push them to alter the mix of services they offer.
Developing of technologies and lower transactions costs allow Banks to treat clients individually. Such as, online mortgage applications and stock trades, banks can retain their relationships with clients by creating bundles of service unique to the needs of individual clients.
Increasingly demanding customers mean that banks must continually enhance the services that they offer and more suitable for all kinds of clients.
The expectation of what technology should be able to exceed what it currently can do. The big issues of security and trust.
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Introduction
Relationship with Customers
Relationship with Partners
Relationship with Employees
Case Study
Conclusion
Q&A
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Bank needs partnershipBank needs partnership
The value of partnership is highly recognized by both bank managers and customers
Source :http://www.co-operativebank.co.uk/partnership1997/97_customers_social.html
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Who is bank’s partnerWho is bank’s partner
Suppliers: Bank is supported by diverse suppliers. Such as • IT Service Provider (e.g. IBM)• Information Service Provider (e.g. Reuter)• Others ( e.g. Newsagents,)
Various categories within the financial industry itself
(eg. Insurance companies, broker companies, other banks)
Cross-industry partners: Bank can cooperate with the service
provider in other industry to create new service product.• Online payment service • Mobile banking
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SWOT AnalysisSWOT Analysis
Strengths
• Gaining customer base– Case: alliance between Royal bank and AOL
• Significant cross-sell opportunities– Case: Alliance between China bank and Sunlife insurance
company, Canada• Gaining economies of scale or scope
– Case: bank for banks project by UBS• Procurement cost reducing
– Research by Xerox shows the cost reduced from $150 per order to $25 per order
Weakness
• Security concerns • System failure of partners brings troubles
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SWOT AnalysisSWOT Analysis
Opportunities
• Mature B2B technology • High acceptance of partnership value (especially for small bank)
Source: «Networking partnership» by USB news letter 2002
Threats• Fast changing technology tendency • Legal concerns
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Introduction
Relationship with Customers
Relationship with Partners
Relationship with Employees
Case Study
Conclusion
Q&A
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Relationship with employeesSWOT analysis
Relationship with employeesSWOT analysis
The new reality of new virtual banking way of doing things has significant impacts on the relation between employer and employees. It changes the employees’ responsibilities and employees’ importance values.
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Strengths Strengths
What advantages industry has? What do changed industry do well? What relevant resources industry has access to? What do clients see as industry strengths?
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Weaknesses Weaknesses
What industry does badly? What could be improved in the industry? What should industry avoid?
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Opportunities Opportunities
Where are the good opportunities facing industry? What are the interesting trends for the industry?
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Threats Threats
What obstacles industry face?
Is changing technology threatening industry position?
Could any of industry weaknesses be serious threat?
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Relationship with employees conclusion
Relationship with employees conclusion
Work places
Professional level
Security and Control
The quantity to the quality
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Introduction
Relationship with Customers
Relationship with Partners
Relationship with Employees
Case Study
Conclusion
Q&A
Case studywww.netbank.com
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Source: www.netbank.com
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Business modelBusiness model
Source: Managing the Digital Enterprise, Professor Michael Rappa.http://digitalenterprise.org/models/models.html
Virtual Merchant o e-tailer, is a retail merchant that operates solely over the web
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RegulationRegulation
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Value creation Value creation
sharing its operational cost savings by paying
more deposit rates and collecting lower
fees
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Products and servicesProducts and services
DepositDeposit LoanLoan OthersOthers
Checking accounts Residential Mortgage Loans Wireless banking services
Certificates of Deposit (CDs) Checking Overdraft Protection accounts
Foreign currency exchange
Individual Retirement Accounts (IRAs)
Vehicle Loans
GeorgiaSaves ProgramATM debit cards Credit cards
Small business banking products
Leasing
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How to open an account and make a deposit?How to open an account and make a deposit?
wire transfers direct deposits automated teller machines external funds transfers by mail
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How to have cash?How to have cash?
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Introduction
Relationship with Customers
Relationship with Partners
Relationship with Employees
Case Study
Conclusion
Q&A
33
ConclusionConclusion
Relationship with Partners Relationship with Employees
Relationship with Customers
TechnologyTechnologyInnovations Innovations
from e-commercefrom e-commerce
TechnologyTechnologyInnovations Innovations
from e-commercefrom e-commerce
Reducing cost
Enhancing User Experience
Creating new service and market
Source: «e-solutions pour l’entreprise»
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Introduction
Relationship with Customers
Relationship with Partners
Relationship with Employees
Case Study
Conclusion
Q&A
35
Thanks!
Q & AQ & A