The banking sector, technology and service delivery Introduction The revolution came after the modernization and globalization process in economy has a considerable impact on the financial institutions. The financial sector reforms and the reforms of banking sector are a part of the economic reforms. The banking sector holds the central position in the global economy. In this modern world of money and finance, the importance of banks in the economy of any country is vital.
Is Internet banking the way forward? Introduction In recent years the various forces that are shaping the global economy, in particular processes of globalization, innovation and technological development, international money forms have had a critical bearing and role in the development of capital and securities market that have expanded rapidly as a result Garrett, In relation to these processes then banks play a vital role.
They are a key element of global economic activity and thus the trends driving changes in banking are in and of themselves reflective of these global trends.
Adaptation and evolution are the key indicators and determinants of continued success and expansion for banks and the transformative technology associated with the rise of the Internet represents both a challenge and a response to challenges for banks.
In considering the future role of the Internet in banking it is worthwhile examining the historical development and delineation of the functions of banks The emergence of models of banking familiar to us is associated with the rise of Italian merchant banks during the Renaissance.
Both historically and currently then banks have been associated with developments in accounting procedures, systems dealing with the transfer of payments, new forms of services rendered and the application of technological developments.
It is also then not surprising to note that continued processes of globalization are at the heart of trends in banking in the 21st century. At the heart of banks role within trade was the need for a way for participants in trade to do so safely and conveniently.
From this the system of credit was first used and this had a bearing on the acceleration of the development of international trade, a fact which holds true today even if forms are varied. The expansion of banking thus can be seen as a process of developing financial systems which were closely linked to trade and in particular free Money banking and global finance essay.
By the end of s it became apparent that new technologies were driving the financial markets to be truly global in the midst of intense competition. It saw the rise of non-bank financial institutions which sought to provide alternative financial services at both personal and commercial levels.
For example, General Electric Capital the financial services subsidiary of General Electric Corporation, supplies credit card facilities to department stores and is the largest insurer of homes in the US Heffernan, Similar developments in the UK have seen Marks and Spencer, Tescos and other department stores enter the market offering financial services to their customers.
Consequently the globalization of capital markets can be to seen to have pushed banks to seek to develop themselves and differentiate their services utilising new means in both technological applications and service provision to adapt to an ever increasing competitive environment.
As such it is readily acknowledged that for modern banks the strategic use of technology is now a key factor both in terms of restructuring banking systems and as a method of creating new demands for financial services Heffernan, Thus considering the dynamic growth and expansion of the Internet at the close of the 20th century it is not surprising to note that the phenomenon of internet banking has expanded dramatically.
Indeed this expansion has been accompanied with increased attention on whether this form of banking will become the dominant form of banking in the future. The use of which it is argued will allow banks to keep abreast of trends of globalization and increased competition allowing them to capitalise on continued technological developments associated with internet technologies that break down geographical as well as functional barriers.
However, the survival of a banking form depends on whether it is able to adapt to providing the most effective and efficient intermediary and payment service for its customers.
Therefore in order to maintain competitive advantage in financial markets banks have to keep pace with the changing nature of what constitutes the roles and functions of being such an intermediary Bryan, According to Heffernanthe existence of traditional banks is due to two main reasons: The role of banks as financial intermediaries is one which sees them as providing a whole range of deposit and loan products but the nature of this role may vary in different ways.
The traditional function is one of taking deposits and then lending a percentage of the deposit and according making profits from interest charges. Additionally because of the high cost of generating useful information for lenders in order for them to find the most appropriate borrowers the role of banks in providing such information has become an essential one.
Although modern banks operate on international and global scales dealing oftentimes now with truly global customers as well the basic model and functions of banking has not changed even if forms are varied.
Yet numerous risks for banks and banking structures have emerged due to this wave of globalization and developments in technology. Examples of these can be seen in the processes of deregulation which have led to the disappearance of old banking regulations Mayer, As a result the range of new products and services which banks must adapt in offering with increased global competition has led them to face new risks as well as new competitors outside the banking system, such as business corporations who have become eager to provide debit services as well.
In general then we can surmise that these risks have emanated from increasing competition, product innovation, the movement of capital markets, increased market unpredictability and the removal of old barriers to the provision of financial services Bessis, Accordingly because of the significant pressures on banks to minimize risks and the requirement of maintaining capital capability, many banks have made the strategic decision to focus on two stable fee-based profit areas, namely retail banking and private banking.
However retail banking is a challenging and tough area due to the amounts of product differentiation between services offered and provided which gives rise large amounts of competition between new entrants and established bank branches.
Because they more likely focus on providing services for more well-off individuals, the service demands of these consumers are more sophisticated and professional ones. For example, private bankers may offer complicated financial analysis systems to help clients manage their investment or stock portfolios.
Moreover an increasing phenomenon related to clients of banks today are their demands for new money types represented for example by e-cash developments and better profits from their investments all of which contribute to increased pressures for banks. It is expected an suggested that internet banking may help to solve the problems existing in both these kinds of traditional banking as well as responding in and of themselves for the continued growth of demand for banking online due to customer preferences and needs.
First of all internet banking has been suggested as being able to offer economies of scale and low transaction costs.Introduction. The automated teller machine (ATM) is a machine that acts as a teller in an institution by receiving and issuing money to and from the ATM account holder or user.
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The banking sector holds the central position in the global economy. In this modern world of money and finance, the importance of banks in the economy of any country is vital.
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Be informed and get ahead with. Free Internet Banking Essay Is Internet banking the way forward? Introduction. In recent years the various forces that are shaping the global economy, in particular processes of globalization, innovation and technological development, international money forms have had a critical bearing and role in the development of capital and securities market that have expanded rapidly as a result.