Question:

a) E-banking is defined as the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels.

(i) Show down any banking products and services offered.

(ii) Name such electronic and interactive devices used.

(iii) Why do we use the Internet as the new distribution channel for e-banking products and services?

b) In addition to traditional banking products and services, financial institutions can provide a variety of services that have been designed or adapted to support e-commerce.

(i) Web linking and website hosting are two examples of such support services. Outline each one of them.

(ii) List down the risks associated with both support services mentioned above.

c) E-banking risk is the potential that unexpected events may have an adverse Impact on the bank earnings. One such type of risk is credit risk.

(i) Define credit risk.

(ii) There are aspects of on-line loan origination and approval than tend to make risk management of the lending process more challenging. If not properly managed, these aspects can significantly increase credit risk. Briefly explain what are these aspects?