Challenges in the expansion of eBanking services

Development of information technology and transfer payment system for commercial banks in the past 10 years, created conditions for the opening of new distribution channels of banking products and services to customers through a computer. IT analysts and former forecaster predicted and banks promised (r)evolution of the banking business in this area and significant revenue growth, while reducing costs.
However, a recent analysis on the markets of ex-Yugoslavia shows that after a satisfactory initial results there was some delay in the growing portfolio of clients that use this distribution channel, and that the offer of services by banks is reduced to the standard payments. The reasons for this condition may be required to last:
  • Most banks offer customers traditional payment services;
  • Existing solutions for banks are burdened with costs for eBanking vendor solutions that are permanently nvolved in the division of the “pie”, so that banks in tariff policy can’t further stimulate customers to use eBanking. On the market there are only 2 independent vendor with a significant presence in the banks. This monopoly position does not affect motivation to spread and improve range of eBanking services;
  • Banks do not have room for game in this segment. Existing solutions enable customers to work with several banks over the identical solution. Consequently, all banks have same offer of the ebanking service. Instead of competing with the volume and quality of services, banks, the only thing left to be attractive rates. Rates are below the threshold of profitability, so the maneuvering space for banks significantly limited;
  • There are certain infrastructure (and financial) barriers to the introduction of new services to customers, except as legally and orderly payment, other services are generally different from bank to bank;

  • A number of clients (especially state institutions and public enterprises) does not match that in the mediation between the bank and they involved a third party, because of the existing operational and reputation risks.

There are a significant number of services that banks can offer clients through this distribution channel, but there are insurmountable limits that are the result of the reasons listed above.

On developed markets, the banks that it can, choose to implement their own eBanking solutions. Recently, the regulation of the field of e-business on the domestic markets (digital certificates) greatly influence the development strategies of existing banks in this field.