ContentContent

• 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?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-bankingDevelopment of E-banking

1980s :

- Rapid development of the Internet

- TCP/IP system (communication system)

- E-commerce

Development of E-bankingDevelopment of E-banking

Early 1980s :

- Access to their accounts with the computer of the bank .

Development of E-bankingDevelopment 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-bankingDevelopment 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 Distribution of Three Types of Internet BankingBanking

• 35 institutions- 80% of total

customer deposits

- 60% of total assets of Hong Kong banking sector

Growth of Internet Banking AccountsGrowth of Internet Banking Accounts

• Personal internet banking accounts grew 12.5%

• Business internet banking accounts grew 53.3%

Distribution of Internet Banking among Distribution of Internet Banking among 35 Institutions35 Institutions

• Six major institutions are serving :- 78% of all personal internet banking accounts- 66% of all business internet banking accounts

Advantages of E-bankingAdvantages of E-banking

• Benefits for Banks

• Benefits for Small to Medium Businesses

• Benefits for Customers

Benefits for BanksBenefits 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 BusinessesBenefits for Small to Medium Businesses

• To run its operations more effectively

• Lower cost than traditional financial management mechanisms

Benefits for CustomersBenefits 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 CustomersBenefits for Customers

Communication- communicate easily

Environmental- Abolishing the uses of paper

Others - Offering one-stop-shop solutions

Brokerage ServicesBrokerage Services

• To create a group of investment to observe

• To learn about companies’ financial performance online

Automatic Teller Automatic Teller Machine( ATM )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 HSBCA 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 HSBCA 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

Step 2Step 2

Disadvantages on E-bankingDisadvantages on E-banking

•A need for customer skill to deal with A need for customer skill to deal with computers and browsers. computers and browsers.

E.g. Elderly, Housewives → InconvenientE.g. Elderly, Housewives → Inconvenient

•Site change it will make the customer Site change it will make the customer have some confusion or delay. have some confusion or delay.

•Security RiskSecurity Risk

Security RiskSecurity 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 WebsitesFraudulent Bank Websites

• A suspicious bank website:www.onlinebea.com

• Original bank websitewww.hkbea.com

• The website was believed to aim to trick persons into disclosing their sensitive personal information.

Fake EmailsFake Emails

• Email send fromFraudulent bank

• Verify the personal information

• Guide customerenter the fraud link

• Disclosing their ATM card numbers and their passwords

Viruses and WormsViruses and Worms--Trojan Horse ProgramTrojan Horse Program

• When we open some suspiciouswebsites or email

• Trojan Horse Programwill install our computer secretly

• Hidden in the computer• When you access

bank websites• Capture our

account andthe password

PersecutionsPersecutions

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 NewspaperCase 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 Multiple Security ControlsControls

Step 1Step 1

• Unique ID and PIN to login

Step 2Step 2

• Unique Singer PIN to authorize transaction

Step 3Step 3

• 128-Bit SSL & java applet guarantee end-to-end encryption

Step 4Step 4

• Optional use of digital certificate to login and sign transaction

TheThe End End