Reading Comprehension (Skimming and Scanning) (15 minutes)
Directions: In this part, you will have 15 minutes to go over the passage quickly and answer the questions on Answer Sheet 1. For questions 1-7, choose the best answer from the four choices marked A), B), C) and D). For questions 8-10, complete the sentences with the information given in the passage.
Learning
Internet is being adopted as a parallel medium of communication, transaction, and social networking. Internet banking is fast gaining speed across the globe for its convenience and ease of conducting transactions at a speed and service levels never dreamt of, a decade ago. Bankers needs take some learning for this last decade of e-driven environment.
Internet banking introspection (反省)
In spite of its multiple advantages, there is a need to step back and re-think on perceptions of the masses. Is Internet banking truly replacing the layers of branch banking in a big way? Is Internet banking a definitive future of how world people will transact over net? There is enough evidence of Internet banking gaining considerable adoption in developed and to a lesser degree in developing countries. However ample evidence exists to suggest that Internet banking has been highly accepted in only specific line of services and yet global bankers have to fight a fierce battle when Internet banking will be a truly serious and parallel banking channel. But one thing is sure, e-banking has going through a lot of transformation for a decade and will surely keeping it’s footprint across the globe.
By next decade, mobile banking may take over as preferred channel in the tribal regions of Africa and world may follow the pattern. Bangladesh has successfully tested mobile banking for have-nots and again proving a point to the word that micro-banking is not the only aspect they are leading, given the size and status of their economy.
Maintaining e-banking infrastructure
Developing and maintaining Internet banking is extremely tough call for a modern day banker. At one side the cost and efforts of maintenance of e-banking infrastructure may not necessarily justify the benefits to bank of every size. And at the same time, cost of not providing good internet banking platform is also huge and may affect the opportunities loss for banks. Having said that, in today’s context, providing full-service Internet banking platform is more of “when and not if” and the benefits are comparable to “chicken or egg” theory.
Pre-Y2K (千禧危机)
In the first generation of Internet banking, i.e. pre Y2K era, banks in the developed world provided basic facilities such as view balance, e-statements, check-book request, stop payment instructions, electronic bill payment etc.
Post-Y2K
In post Y2K era banks aggressively adopted various services such as electronic bill presentment and payment, customized reporting, account aggregation over multiple bank accounts, investment banking, also portfolio/investment management, comprehensive money management, and trade finance etc.
Internet-only banks
Y2K was also an era when few “Internet only” banks were established, and out of which Japanese banks have better survived by now. The rest of the world is struggling to keep this “internet only” concept alive.
Needless to say, debate is on for account aggregation vs. multi-factor authentication (身份验证) vs. privacy vs. so on.
2007 and beyond
In the present regime of 2007 and beyond, the banks are concentrating on targeting the incremental (增加的) service-level in online banking value-chain e.g. developing creative ways of countering security threats, targeting comprehensive supply chain management for entire life cycle of a transaction , customizing the social network in wbe2.0 including offering more control to the user, aligning internet banking with multiple channels to offer the best technological upgrades to the customer, mobile banking services, etc. Banks are targeting Internet banking as a medium to generate new business and attracting either offline or fresh customer through effective ways of cross-selling, establishing cross border services for various corporate as well as consumer segment. Internet banking is also been used as a channel to create profile driven marketing campaign for various banking products.
Research suggesting internet banking growth story
•According to Pew Internet & American Life Project in 2005, around 53 million Americans conduct majority of their banking online. This is approximately a quarter of all adults and this has risen over 47% since 2002.
•Aite Group forecasts that by 2010, 13% of checking accounts will be opened online in the United States, up from 3% in 2006.
•Global e-commerce activity is currently estimated to be approximately 10 trillion US dollars. Increasingly, Internet banking will be used as a payment mode either using physical or virtual credit cards or though fund transfer or direct debits (借贷). Currently physical card plays a major role in these global payments with or without using Internet Banking.
Security threats over internet—a need for introspection
In contrast to the growth stories, parallel research by organization such as Mintel in USA suggests a flip side of the story. The study by Mintel indicates around two thirds of 40% younger consumers 18-34 are turning way from online banking services, as they “don’t trust transactions on the Internet”. Therefore a huge introspection is needed from bankers for planning to counter the security threats in terms of hacking, Trojan horses (木马软件) and several other modes of attacks on customer as well as banks.
Several Banks across the globe had to either compensate customers or to accept the responsibilities of security of their Internet banking channel. A security threat is a major deterrent for consumers aggressively using Internet banking. However it is also seen that perception of threat is much higher in the minds of consumers in comparison to the actual threat itself. Banks have to aggressively work to offer insurances or guarantee to the customers, which may help to secure huge potential market. But this still leaves with issue of data floating around with the fraudster (骗子), which may not be resolved with guarantees.
Some learning by banks
•Internet is one of most cost effective channel of conducting banking operations. It is estimated that Internet banking offers up to minimum of 60% cost saving over normal offline banking. But this numbers keep changing especially in web 2.0 environments.
•Bankers across the world have realized that customers using online banking offer relatively loyal customers to the bank. But can they take this for granted, as new online financial service community (especially non-banks) is posing strong threats?
•According to Gartner, on an average, companies save about 45 cents every time they send an account statement electronically instead of by paper mail. A bank that sends monthly account statements by paper mail to 5 million customers would spend $27 million more than if it sent electronic statements. (So much less wood saved for countering global warming.)www.examw.com
•Branch managers (especially of traditional banks) across the globe have realized that Internet banking offers is not a hindrance or competition to their business growth, but it complements the operations as it actually reduces the excessive burden of servicing customers.
•Banks are offering customized reporting for customers to analyze their income, expenditure items and this helps individual families to study and budget their spending from e-banking statements. But bankers need to watch as to how many percent of customers actually use these flashy customized gadgets or are they spending money at wrong places.
•Can we devise threats-free and full-secured environment, where users will freely conduct transactions? I pray this would be true in next decade or so.
•Mobile banking may cross over Internet Banking volume within less than a decade. Internet channel heads, better watch out.
