Virtual banking needs new regulations: Analysts<\/p>\n
JAKARTA (JP): The rapid development of information technology
\nin the banking sector means changes are required in its
\nregulation, analysts said yesterday.<\/p>\n
\"The existing banking regulations have to be adjusted,
\nespecially to anticipate developments in electronic banking
\ntransactions,\" Chandra Sugiono, chief consultant at PT Sentra
\nKonsultama, declared.<\/p>\n
He noted that with the increasing popularity of the Internet,
\nmore and more local banks are using the information superhighway
\nto promote their products.<\/p>\n
A number of them, including PT Bank Internasional Indonesia,
\nhave even offered banking services through the Internet, although
\nthese are still limited to \"safe\" practices such as account
\nopening.<\/p>\n
He predicted that real cyberbanking practices -- banking
\ntransactions through the Internet -- will be commonplace globally
\nby the end of this year.<\/p>\n
Such virtual banking has been initiated by a number of
\ninstitutions, including Visa International and Worlds Inc.,
\nIntuit Services Corp. and Securities First Network Bank -- all in
\nthe United States.<\/p>\n
Visa International and Worlds Inc. has created virtual banks
\nand stores on the Internet through an electronic courtyard, a
\nthree-dimensional bank with \"real\" tellers. Visa does the bank-
\nend processing of information and passes it to its member banks.<\/p>\n
Securities First Network Bank has conducted a large number of
\ntransactions on the Internet, ranging from travel agents to oil
\ndrillers, with the help of Netchex which does the encryption,
\nauthorization, and authentication through hardware keys which can
\nidentify the computer source of any transaction.<\/p>\n
Intuit, the largest online banking and bill-paying network in
\nthe United States, is the hub where banks and their customers
\nconduct transactions such as fund transfers, electronic bill
\npayments and balance information -- all with fees.<\/p>\n
\"Sooner or later, those virtual banking practices will spread
\nthroughout Indonesia. However, we will face serious challenges in
\nterms of the legal infrastructure,\" Chandra said at a seminar
\nhosted by STIMIK Perbanas, an institute of information management
\nand computer.<\/p>\n
He noted that internationally there is no single regulation
\nwhich governs virtual individual transactions across countries.
\nHowever, there are efforts to establish common rules to guarantee
\nsafe virtual banking practices.<\/p>\n
He predicted that traditional banks which do not anticipate
\nsuch virtual banking practices will surely suffer when virtual
\nbanking becomes more popular.<\/p>\n
Currently, information and transactions have become real
\nbanking products. Therefore, bankers have to tie themselves to
\ninformation.<\/p>\n
Meanwhile, Richardus Eko Indrajit, an information technology
\nconsultant at PT Price Waterhouse Indonesia Konsultan, said banks
\nwill need more funds to invest in information technology to
\nimprove their competitiveness.<\/p>\n
\"Information technology is offering opportunities to gain a
\ncompetitive advantage. This should be understood by the
\nmanagement at the corporate level,\" Richard said.<\/p>\n
He warned, however, that before acquiring the most advanced
\ninformation technology, banks must ensure that the technology is
\nreliable and compatible with their existing systems.<\/p>\n
He noted that information technology must be embedded in
\nbanks' information system, which is supported by enough human
\nresources, and be aligned with their business strategy to support
\ntheir business objectives. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/virtual-banking-needs-new-regulations-analysts-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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