TECHNOLOGY: THE BANKING INDUSTRY REENGINEERING FOR E-COMMERCE
The banking industry's top-to-bottom redesign of the entire retail operations of some of the world's largest banks to facilitate e-commerce is creating a concept some analysts are calling "Future Banks" (Kobrin, 1997; Oliver, 1997).
Accepting e-commerce must be done for banks to survive onslaughts from the Internet, brokerage firms and mutual-fund houses and from industry consolidation and technology. The critical question to be discussed in this paper is "What is electronic commerce and how will it impact banking?"
We will do this by examining the following:
Section 1: What is electronic commerce
Section 3: Alternatives for implementing change
Section 5: A look at the new business style
Section 7: Look at the new infrastructure including network design for hardware and software
Estimates of the size of e-Commerce vary, but analysts predict that the current business-to-business e-commerce market for products and services totals between $2 billion and $3 billion. Most industry analysts agree that the business-to-business e-commerce market has a very low penetration rate of 10% or less today (Kobrin, 1997).
Ninety percent of electronic commerce transactions are expected to be business-to-business by the year 2001 (Violino, 1997). Some of the characteristics of the e-commerce marketplace include a high services component, reflected in the fact that half of all revenues are derived from services. In addition, to fully leverage e-commerce, companies are integrating e-commerce applications with existing enterprise-wide systems (Violino, 1997).
These e-commerce transactions today are moving over a mix of public and private networks. This marketplace is taking shape today, and the most significant, sophisticated applications--those bringing competitive benefits to those companies with the vision and the sense of urgency require a blend of softwa...