Virtual Banking :: essays research papers

TABLE OF CONTENTS01.00............ EXECUTIVE SUMMARY02.00............ TRENDS IN RETAIL BANKING03.00............ ABOUT THE INTERNET04.00............ VIRTUAL BANKING AND APPLICATIONS04.01............ SMART CARDS05.00............ EXAMPLES06.00............ SECURITY ON THE INTERNET06.01............ CRYPTOGRAPHY06.02............ FIREWALLS06.03............ TRUSTED OPERATING SYSTEMS07.00............. REGULATIONS AND PROBLEMS08.00............ CONCLUSION .09.00. REFERENCES01.00 EXECUTIVE SUMMARYThe cyberspace is emerging as an efficient delivery channel for financial services. WithInternet banking, customers do not need to have special bank-issued software. Banksmaintain their identity and can differentiate themselves by customizing the services And information they provide over the Internet.02.00 TRENDS IN RETAIL BANKINGWhat does better customer mean? Increasingly, customers are demanding moreconvenient ways to do their banking. An Ernst and Young study (Technology inBanking Report) conclud ed that "nothing changes in the banking world if customerscannot get financial services when and where they wish...this means anywhere, at anytime." Statistics show that ATMs, telephone banking, and home banking account forover fifty percent of solely banking transactions today, and total non-branch activity isgrowing at fifteen percent a year. In one survey (Web-Tech, Inc., May 17, 1995),eighty-two percent of 18- to 34-year olds polled favored banks with 24-hourservice. Customers are also demanding a more sophisticated mix of products tailoredspecifically to their financial needs, and non-bank competitors are better fulfilling theseneeds. Banks today hold only 20% of household financial assets, versus 34% twentyyears ago they have 30% of business deposits, versus 42% only seven years ago.Nonbank credit control board providers have gained inroads against banks, holding a 25%market share versus 5% in 1986 (WebTech, Inc., May 17, 1995).Internet banking offers an attractive solution to this redesigned products and services.Customers have 24-hour graphical-interface access to their accounts and give noticethat their bank is doing something to make banking easier for them. 03.00 ABOUT THE INTERNETThe Internet has exploded in the last two years thanks to the invention of the so-called"web browser." A browser is a point-and-click software program that allows "surfers" tonavigate around the Internet without knowing any UNIX commands. The firstbrowser was developed by the National Center for Supercomputing Applications, agovernment agency. With a browser and access to the Internet, you can order a pizza,listen to and purchase a CD, stroll through the Louvre, or view artificial satellite photographsof Scotland. Although it may get congested from time to time, the Internet itself is extremelyreliable. There is not actually any one network that is the Internet it is made up ofthousands of networks that connect to each other through common rout es, and theyall agree to carry each others traffic. There is a lot of money flowing up from local