WELCOME TO OUR PRESENTATION

E-COMMERCE

E-Commerce is the use of Internet and the web to transact business but
when we focus on digitally enabled commercial transactions between
and among organizations and individuals involving information systems
under the control of the firm it takes the form of e-business.

There are mainly five types of E-Commerce models:

1. BUSINESS TO CONSUMER (B2C)

2. BUSINESS TO BUSINESS (B2B)
3. CONSUMER TO CONSUMER (C2C)
4. PEER TO PEER (P2P)
5. M-COMMERCE
E-COMMERCE (Continued)
E-COMMERCE (Continued)
 E-COMMERCE (Continued)

There are other types of E-Commerce business models too

like

# Business to Employee (B2E),

# Government to Business (G2B)

# Government to Citizen (G2C)

But in essence they are similar to the above mentioned

types.
 Drivers of E-commerce
Ω Electronic Commerce is easy and affordable

Ω Electronic Commerce transforms the market place

Ω Electronic Commerce has a catalytic effect

Ω Enhanced customer service

Ω Electronic commerce over the internet vastly increases

interactivity in the economy

Ω Openness is the underlying technical and philosophical tenet

of the expansion of E- commerce.

Ω Electronic Commerce alters the relative importance of time.

CHRONOLOGICAL ACHIEVEMENTS OF E-COMMERCE
1979: Michael Aldrich invented online shopping.
1981: Thomson Holidays, UK is first B2B online shopping.
1984: Gateshead SIS/Tesco is first B2C online shopping and Mrs Snowball ,72, is
first online home shopper.
1985: Nissan UK sells cars and finance with credit checking to customers online
from dealers' lots.
1987: Swreg begins to provide software and shareware authors means to sell their
products online through an electronic Merchant account.
1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT
computer.
1992: J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies
Will Change the Way We Shop and What We Buy. St. Martin's Press. ISBN
0312063598.
1994: Pizza Hut offers online ordering on its Web page. The first online bank
opens. Attempts to offer flower delivery and magazine subscriptions online.
 CHRONOLOGICAL ACHIEVEMENTS OF E-COMMERCE
(Continued)

1995: Dell and Cisco begin to aggressively use Internet for commercial
transactions. eBay is founded by computer programmer Pierre Omidyar as
AuctionWeb.
1998: Electronic postal stamps can be purchased and downloaded for printing
from the Web.
1999: The peer-to-peer file sharing software Napster launches. ATG Stores
launches to sell decorative items for the home online.
2002: eBay acquires Pay Pal for $1.5 billion. Niche retail companies CSN Stores and
NetShops are founded with the concept of selling products through several
targeted domains, rather than a central portal.
2009: Zappos.com acquired by Amazon.com for $928 million. Retail Convergence,
operator of private sale website RueLaLa.com, acquired by GSI Commerce
for $180 million, plus up to $170 million in earn-out payments based
on performance through 2012.
2010: US e-Commerce and Online Retail sales projected to reach $173 billion, an
Increase of 7 percent over 2009
 BUSINESS APPLICATIONS

Some common applications related to electronic commerce are the following:

# Email # Online Office Suites

# Enterprise Content Management # Domestic & International

Payment Systems

# Instant Messaging # Shopping Cart Software

# Newsgroups # Teleconferencing

# Online Shopping & Order Tracking #Electronic tickets

# E-Banking
 E-BANKING
E-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive
communication channels. Customers access e-banking services inculcates
using an intelligent electronic device, such as a personal computer (PC),
personal digital assistant (PDA), automated teller machine (ATM), kiosk, or
Touch Tone telephone.

E-Banking system configures based on four factors:

• Strategic objectives for e-banking;

• Scope, scale, and complexity of equipment, systems, and activities;
• Technology expertise; and
• Security and internal control requirements
 E-BANKING (Continued)

The following entities could provide or host banking-related

services for financial institutions:

•Another financial institution,

•Internet service provider,
•Internet banking software vendor or processor,
•Core banking vendor or processor,
•Managed security service provider,
•Bill payment provider,
•Credit bureau, and
•Credit scoring company
 E-BANKING (Continued)
E-banking systems rely on a number of common components or
processes.
•Website design and hosting,
•Firewall configuration and management,
•Intrusion detection system or IDS (network and host-based),
•Network administration,
•Security management,
•Internet banking server,
•E-Commerce applications (e.g., bill payment, lending,
brokerage),
•Internal network servers,
•Core processing system,
•Programming support, and
•Automated decision support systems.
 E-BANKING (Continued)

Figure
1:
Third-
Party
Provider
Hosted
E-Banking
Diagram
 E-BANKING (Continued)

Figure
2:

In-House

E-Banking

Diagram
 RISKS ASSOCIATED WITH E- BANKING
Security vulnerabilities are part of web reality. The success of
the internet has attracted a rising number of hackers and other
scallywags. Thus, the internet, because of its low cost, global
reach and versatility raises the stakes for the banks – both in
terms of the opportunities it presents as well as the risks.

•Strategic Risk
•Operational Risk
•Liquidity & Pricing Risks
•Reputation Risk
•Legal Risk
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

The cheapness and global reach of the internet

opens up the threat of increased competition
from new entrants who will no longer need a
branch network to operate effectively in any
given market.
M
I How it could occur
T
• The Internet age is all about customer empowerment
I
G • It gives customers to access and compare the offers of
A different banks.
T • Banks with an existing brand name still have some
I advantage, but it is not something that can be wholly
O taken for granted.
N • Poor e-banking planning and investment decisions can
S
increase a financial institution’s strategic risk.
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

Financial institutions should pay attention to the following:

• Adequacy of management information systems (MIS) to track

e-banking usage and profitability;
• Costs involved in establishing e-banking technology;
• Design, delivery, and pricing of services adequate to generate
sufficient customer demand;
• Costs and availability of staff to provide technical support for
interchanges involving multiple operating systems, web
browsers, and communication devices;
• Competition from other e-banking providers; and
• Adequacy of technical, operational, compliance, or marketing
support for e- banking products and services.
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

Operational risk arises from fraud, processing

OPERATIONAL RISK errors, system disruptions, hacking, or other
unanticipated events resulting in the
institution’s inability to deliver products or
services.
M
I
Examples of Operational Risks:
T
I • Robberies
G • Thefts of ATM machines
A • Frauds
T • Processing errors
I
O
• System disruptions
N • Hacking
S
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

• Verifying the customer’s identity for on-line credit applications and

executing an enforceable contract;

• Monitoring and controlling the growth, pricing, and ongoing credit

quality of loans originated through e- banking channels;

• Valuing collateral and perfecting liens over a potentially wider

geographic area;

• Collecting loan payments from individuals over a potentially wider

geographic area;

• Monitoring any increased volume of, and possible concentration in,

out-of-area lending.
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

Funding and investment-related risks could

LIQUIDITY increase with an institution’s e-banking
&
PRICING RISKS
initiatives depending on the volatility and pricing
of the acquired deposits.
M How it may reveal:
I
T
I The ability to transfer funds between different
G bank accounts may increase deposit volatility
A
T and could, in extreme situations, lead to “virtual
I bank runs”. Banks will need to consider this
O
possibility into their liquidity management
N
S policies.
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

The institution should modify its policies as necessary to address

the following e-banking funding issues:

•Potential acquisition of funds from markets where the institution

is not licensed to engage in banking;
•Potential impact of loan or deposit growth from an expanded
Internet market, including the impact of such growth on capital
ratios; and
•Potential increase in volatility of funds due to the negative
impact of customer confidence for e-banking security problems,
or competitors' deposit or lending pricing policy.
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

An institution’s decision to offer e-banking services,

REPUTATION RISK especially the more complex transactional services,
significantly increases its level of reputation risk.

What it may reveal:

•Loss of trust due to unauthorized activity on customer accounts,

•Disclosure or theft of confidential customer information to unauthorized
parties (e.g., hackers),
•Failure to provide reliable service due to the frequency or duration of
service disruptions that is temporary systems breakdown;
•Customer complaints about the difficulty in using e-banking services and
the inability of the institutions help desk to resolve problems.
 RISKS ASSOCIATED WITH E- BANKING
(Continued)

Customers should be responsible for any

security breach or system problem that is
due to negligence on their part, and this
should be reflected in the contractual
LEGAL RISK agreements for internet banking services.
But if the damage is occurred for system
breakdown, negligence of bank employees,
attack by hacker or any other parties; the
bank must be liable to cover the damage.
 PRACTICED SECURITY SYSTEMS OF E-
BANKING

• Physical Security
• Network Security
• Back-up
• Encryption
• Message Authentication
• Digital Signature
• Algorithms & Cryptographic Mechanisms
• Three Factors Authentication
 COMMON CRIMES ON E-BANKING

1. Unauthorized access into network system.

2. The use of the laying devices
3. The implementation of computer viruses and other ways of
disturbance.
4. Deactivate protected equipment
5. Forming, transferring, accepting, transforming, displaying and
keeping some information
6. Access in the restricted automated systems.
7. Monitoring the protection of the software integrity.
8. Registration (logging) with reference to the forbidden resources
9. Cryptographic methods (Hiding information of computer system.)
 FACTORS STIMULATING THE GROWTH IN E-
BANKING

Some of the market factors that may drive a bank’s strategy towards internet
banking include the following:

•Competition
•Cost efficiencies
•Geographical Reach
•Branding
•Customer Demographics
 21ST CENTURY ONLINE APPLICATIONS OF E-BANKING

# Access our bank accounts # Transfer money

# Make investment
# Apply for loans and mortgages
# Purchase goods and services
# Sign contracts
# Track parcels and shipments
# Collect dividend
# Play online games
# Bet
# Receive Healthcare
# Order medicines
# Pay Bills
# File tax returns
# Top-up mobile phones
# Change addresses
# Access governmental servic
# Vote
# Gamble
# E-procurement
# Order medicines
VARIOUS FORMS OF E-BANKING IN BANGLADESH

• Call Center

Automated Online Banking SMS Banking Any Branch Banking

Teller &
Machine (ATM) Tele-banking

Virtual Banks Remittance Call Center

(Electronic Way)
 SUMMARIZED FEATURES OF E-BANKING IN BANGLADESH

• 24- hours cash withdrawal facility

• Quick cash withdrawal without having queue
• Account activities enquiry in any moment
• Statement request through ATM/Debit/Credit Card
• Transfer own funds to other account number in same bank
• Present Balance enquiry
• More than16- hours shopping facilities
• Deposit or Mail cash or check(s) (Cross check) through mechanical
device.
• Changing Personal Identity Number
 SUMMARIZED FEATURES OF E-BANKING IN BANGLADESH
(Continued)

• Cash deposit which will originally deposit very next day of deposit
that means, people do not need to go to the branch for every
occasion.
• Mini statement which contain 8-10 previous transaction records
• Can able to pay utilities bill
• Withdraw money by using VISA, PLUS, MASTER, MAESTRO and
other credit card
• Withdraw money from dollar account which gives taka by converting
foreign currency.
SWOT ANALYSIS
 THE BARRIERS OF E-BANKING IN BANGLADESH
• Unreliable connectivity and low bandwidth (9K);
• Poor telecommunication infrastructure with limited fixed-line
access;
• Very minimum number of users of web sites;
• High price of computer and hardware
• Lack of technically efficient personnel;
• Lack of investment in hardware and software;
• Electronic payments and inter-bank connectivity is poor
• Small number of Credit Card users;
• Limitations of supportive legal system
• Absence of cyber law
• People's mindset and very slow and expensive Internet services
• Enterprise managers' are lack of initiative
• Bureaucratic complexities
• Lack of awareness at government level of E-Commerce issues
 RECOMMENDATIONS
• There should be an EFT (Electronic Fund Transfer) Gateway

• A CCG (Credit Card Gateway) should be established

• Unlicensed radio frequencies should be made available on demand

• Bangladesh government should compel the banking sectors to automate

their operation

• The control of foreign exchange should be liberalized gradually

• Business organizations like FBCCI, DCCI, MCCI, and BGMEA can play a
significant role in promoting E-Commerce in Bangladesh.

• Political commitment to improve governance and institutional strength

• National ICT policy, 2002 and enactment of the ICT Act, 2005 is required to
enhance the implementation of E-Banking
 CONCLUDING REMARKS

Bangladesh is rich in ICT human capital and continuously producing

graduates to meet the demand of the next century. Even Bangladesh
doesn’t require any foreign expert to implement, execute and maintain
ecommerce infrastructure. Despite the encouraging state of
implementation, E-Banking can never be deployed until and unless an
Electronic Fund Transfer (EFT) Gateway and a Credit Card Gateway
(CCG) have been established. These two Gateways will eliminate the
security issues in E-Banking and enhance the e-transactions. In
addition to that, creating awareness among the citizens and the
business organizations is essential for the implementation and growth
of E-Commerce and also for E-Banking in Bangladesh.