Convenience of e-commerce and e-banking

E-Commerce and E-Banking is a result of such technological development, where one is able to buy or sell a product from or to the other part of the world without leaving one's own seat at a click of a mouse button. One is not restricted by time boundaries when it comes to checking out the financial status or position.

Market statistics: Market size projection from technology research company Forrester indicate that more than $560bn of sales will be made online by year 2006. This is facilitated by the development in E-commerce and E-Banking strategies.

E-banking
Confidence in the economy comes through the knowledge of one's financial status. Therefore, online banking, providing up to the minute information on one's financial status plays a big role in the way one spends or invests his/her money. Internet banking on the other hand breaks the time boundaries and dependency when it comes to managing one's finances. No doubt, E-Banking concept is beneficial to both the customers and the bank.

*Reduces the physical branch requirement, this in turn reduces the cost in maintenance and staffing. Microsoft boss Bill Gates in his books on Business @ The Speed of Thought has calculated Banking cost per transaction as follows:

Branch Banking : US$ 1.07
Tele Banking : US$ 0.52
ATM : US$ 0.27
Proprietary Online : US$ 0.15
Internet : US$ 0.01

* Provides flexibility to customers, whereby they are able to keep track of their finances in their own time not bound by the branch opening and closing time.

* Increases bank's concentration to focus more on the core businesses such as formulating new products and services without the headache of repetitive day to day administrative issues.

* Increases the bank's opportunities to cross sell services to customers.

* Customers are put in better position to research and compare in order to choose the best product and services that they receive.

Following is a list of services that can be offered. This is just a small piece of the whole cake of opportunities that are available and that are yet to come.

Online features allow customers to:

* Check their balance
* Review their transactions
* Print a mini statement of account or place an order for full postal statement
* Order cheque book and paying-in book
* Make online application for credit and debit cards
* Pay regular bills
* Transfer money to and from different accounts, both internally and externally
* Set up repetitive scheduled payments such as instalment.

E-commerce
The concept of a high street shop is challenged by the opportunities offered by E-Commerce. This is where one is not restricted by the flow of customers in the street where his/her shop is located. Regardless of how small or big the company is, it puts them roughly, at the same footing and exposure when it comes to selling their products. The concept of E-Commerce is both beneficial to the customer as well as the retailer.

It reduces the need for a physical presence or a shop premise.

*Automated transactions reduce the staffing requirements.
* Offers flexibility to the customers in terms of when and how they shop.
* Customers are able to check and compare products offered by different retailers without leaving their seat.
*Retailer is freed from the burden of day to day administrative issues to focus on enhancing the quality and range of products offered and improving the customer service.

One cannot discuss the opportunities offered by E-commerce without discussing E-Banking. At the end of the day a customer visits a web site, browses through the product lists and chooses to buy the product. Payments need to be made in order to transfer the ownership of the product to the customer. If there is no opportunity to make such online payments then surely, the essence of E-Commerce just falls apart. Following is just a minor list of services (in comparison to the opportunities that wait in the real world) that the bank can offer to facilitate E-Commerce:

Online payments:
Merchant account: This is an account for the merchant or the retailer whereby he/she is able to accept payments, via credit or debit card over the internet, by phone, fax or e-mail. The E-Banking feature of the bank clears this payment.

Future pay account: This allows merchants to offer instalment and repetitive scheduled payment facilities to their customers. The E-Banking feature of the bank manages these scheduled transactions.

Obstacles
There are two main obstacles to e-commerce and e-banking, one is the mindset of the people and the other is the need for a basic infrastructure.

The thinking in offering E-Banking services and E-Commerce services is different from the traditional branch and shop premise based services. Therefore, the nation needs to go through a culturing process in this regard.

Basic infrastructure such as the need for software and hardware to automate administrative tasks and transactions, communications and networking infrastructure to maintain upto date information and carry out live transactions, security procedures and techniques to prevent cyber fraud and eves dropper from getting access to the system.

If one does not deal with the two above mentioned points then it will result in the following issues that discourage the customers from taking advantage of such services:

* Slow speed: Making browsing the product catalogue or checking the status of one's account time consuming.

*Difficult user interface: Making it difficult for non-technical individual to make use of the feature and services, often not being able to find the option that they are looking for.

* Security risks (cyber fraud): Not having proper security measures takes away customers confidence from carrying out online transactions and making use of the latest services. The fear of cyber fraud prevents them from revealing their financial details. There can also be legal obligations along with the need to boost customer confidence to make sure proper security measures are in place. There are various industrial-standard security measures that can be taken, such as: placing firewalls to prevent access to unwanted services and systems, using encryption techniques such as, SSL and Public Key Infrastructure (PKI), to secure the transmission of data, pro-active monitoring of the system so that actions can be taken against malicious access attempts etc.

* Technical glitches: Poorly developed software resulting in various technical glitches, often not allowing the customer access to their account can be a major de-motivating factor.

Conclusion

There has been tremendous technological development in Bangladesh. Along, with that the banking sector has faced various make-shifts to improve upon the quality of its products and services offered. Customer service has become a talking point both in the retails and banking sector. This has resulted in their adaptation of technology to increase the efficiency of their processes. However, it is still slow compared to other countries even the countries in the Indian sub-continent. Therefore, in order for Bangladesh to win or at least keep up with the race in E-Commerce and E-Banking there needs to be shift in the thinking at the top management level. The thinking must include how time consuming business process can be automated by taking advantage of the development in the ICT sector.

Kazi Abdul Mazid is Advisor of Premier Bank.