Traditional Banking Services Research Articles

PERCEIVED SECURITY TOWARDS E-BANKING SERVICES: AN EXAMINATION AMONG MALAYSIAN YOUNG CONSUMERS

Electronic banking (or e-banking) has experienced an exponential growth in Malaysia in the recent years. It transforms the traditional banking services and leads to a huge shift in global marketing practices. Despite its popularity, many consumers still doubt about its efficiency and effectiveness. This paper aims to examine how young consumers, especially the Generation Y, perceive the e-banking security based on their perceived regulatory related issues, protected transaction, adequate mechanism and service quality. The results showed that all independent variables, except adequate mechanism, were significantly related to the perception of e-banking security. The findings provide important insights to both academicians and e-banking practitioners in planning for their e-banking strategy. Keywords: Perceived security, e-banking, service quality, young consumer

Examination of the Status of Financial Inclusion and Its Determinants in Tanzania

The primary motive of this paper is to examine the determinants of financial inclusion in Tanzania. The paper borrows data from a household survey conducted by TWAWEZA. Employing the probit regression, the findings of this paper reveal that gender, education, age and income are the pertinent factors which affect the financial inclusion in Tanzania. The paper further shows the following: First, if you are a man, financially stable, have a good education and are relatively older, you then stand better chances of being financially included. The results show that, as the level of education increases, the individual is more likely to be financially included. The possible reason for this observation may be clearly linked with the financial ability of educated individuals to afford holding bank accounts and presenting personal guarantees when required by the banks during loan application because the level of education goes parallel with the income level. In addition, the results confirm a gender gap in formal financial inclusion, and this may be due to the factors such as inability of women to show collateral, their poor financial education awareness and lower business experience. Second, the paper also shows that the factors which affect traditional banking services are the same as those affecting mobile banking services (gender, age, income and education), and that there is a negative trend and a clear departure of customers’ usage from banking retail services to mobile financial services. Although this gap has been narrowed recently, the best option with the banking sector is to create more new delivery channels while using mobile financial services as an infrastructure to deepen financial access reaching more un-banked population. The paper, therefore, recommends banks to create more delivery channels while using mobile telecommunication network as an infrastructure to deepen financial access reaching more unbanked people rather than competing with mobile network operators. The findings of this paper may also be used as a wake-up call for policy makers to put more emphasis on women and young people who are often left behind during Government’s effort toward reaching the entire population as far as financial inclusion is concerned.

An empirical study of customer usage and satisfaction with e-banking services in the Republic of Macedonia

Abstract Recent developments in the field of information and communication technologies (ICTs) have created new opportunities for enhancing both the operations and competitiveness within the banking sector. The application of contemporary ICT-based solutions has resulted in significant changes in the traditional banking business, through the involvement of brand new approaches in the process of distribution of banking products and services to customers. As a part of the services offered by any modern bank, e-banking has become a synonym for an efficient system aimed at delivering traditional banking services through electronic communications channels, available to anybody, anywhere and anytime. The goal of the paper is to perform an empirical analysis of the current situation regarding the level of customer usage and satisfaction with e-banking services in the Republic of Macedonia. The study will enable us to determine which variables affect the level of adoption and satisfaction with е-banking services. The study is fully based on the statistical data analysis of the responses gathered from a representative sample of e-banking customers.

Diffusion and Adoption of Credit Cards in Indian Banking Sector

The study emphasizes on the identification of factors, which may have influenced the banks to adopt credit cards along with their traditional banking services. Bank specific variables were investigated to deepen the understanding on the diffusion and adoption of credit cards. The data relating to sampled banks’ characteristics have been collected from database of Reserve Bank of India. To know about the status of the bank regarding its adoption of credit card, the websites and annual reports of the banks were explored during different intervals of time period of the study. The study considers the dependent variable i.e. adoption of credit cards as dichotomous variable, whether or not a bank renders the credit card services, denoting 1 if the bank has adopted credit card otherwise 0. The logistic regression has thus been applied to get the valid and reliable results. The empirical findings reveal that, size, non-interest income, non performing assets, profitability, age and market share of the bank are the variables which have contributed significantly in the diffusion and adoption of credit cards.

Factors Influencing the Banking Customers to adopt the E-Banking Services in Kanyakumari District

Electronic Banking is defined as the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels. E-Banking provides the convenience and flexibility of 24 hour banking from home or working place which otherwise becomes difficult in hectic schedules and busy lives. It enables individual customers or businesses to access accounts, transact business or obtain information on financial products and services through the internet. Through e-banking it is possible to do transactions from any part of the world. It provides ease and comfortability to the customers, there is no need of physical presence of any customers in bank. In order for banks to increase returns on their investment in e-banking for their retail customers, it is imperative that they understand the factors that influence the adoption of e-banking services within their environmental context. For instance, perceived usefulness and ease of use are variables generally believed to influence the adoption of e-banking technologies. In this study, however trust in the e-banking system emerged as the most significant factor that impacts the adoption of the e-banking services.

Risk and Returns in Shari’a Compliant Cross-Section Stocks: Robustness Test of Application and Anomalies of CAPM

Islamic finance is relatively new branch of knowledge whereby activities of market participants are regulated by Shari’a (Islamic law). Islamic finance is expanding to capital market in addition to traditional banking services. This study is intended to understand and document the asset pricing mechanism of Shari’a compliant securities. We selected the well researched market index variable under conventional capital market studies to test the impact in variation of stock returns on special Sample of Shari’a compliant companies on ten years monthly data (2001-10) from Datastream. We have tested basic equation of CAPM and its modified form Shari’a compliant asset pricing model (SCAPM). We also tested the return differences due to size, B/M, PER and CFY. Results favoring the strong impact of market index on stock returns (70%) and confirm the Anomalies of size, B/M, CFY and PER, while SCAPM turned slightly better in explaining variations of cross section stock returns.

Financial Inclusion of Indian States:An Empirical Analysis

Financial inclusion is one of the most important policies for economic development. India has also taken measures to accelerate financial inclusion. This paper, incorporating data on traditional and modern banking services as well as data related to transactions of Self-help Groups (SHGs)- linked with banks, re-examines the position of different states in terms of financial inclusion. Researchers have used modified version of Sarma’s (2008) multidimensional index and Principal Component Analysis (PCA). Formal banking services have been found to be the main factors in including the financially excluded. Most states have achieved a low rate of financial inclusion. Western, southern and some northern states have done better, whereas north-eastern states have lagged behind.

American Express: Bank 2.0

In June 2011, American Express announced the formation of a new group, Enterprise Growth (EG). EG was designed to challenge existing credit and charge business models and extend American Express's leadership into the world of digital and mobile forms of payment through the use of software platforms and mobile apps. Alpesh Chokshi, president of EG, and Wesley Wright, product development leader, were well aware of the magnitude of the potential market that was currently underserved by traditional banking services. They saw an opportunity to do something bigger—to move American Express into debit and checking spending. EG called the initiative Bank 2.0, indicating the application of technology to usher in a “next iteration” of banking. Excerpt UVA-S-0242 Rev. Jul. 13, 2020 American Express: Bank 2.0 A New Mission in Enterprise Growth In June 2011, Kenneth Chenault, CEO of American Express (AXP), announced the formation of a new group within the company, Enterprise Growth (EG), to drive expansion into digital and mobile payments. “New technologies are redefining the payments business and creating opportunities that go beyond our existing businesses,” said Chenault in a press release. “The Enterprise Growth group is designed to extend our leadership into the world of alternative payments and create new fee-based revenue streams for the post-recession environment.” To lead the group, AXP hired Dan Schulman from Sprint Corporation (where he had headed the Prepaid Group after previously serving as founding CEO of Virgin Mobile USA, as president and CEO of Priceline.com Incorporated, and in other leadership positions). “Technology [is] fundamentally going to change the way you might think about financial services,” Schulman said during one of his first meetings with EG, “just as the Internet has redefined one industry after another.” EG, he continued, was designed “to challenge existing business models” and “to think about the intersection between software, software platforms, mobile apps, mobile technology in general, and financial services.” For Alpesh Chokshi and Wesley Wright, this was the moment they had been waiting for. Both of them had been at AXP since 2001 and had worked in its prepaid business since 2005. When EG was formed, their group had moved into EG with a mandate to drive expansion beyond AXP's traditional credit and charge business on a global basis. Chokshi was the president and Wright led product development. Before moving into EG, together with their team they had driven the expansion of AXP's prepaid business into gift cards and reloadable cards. Now, with the support of Chenault and Schulman, they saw an opportunity to do something bigger—to move AXP into debit and checking spending, a large sector of payments in which it did not currently play (see Exhibit 1 for AXP consolidated financial performance and Exhibits 2 through 4 for performance metrics of the US cards business). Their team had begun calling the initiative Bank 2.0, indicating the application of technology to usher in a “next iteration” of banking. . . .

СУЧАСНИЙ СТАН ТА ПЕРСПЕКТИВИ РОЗВИТКУ БЕЗГОТІВКОВИХ РОЗРАХУНКІВ В УКРАЇНІ

В Україні проводиться реформа фінансового сектору економіки, ключовим завданням якої є зменшення обсягу готівки та збільшення безготівкового обслуговування через сучасні дистанційні канали.
 У статті розглянуто теоретичні основи надання традиційних та дистанційних банківських послуг, а також зазначено їх основні ознаки. Серед дистанційних послуг, які надаються банківськими установами України основна перевага належить інтернет-банкінгу. Здійснено класифікацію послуг інтернет-банкінгу на основні та додаткові. Проаналізовано інфраструктуру безготівкових розрахунків в Україні та інших країнах, зокрема кількість банкоматів та POS-терміналів, кількість держателів платіжних карток і банків-членів карткових платіжних систем, а також банки, що мають найбільшу кількість емітованих платіжних карток в Україні. Окремо у статті проаналізовано дистанційні канали обслуговування клієнтів Приватбанку та Ощадбанку через лідируючі місця на ринку в системі Приват24 і Ощад24. Надано рекомендації для розширення обсягу надання банками безготівкових послуг.

Is the Traditional Banking Model a Survivor?

We test whether relatively small US commercial banks that use traditional banking business models are more likely to survive during both good and bad economic climates. Our concept of bank survival is derived from Stigler (1958), and includes any bank that did not fail, was not acquired, and was not absorbed into its parent holding company. Our concept of traditional banking is based on four hallmark characteristics of this business model: Relationship loans, core deposit funding, revenue streams from traditional banking products and services, and physical bank branches. We find that banks that adhered more closely to this business strategy were an estimated 13 percentage points more likely to survive from 1997 through 2012 than banks that used less traditional business strategies. Importantly, the estimated traditional bank survival advantage approximately doubled during the 2006-2012 crisis period compared with the relatively stable 1997-2006 pre-crisis years.

Banking, Not Banking and the Valuation of Banks

Rethinking of bank business models, fueled by the recent crisis and tightened capital requirements, is under growing attention from financial research on banks. Effects of the income structure on banks’ performance and value creation are central items. Market valuations of banks are of particular interest since they reflect combined expectations for profitability and risk. To date, studies refer to aggregated components of earnings. Hence findings provide with limited insight on the value-contribution of specific activities and, further, they tend to conflict.The present paper proposes an original investigation of the value-contribution of different activities, based on a sample of 218 quoted US Bank Holding Companies throughout 2003-2009 (a full economic cycle). With regard to an historical debate and a major issue for banks’ stakeholders, it emphasizes on the contribution of traditional banking services as opposed to various non-banking activities. The contribution of banking is found to be influenced by its components: interests on loans tend to contribute negatively but banking fees positively. Besides banking fees, the valuation of the smaller BHC is also supported by customer investment services. The larger BHC may benefit from a broader spectrum of non-banking activities, such as insurance, as opposed to interests on loans. Trading has a negative influence for all specifications. These results are robust to underlying effects on ROE and risk. The hierarchy of value-contributions is next addressed. For all samples, of which also BHC with the highest banking fees within banking income, customer investment services over-perform banking. Insurance activities under-perform banking, even for the larger BHC and BHC with lowest banking fees intensities.

Security of E-Banking in Bangladesh

E-banking implies provision of banking products and services through electronic delivery channels. It permits anytime, anywhere and any how banking. It offers easy, faster, convenient, low cost banking services around the clock. Security has been recognized as a capital component of electronic banking industry. The main factor of e-banking practice and security are different from traditional banking services because of uncertain nature of the online environment. Every steps in the online banking activities are secured by one or more security mechanisms. This paper discusses the substantial cracks in existing knowledge about the internet banking security in Bangladesh. The typical data is collected both from the secondary and primary sources. In analyzing data, the statistical tools have used with the aid of SPSS software. The result shows that e-banking practice is not highly secured in Bangladesh. The users also have lack of awareness about e-banking security.

E-Banking Practice in Bangladesh: Comparative Study on Male and Female Users

E-banking implies provision of banking products and services through electronic delivery channels. Factors that affect e-banking practice and its security are different from traditional banking services because of their uncertain nature of the online environment. Every step in the online banking activities is secured by one or more security mechanisms. Most of the Bangladeshi customers both male and female are not conscious about e-banking security. They have lack of technical knowledge to handle their e-bank account. Many of them have no computer in their residence. Female users are more conscious than male. Bangladeshi banks are operating their e-banking functions by non-technical hand. The main objective of present study is to find out the perception, attitude and practice of male and female users of e-banking in Bangladesh. The investigation was concentrated on male and female users of e-banking in various divisions, districts, towns and rural areas in Bangladesh. The sample consisted of 22 female and 98 male bankers and bank customers, were selected purposively from various territory. Out of 120 respondents, 48 bankers and 72 bank customers gave their opinion on many issues of e-banking. Data was collected using questionnaire administrated by the researcher. Data were processed through micro computer using Statistical Package for Social Science (SPSS). For analyzing data suitable statistical tools such as chi-squire test and Pearson product correlation were used.

Combine Effect of Automated Services and Traditional Services Quality on Customer Satisfaction: Evidence from Banking Sector of Pakistan

In recent years, the use of technology to deliver the services has grown rapidly in banking sector and it made a significant impact on customer perception. In previous studies; automated service quality was proposed by the several studies to be an important antecedent of customer satisfaction. However, in traditional settings, human element is also considered a strong motivator of customer’s satisfaction. So the major objective of this research study was to explore the combined effects of automated service and traditional service quality (human interaction) on customer satisfaction. Furthermore, the investigation on customer satisfaction in automated services context, combine with traditional services quality is limited. However, we didn’t find any comprehensive study that has modeled these variables together. The research study was conducted through cross sectional field survey and self-administrated questionnaire was used in order to collect data in banking sector of Pakistan. Multiple regression analysis process was conducted to assess the effect of both services typology (automated and traditional) on customer satisfaction. The results have shown three main findings. First, it was found that automated service and traditional service quality (human interaction) both have direct significant effect on customer satisfaction. Second, the results find that an insignificant relationship between ATM services on customer satisfaction when moderated by Traditional Banking services, and directly this services play an important role to satisfy the customer. Thirdly, results found a strong positive significant association in Mobile banking services and internet banking services moderated by teller banking services.

Understanding Mobile Banking from a Theoretical Lens

Characteristic of every developing nation, Kenya has found itself at crossroads; defining the banking industry with the urge to provide banking services to majority of the unbanked populations. Mobile banking is a banking model that has been adopted by Kenyan Banks to reach out to unbanked populations. This paper is based on a case study conducted in Kenya on selected mobile banking products in 2012. The Actor Network theory methodology was used to identify and follow actors. Using in-depth interviews with key informants, survey of users and agents as well as focus group discussions and observation, it was established that agent phones and Point of service (POS) devises were used to deliver traditional banking services to users whose access mode was their mobile phone or debit cards. There existed partnerships between banks and mobile network operators whose operations were regulated by the Central Bank of Kenya and the Communications Authority of Kenya. This paper seeks to explore fundamental requirements for the interplay of actors in the execution of mobile banking services. It critically analyses data collected, with reference to the Network Society theory by Manuel Castells and Actor Network theory by Michael Callon and Bruno Latour, to inform on cross-sectoral partnerships and user attributes necessary in mobile banking uptake and use.

Understanding mobile banking from a theoretical lens: Case studies of selected Kenyan m-banking products

Characteristic of every developing nation, Kenya has found itself at crossroads; defining the banking industry with the urgeto provide banking services to majority of the unbanked populations. Mobile banking is a banking model that has beenadopted by Kenyan Banks to reach out to unbanked populations. This paper is based on a case study conducted in Kenyaon selected mobile banking products in 2012. The Actor Network theory methodology was used to identify and followactors. Using in-depth interviews with key informants, survey of users and agents as well as focus group discussions andobservation, it was established that agent phones and Point of service (POS) devises were used to deliver traditionalbanking services to users whose access mode was their mobile phone or debit cards. There existed partnerships betweenbanks and mobile network operators whose operations were regulated by the Central Bank of Kenya and theCommunications Authority of Kenya. This paper seeks to explore fundamental requirements for the interplay of actors inthe execution of mobile banking services. It critically analyses data collected, with reference to the Network Society theoryby Manuel Castells and Actor Network theory by Michael Callon and Bruno Latour, to inform on cross-sectoralpartnerships and user attributes necessary in mobile banking uptake and use.

A conceptual framework for detecting financial crime in mobile money transactions

Mobile money has made it possible for the unbanked to access financial service to areas previous not accessibly to traditional banking systems. Africa in particular, has indeed seen a growth in use of such services owing to the high penetration of mobile phones. While traditional banking services have been well regulated and secured, mobile money services are still new and vulnerable. Also, attacks and crimes targeting the internet, new technologies and new methods of payments have become sophisticated. This scenario requires novel proactive, real time techniques and solutions to detect financial crimes in mobile money transactions (MMT). The Financial Action Task Force (FATF) 2012 requires mobile money to be subject for monitoring and for compliance. Payment systems have evolved from hard cash, to credit cards, debit cards and now to the M-money, there are several approaches that have been used to detect financial crime in platforms such as credit cards and in the traditional banking system. However, most of these approaches are not suitable for m-money methods. A conceptual framework for detection of mobile money financial crime is proposed. The framework incorporates data mining techniques, big data analytics, Know Your Customers, historical databases and a knowledge base among other things.

E-finance innovations through social activities: the case of Lithuanian banking services

Changes in e-finance are numerous in spite of overall contraction of monetary flows in the Lithuanian economy. More attention is paid to provide traditional banking services in novel ways, offering free tools for planning budgets, testing financial investments, and consultations, etc. The research focuses on valuation of e-finance innovations occurrence through measures for knowledge inflows, testing whether and how social activities (education programs, open seminars, consultations, public comments, contests, games, platforms) and participation in networks allow to involve potential innovators and create advanced e-finance services. The emergence of social activities, especially by banks, is numerous; banks show more interest not only in separate projects, but in social networks as well. The research results indicate that involvement of banks into social activities is mostly related to reaching the aim of ensuring awareness and trust by current or potential customers and only partly of searching for opportunities to cooperate for innovations.

The prepaid mobile wallet: A powerful product for an impatient ecosystem

This paper analyses the intersection of prepaid commerce and the mobile wallet, in order to present strategic options for banks seeking to respond to what Mobey Forum contends is an emerging threat to their positions in the mobile wallet ecosystem. It provides an overview of the various market developments and growth sectors in prepaid services, together with a description of prepaid’s differentiating characteristics, before exploring how their competitive attributes and advantages over traditional banking services are congruent with the key drivers of mass market mobile wallet adoption. It contends that new, innovative prepaid service models and ‘second generation’ mobile wallet solutions are mutually supportive and, when combined, they will each drive innovation in the other, pushing traditional banks further down the mobile value chain as a result, and forcing them to yield both market share and visibility with their mobile customers. The paper acknowledges that, for now, prepaid may be a ‘better fit’ for the mobile wallet than traditional banking alternatives. In order to explore the prevailing options for banks, the paper then cites examples of how innovative banks have responded to this emerging market. These options include developing a proprietary prepaid infrastructure for active and open use with customers, using a prepaid infrastructure ‘behind the scenes’ in order to support new services such as peer to peer money transfers, providing back-end infrastructure support to the new prepaid service providers, and establishing an agent network enabling the bank to resell the prepaid digital products of popular merchants. The paper concludes that banks now need to recognise prepaid as a major driving force in the future of mobile wallets and accept that influential stakeholders in the mobile wallet development ecosystem are now using prepaid as a means of accelerating mobile wallet development and deployment.

E-banking: Online Transactions and Security Measures

This study presents the technology involved in the more important payment systems currently available to internet users. As the field is undergoing a major upheaval by changing the traditional banking services, e-commerce is facilitating change in recent years. These programs in-returns have shown lucrative growth in internet businesses and capital generation. Transactions on an international scale are the mark of highly demanding businesses with a global consumer base. Banks around the world provide their banking services online though electronic channels, one of the most widely used is the internet channel. Many people avail internet banking services which is convenient in this day and age. On-line banking platforms allow consumers to manage their accounts globally and at their convenience. The internet banking services have to be at top level of security and risk free in order to be trusted by customers. In this study the attack models have been explained and the top risks factors that the internet banking services come to face and applications have been discussed. This study deals with experimental models that can be applied to curb cybercrime attacks and make the internet banking applications more secure to the consumer strata.