Essay Example on Bill Gates said in 1994 banking is necessary but banks are not

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Bill Gates said in 1994 banking is necessary but banks are not Johnson 2017a This is because banking is now possible entirely online without any physical branches This is possible because of financial technology fintech Financial technology is broadly defined as any technological innovation in financial services Browne 2017 The rise of internet banks and the increase of internet banking can be attributed to changing consumer behavior Consumer behavior has been changing due to increased digitized living which can be described as a life style in which Internet connected mobile devices allow people to work shop play create share inform communicate and transact in an integrated manner on their own terms 24 7 across the globe Cortet et al 2016 pg 14 15 It is now expected of banks to deliver greater speed and convenience in payments and other financial services Digital payments give banks the ability to collect much more data including location and behavioral data e g search data preferences Customers may find this intrusive but it also has many benefits The benefits include receiving more relevant offers better budgeting discounts etc The risk of sharing personal data can be outweighed by these benefits The personalized and seamless customer journey will continue to increase into the future because of data collection Banks who do not understand the importance of this will not keep up Cortet et al 2016 Fintech can be a helpful and useful tool in banking because it has the potential to reach millions of customers and offers customers a better value proposition Johnson 2017a 



Examples of internet banks banks entirely online and traditional banks with internet banking features in Europe and other countries have shown this Bank Leumi is an Israeli bank and over 70 of their customers use mobile for banking transactions Johnson 2017a Bank Leumi created an internet only bank called Pepper with no physical branches This benefits them by having lower investments in maintaining heavy and expensive legacy core systems as their mobile banking platforms are more advanced and lean Johnson 2017a SEB is a universal bank that operates in Sweden Latvia Estonia and Lithuania Up to 99 of daily banking activities in SEB Lithuania are done by customers themselves using internet banking SEB launched a new SEB Lithuania mobile app and digital identification tool Smart_ID app and an advisory service that can be done remotely which is a video financial consultation done in real time Customers can submit an application and their loans become available online 



The notification comes on average in about five minutes to determine if the loan decision is accepted or if more information is needed They have also utilized mobile e signatures for their corporate customers to allow them to sign factoring and lease agreements online Johnson 2017b Previously fintech was thought of as a threat Now fintech should be thought of as a partner because it can be easily implemented in traditional banks Johnson 2017a Banks should implement fintech to avoid falling behind from the competition These examples show how banks have increased internet banking activities and that most of their customers adopted to them and use them daily Factors that have an impact on whether customers will adopt to internet banking are security convenience and usability If customers believe that internet banking is secure then they are more likely to adopt it and use it Security is a reason that deters customers from performing transactions using internet banking


Shanmugam et al 2015 Enhanced secure internet banking features should be implemented and communicated to customers to increase customers confidence in using internet banking Convenience is another factor in customers perception of internet banking Saving time and the ability to perform banking transactions or view bank accounts from any location at any time has an important impact on the use of internet banking Another attribute often mentioned by customers is the ease of use Customers would choose not to adopt internet banking if it were not easy to use Clemente Ricolfe 2017 The operability of the website includes elements such as ease of browsing attractive appearance web design or that the site conveys a sense of competency Chau and Ngai cited in Clemente Ricolfe 2017 pg 969 Rapidity which is the speed of a transaction also contributes to increased customer preferences in internet banking Clemente Ricolfe 2017 Our findings demonstrate that British internet banking adopters are highly satisfied with internet banking Shanmugam et al 2015 pg 630 the qualities of internet banking such as security accuracy user friendliness and network speed have a significant influence on whether and how quickly customers adopt internet banking services Freed 2011 Liao and Cheung 2002 cited in Shanmugam et al 2015 pg 631 The new product includes the features that customers want according to the literature reviewed which are security convenience and usability Examples from banks have shown that most customers have adopted internet banking and use the features daily The new app will provide more convenience and ease of use by making the process completely mobile The product makes the identification process stronger which will enhance security and increase customers confidence in internet banking


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