E-banking

Content What is E-banking? Development of E-banking Advantages of the E-Banking Disadvantages and Risk of E-banking Precaution of risk and security Persecutions

What is E-banking? Definition: The provision of banking service through electronic channels and the customer can access the data without any time and geographical limitation.

Development of E-banking 1980s : - Rapid development of the Internet - TCP/IP system (communication system) - E-commerce

Development of E-banking Early 1980s : - Access to their accounts with the computer of the bank .

Development of E-banking May 1995 : Wells Fargo - the first bank in the world to offer customer access to their accounts over the internet . Allows customer to see their accounts online

Development of E-banking Hong Kong (September 1999 ): Bank of East Asia - first launched Internet banking Mortgage applications , personal loans and stock trading Basic banking functions

Distribution of Three Types of Internet Banking 35 institutions 80% of total customer deposits - 60% of total assets of Hong Kong banking sector

Growth of Internet Banking Accounts Personal internet banking accounts grew 12.5% Business internet banking accounts grew 53.3%

Distribution of Internet Banking among 35 Institutions Six major institutions are serving : - 78% of all personal internet banking accounts - 66% of all business internet banking accounts

Advantages of E-banking Benefits for Banks Benefits for Small to Medium Businesses Benefits for Customers

Benefits for Banks Larger customer coverage Reducing the costs of operations Promoting their services and products internationally Increasing the customer satisfaction and providing a personalized relationship with customers

Benefits for Small to Medium Businesses To run its operations more effectively Lower cost than traditional financial management mechanisms

Benefits for Customers Convenience 24 hours a day, seven days a week Cost Reducing transfer fees Speed Faster circulation of assets Competitiveness - Fostering competition in financial market

Benefits for Customers Communication communicate easily Environmental Abolishing the uses of paper Others - Offering one-stop-shop solutions

Brokerage Services To create a group of investment to observe To learn about companies’ financial performance online

Automatic Teller Machine( ATM ) First electronic channel introduced to HK Accepting deposits and dispenses cash Convenient in handling accounts

A Demonstration of Paying Tax Online of HSBC Step 1 - Click “Add New Merchant”

A Demonstration of Paying Tax Online of HSBC - Choose the category, merchant and bill type - Insert the bill payee account number

A Demonstration of Paying Tax Online of HSBC Step 2 A Demonstration of Paying Tax Online of HSBC Choose the account that you want to transfer from Insert the amount of fund that you would like to transfer Choosing the date of transfer

Disadvantages on E-banking A need for customer skill to deal with computers and browsers. E.g. Elderly, Housewives → Inconvenient Site change it will make the customer have some confusion or delay. Security Risk

Security Risk Increasing number of fraudulent bank websites Fake emails purporting to be sent from banks Use of Trojan Horse programs to capture user IDs and passwords

Fraudulent Bank Websites A suspicious bank website: www.onlinebea.com Original bank website www.hkbea.com The website was believed to aim to trick persons into disclosing their sensitive personal information.

Fake Emails Email send from Fraudulent bank Verify the personal information Guide customer enter the fraud link Disclosing their ATM card numbers and their passwords

Viruses and Worms -Trojan Horse Program When we open some suspicious websites or email Trojan Horse Program will install our computer secretly Hidden in the computer When you access bank websites Capture our account and the password

Persecutions For Bank: Should provide specific guidance to their customers

For Customers : Should not disclose their customer IDs (e.g., account numbers) or passwords to anyone else. Periodically change their passwords Should promptly log out from the service Should regularly check their account balances and statements to identify unusual transactions.

Do not access Corporate Cyberbanking through public terminals. To safeguard your computer from any other hacker attack, install anti-virus and anti-spyware software on your computer and update it regularly.

Case From Newspaper Don’t use the hyperlink to login to the website of banks Should deeply check the postscript of the website Observe that is it have the encryption and compare the login account of encryption cert is equal to the bank.

Multiple Security Controls

Step 1 Unique ID and PIN to login

Step 2 Unique Singer PIN to authorize transaction

Step 3 128-Bit SSL & java applet guarantee end-to-end encryption

Step 4 Optional use of digital certificate to login and sign transaction

The End