Research On The Development Of South Korean Internet Banking

This paper will focus on what stage has Internet banking services of South Korea has developed to; what are the existing problems, and will also discuss how to make the improvements . The whole text will be divided into six parts: the introduction; a summary of online banking; online banking establishment and development of South Korea; the trend of South Korean Internet banking; strategies and recommendations for online banking of China; and the conclusion.In the introduction it summarizes the background, the concept and the function of Internet banking of South Korea, meanwhile it explains what stage online banking services of South Korea has developed to, what are existing problems of online banking and how to make the improvement.The general overview of Internet banking can be divided into four parts: the concept of online banking, the background of internet banking, features and risks of Internet banking.The concept of Internet banking deals with the concept of Internet Banking, and it also lists the Electronic Banking, Virtual Banking or Cyber Banking, Remote Banking and etc, which are all similar with Internet banking. Then it gives an explanation of the differences between these similar concepts.The background of the emergence of Internet banking can be summarized as follow seven points:①follow the international banking industry and environmental change;②information-oriented of the banking industry;③environments of banking industry in the multimedia era–the multimedia and financial networks;④changes in the banking business;⑤the changes of counters;⑥changes of customer requirements;⑦the increasing strategic cooperation. In the features of Internet banking it discusses some of the characters of Internet banking, the advantages and disadvantages of Internet-banking.The characters of Internet banking are: First, due to the globalization of world financial services, financial transactions can be carried out without any geographic, time constraints; Secondly, the market-based -intermediation that the principle of market brings in, has promoted the disintermediation and the securitization in financial transactions, thereby reduces the cost of financial transactions. So it is expected to form the intermediary market that apply to market principles; Third, having a customer-centered financial markets; Fourth, a comparison between financial institutions and markets, which promoted the standardization of financial products.Therefore, banks keep the old and new clients through the Internet and develop new circle of beneficiaries, and they can have the following types of strategic advantage.Internet banking advantages: First, the convenience of Internet banking is the biggest advantages; Second, from the customers'perspective, the biggest advantage of Internet banking is its convenience, however from the banks'perspective, the greatest advantage is cost savings; Third, Internet based interface can provide more sophisticated products and services; Fourth, in the marketing, Internet banking provides programs which are low–cost to achieve a variety of marketing strategies.Internet banks drawbacks: First, financial products and services are very easily to digitize , and there are few differences in the quality of products and services; Secondly, the initial costs of IT investment are too much and the payback period is short, and sometimes the structure of the system can differ from the expectation, whose result is that the system will be the judged to be unsuitable; Thirdly, due to the reliance on computers and networks of the Internet banking, it may increase operating risks; Fourthly, the introduction of Internet banking brings channel conflicts and other issues to traditional banking which relies on both physical business networks and human input volume.The part of the risks to the operation of Internet banking mainly consists: the strategic risk, the reputation risk, and the legal risk. And it also explains other risks of Internet banking such as the credit risk, the liquidity risk, the interest rate risk, the foreign exchange risk and so on.In this paper,the establishment and development part of Internet -banking in South Korea can be divided into three parts:①several stages of the development of Internet-banking in South Korea②the present status of South Korea's internet banking③the economic effects of Internet banking in South Korea.South Korea experienced the initial stage of the development of Internet banking, the intermediate stage and advanced stage :①The initial stage is the stage of communication between banks and their customers, and will also provide services such as online loan applications, on-line negotiations with customers②The intermediate stage is the stage of exchanging transaction information formally between the customers and banks--a stage that can process some online financial transactions;③Advanced stage is the stage of realizing all the counter services to be handled online.It discusses the present condition of Internet-banking in South Korea regarding to: the banks that introduce Internet-banking and the services that are provided; the number of customers'landing; the use of performance; the processing rate of the financial services business in different channels; the scale of investment.The economic benefits brought about by the proliferation of Internet banking, can be summarized in four points. First, the development of multimedia technology and the proliferation of e-finance; Second, changes in the concept of counter let delivery channels become more diversified. Thirdly, the emergence of new financial products and services; Forth, both the banks and customers have the effects of reducing costs.The part of the trend of development in Banks of Korea in the paper includes the existing problems in online banking of South Korea, South Korea's e-banking development programs, changes and the prospect in online banking of South Korea.There are some problems existing in South Korea's internet banking, in the banking system structure, the information technology, the human security, and in other aspects. The Bank of Korea's development programs can be broadly cited as:①Enhancement on online banking services②The ways to deal with emergence of new risk elements③Enhancement on database marketing④Strengthened Internet Marketing with the increase in Internet applications⑤Expanding business fields beyond the financial business⑥The perfection of relevant laws and the conversion in the understanding of the highest operators⑦Through the merger of the staff re-organization structure.Changes and prospects of South Korean Internet banking:①Internet banking is an option not necessary;②Trust comes first. In the part of strategy and suggestion for the development of Internet banking of China in this paper, there are development status of online banking of China, and the programs for development of China's Internet banking.According to the current development status of China's Internet banking, existing issues on online banks, and the influence of international economy we can address the following programs:①To create a good environment for the development of Internet -banking of China②To positively change the concepts, and strengthen the management of Internet banking③To strengthen the supervision of CBRC on financial risks.In the concluding part of this paper addresses the corresponding methods of banks: First, we must take full advantages of the shortcomings of the Internet banks to minimize risk. For the active development of Internet banking in our country, we must create an environment in which whoever it is, in any place all the people are able to take advantages of the lower cost of information communication to highly make use of sound effects, digital images and other multimedia services. Moreover, banks also need to strengthen their security.Finally, the banks must develop better Internet banking in order to obtain benefits, and it is necessary to provide services required by individual customers to expand the profitability through this one-to-one marketing strategy.