- Bibek Maharjan
As the banking trend has seen various improvements in their journey, today they are not limited to certain strategies and processes. The traditional practice of banking transactions may be replaced by the modern emerging trends of e-banking; various other trends surpassing e-banking may also occur in the future with the advancement in technology. At present, e-banking is one of the emerging concepts. The use of e-banking and online transactions have shown fruitful results as the customers and organizations can get quick online access to their concerned banking questions allowing to invest their time they spare -- going to bank, waiting for turn, carrying out the hassle of offline processes --- on other productive sectors.
E-banking, which popularly resembles the short form of Electronic banking, is the process of performing online transactions via Internet independent of the physical form of the financial institutions. The business transactions is much quicker and reliable with e-banking. Some of the practices of e-banking involve virtual networks such as online banking, virtual banking, etc.
E-banking emerged in Nepal with the establishment of first joint Venture Bank -- now NABIL Bank -- in 1984 as it introduced credit cards in Nepal in 1990. This led to the introduction of Automated Teller Machine (ATM) by Himalayan Bank Ltd. in the country in 1995. Similarly, with this trend, Tele-Banking (Telephone Banking), Internet Banking and Mobile Banking began to develop.
Various e-banking channels available in Nepal are ATMs, Telephone Banking, Internet Banking, Mobile Banking and Point of Sales. Customers can recharge their mobile phone balance accounts, pay Internet bills, transfer amounts from one account to the other, pay electricity bills within a single website network such as esewa.com.np, ipay.com.np, etc. Many banks in Nepal like have adopted the practice of using such online payment websites for performing their financial transactions, for better customer service and for other purposes.
Internet Banking practices also helps to expand the reachability of financial practices to global markets adding higher-customer value and adding sound international business relation. The combination of wireless and mobile technologies enabled new revenue opportunities for financial service organization assisting to access financial services over multiple channels as ATM, Mobile Banking, etc. for customers. It attracts prime customers and enhance loyalty. It also considers the time sensitive financial transactions by providing opportunity to access those data in the presence of network and Internet anywhere at any time.
While e-banking has various advantages, it also involves high risks like Cyber Crime and hacking. Password leakage through e-mails and hackings can be a common problem. Similarly, various frauds like the use of fake credit cards can also take place. For example: Recent Panama Papers case have raised a question of doubt against seven Nepali shareholders to practice illegal outflow of money accumulated through tax evasion and corruption as per the investigation held by The International Consortium of Investigative Journalists (ICIJ). Nonetheless, the names of the suspects have not been revealed, but the data do name the company - Nepal Ventures Limited. It is found that they have been involved in offshore banking and have allowed the flow of huge money through tax evasion.
Few years back, Bangladesh’s Central bank became a victim of Cyber Crime. Cyber-thieves stole more than $100m from the country’s foreign currency reserves after which the head of the bank, Atiur Rahman, resigned from his position. However, the suspicions at other banks for the volume of requests of money by cyber-hackers led to the gang’s inability to get away with nearly $1 billion. So, e-banking, in case of weak political regulation, ineffective monitoring and mismanaged security, affects the ethical banking practices.
However, as per the respected governor Mr. Deependra Bahadur Kshetry’s statement, such frauds are not high in number as e-banking is still in the developing stage in case of Nepal. He further mentioned that strict policies and regulations would be made for ensuring ethical and right e-banking practices in case of locating any wrongdoings in the upcoming days. Hence, it is very essential to ensure proper maintenance of information security control measures while performing financial transaction via e-banking services.
If effectively utilized in the presence of strict monitoring and control, then e-banking can certainly overshadow the less effective traditional business practices.
E-banking has potential of growing in Nepal. Till date, practice of e-banking services in Nepal can be observed high only in major cities like Kathmandu, Pokhara, Biratnagar, etc. Hence, the practice and access of such services must be spread throughout different parts of the country to integrate all the essential business transactions. Additionally, Nepal need to open its market for the foreign banks which needs a strong connection network; and E-banking is undoubtedly the best possible appropriate network system.
Therefore, the right practice of e-banking at right time can definitely leave a phenomenal trademark for all of the banking trends.
(The author is an Undergraduate student (BBA Hons/Emphasis) at KUSOM college, Balkumari)