The concept, advantages and risks of electronic banking
The emergence of electronic banks
In light of the tremendous development in computing and communication technologies that have achieved a rapid and comprehensive exchange of information, and this was accompanied by the investment of the Internet in the field of electronic commerce within the concepts of e-business, e-commerce and digital economy, in light of all this the development of the concept of online financial services, to transform the idea From merely carrying out business over the line especially through the client's computer system software, to a bank that has a full network presence and whose website contains all the necessary software for banking; On top of that, the concept of banking service has evolved from performing financial services for client accounts to performing money services, financial advice, investment services, trade, administration and others
The history of the emergence of electronic banks or internet banks dates back to 1995, which witnessed the birth of the first bank on the network, NET BANK, and since then electronic banks began to arise, especially in developed countries where the United States of America has more than 80 electronic banks in 2017, and more than 50 banks In the European Union in 2017, as well as in Asia, there are more than 30 banks that started operating in that same year, and these banks operate as separate authorized entities or as a subsidiary institution or as branches of a foreign bank or as an electronic bank
Definition of electronic banks
Electronic banking, in its modern sense, is not just a branch of an existing bank that provides financial services only, but a comprehensive financial, commercial, administrative and advisory, with an independent presence on the line
A general definition of electronic banks can be given, so the electronic bank refers to the system that allows the customer to access his accounts, or any information he wants, and to obtain various banking services and products through an information network connected to his computer or any other means. Electronic banks are in question, according to international studies, specifically the American and European supervisory and regulatory bodies
Basic types of electronic banks on the Internet
INFORMATIONAL e-banks : It is the basic level of electronic banks, or what can be called a minimal form of electronic banking activity, and through it, the bank provides information about its programs, products and banking services
COMMUNICATION e-banks: so that the site allows a type of communication exchange between the bank and its customers, such as e-mail, filling out requests or online forms, or modifying information of entries and accounts
TRANSACTIONAL e-banks: This is the level at which it can be said that the bank carries out its services and activities in an electronic environment, as this image allows the customer to access and manage his accounts, make cash payments, fulfill the value of bills, perform all information services, and make transfers between his accounts inside the bank or with External entities, which represent electronic banks
The importance and reality of electronic banking
Electronic banks are the appropriate means to achieve better rates to compete and stay in the market, in light of the strong competition in the banking market, whose title is the comprehensive, fastest and least expensive service. Electronic payment systems and the emergence of electronic money associated with the development of electronic business and electronic commerce provide a justification for the existence of electronic banks
Advantages of electronic banking
There is no doubt that these banks that rely on high technology have many advantages, whether for the bank as a bank or for the customer. The most important of these advantages are as follows
a. Advantages achieved by the bank: The most important advantages of an electronic bank is to reduce costs for the bank or institution established for it, as the bank gets rid of the burdens of opening new branches in various places inside or outside the country, because the electronic banking system transfers the bank and its various services to each customer, wherever It was, and international experience has proven that the countries in which this type of banks have spread have closed their major banks most of their branches due to the establishment of the new bank
b. Advantages that achieve the individual: electronic banks achieve a high degree of comfort for the individual, as it provides him with going to the bank’s headquarters and standing in a queue until he gets the service, and it also saves him time and provides him with good services, such as paying the bills for goods and services that he gets without effort and other new services, Which may suit its other requests, such as an insurance document, education and other services, and this system of banks achieves the confidentiality of accounts and transactions carried out by the client
Electronic banking risks
The emergence of electronic banks was a response to the requirements of the new environment in light of the digital economy and the intensification of competition between banks. However, it posed several different and varied risks, which posed several challenges to electronic banks
Despite all the advantages mentioned above, the electronic bank, including its technology, has risks just as any new technology must have some risks, including: the risks resulting from the widening of the gap between the bank and the customer, and the resulting operations Borrowing without adequate collateral, exposing banks to fraud
As the Internet banking service is difficult to monitor accurately, and in addition to this risk that affects the bank and the individual, there is a greater risk that could affect the national economy as a whole and comes mainly from the aspect of the volume of liquidity in the economy, these electronic banks allow The customer has the right to transfer his money and any sums by pressing the computer or phone button outside the borders of the country to another country or vice versa, and in this case he makes the country vulnerable to the influence of liquidity crises, with increase or decrease
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