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Growth of e-financial services
Edited by Krishnan Dandapani
1. Introduction
Global integration, deregulation, advances in the Internet technologies are dramatically changing the structure and nature of financial services. Internet and related technologies are enabling new financial service providers to compete more effectively for customers.
The technological changes are accelerating financial sector development by lowering the costs, increasing the breadth and quality, and widening access to financial services. It can considerably improve efficiency and decrease the costs of internal business functions such as expense reporting, contract labor management, and time-and-billing procedures.
[2] Allen et al. (2002) define e-finance as "the provision of financial services and markets using electronic communication and computation. E-finance activities include all types of financial activities carried out over the cyberspace or other public networks, such as online banking, electronic trading, provision and delivery of various financial products and services such as insurance, mortgage and brokerage"[1].
Andrew [13] Fight (2002) defines e-finance "all which relates to the linking of business, finance, and banking via electronic means, encompassing information gathering, processing, retrieval, and transmission of data as well as the transmission, purchase, and selling, of goods and services"[2].
The UNCTAD defines e-finance as "that of financial services delivered through Internet or online. E-finance includes online brokerage, banking, insurance, and other financial services. Internet technologies have now penetrated all aspects of financial services industry, both retail and wholesale, back-office and front office, information and transaction"[3].
E-finance is about web-enabled finance function, which includes all areas of financial services industry. However, if its true benefits are to be realized, e-finance is far more than just adding a web front-end to financial services. It is about changing fundamentally the value proposition of the finance function by redefining its core activities, changing the interaction mechanism between itself and its prime customers, and moving it up the value chain by creating and assisting others in the organization to create better value for shareholders. Technology enablers play key roles in making the transition to e-finance. An e-finance transformation sees finance change its role from transaction processing to true business partnering, with far reaching implications on interactivity with customers, suppliers, and others within the organization[4].
Developments in technology and deregulation are eroding the nature of what has made banks special. On...