E-Commerce Assignment 2: Section 1
Chosen E-Commerce:
For this particular assignment the topic I have chosen to cover is e-banking in all its forms. e-banking is an extension of traditional banking services provided to enhance customers experience.
Examples of E-Banking:
Two examples of organisations that are involved in this type of e-commerce are as follows:
The National Bank
Kiwi Bank
How the changes influenced by e-commerce have changed the business model/s for this sector?
e-commerce has significantly changed the way in which traditional banks do business and also changed their business model.
Branch-Based Banking Model vs Online-Based Banking Model
Since the rapid establishment of Technology, The Internet and Perceptions the banks have both taken advantage of the changes and also been forced to evolve. Where once the physical bank was the cornerstone of the business environment this has changed to a great degree. We now see a push for banking to be performed online, bricks & mortar banks as well as staff have been downscaled in favor of electronic banking.
We are now seeing the online banking shifting not just as an extension of existing banking services but the core services of a lot of banks.
In the past most customers were very familiar with their local bank and its manager. They would regularly venture in to perform all manner of their banking tasks. But the average customer at present would be hard pressed to even tell you who works in their local bank. Younger generation would be completely unfamiliar with these procedures in favor of online banking, electronic bill payment, depositing money online.
Two Business Models that have evolved with the use of e-commerce are detailed below:
Electronic Bill Payment
All bill payments can be made online and there has been a shift by both banks and companies to move to this type of payment. Most companies now allow you to make payments online and using your banks bill payment service you can search for the required company and their account information to make payment with. This has made bill payment much easier and accessible to everyone. As this new business model evolves and grows it has had an impact on other areas.
The use of the traditional Cheque for payment has greatly declined (Insert Figures Here). An easier and better way is slowly but surely superseding it.
"View your bill online", "Online Bill Payment", "Electronic Bill to your Inbox" all of these services have had a combined effect on another seperate but integral part of banking and that is Snail Mail. Traditional mail has seen a great decline in use as electronic services become more widespread, user friendly and adoption increases.
"Despite a slow start, on-line banking, insurance and financial services are here to stay. In some cases, they are forcing others to change the way they operate" (Mike Cunningham, 2002, p53)
Mobile Banking:
As mobile devices become more than just telephones we now have mobile banking. Now you no longer have to be either be at a computer or in a branch to perform all of your banking needs. With the prominance of such devices like the iPhone using this as a banking tool has been a natural progression now that surfing the web from anywhere is possible. Some of the services that are offered using mobile banking are as follows:
Mini Statements
Account Activity Alerts
Balance Checks
Money Transfers
Various other loan, credit statements
E-Banking World-Wide
World-Wide there are multiple forms of E-Banking taking place. You see the traditional banks who have evolved into offering online banking as an extension to their existing banking services and slowly as adoption takes place they have become core banking services. Examples of these are Bank of America, Barclays UK where the e-banking services have slowly evolved over time.
You will also see Online-Only Banks that have come to pass solely because of the online environment and the increasing need for banking flexibility and have no bricks and mortar branches for customers. One example of this type of bank would be Wells Fargo (https://www.wellsfargo.com) in United States of America. Other traditional banks are offering online accounts that are the same service as the online only banks where your account is managed solely online and assistance is provided either by email or over the phone.
Typically online only banks or online only accounts offer cheaper bank fees and higher interest rates. This is provided because of the reduced overhead costs associated with such an account because of there being no need for branch based services and all of the account services are handled online.
E-Banking in New Zealand
E-Banking in New Zealand in the majority of cases are traditional banks with online services. There is only one bank offering online only services and that bank is RaboPlus bank. However they do not provide full online banking services but rather Savings and Investment schemes and state themselves that they prefer to be (etc al "Your Significant Other Bank" - http://www.raboplus.co.nz/about-raboplus/default.aspx, 2010).
It seems that in New Zealand we are a step behind in terms of online banking offerings but on par with other services like mobile banking, online bill payment etc.
Below is a graph which show the proportion of customers for each bank who use online banking as of 2008. Image retrieved from http://www.scoop.co.nz/stories/BU0802/S00307.htm
Comparison between between NZ and Global E-Banking:
Whilst there are minor differences between offerings Nationally and Globally the main difference is the scale variety of online services. Global online banking customers see a wider variety of online banking features at cheaper rates. This is largely due to the services having been offered for a greater period of time which in turn has given them a longer period of time to evolve. For example some American banks catalog everything you purchase using your cards Eftpos / Credit Card from the very first time you use it and automatically categorize it depending on the type of product that it is. When you log in and view your purchases you can see exactly what you have spent your money on and where. e.g. What percentage of your spending goes on groceries.
There also seem to be some evidence that New Zealand banks have been slower to react to the evolving business environment. As an example National Bank still use two factor authentication when logging into their site whilst Kiwibank has a scheme called Keepsafe that asks you a answers to preset questions each time you log in. Thus adding a third layer of authentication when logging in.
"There has to be an executive sponsor from the top that has the E-business religion," says National Semiconductor's Phil Gibson. "If that person isn't up there saying that the Web is one of the most important things in our business today, you're simply not going to move fast enough." (as cited by Mike Cunningham, 2002)
References:
Mike Cunningham. (2002). Smart Things To Know About E-Business. Capstone Publishing Ltd, Oxford, United Kingdom
Jonathan Groucutt & Paul Griseri. (2004). Mastering e-Business. Palgrave MacMillan, New York, United States
Robert DeYoung. (May, 2005). The Performance of Internet‐Based Business Models: Evidence from the Banking Industry. Retrieved from http://www.journals.uchicago.edu/doi/full/10.1086/429648
University Newcastle. (Sep, 2002). Internet banking creates biggest shake-up in 400 years. Retrieved from http://www.alphagalileo.org/ViewItem.aspx?ItemId=45514&CultureCode=en
Kiplinger's Personnel Finance Magazine. (July, 2005). The top 10 online banks. Retrieved from http://articles.moneycentral.msn.com/Banking/BetterBanking/TheTop10OnlineBanks.aspx
RaboPlus Website - http://www.raboplus.co.nz/about-raboplus/default.aspx
John Crawley. (Feb, 2010). U.S Postal service seek 30,000 job cuts via buyouts. Retrieved from http://www.reuters.com/article/idUSTRE57O6A920090826
Anick Jesdanun. (Feb, 2008). Postal agencies respond to mail decline. Retrieved from http://www.msnbc.msn.com/id/22992125/ns/technology_and_science-tech_and_gadgets//
Press Release, The Nielson Company. (Feb, 2008). Two-thirds of online kiwis use Internet banking. Retrieved from http://www.scoop.co.nz/stories/BU0802/S00307.htm
Statistics New Zealand. (April, 2009). Business Operations Survey: 2008. Retrieved from http://www.stats.govt.nz/browse_for_stats/businesses/business_growth_and_innovation/BusinessOperationsSurvey_HOTP08/Commentary.aspx
Internet Banking News. (April 2010). E-banking (Online Banking) and it's role in today's society. Retrieved from http://onlinebanking.getsnews.com/e-banking-online-banking-and-its-role-in-todays-society
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