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Unit 11: Innovations in Banking

a customer may perform banking transactions electronically without visiting a brick-and-mortar Notes
institution.
E-banking is defined as the automated delivery of new and traditional banking products and
services directly to customers through electronic, interactive communication channels.
E-banking includes the systems that enable banks' customers - individuals or businesses, to
check accounts, do/transact business, or obtain information on financial products and services
through a public or private network, including the Internet.
Customers can avail e-banking services by using an intelligent electronic device, such as a
Personal Computer (PC), Personal Digital Assistant (PDA), Automated Teller Machine (ATM),
Kiosk, or Touch Tone Telephone (TTT).

11.2 E-Banking Components

E-banking systems can vary significantly in their design depending on a number of factors.
Financial institutions should choose their e-banking system design and configuration, including
outsourcing relationships, based on four factors:
1. Strategic objectives for e-banking
2. Scope, scale, and complexity of equipment, systems, and activities

3. Technology expertise
4. Security and internal control requirements.
Financial institutions may choose to support their e-banking services internally. Alternatively,
financial institutions can outsource any aspect(s) of their e-banking systems to third parties. The
following entities could provide or host (i.e., allow applications to reside on their servers) e-
banking-related services for financial institutions:

1. Another financial institution
2. Internet service provider
3. Internet banking software vendor or processor
4. Core banking vendor or processor

5. Managed security service provider
6. Bill payment provider
7. Credit bureau
8. Credit scoring company

E-banking systems rely on a number of common components or processes. The following list
includes many of the potential components and processes seen in a typical institution:
1. Website design and hosting

2. Firewall configuration and management
3. Intrusion detection system or IDS (network and host-based)
4. Network administration
5. Security management

6. Internet banking server

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