Manuals GCASH: Risk Management
Electronic banking is a broad term applied to activities involving the banking and on-line accounts updating for value over a computer network or automated system. As significant participants in the marketplace, financial institutions are becoming more aggressive in adopting electronic banking capabilities that include sophisticated marketing systems, remote banking capabilities, and stored value programs. This area is highly dynamic as emerging technologies yield a variety of delivery alternatives and innovative products and services. Electronic systems are becoming increasingly important due to:
- the increasing competition from non-bank financial services companies, the telecommunications industry, and systems or software developers;
- the demand for more efficient and convenient capabilities; and
- the widening cost and delivery differentials between electronic capabilities and traditional delivery channels.
Electronic delivery and payment systems involve a wide range of potential risk exposures. The use of an electronic channel to deliver products and services introduces unique risks due to the increased speed at which systems operate and the broad access in terms of geography, user group, applications, databases, and peripheral systems. In addition to the unique risks, traditional risks which are similar to those in customary banking activities are also present.