The Impact of e-Banking Practices on Five Selected Universal Banks

Abstract

The impact of technology has made strategic and competitive advantage of universal in a real time environment on the efficient and real time processing of bank data that eventually increase the income. This is a new way of channel of accessing and doing transactions in banking industry who embraced the online banking as a new paradigm of communication and online transactions. The new technology where created so that the clients can access their accounts without delay anywhere and everywhere twenty four by seven in their own convenience. This kind of traditional transaction normally done inside the premises. In this paper, the researcher aims to recommend a new model of computing ROI as a function of three Independent variables like internet banking compliance, ratio of the banks number of branches to the number of branches of all the five and ratio of banks loan to its deposit liability were the factors contributors that affect the ROI. The ROI was based on Dupont formula where these three variables were being studied. The researcher also used multi-regression in predicting the effect, extent and impact of three independent variables in banking practices on five universal in the Philippines. This work is a contribution in the ongoing research towards adaptation of ROI model based on Dupont formula using data mining. Poor services and the desire to increase market base were primary reasons why changed from traditional activities to modern one. The convergence of information and communication technology in reaching clients without building new physical branches are used now by the banking industry to transfer information from one place to another and to make available immediately to clients information either in an office or at home. The changing life style of led to real time banking operation in order to satisfy the customers desire for convenience. Globalization in the banking industry is perhaps more focused on the profit to be made and that may be the reason why are becoming more astute in their approaches to services to clients in order to achieve maximum profit. Local bankers foresee that more foreign will enter the country. They will bring their portfolio of modern products and services with them, as well as their global sourcing of funds. The Philippine banking industry may have realized the need to modernize at least some of their services to insure that prime clients are not lost to foreign financial institutions. The banking industry as other organizations that render service - it must be open, speedy, and efficient. Electronic online transmission with regard to data processing of documents is an acclaimed approach to achieving efficiency. Traditionally, a person goes to the bank personally for the safekeeping of their money. The Internet is opening up new servicing channels and opportunities for local to compete with other locally and globally. However, barriers still exist in the servicing of the information provided online. This research will determine the relative effects of increase in the number of branches, ratio of loans to deposit liabilities and stage of implementation of the e-commerce law in terms of improving the performance of the banking industry measured in changes in their returns on investment (ROI). To the bank, the e-banking offers a more cost-effective means of delivering these routine functions and frees branch personnel for selling services with a greater return. Entry into the e-banking arena is thus no longer complex from the standpoint of either operations or marketing. Attention is now focused on how an e-banking strategy integrates with an overall retail and corporate service strategy and how e-banking can be positioned to increase bank profits. Banks generally view an e-banking program in terms of how it will impact in internal operating cost and what effect it will have on market share in terms of bank efficiency. Reducing cost is a primary reason that is common to large with extensive investments in branch facilities and personnel.