Report on E-Financial Services in Global Markets

Introduction of E-Financial Services in Global Markets

Global advancement in the technology of the internet is tragically changing the nature as well as the structure of the finance services. In order to compete and deal more effectively with the customers, internet as well as the technology are allowing new facilities to finance service providers. Overall, it helped in improving the efficiency and minimizing the expenses of functions of internet business like management labor and procedure of time and billing.

E finance is actually enabled through web that include all the fields of finance services industry. It is all about the channel and evolution of the value preposition of the structure and function of finance through defining its core values, it changes the mechanism of interaction between customer and its services. While making the transition toward E-finance, the key role is played by technology enablers.

Allen et. al. (2002) describe the E finance as the provision of markets and financial services that utilize electric communication and computation. All the activities related to finance are carried out in the area of cyberspace or other places like online banking, electronic trading etc. It also includes online brokerage, online insurance. The technologies of internet are now incorporated in almost all points of finance services even in retailing and wholesale, and transaction and information storage.

In tis report we are going to highlight the impacts of E-finance on many of the behaviors in our usual life style like change in conventional banking processes, online trading, online shopping. This article is highlighting the pros and cons of the use of E-finance. And E-Finance is changing the markets of Oman.

Literature of E-Financial Services in Global Markets:

Allen and Gale (1997) debated on that the financial system of the banks decrease the risk by intertemporal smoothing. Banks can pile up the reserves in optimum limit of the time and can use them in their bad times. But it is still an empirical issue that to which extent this disintermediation is led by e-finance.

Brett F. Woods (1997) said that money or the E-financing actually describe the security of cash transfer electronically, cash deposits, payments and online shopping, then who take the responsibility f loss of any case of theft identity.

It was Claessens. S. et. al. (2001) who recognized the consequences of e-finance on system in different states and the increasing opportunities for all types of emerging markets. In the light of all the study, he addressed new problems of the policy and the responsibility of the government intervention. 

Kolodinsky et al. (2004) argues on the factors that influence the adoption of the products and services of e banking, their benefits, compatibility, their complexity, risk that are involved and overall product involvement. V.C. Joshi (2004) also put light on cybercrime, and the issues related to security and regulation, along with e-trading, e-banking, e-finance and the marketing of their products.

Dandapani, K. et. al. (2005) and Dandapani, K. (2004 and 2001) focused on the growth of the virtual banking and more emphasize on their business economic model. They analyzed both constraints as well as the impetus for their success and development. The online banking increased through brick and mortar bank maximization tragically. Only those survived that were pure play virtual banks turned into brick and mortar. Manuchehr Shahrokhi (2004, 2002, and 2001) gave an overview on the use of IT and internet linked with financial system and the industries. He also highlighted the growth of the e-finance and its evolution and their overall impacts of the economy of the world.

Advantages and disadvantages of using E-Banking

Advantages of E-Financial Services in Global Markets:

1. Online account is easy to establish and simple to use

2. It facilitates us in our daily life because through this we can easily pay our bills and we can transfer our money between different accounts from almost everywhere in the world toward anywhere around the globe

3. We will not need to stand in a line in order to pay our bills. Moreover, we will not be needing the recipient of the bill. In online banking we can easily view our transaction anytime we want

4. This application is available to us all the time, we can use it anywhere at any time, even on night and holidays when usually banks are closed. The only thing that is required is an active internet.

5. It allows us to keep an eye on our money and our bank balance all the time

6. This technology is quite fast and more effective. Fast and easy transactions are performed through it. More than one account is manageable through internet banking

7. It’s a great platform to get benefits of all the bank products and services

8. Any suspicious activity or the threat to our account can be managed and get informed before any kind of severe damage

9. It also provides the services of loan and options for seral investments

Disadvantages of E-Financial Services in Global Markets:

1. For the very first time, it is very difficult to understand that how can we use this technology. So, the person who is unfamiliar toward these technologies will face this challenge at first

2. Without internet connection we cannot have access to all these applications so without internet all this is useless

3. The big issue in e-banking and e-finance is the security issue. The information of the account can get hacked by the people who are not authorized.

4. The security of the password is always at risk. The account can get misuse if the password will not get secure and safe.

5. The more risk will come when the information of the banking is spread out

6. The access toward the account is quite not possible when the server of the bank gets down.

7. It will get hard to know that our transaction is done or not, when the server of the bank is down

8. The unlimited notifications are annoying and get overly marketing. But it can easily get turned off

9. The constant updates through messaging or email become annoying sometimes.

E-Banking of E-Financial Services in Global Markets:

Online banking is actually the delivery of the products and services of the bank through electronic communication and basically through internet. It is also termed as internet banking. It also involves ATM, telephone banking, debit cards and wire transfers.

In 1970, home PC banking was introducing but it was very limited toward certain people. The very first online banking facility was in the Nottingham Building Society (NBS) in 1983.  It actually allowing the online seeing of the statement and bill payment etc. the transaction setup is quite manually overall. By the end of 1990, there were many financial institutes that offered this service. In 1005, there was a survey which found out that 81% of the banks allow the online account access 24/7.

Personal finance/Wealth management of E-Financial Services in Global Markets:

This platform gives the advantage of the web took that increase the flexibility and convince. It is related to the personal financial advice, execution or planning. Many good advices on taxes, investment and planning for the retirement is given by the private banker’s face to face or any financial consultant or investment manager. So, there is the internet platform that can make us the entire new financial plan and also for free.

Venture capital of E-Financial Services in Global Markets:

For the entrepreneur, the powerful platform is now web while searching the venture capital while looking for the investment chances. Those information’s that took a lot of effort and research before can now available on internet with in few clicks. Now it is easy to get data on many venture firms and also to get information about firms who are searching for new businesses to invest in.

Internet has many impacts on venture capital funding, like it gives instant approach to information, writing plan on business and its submission. It gives direct link with entrepreneur and funding firm. Internet is now also providing training opportunities and development for entrepreneur.

Electronic trading of E-Financial Services in Global Markets:

On the technology of web, there are many ATS market processes that have been produces in previous years. There is now the availability of online institutional training in currencies and derivatives are quickly available by major institutes. From many ATS mechanism one of the most significant is – Electronic Communication Network (ECN). There are many financial companies that are eager to join ECN where they can easily compare trade with other competitors, which save them the cost of researching other exchange and it help them in trading for 24/7.

Insurance and Annuities of E-Financial Services in Global Markets:

E-Finance made the foundation of online insurance market. There are 4 major phases in insurance industry. 1) automobile 2) property 3) health 4) life. This thing has gained its benefits in online system. There are 2 ways for delivering online insurance. First is insurance carrier based on internet that is under some developed company in order to sell the products and services through the model. The second model is that the firm will act as virtual agents in the place of insurance market or the portal (Bank, 2001).

Electronic payment method of E-Financial Services in Global Markets:

Credit and debit cards are now one of the most important form o payment through internet. There are also electronic wallet or smart cards or the bitcoin wallet. E-wallet is actually an account that store the information of the user like data and credit card in order to make online transactions.

E-Finance services in Oman

There are many firms and institutes that are getting benefits of E-finance in Oman. For example;

• online banking technology is quite common in Oman. Many banks like National bank of Oman, Bank Dhofar, bank of Maskat etc. are getting use to e-banking services. About 60% of the people in Oman are using internet banking in their day to day life.

• Online shopping through debit or credit card is another service that is getting very common in Oman. According to Times of Oman, 45 % of the shoppers in Oman are doing online shopping. Oman has ranked 2nt in middle east for online shopping according to a study.

Conclusion of E-Financial Services in Global Markets:

In last ten year the evolution of the e-finance and its development has become very much highlighted. The acceptance of internet technologies will fuel the growth in e commerce. The most primary adapter of information technology was financial sectors. There is a relation between e-business and e- finance.  The influence of internet over the services of the finance is quite clear to everyone. But there are still certain trends that are growing at exponential rates like automation of customer services, and regional financial processes.

The advancement in technology should reduce the expenses and take more focus on building up the security and gave us a dedicated digital media. There is a requirement for open markets, and reduce the impacts of switching the costs. The supervision and regulatory mechanism in payment methods as required that can promote the success of digital money.

e-finance has clearly a lot of advantages especially for this generation who require everything on just one hand approach of the phone. So that they can have access to everything related to their money at all the time and at any place. But every good thing come with some bad too. There are clear disadvantages of using internet services for finance but that can get overcome if deal technically. Security is always a risk but it is still risk while doing conventional methods of payment. On the other hand, online transactions and shopping provide great facility to everyone. 

E-Finance can get streamlined with conventional method of business and can give information with value added services by the use of technology. Through deploying strategical applications of the technology in the services of finance, the executives of leading finance and IT are giving a transformation to functioning of the finance.

References of E-Financial Services in Global Markets

Allen, Franklin, et. al. (2002). “E-Finance: An Introduction,’ Journal of Financial Services Research, Volume 22, No. 1-2/August 2002; pp 5-27.  

Allen, Franklin, McAndrews, J. and Strahan, P., (2001).  E-Finance: An Introduction” Working Paper #01-36, The Wharton School, University of Pennsylvania. USA. (http://fic.wharton.upenn.edu/fic/papers/01/0136.pdf).  

Allen, Helen, J. Hawkins and S. Sato (2001).  “Electronic Trading and its Implications for Financial Systems,” Working paper, Bank of England. BIS Papers No 7.  

 Allen, Franklin and Douglas Gale. (1997). “Financial Markets, Intermediaries and Intertemporal Smoothing, “Journal of Political Economy, Vol. 105, pp. 523-546.

Claessens, S.  (2001): “E-finance in emerging markets: is leapfrogging possible?” Financial Sector Discussion  Paper, no 7, World Bank, June (www.worldbank.org).   

 Claessens, S, T Glaessner and D Klingebiel (2000): “Electronic finance: reshaping financial landscapes around the world”, Financial Sector Discussion Paper, no 4, World Bank, September (www.worldbank.org ).   

Dandapani, Krishnan, Alfried Lassar, S. Lassar Sharon (2005). Virtual Banking: Impetus and Impediments", the International Journal of Finance, Vol. 17, No. 2, 2005.   18

Joshi, V.C., (2004). ‘e-finance: log in to the future,’ Response Books (A Sage Publishing Division in India). 2004.

Banks, Erik (2001). E-Finance: The Electronic Revolution, London: John Wiley (http://neumann.hec.ca/cref/pdf/ine-ang.pdf ).

Kolodinsky, J.M., Hogarth, J.M. and Hilgert, M.A. (2004) ‘The adoption of electronic banking technologies by US Consumers’, International Journal of Bank Marketing, Vol. 22, No. 4, pp.238–259.