INFORMATION TECHNOLOGY & ONLINE BANKING

Information Technology & Online Banking

Information Technology & Online Banking

Introduction

One of the major technological impacts during the past few years on trading, service and banking activities has been through the internet. All phases of business from purchasing through supply chain management through sales and payments financing have been impacted. Banking plays the major role in all transitions and trading activities as the integral part of business itself. Taking into account recent trends in e-commerce and on-line trading, growth of Internet users and urgent need of fast transactions, it is possible to say that online banking is one of the promising fields in business today.

Discussion

In rapidly changing environment, the internet is used more as a source of information than as a place to buy. All communication is immediate, and distance and length of communication have impact on cost. As a source of information, the internet is demand driven in the users have the option of getting the information they want - if it is available -when needed. For instance, “In February 2002, the research company Datamonitor predicted that within three years, 120 million people will bank online in the U.S. and Western Europe alone? (Estell, Myers, 2002). Taking into account IT and the Internet projections, it is possible to say that in the next ten years the world will enter a new era of internet capability “that will transform online activity? (Berners-Lee to star in debate, 2005).

Also, tremendous growth of online banking in future is explained by growth of the internet population around the world. A special regions include Asia, Eastern European countries, and Africa. Although, today, European countries has shown remarkable growths in online banking. In Spain for instance, “by 2005 the number of online banking clients in Spain is projected to jump from 3.9 million to 6.8 million. Bankinterâ„¢s clients carry out 46 percent of their transactions online, but the bankâ„¢s primary mode of recruiting new clients is still though the branch offices? (Crowley, H., Kent, 2005).

Electronic transitions are more favorable for majority of companies operating on the global scale. In this case, “The migration from paper checks to electronic payments and online banking has been dramatic. Today the proportions are reversed: 15% paper, 85% electronic? (Quittner, 2005). While estimates of the present volume of online banking vary widely, it is clear that it is growing at a rate that is nearly exponential. By the year 2004, estimated combined online sales in Europe will rise to US$1.5 trillion.

Online banking and online transaction will increase greatly in several years because online banking is the base for international e-commerce, which refers to trade that actually takes place over the internet, usually through a buyer visiting a seller's website and making a transaction there. Online banking serves all types of business, large and small, service and production, B2B and B2C.

B2B accounts for most of the business, perhaps as much as 80-90 per cent. Online banking, being a relatively new approach in fifnance, reports on ...