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Implementation Approaches

Home Banking History


Financial institutions were interested in home
banking concept into reality as early in 1970.
The most popular approach of the 1970 was home
banking via touch tone telephone, which enable
customers to check a/c balances, transfer funds
and pay bills.
With telephone banking customers use a numeric
password on a push button telephone to access
banking services.
In 1980, cable television also was considered as a
possible medium for home banking.
Then comes home banking from PC.
Home Banking Implementation
approaches
Proprietary bank dial-up services
Off the shelf home financial s/w
Online services based banking
World wide web based banking
Home Banking using banks
Proprietary S/W
Bank mainframe computer system connected
with terminal server with modem.
When a consumer wants to communicate with
Bank, then the information is transmitted via
terminal server which is connected to bank.
Banking via the PC using Dial-Up
Software
Intuit: is the leading provider of home & small
business financial Software, supplies and
services for PC users.
Quicken: allows users to organize, understand
and manage their personal finances.
Intuit Services
To check current a/c balances, transfer funds
between a/c, determine the clearance of given
transactions.
Online bill payments enables users to pay bills by
transmitting payment instructions via modem.
E.g. a Quicken user needs to pay three bills, the
user would open Quicken and type the names of
the payees and the amounts and then hit transmit.
Multiplatform strength: DOS, windows
New revenue strength: new products & services
Recurring revenue opportunities: e-credit card
statement delivery, attractiveness to software
product.
Banking via Online
Services
Prodigy & CityBank providing home banking
services.
Prodigy providing home banking to consumers
since 1988 and has relationship with more banks
than any commercial online services.
Customers can check their a/c balances, transfer
money between a/c, pay bills electronically, review
their CitiBank credit card a/c, buy & sell stock
through CitiCorp Investment services.
AOL users will not need to use Quicken s/w to
access the banking services. Rather Intuit built a
Quicken like application into AOL that will have the
basic banking functionality of transferring funds
etc.
Banking via the Web: Security First
Network Bank(SFNB)
The goal is to provide superior customer
service & secure electronic environment.
Internet banking: Consumers do not need to
purchase any additional s/w, store any data
on their comp, wait for new versions &
upgrades, since all transactions occur on a
secure server over the internet.
The first Internet bank to provide e-banking
services to internet users was SFNB.
Secure registration via login id & password
SFNB provides joint a/c facility.
Open vs Closed Models
In an open system, content changes can
occur easily because of the use of standard
technology and components.
Banking(web) used open system : easy to
customize to a bank changing needs.
Closed system: in which the changes are
difficult since everything is proprietary.
E.g. Banking interfave developed around
Intuit cannot be modified unless the
vendor distributes a new version of its s/w.
Management issues in Online
Banking
Banks must deliver high quality products.
Creation of online financial supply chain
Low cost interactive access terminals for he home
Some banks are forming cooperative partnership
with bank s/w companies, while others are writing
their own s/w.
Pricing affect online banking via:
Initial s/w pricing
Financial product pricing
Usage pricing
Marketing issue
Back-office support for online banking
University Questions
Explain in details home banking
implementation approaches.
Explain categories of home banking.
Explain management and marketing issues of
online banking.
Short note on Security First Network Bank.
University Questions
Write a brief note on pricing issues in online
banking
Write a note on Banking via PC
Compare open versus closed models in
connection with network banking.
Structure of Security First Network Bank.

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