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6CONDITION OF REMOTE BANKING SERVICES MARKET IN FOREIGN COUNTRIES
The relevance of the research topic is determined primarily by the increased attention to the activities of commercial banks in the Internet banking market. In modern conditions of market economy the activity of Banks is associated with the provision of virtual services to customers that is necessary for their further operation. Refusal from remote banking services or delayed response to changes in technology entails a loss of customer loyalty to the banking product as a whole the loss of competitive advantages in the banking market will inevitably lead to a critical point in the activities of a particular credit institution in banking services. This article describes and identifies the main trends in the development of the virtual banking services market in foreign countries. Comparative analysis and graphical method of data presentation have become the leading methods to study the development of remote banking services in foreign countries. The practical value is that materials and practical results of study can be used by specialists in the field of banking studying the market of remote banking products.
Keywords
commercial Bank, Internet banking, banking services, banking product, fraud
AUTHORS
Tatiana A. Alabina,
Candidate of Economics, Associate Professor of the Department of Finance and credit,
Kemerovo State University, Kemerovo 6, Krasnaya Street, Kemerovo, 650043, Russia madam-alabina@yandex.ru
Anzhela A. Yushkovskaia,
Student Institute of Economics and Management, Kemerovo State University, Kemerovo 6, Krasnaya Street, Kemerovo, 650043, Russia AngelaUshkovskay@yandex.ru
1. Introduction
Currently, all spheres of life in developing societies have become dependent on such an acute resource as time. In such conditions speed is absolutely necessary quality.
Economic theories have led to entirely new ideology about the value of time, which can be expressed by the following aphorism: "'Time is more expensive than money, because money comes and goes, and time only goes", forming the role of lost time. So, in any economic model profits are increasing by reducing current costs.
Today in the field of banking the technology of remote banking has the greatest economic prospects.
Remote banking is a mechanism of interaction with the client without his presence in the Bank branch. It is a network banking service that fully meets the needs of the client in a short time, due to the convenient and intuitive interface.
The relevance of the topic of the article is that with the help of Internet banking, you can assess the financial position of the client, to make most of the operations through
a smartphone, as well as other information and telecommunication technologies. Through the competent use of Big Data, the Bank becomes a significant competitor in the market, because the more data is earned - the more accurate the analysis and forecast of the behavior of potential customers can be obtained. Therefore, it should be expected an exponential growth of banking e-Commerce in countries such as the United States, England, Germany and others.
Effective development of banking business is the main need to maintain the stability of the banking system of any state. In recent years, the world is actively reducing branches of large commercial Banks, the reason for this is:
1) The global trend to reduce the number of face-to-face visits of clients to commercial Bank branches and transfer the maximum number of services to the digital environment, as well as increasing demand for digital financial services and financial services provided remotely;
2) The emergence of high-precision and stable functioning remote identification technologies;
3) The need to introduce additional services and to improve the usability of banking services for customers in order to increase demand for them;
4) The lack of access to the full range of credit institutions and their services in remote regions of different countries due to the logistic difficulties of opening a sufficient number of branches of credit institutions in such regions;
5) The need to increase the availability of banking services for people with disabilities;
6) High costs of maintaining an extensive network of Bank branches. The solution to this problem is the development of Online banking, which will simultaneously serve hundreds of thousands of customers, reducing operating costs.
2. Materials and Methods
The study used general scientific methods and principles of knowledge: consistency, complexity, comparative method, graphical method of data presentation.
3. Results and Discussion
The first projects related to the management of Bank accounts through personal computers, were implemented be western banks in the 80s. Depositors were given the opportunity to check their accounts by contacting the Bank's computer by phone (the service was called «home banking»). The spread of the Internet has prompted the world's leading Banks to introduce systems of access to information, and then to transactions with the accounts themselves. In 1995, the world's first virtual commercial Bank, Security First Network Bank, was established in the United States of America.
The service of Internet banking continues to conquer country by country every year, the number of users steadily increase that positively affects provided service quality. It is worth noting that the first place on number of users of Internet banking is strongly kept by countries of Northern Europe in spite of the fact that the pioneer in the organization of the first virtual Bank is the USA (because of fears connected with transactions safety and traditionally high share of calculations with use of paper checks). Nevertheless, almost all largest credit institutions render services of Internet banking in the USA, and the number of users totals more than 120 million people. Since the development of remote service channels, significant opportunities have opened for Banks in the field of sales [1].
Today, the United States is approximately on par with other countries with a vast territory, the share of sales of banking products via the Internet (in 2016, this figure in
the US, Russia and Australia was in the range of 10-20%). About 62% of digital sales are from banking sites for external users (in Australia - 55%, in Russia - 5%) [2].
As mentioned above, European Banks are more active in the Internet banking market that was caused by global financial crisis. Large banking organizations, under the influence of negative factors, were forced to reduce their costs for the maintenance of representative offices and branches. Solving this problem, many of them transferred their main services to the format of remote maintenance. The company's management invests the released funds in the development of digital platforms, in particular, online banks. For example, the Royal Bank of Scotland (RBS), a major restructuring in the branch network carried out by the company's management, closed 99 offices by the end of 2015, and by the end of 2017 the number of closed branches increased to 158 [3]. In 2018, RBS decided to close 162 offices in England and Wales, as a result of which the Bank will reduce about 800 employees. This decision was forced after the revision of the retail banking business of RBS in the regions. RBS industry operations in England and Wales have decreased by 30% since 2014. The number of customers using mobile banking has increased by 53% and mobile transactions have increased by 74% over the same period [4].
However, experts of the research company SNL Financial, argue that in some EU countries there is still an oversaturation of traditional Bank branches. This is due to the uneven reduction of branch expenses. Spain is the leader among the EU countries in the development of Bank representative offices and branches.
European commercial Banks prefer to implement various financial services via the Internet-from the transfer of customer's payment orders and receiving statements to the provision of complex investment services, the execution of payment transactions between Central and commercial Banks. Other services include brokerage services for active investors or private e-banking for wealthy clients.
Internet banking often integrates with social networks, which helps customers communicate with their Bank via an additional communication channel. Most often in Europe the social network Facebook is used by people to interact with their Banks. In Europe, the turnover of Internet banking is more than 5 billion euros annually [5].
Several EU Directives have already been developed to provide a legislative framework for the use of the Internet in the provision of financial services. With regard to risk management and auditing, Bank for International Settlements has developed guidelines for cross-border interaction between countries via the Internet.
Consider in figure 1 the proportion of people using Internet banking visiting the Internet in 2017 [6].
FIGURE 1 - A SHARE OF THE USING PEOPLE INTERNET BANKING VISITING THE INTERNET IN 2017 IN THE LEADING COUNTRIES OF THE WORLD, %
The most active Internet banking services are developed in the Nordic countries -Norway, Denmark, Finland, Sweden and the Netherlands, where they are provided by approximately 95% of commercial Banks and are used by over 80% of customers.
In 2017, it was found that 91% of Norway's population has access to Internet banking sites, making Norway the country with the strongest penetration of Internet banking in Europe [7].
According to the Swedish Association of Banks, almost 85% of the population use Internet banking services in this country, which makes Sweden one of the world leaders in the development of Internet banking systems. Quite high for Europe, the degree of internetization of the population has led to the fact that Swedish Banks were among the first to offer their services via the Internet. The most frequently used in Sweden banking services and online banking products for 2017 include checking the balance on the current account, payment of mandatory payments, transfer of funds between accounts, opening a Deposit, etc. [8].
In 2017, five largest Dutch credit institutions, such as, ING, Rabobank and ABN Amro performed about 85 percent of operations from total amount by means of Internet banking. The service of Online banking of the Dutch Bank ABN Amro was estimated from 4.4 on a five-point scale. The share of users of the smartphones and tablets using banking services on the run for many years increased in the region Benelux countries. In the Netherlands, about 92 percent of teenagers aged from 15 up to 16 years used Internet banking to check their balance. Despite it, smartphones and tablets are to a lesser extent used for remote payments [9].
In such densely populated and developed countries — Great Britain, France, Germany, Spain and Italy services of Internet banking are used not evenly. If in Great Britain and France more than a half of the population uses Internet banking, then since Germany this indicator falls. This results from the fact that, despite rapid technological progress, Germans still very mistrustfully treat the equipment and transfer of own data in the Internet. Not only webcams on laptops which, by the way, at many are stuck, but also banking services fell under their suspicion.
Based on a survey conducted by the consulting company Ernst & Young, many Germans prefer to stay away from online banking. Only 49% of Germans conduct financial transactions online. Half of them prefer to do it on a laptop, and many on a home computer. New technology, such as, for example, smartphones, for this purpose uses only one in five, and the tablets - every tenth. The attitude of the Germans to technology can be easily described using the American payment system Paypal. Despite the fact that it appeared in Germany more than 10 years ago, only 43% of the population use it.
Many users are afraid for the safety of their personal data. There is also a large proportion of those who are simply not interested in maintaining their budget online. The older the user of Internet banking, the more skeptical he is about new offers and technologies. According to Statistisches Bundesamt, the number of online banking users will grow every year. Now, according to their calculations, 53% of the population use Internet banking in Germany. And this is 10% more than in 2010 [10].
Low interest of introduction of Internet banking in Italy, namely 34% in 2018, not caused by low popularity there, but because of the low speed of the Internet and small quantity of free points of access (that is connected with active holding actions for counteraction to terrorism by the Italian law enforcement agencies). For commercial Banks, online banking services become fundamental function which they provide to offer clients a full range of services and to have an opportunity to contact them via any device, at any time [11].
According to the report of the GlobalWeblndex Company in 2016, most often in Europe aged people 55-64 years, and mobile banking - 25-34 years (figure 2) use Internet banking services [12].
70 62 65
60 50 40 30 20 10 0
PC/laptop mobile phone
16-24
25-34
35-44
45-54
FIGURE 2 - AGE GROUP OF USERS OF SERVICES ONLINE BANKING IN 2016, %
That was unexpected that in Germany in rural areas, where a much smaller number of Bank branches than in cities, Internet banking services are used by only 49% of the population. And in big cities, where the choice of banks is much wider, and their number is much more - 57% of the population.
As in all countries where the implementation of banking services via the Internet is practiced, in European countries, great attention is paid to the security of this service channel. The most common type of fraud on the Internet or in online banking comes from phishing emails. The purpose of phishing emails is to get the user's login and password, data of his Bank cards and accounts. Basically, the method of mass mailing on behalf of popular companies and organizations is used. Therefore, despite the attempts of banks to ensure absolute security of remote banking services, cases of unauthorized use of personal data of Internet banking users are increasing.
Thus, the UK banking system from 2010 to 2017 annually suffered from loss of about 121.4 million pounds sterling from fraud in Internet banking. The greatest cost of losses from Internet banking fraud in the UK was discovered in 2015, when the total annual losses of £ 133.5 million were recorded [13].
Internet crimes are dangerous not only by themselves, but also by the fact that they contribute to the commission of ordinary crimes, thereby expanding the scope of criminal activity. The international community is not only looking for effective criminal law and other methods to fight this problem, but is also trying to develop a common policy on this issue.
4. Conclusion
Summing up, it can be noted that the penetration of Internet banking services in foreign countries is more active, which positively characterizes the system of electronic payments.
Internet banking is becoming an everyday part of the financial life of many customers. Bank managers need to develop strategies for the safe delivery of virtual banking services that can meet and exceed the current needs and expectations of customers, anticipate their future needs and help them achieve financial well-being.
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