INTERNET BANKING

INTERNET BANKING : INTERNET BANKING Mon Abrea Michelle Abad William Ilagan Kessa Thea R. Peralta Erlinda C. Tejares

OBJECTIVES : OBJECTIVES Discuss experiences about online banking Propose solutions to minimize fraud Evaluate alternatives that can address the public’s skepticism about online banking safety

WHAT IS INTERNET BANKING? : WHAT IS INTERNET BANKING? Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their bank or virtual a society. The emergence of online banking in the recent years has brought about both positive and negative perception in the banking industry as a whole. Internet banking in the Philippines is still a baby compared with its foreign counterparts specially those from developed countries such as the US and countries in Europe. In the country, Citibank, Bank of the Philippine Islands, Banco de Oro are the front-liners in the innovation and continuous improvement of online banking.

FEATURES OF INTERNET BANKING : FEATURES OF INTERNET BANKING Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.). – This is the most common functionality that is extensively used by banking consumers. Non-transactional (e.g., online statements, check links, chat) Financial Institution Administration - features allowing the financial institution to manage the online experience of their end users ASP/Hosting Administration - features allowing the hosting company to administer the solution across financial institutions

internet BANKING EXPERIENCES : internet BANKING EXPERIENCES Group ACTIVITY Breakout: 15 minutes Class discussion: 20 minutes Come up with your expectations of a satisfactory internet banking experience. Share the best and worst experience you have had.

INTERNET BANKING EXPERIENCES : INTERNET BANKING EXPERIENCES The upside to online banking usually is that you do see mistakes faster than you do in the old way where you'd wait until you got your bank statement, which perhaps wasn't the case before online banking and when you only found out once a month where you stood. – ACT, 30 There's this feeling that if you have your account online, that someone can hack into it and steal your money. What I always tell people when they express those concerns is people can do that anyway whether you have an online bank account or not. – JSP, 26 I have not fallen prey to any of IB attacks, so far. The reason is that they have tended to have been quite unprofessional looking. For starters, they usually begin with 'Dear customer' rather than specifying my name. My bank knows my name. - AEM, 29 For the most part, though, it's been the banks who have seen the real horror, as they have been forced to foot the bill to refund the losses. –VOO, 27

BENEFITS OF INTERNET BANKING : BENEFITS OF INTERNET BANKING CONVENIENCE – available 24x7 (except for site maintenance) FREE (for most transactions) FAST (depends on internet bandwidth) RELIABLE (relies on security settings instituted by the bank) SECURE (two-level log-in measure)

HOW TO MINIMIZE FRAUD : HOW TO MINIMIZE FRAUD Group ACTIVITY Breakout: 15 minutes Class discussion: 20 minutes Come up with your own experience or your friends experience of internet banking fraud. How do we curtail such?

INTERNET BANKING FRAUD – MOST COMMON : INTERNET BANKING FRAUD – MOST COMMON Why Scammers Use Phishing Scams? Why People Fall for Phishing Scams? How to Spot Phishing Scams?

INTERNET BANKING FRAUD : INTERNET BANKING FRAUD Why Scammers Use Phishing Scams? Why would somebody do this? Well, you can gather a lot of juicy information with a phishing scam. First, you can get somebody’s account number and password. Then you can try to hijack their assets. Some phishing scams ask for all of your personal information (SSN, mother’s maiden name, date of birth, etc) so that they can steal your identity and open credit accounts in your name. Some victims of phishing scams have given up their credit card numbers only to find that the card was used fraudulently.

INTERNET BANKING FRAUD : INTERNET BANKING FRAUD Why People Fall for Phishing Scams? Anybody can be tricked by a sophisticated phishing scam. Simple phishing scams are easy to spot, but the best scammers are actually pretty smart. They use a variety of tricks to make the phishing scam look like a legitimate process. For example, they might include a graphic from the bank right on the email message or website. Or, the link provided in the email may look like it goes to the bank’s website while the victim is actually sent to a very different site.

INTERNET BANKING FRAUD : INTERNET BANKING FRAUD How to Spot Phishing Scams? It is easy to uncover a crude phishing scam. For example, if you get an email from a bank you’ve never opened an account at, then don’t follow the link and enter your personal information. Now, if you actually have an account at the institution it gets more interesting. You’ll want to look at the message carefully to see if it is a phishing scam. Are words misspelled? Sometimes scammers operate in a second language and they give themselves away by using poor grammar. The best way to avoid becoming a phishing scam victim is to use your best judgment. No financial institution with any sense will email you and ask you to input all of your sensitive information. In fact, most institutions are informing customers that “We will never ask you for your personal information via phone or email”.

MARKET ACCEPTANCE/RELUCTANCE : MARKET ACCEPTANCE/RELUCTANCE Group ACTIVITY Breakout: 15 minutes Class discussion: 20 minutes WHAT ARE THE WAYS TO ADDRESS THE PUBLIC’s SKEPTICISM ABOUT ONLINE BANKING SAFETY?

SUMMARY : SUMMARY Online banking is all about making life easy. You can use technology to automate tedious tasks and save time for the more important things. As an added benefit, you often experience fewer errors and have an easier time of tracking things. Online banks allow you to have more choice and flexibility. You can do things on a computer, and you often get more competitive rates from online banks. They claim that they do not have the overhead and expenses associated with brick-and-mortar banks, so they can pass the savings on to you. Online banking makes our lives easier. However, it also makes a few things easier for criminals. For the most part, online banking actually makes you safer. While you can enjoy better returns and more convenience, online banking isn’t perfect. Set your expectations on what you have to give up in order to enjoy the benefits of online banking.

CLASS SURVEY : CLASS SURVEY Group ACTIVITY Breakout: 10 minutes Class discussion: 10 minutes SURVEY EACH TEAM MEMBER AS TO WHO USES AND NEVER USES ONLINE BANKING.

CLASS SURVEY RESULTS : CLASS SURVEY RESULTS INTERNET BANKING USAGE 100%

Slide 17 : BREAK

E-banking strategies: Why banks go online? : E-banking strategies: Why banks go online? METROPOLITAN BANK - E-Banking services are aligned well with the bank’s goal to enhance its business relationship with clients and maintain financial stability through operational efficiency and cost effectiveness BANK OF THE PHILIPPINE ISLANDS - Wants to give its clients options for self-service channels because these are cost-efficient to the bank. Cost-efficiency, in turn, allows the bank to offer their clients the best products and services. "We would like to focus on good customer experience. That’s why you have to make channels available to everyone.” "HSBC has been one of the early banks to offer e-banking services and offers a comprehensive range of services. HSBC has always been customer-driven and continues to upgrade e-banking capabilities according to customer needs and requirements.” CITIBANK - "We do not want to be at the bleeding edge. We want to be leaders, but we make sure that what we are going to base an installation on what will work."

GAME TIME : GAME TIME

When was INTERNET BANKING introduced? : When was INTERNET BANKING introduced? 1990 1980 2000 1970

Why do customers turn to internet banking? : Why do customers turn to internet banking? Due to dissatisfaction with standard procedures and practices. The total absence of human interaction appeals to them. For security reasons. This is mainly because of customers being assured of banks' ability to keep transactions safe and secured. All of the above

Give at least 4 banks that currently offer internet banking. : Give at least 4 banks that currently offer internet banking. ? ? ? ?

What is the latest technology employed by banks to promote secure log-in? : What is the latest technology employed by banks to promote secure log-in? case sensitive password two level log-in ask for MMN or birthday combination passwords

Give the five (5) benefits of online banking. : Give the five (5) benefits of online banking. ? ? ? ? ?

TRIVIA : TRIVIA

BRIEF History of Internet Banking : BRIEF History of Internet Banking Internet banking was introduced in the early ‘80s . It was known as modern home online banking services were the distance banking services over electronic media. Online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. The last decade has seen a profuse growth in internet banking transactions. Several pieces of legislation have also been introduced in this area. Though it began in the 1980s, it was only in the mid nineties that internet banking really caught on.

2003 BANK SURVEY (latest available info) : 2003 BANK SURVEY (latest available info) A survey conducted in June 2003 of 21 banks belonging to the Business World Top 1000 Corporations reveals that the Philippine banking industry is just as cautious as it was years back. Most of the banks are focused on traditional IT banking applications and systems. Some have ventured into newer types of applications, such as e-banking and e-commerce, but the survey shows that they only started transition to new systems at the beginning of the century. Only a handful have dared to venture into new technologies in the late 1990s. The 21 banks in the survey represent almost 50% of the 44 banks listed in the Business World Top 1000 Corporations 2002 edition. Interviews with the banks’ e-banking point persons reveal that some banks are waiting for market responses. Even big commercial banks won’t join the e-banking fray, for instance, simply because it’s the trend.

Slide 28 : THANK YOU!