The e-banking business faces many of the same roadblocks as the rest of the retail sector, when it comes to wide spread usage and acceptance of their e-banking systems. The focus of this research will be to explore the effect of the Internet on the traditional brick and mortar retail bank. E-banking still faces many roadblocks in the re-engineering of the banking system. The research in this study answers the question, "What changes to their business design will the retail banking industry have to make, in order to compete in the online banking industry?" It explores the issues of EDI, the challenges that they face, e-money, and discuss the measures that the banking industry must make to remain competitive.
E-Commerce and Business Redesign
The advent of the Internet has opened many new possibilities for businesses worldwide. Many companies only exist in cyberspace. It is no longer necessary to have a brick and mortar building to run a business. Some service related industries have developed that do not even require a warehouse or other such facilities. Other traditional brick and mortar businesses have been able to use the Internet to establish new product lines and to add another distribution channel for existing products. Yet another group of businesses does not have a web-presence, but uses the Internet or an Intranet to make their established business run more smoothly. They use it for inventory control, to speed communications, and to automate many processes that used to take time and money to accomplish. This is a typical scenario in manufacturers.
The Internet has become a necessity for many established businesses. There is one business, however, that was the backbone of it all, long before the invention of the Internet. The banking industry is the backbone of the economy and nothing else could exist without them, provided that we do not return to a barter system. The Internet has transformed the face of many business sectors, but nowhere else has this transformation been more evident than in the financial sector. Lin and associates  feel that e-banking will lead to stiffer competition in the banking industry and will help to bring more equality to banks. They will have to find new ways to compete. She discusses many technical issues such as liquidity and security that will have to be considered as a part of business re-design for the banking industry. Choi and Whinston  state that the newspapers and journalists are making more money in the Internet business than the businesses themselves.
There has been a wealth of information published in academic journals regarding this subject and the topic areas are wide spread. The e-banking business faces many of the same roadblocks as the rest of the retail sector, when it comes to wide spread usage and acceptance of their e-banking systems. The focus of this research will be to explore the effect of the Internet on the traditional brick and mortar retail bank. It will answer the question, "What changes to their business design have the retail banking industry had to make, in order to retain their marketshare since the advent of online banking?" It will explore the issues of EDI, the challenges that they face, e-money, and discuss the measures that the banking industry must make to remain competitive.
EDI and the Banking Industry
Electronic Date Interchange (EDI) means the exchange of data from one computer system to another computer system. This can take place between two different institutions or with in the same institution. It is the backbone of today's banking industry. The term e-Commerce has not been limited to EDI, but also includes the business practices built around computer-to-computer transmissions including message forms, files many other items that have led to significant changes within an organization  and has led to many new ideas for marketing. EDI in the banking industry allows us to wire funds via the Internet, manage accounts and pay bills online. Many daily tasks can be done from a person's own home, eliminating the need to drive, perhaps facing foul weather or other such inconveniences.
There are many barriers to e-banking and e-commerce that will mean security for the brick and mortar establishment at least for the time being. These barriers are summarized in the article "An E-Commerce State of the Union." . Solish criticizes the industry as a whole for not being able to develop into a cohesive industry. Everyone is going in different directions and there is no focus. Industry officials estimate that the industry will reach $327 billion in 2002 in transactions. Currently, they are generating $8 billion, therefore this estimate seems unreasonable . He reviews the use of EDI and makes the point that it is gaining acceptance but is not growing as developers had expected. The systems are in place, but the process is too cost prohibitive in its current state. The roadblocks to implementing it are primarily the high cost and difficulty in implementation. Everyone runs on their own platform and uses their own language . In order for EDI to become a reality a standard set of guidelines must e developed .
Up to this point everyone who wanted to go Internet with their business, this led to a billion different sites, all of then can stand alone, but many cannot talk to each other. In order for EDI to be implemented and become standard practice, every system in the chain must be able to communicate with the others.
One of the primary roadblocks facing both the retail industry and the retail banking industry in the wide-spread acceptance of e-banking is the issue of security. Some e-banks are trying a new model that no longer needs a brick and mortar facility. The acceptance of these banks has been less than enthusiastic. One of the key issues is security and privacy issues. People must feel that their personal information and account is safe from intrusion by those not authorized to view it. There have been many advancements in the area of Internet security that have helped to make the transfer of data more secure and build public confidence in the system.
The following features are necessary for secure messaging: confidentiality, message integrity, and authentication of both parties . Banking transactions require additional attributes. The generation of electronic cash requires anonymity of the receiving party. There are many technologies available to help assure that these tasks are accomplished. such as encryption, secure servers, firewalls, secure keys, electronic signatures, and blinding factors that are embedded during encryption. There are literally thousands of academic and technical articles published on the subject of Internet security. Zwass  gives an overview of many subjects that relate to e-commerce, but does not go into exhaustive detail.
E-money is subject of much excitement and controversy. There are many considerations in the development of an e-money system and all of them are not technical issues. The issues of security and the difficulties associated in establishing EDI between different banking systems using different platforms are major setbacks, but there are other issues that will hamper the business re-design to one that favors an e-banking model. Some refer the development and promotion of e-money as the re-engineering of the world money system and there are many pros and cons . There are even some who think that e-money will someday replace traditional paper money systems altogether. Popular literature is filled with both sides of this issue, but none are conclusive and many are based solely on personal opinions . There is a lot if literature on the future of e-banking, but there are few articles that are based on real empirical data, most must be discounted as an opinion, such as the well-written, yet unfounded article by Lori Enos  that appeared in a trade magazine E-commerce times. The problem with these articles is that they put out a lot of information that quickly becomes a part of popular culture. Anyone wishing to enter into the field of business re-designs for e-commerce must critically analyze these articles and be sure to base their re-design on fact, not popular opinion.
Keys to Success in E-Business
E-banking faces many challenges in its implementation and acceptance. The question in business re-design in the banking industry is where to place the most resources. Barua and associates  states that there are several key issues that must be addressed and that failure to address these issues will lead to failure and more expenditure down the road. Barua feels that a company should weight investments on system integration; customer orientation of supplier orientation of IT, internal orientation of IT; customer-related processes; supplier-related processes; customer e-business readiness; and supplier e-business readiness . This is a comprehensive approach and will apply to any e-banking re-design or any other e-commerce design project.
There have been volumes of information related to how to succeed in business on the Internet, but as it has been pointed out, much of it is based on opinion…