Banking on the Internet (e-banking) is in many countries for a decade already an everyday tool for millions of persons. Operating direct on the stock exchanges is no more limited to experts. Even wallets are turning out to be used more electronically. Getting your account balance via alerts, making micro-payments in shops or to friends, creating savings for the unbanked customers, … A lot is moving fast for financial (e.g. banks) and nonfinancial agents (e.g. telecoms) in these new channels.  This can generate a lot of questions: - What are the risks of these new developments and how to tackle them? What are the commercial and technical challenges for the future?

1. Bankers’ challenges in electronic banking,
management perspectives.
April 2014
H. Van de Vyver

2. Objective
(e-banking) is in many countries for a decade
already an everyday tool for millions of persons. Operating direct on the
is no more limited to experts. Even are turning
out to be used more electronically.
Getting your account balance via alerts, making in
shops or to friends, creating savings for the unbanked customers, … A
lot is moving fast for financial (e.g. banks) and (e.g.
telecoms) in these new channels.
This can generate a lot of :
- What are the risks of these new developments and how to tackle
them?
- What type of new legislation do regulators create?
- Who are these online banking clients?
– What are the commercial and technical challenges for the future?
- What about the security of e-banking?
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3. Your trainer
 Trainings all over the world
 Long tracking record
 marketing department of the BNP Paribas
Group in Luxemburg since 1999
 Private Banking department of the
Kredietbank Group in Luxemburg.
Mr. Hubert VAN DE VYVER
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 Electronic banking expert for the ATTF-
Luxemburg, the Belgian Bank Academy and
Radcliffe Training in London
 International Trainer and Consultant (seminars
on e-banking, electronic finance and
multichannel banking)
.

4. E-banking ?
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5. Introduction
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6. Definition
e-banking or electronic banking is the use of electronic methods to
deliver traditional banking services using any kind of payment
media.
Source: Six Puzzles in Electronic Money and Banking
Connel Fullenkamp and Saleh M Nsouli
International Monetary Fund
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© ediaro.com
Introduction

7. Introduction
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8. Introduction
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Source: http://www.statisticbrain.com/online-mobile-banking-statistics/

9. 9
Situation of e-banking
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10. Introduction
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Source: http://www.comscoredatamine.com/

11. Introduction
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Source: http://hercules.gcsu.edu/

12. Why consumers buy financial products online
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Self-Direction Explains Which Markets
Lead Online Finance
Some products are too complicated for even the
self-directed to buy online without any online or
off-line advice
Frequently purchased or simple products are
moving online: shares, savings accounts, credit
cards…..
…. But infrequent and complex products need
more than self-direction: mortgage, life
insurance, pension fund … most buyers are
unfamiliar and need to speak to someone before
buying or get online: their position, be able to
analyse it, get advice and tools to support
decision-making and transaction

13. Why consumers buy financial products online
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Self-Directed Consumers account
for half of all online finance
buyers, despite being only one-
fith of all consumers
Online experience and confidence
in security drive WHEN they buy
-The reason for the difference in behavior lies in
consumers’
-attitude to finance, not technology.
- Online financial buyers are confident both in
technology AND their own financial decision-making
-Self-direction: motivation and confidence to research
and take
financial decisions without the help of an advisor

14.  Example of an e-bank: InG Direct
 Origin: Netherlands
 Online clients: over 20 million customers in nine countries
 Services offered: current, savings account and brokerage
 Demo: http://home.ingdirect.com/
 Strategy: Oldie but goodie in the ever advancing world of new
and better high yield savings accounts
 Comments: http://www.moneybluebook.com
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Introduction

15. Introduction
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16. Channels in turmoil
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Introduction
Channels in turmoil
Challenges and pitfalls
Multichannel optimization
New payment methods
Multichannel optimization
New payment methods
Day 1

17. Channels in turmoil
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https://www.deloitte.com/assets/Dcom-
UnitedStates/Local%20Assets/Documents/us_fsi_CBS_Evolving_Models_may08.pdf

18. Channels in turmoil
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https://www.kpmg.com/

19. Channels in turmoil
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© ediaro.com
© econum.fr
From ebanking to social media (payments and
banking)
Possibilities
Services
Costs

20. Channels in turmoil
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© econum.fr
Web 3.0 without banking
intervention
Disintermediation
Challenges
Benefits and dangers

21. Channels in turmoil
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© dwprblog.com

22. Channels in turmoil
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© timesofmalta.com
Upgraded ATM’s
•Possibilities
•Services
•Costs

23. Channels in turmoil
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© phandroid.com
© seeedstudio.com
Payment tools in shops (Point
of Sales)
•Existing and new cards
•No cash anymore?

24. Channels in turmoil
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https://www.deloitte.com/assets/Dcom-
UnitedStates/Local%20Assets/Documents/us_fsi_CBS_Evolving_Models_may08.p
df

25. Channels in turmoil
25
© hdpaperwall.com
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26. Summary Seminar
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Introduction
Channels in turmoil
Challenges and pitfalls
Multichannel optimization
New payment methods
Multichannel optimization
New payment methods

27. Challenges and pitfalls
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How to challenge and handle the technical limits
- evolution of the technology
- acceptance by the end users

28. Challenges and pitfalls
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© worthofweb.com
The internet community helping to develop services
- social media offering financial services
- scale effect and viral evolution

29. Challenges and pitfalls (Conclusion)
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30. Strategy
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http://http://www.pwc.com

31. Strategy
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http://www.pwc.co.uk/banking-capital-markets/publications/banking-survey-
digital-tipping-point.jhtml

32. Summary Seminar
Day 1
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Introduction
Channels in turmoil
Challenges and pitfalls
Multichannel optimization
New payment methods
Multichannel optimization
New payment methods

33. Multichannel optimization
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© kpmg.com

34. Multichannel optimization
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Source: http://www.wipro.com

35. Multichannel optimization
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36. Multichannel optimization
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http://fr.slideshare.net/backbase/banking-on-digital-innovation-in-financial-services

37. Multichannel optimization
 Advice in branches
 expensive channel
 specialized channel
 brick and click
 local (branch) vs. global (web)
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38. Multichannel optimization
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 Operations and brokerage in web banking
 client works for the bank
 good overview vs. mobile
 cheap ?
 marketing tool or required ?

39. Multichannel optimization
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 Information (only ?) in m-banking
 send /receive sms/alerts
 payment tool
 cheap ?
 marketing tool or required ?

40. Multichannel optimization
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 Synchronisation between the channels
 strategy
 information
 same
 adapted
 feedback between channels

41. Multichannel Optimization
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42. New payment methods
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• Card based payments
• Network money
Situation
• Possibilities
• Services
• Costs
• Demo
Mobile payments
• Possibilities
• Services
• Costs
• Demo
Peer to peer payments
Friends to family payments

43. New payment methods
Terminology: Mobile banking vs. Mobile payments
Many consumers (and even a fair number of bankers) make the mistake of
using these two terms interchangeably.
But there is a difference: Mobile Banking refers to platforms that enable
customers to access financial services (such as transfers, bill payments,
balance information and investment options).
Mobile Payments, on the other hand, is generally defined as the process of
using a hand-held device to pay for a product or service, either remotely or at a
point-of-sale.
https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/mobile-payments-
for-banks/Pages/monetizing-mobile.aspx
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© kpmg.com

44. New payment methods
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45. New payment methods
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© kpmg.com

46. New payment methods
Day 1
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• Card based payments
• Network money
Situation
• Possibilities
• Services
• Costs
• Demo
Mobile payments
• Possibilities
• Services
• Costs
• Demo
Peer to peer payments
Friends to family payments

47. New payment methods
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48. New payment methods
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Electronic money, or e-money, is any electronic payment media –
any material, device, or system that conducts payment via the
transfer of electromagnetically stored information
Source: Six Puzzles in Electronic Money and Banking
Connel Fullenkamp and Saleh M Nsouli
International Monetary Fund

49. New payment methods
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1. Micro payments Card-based e-money
2. Retail POS payments Card-based e-money
at POS
3. Buddy Banking e-money, peer-to peer
4. Bill payments ATM, Internet banking,
e-money
5. Electronic commerce e-money

50. New payment methods
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51. New payment methods
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52. New payment methods
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Country Type of system Loading process Value limit
(Usd)
Canada Visa Cash, card based special loading procedure,
Internet
325
France Moneo, card based ATM 100
Germany Geldkarte, card based ATM 200
USA Visa, Amex, Master
card, network based
credit card or bank account 25 – 10.000
Hong Kong Octopus, card based
Yahoo Pay Direct,
network based
Autoreloading, over the
counter
from bank accounts
130
640
Russia PayCash, network
based
Internet No limit

53. New payment methods
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Consumers’ E-Wallet wish list
* Ability to check statements 58 %
* Checking of bank balances 54 %
* Ability to pay bills 34 %
* Intra account transfers 35 %
* Scope for P2P payments 29 %

54. New payment methods
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(and problems)
when lost, the money and
credits can not totally be
recuperated
improve confidence of use
(one does not see how
much stands on his
electronic purse)
reduce the use of coins
improvements with non
financial credits
integration in the existing
cards (credit, debit, shops’
fidelity ...)
promotional support
request from younger
consumers
Electronic purse

55. New payment methods
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• Card based payments
• Network money
Situation
• Possibilities
• Services
• Costs
• Demo
Mobile payments
• Possibilities
• Services
• Costs
• Demo
Peer to peer payments
Friends to family payments

56. 56
Peer to peer payment
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57. New payment methods
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Peer to peer payments
– p2p lending marketplaces (e.g. Prosper, Zopa, Lending
Club,Smava) – participants driven mainly by economic
motives
– social lending services enabling micro financing
(e.g. Kiva, MyC4) – participants driven mainly by social
motives
– other concepts (e.g. Virginmoney “We manage loans
between family and friends“)

58. New payment methods
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Fees:
– borrowers:1% of the funded loans
– lenders: 0.5% annual loan-servicing

59. New payment methods
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 get information on standard interest rates and default rates
associated with the various credit rating levels
 make judgments about reasonable payments and risk levels.
 bids with the lowest rates combined to produce a single loan (
repaid over three years).
 payments drawn from the borrower's bank account and sent to
the various lenders' accounts.
.

60. New payment
methods
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Source:
P2P-banking.com

61. New payment methods
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• Card based payments
• Network money
Situation
• Possibilities
• Services
• Costs
• Demo
Mobile payments
• Possibilities
• Services
• Costs
• Demo
Peer to peer payments
Friends to family payments

62. New payment methods
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 facilitator of friends and family p2p loans in the US
 does not do the matchmaking between borrowers and lenders,
 supports the process between persons that already had offline
relations
 number on loan volume generated was 390 million US$.
 acquired predecessor Circlelending in 2007

63. New payment methods
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64. New payment methods
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65. New payment methods
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© kpmg.com

66. New payment methods
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https://www.kpmg.com/Global/en/IssuesAndInsights/
ArticlesPublications/social-banker/Documents/the-
social-banker-v2.0.pdf

67. New payment methods
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68. 68
More and questions
Website:
http://ebanking.homestead.com
YouTube Channel
http//youtube.com/ebanking
E-mail address :
info@Celufo.biz
7 - 9 April 2014