Virtual banking catches on worldwide
Telecommunications have become an integral part of modern
banking, opening up immense possibilities for developing and
expanding electronic banking facilities.
Advances in information technology have resulted in banks
and building societies using telecommunications to network
their branches’ computers, so that they are on-line,
and to link up automated teller machines (ATMs).
Driven by increased competition in the banking sector, some
local banks have gone further and provided a variety of new
electronic banking and tele-banking products and services.
Trust Bank, for instance, has launched its ambitious bank@ease
product, which is intended to provide greater flexibility
and extensive electronic distribution channels for its customers’
convenience. Bank@ease runs on an MKI Equation DBA platform.
This in turn runs on an AS400E server. This is state-of-the-art
technology of an internationally recognised standard.
Quickpay, Zimbabwe’s first Internet-based payment service,
was launched last year. It is the result of a partnership
between Jewel Bank and AfriPay, a Botswana-based company.
It enables individuals and organisations to send and receive
money using e-mail and the Internet.
Metropolitan Bank has a tele-banking facility, which enables
clients to make bill payments using telephone lines.
NMB and a number of other banks have also launched electronic
banking products. Standard Chartered Bank, Barclays Bank and
the Zimbabwe Banking Corporation all offer an electronic banking
facility for large corporate customers that enables them to
access their accounts and transfer funds between accounts
using an office computer. Cabs has introduced internet banking.
Despite all these exciting advances, electronic banking and
tele-banking in Zimbabwe is in its infancy. However, electronic
banking services, or virtual banking as it is sometimes called,
would seem destined to expand, in line with developments in
other parts of the world, as increasing competition in the
banking sector provides a powerful stimulus for it to do so.
Virtual banking allows customers to access a host of banking
services from personal computers via a bank’s tele-network
based computers. Banks set up infrastructure that their customers
can use to carry out electronic banking transactions. This
allows banks and their clients and potential clients to interact
through a telecommunications network.
Virtual banking can include an electronic enquiries desk,
electronic brochures for general information and electronic
tellers to deal with routine transactions.
Customers, where they have access to a full range of e-banking
services, can interact with the bank to whatever degree they
wish. They can transfer funds, make payments, write electronic
cheques, talk with electronic tellers (where they are always
first in line) and communicate with the electronic bank manager
for additional requests, complaints and general feedback.
This allows total control over personal or business funds
and relieves the customer of the need to carry about large
amounts of cash.
With good infrastructure, virtual banking could be expected
to become increasingly popular.
The deregulation of the telecommunications industry in Zimbabwe
has seen more players entering the market. Africom, for instance,
recently received the first data telecommunications licence
to be issued to a privately owned company.
The competition that is likely to follow deregulation of
the telecommunications sector is expected to result in the
telecommunications services that are available to the banking
sector, and indeed other sectors, improving.
Issues to do with finance are sensitive. Security is of paramount
importance if electronic banking is to grow. Security systems
have, therefore, to be built into electronic banking.
All information that is communicated through the tele-banking
network is encrypted and authenticated. The software ensures
that no third party, including bank personnel, can have unauthorised
access to the client’s banking transactions.
Any company or individual that registers for tele banking
or e-banking is issued with a unique profile number and personal
identification number (PIN). No transactions can be carried
out without using the PIN. For companies different levels
of security for various levels of personnel are determined
and protected by passwords.
One of the first transactions the client is invited to do
is to change the PIN to one that can be easily remembered.
the bank tracks all transactions done on the tele-banking
system and these are included in one’s account statement.
How much does electronic banking cost? Where electronic banking
is designed for corporations it may cost a great deal. Where
it is designed for individuals it costs almost nothing.
However, the bank has to invest a great deal in terms both
of capital outlay and expertise, in order to provide a secure,
efficient and effective delivery system that will satisfy
clients.
Virtual banking allows customers to obtain transaction information
at any time they wish, without the inconvenience of having
to drive to the bank or queue for service. It also allows
them to effect inter-account transfers and payments to third
parties without having to move from their desk.
The fully integrated portfolio of tele-banking is already
available and well utilised in North America and Western Europe.
Southern Africa still has a long way to go but banks in Zimbabwe
and in some other parts of the region have made significant
strides.
The pace of change continues to grow, as new banks enter
the market. There can be little doubt that it is only a matter
of time before tele-banking becomes well established and widely
available in Zimbabwe.
However, despite the fact that the era of electronic banking
and electronic commerce has begun and is likely to grow, Zimbabwe
has not yet developed laws to fully protect individuals and
the organizations engaging in e-commerce.
This is not to say that e-commerce is completely unregulated
at the moment. If any problems were to arise they would be
solved using common law. However common law was not designed
with e-commerce in mind. Its provisions, therefore, do not
fully state and protect the rights of the person engaging
in e-commerce.
The government is currently working on producing a document
proposing a legislative framework that would address this
problem.
The shortcomings of common law in dealing with e-commerce
and the steps that are being taken to address the situation
will be dealt with by legal experts in this column at a later
date.
In the meantime, members of the banking public can look forward
to an increase in the amount of business that can be done
using a computer and telecommunications links and a reduction
in the number of transactions that require their physical
presence at the bank.
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