The Internet banking model was originally built with a view to merely replace identified brick-&-mortar services and provide an online means of reaching out to the bank. This model was not mature enough for the market as these Internet banking solutions served as mere aggregating mechanisms. Slowly new features like inter-bank local payments, international remittances, communication through secure e-mail with dedicated relationship managers from the bank and exposure of account relationships through online channels were added. Banks then started to use the model as a ‘differentiating’ factor.
Today, the banking business is driven by one mantra - virtually all types and kinds of banking services to be made extendable across channels, including the Internet. With the growth of Internet banking being driven even harder by the retail boom, banks can increasingly rely on new-generation electronic banking solutions built on open architecture, with robust security features, that provide true relationship banking functionality as well as be scalable and flexible to meet the changing demands of the retail customer.
A good example is Singapore which has one of the highest Internet penetration rates worldwide. All major Singaporean banks provide Internet banking platforms and many also provide host-tohost
capabilities to link up to companies’ backoffice operations for file transfers. The authorities in Singapore have been proactive in recognizing the role of the Internet as a delivery channel and have strongly promoted Internet banking.
This paper looks at what Internet banking has been so far and delves into what the future ahead could be like. It also highlights the importance of having solution vendors who move in sync with the market, focusing on building beyond their core competencies.
The Next Wave in Internet Banking
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