JOURNAL ARTICLE:

Electronic Commerce and Internet Banking Systems
What's In This Article?
1 - Electronic Commerce
2 - The Internet as A Medium for Electronic Commerce
3 - Internet Banking Systems

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1 - Electronic Commerce
Electronic commerce is a modern way of conducting business which addresses the needs of organizations, merchants, and consumers to reduce operating costs while improving the quality of goods and services, and increasing the speed of service delivery. The application of computer networks to search and retrieve information in support of human and corporate decision making is also a vital aspect of electronic commerce.

Electronic commerce involves more than just buying and selling though. It encompasses all types of pre-sale and post-sale efforts, as well as a host of ancillary activities. Such activities would include new approaches to market research, generation of qualified sales leads, advertising, product distribution and purchasing, customer service and support, knowledge distribution and financial transactions.With the advent of interactive media on the Internet communication channel, businesses can dynamically deliver personalised services and content, in real time, to one customer at a time. Opportunities for unique information-delivery, relationship-building and channel intermediation abound in the electronic commerce world on the Internet.

Therefore, the traditional role of financial institutions such as banks as the central payment service providers has, in some ways, been supplanted in the rapidly developing market of electronic commerce. As such, the balance of power might potentially either lie with the retailers of products and services, or with the third party non-financial intermediaries, with the banks' loss of branding in payment services and failure to exploit the traditional, trusted relationship with existing customers.

2 - The Internet As a Medium for Electronic Commerce
Traditional electronic commerce through such means as electronic data interchange, fax communication, value-added networks, etc. has been an exciting and growing aspect of information and communication technology for several years. In 1995, the Internet reached 148 out of the 185 United Nations member countries (86%) and the number of users currently estimated at 20 to 30 million connected to the Internet is also increasing rapidly, with an annual growth rate of 50% to 100% (Chon 1996). In particular, the World Wide Web (WWW), a sub-network of the Internet, is the fastest growing part of the Internet and offers a great deal of attraction in terms of its excellent user-friendly front-end through web browsers. Believed to be growing at twice the rate of Internet as a whole (Winder 1995), the WWW offers particular attractiveness to electronic commerce application areas such as publicity, marketing and advertising; direct online selling; research and development; communication; collaboration, etc.
The Internet has world-wide connectivity, is growing phenomenally in most segment of our society, can be interactive and is relatively inexpensive to use. The downside to electronic commerce is that there is no central authority for managing the Internet, and reliability is sometimes questionable. Delivery is not guaranteed and security must be considered non-existent unless the user provides it.

3 - Internet Banking Systems: The concept of Internet banking entails the banks being able to fully customise their web sites in the WWW for providing financial services and products directly to their customers, and instantly update them without shipping new software to the customers. Web servers would also have the ability to track each customer's on-line transactions and use search engines to analyse customer behaviour and profitability. On the WWW, banks can now reach their customers directly, with no intermediaries. The long-term international growth of the Internet raises extensive opportunities for cross-border information flows and business transactions. In 1995, transaction volume over the Internet's WWW was estimated at more than $400 million.