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Outline

E-banking

Introduction and History of (2 pages)

o

E-Commerce

o

E-banking

o

Online Banking (Internet Banking)

E-Banking (5 pages)

o

What is E-Banking?

o

Types of E-Banking.

1. ATM

What is ATM Banking

The services it offers and its importance

2. Phone Banking

What is phone banking

What services does it offer

Types of phone banking

o

Automated phone banking

o

Representative (Teller) phone banking

o

Internet Via Phone (Discussed later)

3. Home Banking

What is Home Banking

Requirements to setup the service

Services it offers

Continue Outline

4. Internet “Online” Banking

What is Online Banking? (1 page)

Types of Internet Banking

o

Internet via Computers

o

Internet via Phone

What differentiates Online banking from virtual banking? (1 page)

Online banking services (2 pages)

Online banking systems (1 page)

Online Banking without virtual branches (physical branches)

Appearance of ISLAMIC Banks (1 page)

o

Business with Commercial banks

o

Different rules

Comparison of two American Banks. (Departments, services, systems, number of employees, number of customers, history) (2 pages) 1- C ITI Bank 2- IUCU Bank

Comparison of four Saudi Banks. (Departments, services, systems, number of employees, number of customers, history) (4 pages)

o

Al- Ahli Bank

o

Al-Bilad bank

o

Al-Jazeera Bank

o

Al-Rajhi Bank

The difference between Banks in the USA and in Saudi Arabia (1 page)

Recommendations and Conclusions (1 page)

References (1 page)

Introduction and History Telephones and televisions are used daily by many people; alongside these media the Internet has become more important and useful for an increasing number of people (A Consumer Guide to E- Payments. FTC FACTS). The Internet has existed since the late 1960s but for most of that time it was only accessible to governments and for scientific research purposes. By the mid 1990s, as web

interfaces improved, it became available to the public and E-commerce developed, allowing businesses to offer their products and services on the web. E-commerce became possible in early 1990s when the Internet was opened to commercial use. With the 24\7 availability of Internet commerce websites, it has become very important to the users to trace and track their transactions, as they occur to ensure the account status and stability. Thus, it has become very important to have banks that can serve, support and work with e-commerce companies and consumers 24\7. They provide banking services and systems that connect to ecommerce websites allowing customers to check their transactions online, allow businesses to accomplish their goals, and allow customers to move money around to accomplish their financial transactions (Federal Trade Commission, E-Payments). What is e-commerce? E-Commerce has different definitions, which at the end seem to lead to one meaning. Kalakota and Whinston defines e-commerce:

o

From a communication prospective, it is the delivery of information, products/services, or payments via telephone lines and computer networks.

o

From a business prospective, it is the application of technology to improve the automation of business transactions and workflow.

o

From a service prospective, it is a tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery. Consumers need a high quality service, Just In Time (JIT) service, and a faster, more secure and less expensive process.

o From an online prospective, it is the capability of buying and selling products and information on the Internet. To summarize, E-commerce is the purchase of goods and services (products, information, etc) through online transactions and the transfer of funds over computer networks (Olle, 2000). These

activities occur between different parties with the support of technology networks including POTS (plain old telephone systems), cable TV, leased lines, or wireless (Kalakota, Whinston, 1996; P4). In addition, the process of executing commercial transactions electronically with leading technologies such as Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT) and electronic mail support businesses to business ecommerce; these technologies also give people the opportunity to exchange business information and do electronic transactions with businesses (Kalakota, Whinston, Electronic Commerce; P7). E-commerce involves buying and selling goods, purchasing and provisioning services, and making other financial transactions over the Internet. (Poole, Lambert, Woodford, & Moschovitis, 2005). It also involves Just In Time transactions (JIT), which avoid the problems of phone calls such as busy signal or the call not being answered, phone call billings, which are more than internet bills cost, shipping costs for digital goods, gas billings, less labor, etc. Therefore, ecommerce has reduced the cost of conducting some kinds of business and has made organizations more profitable even though it requires other costs to allow it to be established (Kalakota, Whinston, Electronic Commerce, P8). E-commerce can reduce the cost of a business by reducing purchase order processing costs, reducing the purchase time which increases customer satisfaction, increasing the number of purchases with less labor, reducing the number of labor, shortening the order bill cycle, and improving security and satisfaction while allowing consumers to track their transaction online. (Kalakota, Whinston, Electronic Commerce, P18). The Internet and e-commerce finally have given the connected public the opportunity to buy, sell, collect, and exchange information easily, securely, and quickly (Olle, 2000).
 With the Internet and E- commerce, the concepts of time and location have lost their importance because anyone can buy, sell, and do business from anywhere by accessing the Internet (Olle, 2000). Difference between Physical and Virtual Banking:

Physical banking has been the usual way that customers make use of a banking transaction and financial services company. Physical banking involves physical branches that are located around the most populated areas to serve their clients and allow people to compete their transactions and services in person (Sulaiman, C.H, and Wee, 2005). Virtual banking, which does not involve any physical action (going to a bank building, standing in a line, and face to face communication), exists in the form of ATMs, phone banking, home banking, and Internet banking. A virtual bank is a non-branch bank (Kemal, 2001) that involves the provision

of fully automated banking services. Online shopping has become available and more convenient, and secure because of the appearance of online banking (Poole, Lambert, Woodford, & Moschovitis,

2005).

The major function of banking is to mobilize savings and transfers to entrepreneurs (M. Iqbal &P. Molyneux; Thirty Years of Islamic Banking; P4). Banks, financial organizations, or financial applications such as Microsoft banking, Quicken, ADP, and Bank Of America have found easy and secure ways to complete commercial and individual transactions through the use of Internet (Kalakota, Whinston, Electronic Commerce, P192). Iqbal & Molyneux also emphasized that Internet banks are the most important financial tools and services in the modern economy. Types of E-Banking (Virtual Banking) There are different types of e-banking. They can be process-based as with ATM transactions, home banking transactions, phone-banking transactions, and Internet transactions (Liao, Shao, Wang, and Chen, 1999):

1. ATM (Automatic Teller Machine)

Automated teller machines work 24 hours a day, and are located in many different places, especially in the most populated places, which makes them easy to find. Using an ATM requires an ATM card and a personal PIN allowing customers secure 24 hour access to banking services such as deposits, withdrawals, transfers, inquiries about account balances, requests for cheque books, account statements, direct deposits, etc (FTC FACTS For Consumers, 2009).

2. Telephone Banking

By the 1970s consumers were able to use their old system home phones to dial the phone to check their balances, transfer funds, and pay bills. Telephone banking allows customers to conduct banking services using the phone from anywhere and any time, but its only disadvantage is that it

doesn t involve vision for the customers while producing their transactions. Customers can a

knowledge their balances and listen to the transaction, but with the ability to vision it such as viewing it on a computer or on a paper will add more confidence, and evidence to the customer. The phone banking services can be divided to two types:

Operator attended

These functions are for customers who have very complicated inquiries and needs that cant be completed through automated services, or who are not comfortable with automated services, or who

have need for services that require high security. Phone banking is one of the most used and valuable electronic services as phone and cellulars usage has spread all around the world. Automated These functions are for the requests that can be executed and solved by the automated system without the need for human operators. Mobile e-commerce & e banking This is a solution that enhances business to consumer interactions over the Internet. People use their cell phonesInternet features to conduct Internet banking and other business transactions (http://www.flysyk02.netfirms.com/Ecommerce/History.htm). People can use their phonesinternet connectivity to check bank accounts, balances, statements, transfer assets among accounts, check lines of credits, pay bills, etc (Olle, 2000). 


3. Home Banking

The roots of Internet banking can be found in home banking. By the beginning of 1970s home banking was available via touch-tone telephones, at the time banks considered this service as home banking even though it involved the use of phones. Consumers were allowed to pay bills, transfer funds, and check their accounts. By the mid 1980s, banks started to offer home banking services to customers by allowing them to install software that enabled them to connect to the bank through a dial up connection. Home banking allows customers to complete some specific financial services directly from home. It is secure but it is limited to a variety of services that the bank and customer agree on. After 1985, this service was not as popular and was not widespread or used by many banks because it required proprietary systems and huge technology investments, which only a few banks could manage. Also, at that time the PC was not widely spread among many households (H, 2004).

4. Internet Banking

Internet banking is conducted by completing bank transactions by directly accessing the bank through the Internet. Nowadays, Internet banking customers can access many different services online, which makes physical banks open even after office hours. In means of offline banking is becoming to be online banking while physical banks are not opened (out of office hours), so customers do not need to go to the banks or call them any more unless there is an issue that cannot be handled online. Internet banking can be conducted either by accessing the Internet with a computer or by using a

phone that has Internet features.

This type of banking takes place through a portal, through which customers can use different kinds of banking services (Xu, Shao, Wikes, and Shah, 2006). Customers can use digital signatures, which will defined later in the banking services section, manage personal accounts, transfer funds, handle electronic invoices, etc (Olle, 2000). Benefits of Internet Banking Internet banking provides benefits for the bank and for the customers using it. (Lassar et al., 2005; Xu, Shao, Wikes, and Shah, 2006). Because an automated website can be accessed 24 hours a day, E- Banking provides cost savings for banks because they dont need human operators to keep the bank services functioning. As mentioned, Internet banking has reduced phone calls billings, shipping costs for the monthly bank statement and account monthly transactions, gas billings, less labor, etc. Therefore, ecommerce has reduced the cost of doing business and made organizations more profitable even though it does involve other costs to allow it to be established such as maintaining complex secure information systems and technology channels (Kalakota, Whinston, Electronic Commerce; P8). Summarizing the benefits:

1- More transactions are carried out over the Internet than in the physical branches (Kalakota, Whinston, Electronic Commerce; P8).

2-

Banks are offering more than banking services; they are offering services on the bank website such as tax services, as allowing customers to fill out the tax application online, calculating the taxes, etc (H, 2004).

3-

People can bank from any place that has Internet, so it is not limited to a time or a place as it was with physical banking (Abbˉudah, A, 1985).

4- With Internet banking people can check their account status and use other services while phone-banking users can only hear this information. Therefore, Customers are moving from phone banking to Internet banking. 5- Internet banking allows customers to be alerted via email and phone of every update and

change that occurs in their account, which differentiates it from physical banking where customers have to go to the bank to check for updates.

6- Internet banking may be more cost effective for banks, which can then lower the fees for the

customers (Abbˉudah, A, 1985).

Internet
banking
services
(Sulaiman,
C.H,
and
Wee,
2005) 


Opening an account

Most banks that provide Internet services allow customers to open new accounts by accessing the

bank website, logging in, filling in the application online and either submitting it online or printing it

and handing it to a teller at the branch.

Accessing account information

This service allows customers to obtain information about other services available online such as

opening and closing accounts, checking account balances, discovering and checking the latest updates

and inquires (transactions that are taking place) that affect their accounts and transactions.

Electronic Check conversion

Though this service, customers can convert a paper check to an electronic payment. This service

allows customers to take an amount from their account and put a hold on it until the other party

receives the check and withdraws it. The benefit is that normal checks take longer time to be

processed.

Transfer funds

Customers
 can
 easily
 to
 log
 in
 to
 their
 accounts,
 check
 their
 balances,
 and
 transfer
 funds
 in


between
their
accounts
to
cover
any
shortages
in
their
accounts. 


Bank statement

This service is a bank document that customers can access through their accounts to check the record

of their transactions. This service allows customers to go over the previous yeartransactions and

make sure that their has accounts have not been compromised. This document could be printed online

or saved as a word or PDF document on their computers for future evidence. Banks vary by the

number of months they allow their customers to review. For example, CHASE bank allows customers

to go a year back while IUCU allows for three months.

Purchase bank products

This service allows its customers to purchase products electronically. Products are different from

banks to banks but they vary such as cars, gold, mortgage, land, silver, etc.

Download account information

This is a service that enables customers to download any documentation of the services available

and account information. Usually, banks allow customers to download this information to make

them more comfortable with comparing the variety of services they apply with their competitors. Usually, these documents are In a PDF format.

Pay bills

Customers have the ability to go to their accounts, log in, check their balances and check any required payments they wish to make for their credit cards, or other bill payments that are registered on their

account. They can pay all their bills online safely, easily, and quickly.

Order check or deposit book

An order check or a deposit book is a booklet of blank checks which enables a bank account holder to

draw money from his/her checking account deposits by paying bills, paying companies, etc. Internet banking has allowed their customers to order these checks online. Banks will send them to the customers by mail.

Cheque reconciliation

This is the process of matching and comparing figures from accounting records against those

presented on a bank statement. Bank
reconciliation
allows
companies
or
individuals
 to
compare


their
 account
 records
 to
 the
 bank's
 records
 of
 their
 account
 balance
in
 order
 to
 uncover
 any
 possible
discrepancies.
Internet
banking
 moves
this
service
online
to
make
customers
be
more
 comfortable
and
secure
in
 use
of
bank
 services,
which
will
increase
the
usage
of
 these
 services
 and
 customers’
satisfaction
with
them.


Make IRD payments

IRD is income you which is not receivable during the lifetime. IRD is subject to both income and estate taxes, and if possible to -skip taxes, too. The most common source of IRD is an IRA or other retirement plans. Since IRD is not received before death, it is not included on the final income tax return. However, the estate will have to pay federal estate tax, and state death tax. However, This is a service that banks have made it available online to clarified their customers of the process needed to complete such service. Rather than gong to a bank, Internet banking has simplified it to be processed electronically.

Change passwords

This service is a security issue that allows account holders to ensure that their accounts are safe from

fraud or intruders. They can change their personal passwords as many times as they want. This service requires the customer to answer some questions, to enter their old password, and to the new one, to verify their identity, then allowing them to change their personal password.

Alerts

This is reminder or a notification for customers to inform them of any new or processed transactions have occurred. This service also informs customers about balance issues, new products that have been initiated, and about transactions that have been completed.

Find locations and ATM

This service informs bank customers about the locations of the bank s ATMs. This service is most beneficial when people travel or when some ATMs are out of service or under maintenance.

Request a credit card or debit card

By
 using
 the
 Internet
 and
 accessing
 the
 bank
 website,
 customers
 are
 allowed
 to
 purchase
 or
 request
a
new
or
second
debit
or
credit
card.
These
days
many
people
are
using
debit
and
credit
 cards,
so
there
is
no
need
to
go
and
stand
a
line
to
request
such
service.



Request a loan and check status

Customers can log in, and request a loan by filling in a form that requires them to enter their personal information and loan requirements. They submit the form and receive an answer online after the bank processes the application. Some banks prefer to respond by email, while others call the customers and

explain the reasons for denying or accepting the loan request.

Housing mortgage

This
is
a
service
that
the
bank
offers
by
loaning
 money
to
 their
customers
who
have
good
credit


histories
 to
 finance
 the
 purchase
 of
 real
 estate,
 usually
 with
 specified
 paym ent
 periods
 and
 interest
rates.
The
borrower
(mortgagor)
gives
the
lender
(mortgagee)
a
lien
on
the
property
as
 collateral
 for
 the
loan. 
 Internet
banking
is
offering
 this
service
 for
 the
customers
by
requiring
 them
 to
 fill
 the
 online
 application.
 While
 the
 online
 request
 if
 processing,
 the
 bankers
 are
 fulfilling
their
requirements
to
ensure
the
customers
fulfill
 all
the
bank
requirements. 


Stock information

This service informs customers about the stock market. It sorts stock information in different ways,

such as old price, new price, etc. This service is available at most banks, but how it is presented to customers is what differentiates this service among the banks.

Tax documents and information

Banks help their customers complete many tax tasks by offering them tax documents online, helping them to complete and submit these forms online. Banks have become places where an account holder

can go ask questions and resolve difficulties they are facing with their taxes.

Tutorials and online banking help

Some banks are offering online help for the most popular questions and a chat menu that allows customers to go online on the site any time to chat with a representative to solve any problems or difficulties. Also, some banks have voice, video presentation (tutorials) explaining the process to complete some or all of their services to make it easier, more enjoyable for their customers.

Exchange and prime rates

Customers can be all kind of nationalities. Therefore, banks offer all kind of currencies to allow their

customers and account holders to find the best exchange rate so they wont lose money while converting currencies. By offering this type of service, the bank is showing how important their customers are to them (Kemal, 2001). For Example, a website that I have found converts 164

currencies. This website which have being accessed daily (http://www.oanda.com/convert/classic).

Digital Signature

This is an electronic signature that can be used to authenticate the identity of the sender of a message or the signer of a document, and possibly to ensure that the original content of the message or document that has been sent is unchanged. Digital signatures are easily transportable, cannot be imitated by someone else, and can be automatically time-stamped. This service applies the ability to ensure that the original signed message arrived means that the sender cannot easily repudiate it later. This service is a secure approach that gives the customers the safety and security they need (Sulaiman,
C.H,
and
Wee,
2 005).
 
 Internet Banking without physical branch’s' Lately, it has been versioned that there is some Internet banking websites that have been initialized without the visibility of having physical branches. These internet bankers such as First Internet Bank, which can be accessed from https://www.firstib.com/index.html, have started because they realized the importance of the electronic business and how people are increasing in the completing their financial transactions through the banks website. These internet banking websites have contracts with other physical banks in case that their customers need to go to a physical branch to solve a certain issue that couldn’t be solved online or by phone. Also, their clients can use these bank ATMs’ without any fee charges.

Appearance of ISLAMIC Banks Islamic banking or Internet Islamic Banking refers to a system of banking or banking activities that is consistent with the principles of Islamic law (Sharia) and its practical applications through the development of Islamic economics. Because Islamic Banking has its own principles and laws, it is important to describe some important facts and principles in the Islamic religion. According to Iqbal & Molyneux Islam Sharia has Ahkams (rules) that direct people:

1- Ibahat (worship) includes the activities that the Lord has approved or allowed. If God disapproves it then it becomes un-Ibahat (un-worship). 2- Amalat means that every thing (rules, finance, etc) is permitted unless it is prohibited. There are so few activities that are prohibited (Thirty Years of Islamic Banking; P9). 3- Prohibitions (Haraam and forbidden) are the activities that no Muslim is allowed to engage in such as Riba, Gharar, and Maysir (All these names are going to be defined below).

Riba:

Islam has prohibited Riba; also other religions have prohibited it too. Riba is the increase of money or the process of increasing money by adding interest as on a loan or mortgage, etc. It is important to know that there is no difference in a loan that has a fixed or variable, small or big, return of interest. Where there is interest, there is Riba (M. Iqbal &P. Molyneux; Thirty Years of Islamic Banking; P4). The literal translation of the Riba is the Arabic root Raba, which means increase and refers to the practice of lending money at an exorbitant rate of interest. The word Riba is applied where there is a perceived additional increase in the value of a transaction above the original value, size or amount (Wilson 1985:24). The prohibition of Riba is relevant to the subject of insurance because it bars any disparity between sums of money exchanged and bans all sorts of interest. As mentioned, other religions have prohibited Riba:

Judaism: Israelites were forbidden to demand any increase on the principal amount of the sum lent in transaction among themselves: do not charge your brother interest, whether on money or food or anything else that may earn interest. You may charge a foreigner interest, but not a brother Israelite. (Thirty Years of Islamic Banking; P11) Christianity: Saying by Christ to lend freely, hoping nothing thereby (Luke 6:35). By reading this sentence and going to their wholly Bible, it means that every thing belong to god and either put give it for free or give it for its value with no extra cost.

Gharar (Trading) Any prohibition in the religion of Islam is based on the Ahadith of prophet Mohamed or on the Holy Qur an. Therefore, the Quranand the Ahadith prohibit Gharar. Gharar means to unknowingly expose oneself or ones property to jeopardy. It is the uncertainty over the existence of the subject matter of a sale. So if the quantity, the type, the price, and other cases are not clearly known and described, then it is Gharar. Iqbal and Molyneux explained an example of Garar saying, A sells B 1 kilogram of apples for $5 involves Gharar because it is not clear what type of apples are the subject (Iqbal & Molyneux,Thirty Years of Islamic Banking; P11).In conclusion, Islam has given Muslims a complete way to live where they endeavor to construct their entire lives and culture in the light of values and principles of and by the guidance of Allah (God) (Khorshid, Islamic Insurance, P38). In addition, Islam precludes and rejects all those transactions that could result in speculative investment and monopoly. Therefore, Muslims with their belief and faith in Allah, follow all the instructions that Allah and Prophet Mohamed have left them, which requires them to not do any banking services and financial transaction that is prohibited as Riba and Gharar. Finally, by going back to all or most of the religions, it is well clarified how interest is prohibited which a lot of countries and baking systems are not following especially western banks. Banks profiles:

C ITI Bank Citibank is a an international bank, founded in 1812 as the City Bank of New York, then later First National City Bank of New York. Citibank is now the consumer-banking arm of financial services giant Citigroup, one of the largest companies in the world. As of March 2007, it is the largest bank in the United States by holdings. Citibank has operations in more than 100 countries and territories around the world. More than half of its 1,400 offices are in the United States, mostly in the New York City, Chicago, Miami, and Washington, D.C. metropolitan areas, as well as in California. In addition to the standard banking transactions, Citibank offers insurance, credit card and investment products. Their online services division is among the most successful in the field, claiming about 15 million users. As a result of the global financial crisis and huge losses in the value of its subprime mortgage assets, the U.S. government rescued Citibank under plans agreed for Citigroup. On November 23, 2008, in

addition to initial aid of $25 billion, a further $25 billion was invested in the corporation together with guarantees for risky assets amounting to $306 billion (Citi Bank Website, 2009). IUCU Bank As mentioned on the IUCU website that credit union is a "not-for-profit cooperative institution, a financial institution that is owned and controlled by its members, and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members at a lower cost than other banks.Indiana University Credit Union branches are located in Bloomington, Fort Wayne, Gary, Indianapolis, Kokomo, New Albany and South Bend, Indiana. IUCU is committed to financial safety and soundness. It is a financial institution that offers 21 ATMs around Indiana State to allow customers to access accounts as well as nationwide (IUCU Website, 2009). Al- Ahli Bank The National Commercial Bank is one of the most prominent of Saudi banks and was the first bank established in Saudi Arabia. The Bank initiated business in the name of The National Commercial Bank under Royal Decree on 26 December 1953. Since its establishment, the bank has maintained its legal structure as General Partnership until it was converted into a Saudi Joint Stock Company in 1997 as a first step toward initial public offering. In 1999, the Government through the Ministry of Finance's Public Investment Fund (PIF) acquired a majority holding in the Bank (Al- Ahli Bank Wbsite, 2009). Al- Ahli Bank website announces, The NCB is one of the largest Banks in terms of capital in the Arab world. At the end of 2007 the Bank paid-up capital was SR 15,000 million (US$ 4,000 million). Its total assets at the end of year 2007 totaled SR 208,717 million (US$55,658 million). The bank by the end of 2007 all around the Kingdom had surpassed 2 million clients. The Bank operates 1184 Automated Teller Machines and 10750 Point-of -Sale Terminals. 
 Also
the
bank
website
says
“ The
Bank
operates
2
international
branches
located
in
Beirut
and
 Bahrain,
 and
 3
 offices
in
 London,
Seoul,
 and
Singapore. 
 It 
 operates
 a
 comprehensive
 array
 of
 alternative
 delivery
 channels
 such
 as
 Al ‐ Ahli
 Telephone
 Banking,
 Al ‐ Ahli
 Mobile
 Banking,
 Al ‐ Ahli
Online
Banking,
Alahli
eCorp
Banking,
Alahli
ePay
Banking,
Al ‐ Ahli
Tadawul
Banking,
Al ‐ Ahli
 International
 Brokerage.
 Since
 the
 beginning
 of
 the
 90s,
 the
 Bank
 has
 been
 one
 of
 the
 pioneers
 in
 Islamic
 Banking,
 providing
 a
 wide
 range
 of
 innovative
 Islamic
 alternatives
 for


various
 traditional
 services
and
products.
 The
Bank
is
 the
biggest
 Financial
Asset
Manager
in
 the
Arab
region
and
it
is
the
first
to
 offer
mutual
funds
in
the
kingdom ” . 
 Al­Bilad
Bank 
 Bank
Albilad
is
a
Saudi
joint
stock
company,
established
 by 
 Royal
Decree
48/M
on
21/9/1425H
 (corresponding
 to
 4
 November
 2004)
 with
 a
 corporate
 capital
 of
 3,000,000,000
 Saudi
 Riyals
 (Al ‐ Bilad
Bank
website,
 2009). 
 Bank
Albilad
seeks
 to
expand
all
over
 the
country
into
 Saudi
cities
and
 regions
in
addition
 to
 providing
women's
branches
and
banking
services
centers.
The
head
office
is
located
 in
Riyadh , 
 the
capital
city
of
Saudi
Arabia. 
 Al­Jazeera
Bank 
 Bank
ALJa zira
is
recognized
as
one
of
 the
leading
 Islamic
 fast
growing
 financial
institutions
in


Saudi
Arabia
principally
serving
affluent
individuals
and
successful
national
corporations
in
the
 region.
 As
 mentioned
 on
 the
 bank
 website
 that
 “ Bank
 ALJazira
 was
 estab lished
 in
 June
 of
 1975
 and
 began
 a
 restructuring
 process
 in
 1992.
 A
 new
 management
 team
 was
 appointed
 in
 1993
 to
 continue
 the
 restructuring
effort,
and
successfully
introduced
state
of
art
 technology,
modern
 banking
products
and
services
and
revamped
its
staffing
portfolio.
As
a
result
the
bank
became
 profitable
in
1995
and
it
steadily
increased
the
return
of
investment
since
then” . 
 Moving
into
 the
Shari'ah
 (Islamic
 rules)
 compliant
 banking
was
a
 preliminary
 point
 for
Bank
 ALJazira
and
it
led
to
the
outstanding
growths
in
the
past
five
years.
Bank
ALJazira
has
achieved
 progressive
growth,
which
was
mainly
due
to
its
continuing
efforts
to
improve.
 Bank
 ALJazira
 is
 becoming
 a
 premier
 bank
 in
 Saudi
 Arabia
 that
 provides
 high ‐ net ‐ worth
 individuals
and
large
insti tutions
with
innovative
banking
solutions
that
are
compliant
with
the


Islamic
Shari'ah
in
an
exclusive
 ambiance 
 (Al ‐

Al-Rajhi Bank Al
Rajhi
website
specifieds
 that
“the
Rajhi
bank
was
 Founded
in
1957,
Al
Rajhi
Bank
is
one
of
 th e
 largest
 Islamic
 banks
 in
 the
 world
 with
 total
 assets
 of
 SR
 124
 billion
 (US$33
 billion ),
 a
 market
 capital
 of
 US$4
 billion
 and
 an
 employee
 base
 of
 over
 8,000
 associates.
With
 over
 50
 years
 of
 experience
 in
 banking
 and
 trading
 activities,
 the
 various
 individual
 establishments
 under
 the
 Al
 Rajhi
 name
 were
 merged
 into
 the
 umbrella
 'Al
 Rajhi
 trading
 and
 exchange


Jazeera
Bank
Wbsite,
2009).

.
 


corporation'
in
1978
and
it
was
in
this
year
that
the
bank
was
also
established
as
a
Saudi
share


holding
company ” . 
 
 Deeply
 rooted
 in
 Islamic
 banking
 pr inciples,
 the
 Sharia
 compliant
 banking
 group
 is
 instrumental
 in
 bridging
 the
 gap
 between
 modern
 financial
 demands
 and
 intrinsic
 values,
 whilst
spearheading
numerous
industry
standards
and
development.


With
an
established
base
in
Riyadh,
Saudi
Arabia,
Al
Rajhi
Bank
has
a
vast
network
of
over
400


branches,
 over
 100
 dedicated
 ladies
 branches,
 2,000
 ATM's,
 15,000
 POS
 terminals
 installed
 with
 merchants
 and
 the
 largest
 customer
 base
 of
 any
 bank
 in
 the
 Kingdom.
 
 The
 first
 men's
 branch
was
opened 
in
Aldirah
in
1957,
with
the
first
ladies
branch
being
opened
in
Alshmaisi
in
 1979
( Al ‐ Rajhi
Bank
website,
2009) 
 Al-Arab Bank Al
Al ‐ Arab
website
specifies
 that
 “The
bank 
mission
has
been
 the
road
map
 for
leading
 to
 the
 bank's
significant
role
in
developing
Arab
economies
th rough
financing
strategic
infrastructural
 projects
across
the
Middle
East
North
Africa
region
(MENA)” . 
 The
bank
has
 Headquarters
based
in
Amman,
Jordan,
the
Arab
Bank
constitutes
the
first
private
 sector
financial
institution
in
the
Arab
World. 
 Said
in
the
website
at
 the
 end
of
2008,
Arab
Bank
Group
achieved
a
pre‐ tax
profit
of
US
$1.06


billion.
Total
assets
reached
almost
US
$45.6
billion,
while
shareholders'
equity
base
is
US
$7.5


billion 
Al ‐ Arab
Bank
Website,
2009). 
 The
Arab
Bank
has
an
unmatched
Global
 Arab
branch
network
with
500
branches
spanning
30
 countries
in
5
continents.
 The
Arab
Bank 
enjoys
prominent
positions
in
key
 financial
markets
 and
centers
such
as
London,
New
York,
Dubai,
Singapore,
Zurich,
Paris,
Frankfurt,
Sydney
and
 Bahrain. 
 Also,
 The
 bank
 offers
 a
 variety
 of
 products
 and
 services
 covering
 four
 major
 areas:
 Personal
Banking,
Corporate
and
Investment
Banking
(CIB),
AB
Private
Banking
and
Treasury,
 which
 are
 catered
 to
 serve
 the
 needs
 of
 individuals,
 corporations,
 government
 agencies
 and
 other
international
financial
institutions. 
 Said
on
the
website
that
“ On
13th
August
2008,
Arab
Bank
obtained
the
license
to
establish
and
 operate
a
fully
owned
subsidiary
in
Khartoum
 – 
Sudan,
under
the
name
"Arab
Sudanese
Bank",
 which
is
intended
to
offer
 a
full
range
of
banking
products
and
services
that
are
Islamic
Sharia
 – 


compliant.
The
bank's
paid
up
capital
is
US$
50
million
and
is
expected
to
launch
its
operational


activities
by
the
end
of
the
first
quarter
of
year
2009” . 


Al ‐ Wahda
 Bank
 is
 Libya's
 fifth
 largest
 bank
 with
 assets
 of
 US$
 3.85
 billion
 and
 20%
 of
 the


market
with
71
branches
across
the
country.
The
Bank
is
licensed
to
carry
out
all
commercial


banking
activities.
During
early
2008,
Arab
Bank
plc
acquired
19%
of
Al ‐ Wahda
Bank
with
the
 right
to 
increase
its
share
to
51%
within
a
period
of
3
– 
5
years
Al
 – Arab
Bank
website,
2009) .
 


Table of Comparison between all Saudi and American banks:

Bank Services
Bank
Services

C ITI

IUCU

Al- Ahli

Al-Bilad

Al-Jazeera

Al-Rajhi

Arab

Open account

X

NO

NO

NO

NO

NO

NO

Access account

X

X

X

X

X

X

X

Electronic check conversion

X

X

X

X

X

X

X

Transfer funds

X

X

X

X

X

X

X

Bank statement

X

X

X

X

X

X

X

Purchase bank products

             

Download account information

X

X

X

X

X

X

X

Pay bills

X

X

X

X

X

X

X

Order check, book

X

X

X

X

X

X

X

Cheque reconciliation

   

NO

NO

NO

NO

NO

Make IRD payments

   

NO

NO

NO

NO

NO

Change passwords

X

X

X

X

X

X

X

Alerts

X

 

X

X

X

X

X

Bank and ATM locations

X

X

X

X

X

X

X

Request credit\debit card

X

X

NO

NO

NO

NO

NO

Request loan

X

X

NO

NO

NO

NO

NO

Housing mortgage

X

X

NO

NO

NO

NO

NO

Stock information

X

 

X

X

X

X

X

Tax documents and information

X

X

NO

NO

NO

NO

NO

Tutorials and online banking help

No

X

NO

NO

NO

NO

NO

Exchange and prime rates

X

X

X

X

X

X

X

Digital Signature

X

X

NO

NO

NO

NO

NO

Overdraft

X

X

NO

NO

NO

NO

NO

Investments

X

X

X

X

X

X

X

Products for sale

X

X

X

X

X

X

X

The difference between Banks in USA and Saudi Arabia It has been surprising me how much the Saudi banks, consumers, and the banking clients are un- welling to trust the Internet and its technologies. It have been since the beginning of the research on this topic, so clear that the Saudi Banks are un-accurate of the information they provided on their websites and are un-welling for fully internet banking implementation. Fore example, most of the Saudi banks announce the availability of opening an account online and while processing the service it is discovered that it is un-possible to fully accomplish it online. At the middle of the process it asks the user to accomplish the rest of the process in the branch for security and identity issues. Otherwise, it is fabulous to acknowledge that Saudi banks have started some of the implementations of internet banking services, but the time have came to fully accept the implementation of the whole services to allow costumers to forget how banks even look like physically. While contacting several bankers who most are not involved in the IT sector, but are clustered in the banking field, they clarified that security is an issue to the Saudi government as well as it is to the bankers, and to the clients. Also, while the Internet and e-commerce are new to the Saudis’, Clients are not fully adapted to the mutuality of using money transactions online. With all that, still there are a bunch of services, which are online and customers are using it such as paying bills online, and buying stocks online. One of the biggest issues I had while trying to navigate and search for the available services on the Saudi banks website is that most of them do not include a search engine or a site map, which simplifies a search for any searcher. With all what have been said about the Saudis and the Saudi banks, USA that is a highly ranked in economy, innovation, and technology also has shortness with some of its banks services. Fore example, IUCU does not allow customers to open accounts online too. I even found the same

problem with the IUCU, but the Citi bank website had the ability to search, so it was easy to search for the services and try them to confirm their ability. Recommendations and Foundlings It is obvious of how important Internet banking have become especially with the global business that took place in the whole world lately. In addition, with time change between investors as it is with money currencies, it is so important to have Internet banking, which enables all the accurate information, enables all the account processing changes, and identifies all the confusions that customers and investors might have. Therefore, it is obvious that Saudi Banks should implement and provide all the services that they provide physically to be implemented electronically (online). Saudi Banks have forced in the past their customers to use ATMs’ rather than being in the physical branch bank by not serving the customers for the services that can be processed by an ATM. Also, they have employed bankers only to serve those who are not confable or don’t know how to use ATMs’. Those bankers job is to be near ATMS all working hours to ensure that customers are successfully accomplishing their services on the ATMs’. The same decision should take place by offering computers in the bank to enforce the customers to accomplish their services online rather than standing in a queue in a bank to complete their request. It is found that customers can not open accounts online, can not request Cheque reconciliation online, can not Request credit\debit card online, Request loans online, and can not request Housing mortgage online. All these are unable to be fully processed for security and identity issues. Of course Saudis do have a tracking and identifation system as the social security called (AHWAL). Finally, while describing and explaining the services that banks all around include, I was explaining what the service is for and how electronically it should be implemented. For example, at the currencies and rate exchange, it was clear while explaining that it is an important service and tool for customers who travel a lot or who do this kind of business of selling currencies, and for international customers who need to exchange while transferring overseas. I gave an example of a tool that could be used for such service and while navigating all the banks website, I discovered that they types the rate exchange for the currencies in text with out using any calculating tool to make it more easy and enjoyable for their customers.

Conclusion With all the benefits of having the banking services accomplished from anywhere that Internet exists, is available and with the availability of having the services 24/7, it is an issue for the Saudi to adapt to the electronic system. Finally, the Saudi government is lunching the E-government with the mentality of un-accepting any government documents to be accomplished physically, which means they are encouraging the Saudis’ to start being involved in e-government as well as encouraging them to adopt to e-banking or money processing through the internet.

References

Journals and Articles

Kallstrom, Olle (2000). Business Solution For Mobile E-Commerce. Ericsson Review, 2,

Retrieved 01-01-2009.

Ainin, Sulaiman, Lim, C.H, & Alice, Wee (2005). Prospects And Challenges Of E-Banking In

Malaysia. EJISDC, 22,1,1-11, Retrieved 01-01-2009.

E. Anguelov, Christoslav, A. Hilgert, Marianne, & M. Hogarth, Jeanne (2004). U.S

Consumers and Electronic Banking, 1995-2003. Federal Reserve Bulletin, Retrieved 01-01-2009.

Altinkemer, Kemal (2001). Bundling E-Banking Services. ACM, 44, Retrieved 01-01-2009.

Liao, Shaoyi, Pu. Shao, Yuan, Wang, Huaiqing, & Chen, Ada (1999). The Adoption Of

Virtual Banking: An Empirical Study. Pergamon, 63-74, Retrieved 01-01-2009.

A Consumer Guide to E-Payments. FTC FACTS, Retrieved 01-01-2009, Retrieved from

www.ftc.gov

X. Xu, Mark, Wikes, Siobhan, & H. Shah, Mahmood (2006). E-Banking Application And

Issues In Abbey National PLC. E-Technologies, Retrieved 01-01-2009.

Poole, H. W., Lambert, L., Woodford, C., & Moschovitis, C. J. P. (2005). The Internet: A

historical encyclopedia. Santa Barbara, Calif: ABC-CLIO.

Bidgoli, H. (2004). The Internet encyclopedia. Hoboken, N.J.: John Wiley & Sons.

FTC FACTS For Consumers. FTC FACTS, Retrieved 01-01-2009, from www.ftc.gov

Websites

http://www.islamic ‐ finance.com/indexnew.htm.
 R etrieved
 May
 2,
 2009,
 from


Prompting
Genuine
Islamic
Finance
Since
1997.
 


http://abdullahharon.blogspot.com/2007/03/sudan-background-of-islamic-banking.html.

Retrieved May 2, 2009, from History Of Islamic Banking.


 (8/1/2006).
 IRDs
and
Retirement
Accounts 
.
Investment
Advisory.
Retrieved
on
04‐ 05‐

09
from
http://www.investmentadvisor.com/Issues/2006/August%202006/Pages/-IRDs-and-

Retirement-Accounts.aspx

Business servicesss Industries, SAUDI ARABIA: PROFITS OF AL-JAZEERA BANK UP 45%, retrieved on 03-20-09 by

http://findarticles.com/p/articles/mi_hb6465/is_200010/ai_n26263383

Books

(2001). Electronic banking: the ultimate guide to business and technology of online banking. Braunschweig: Vieweg. Abbˉudah, A (1985). Al-Ni · zˉam al-bankˉi f ˉi al-Mamlakah al- Arabˉiyah al-Sa ‘ˉud ˉiyah . Jeddah, Saudi Arabia. Iqbal, M., & Molyneux, P. (2005). Thirty years of Islamic banking: History, performance, and prospects. Houndmills: Palgrave Macmillan. Khorshid, A. (2004). Islamic insurance: A modern approach to Islamic banking. London:

RoutledgeCurzon. Murphy, P., & Meadhra, M. (1999). Banking online for dummies. --For dummies. Foster City, CA: IDG Books Worldwide.

Banks
Websites
 Al­Ahli
 Bank
 http://www.alahli.com/index.asp 
 Al
Jazira
 Bank
 http://www.baj.com.sa/default. asp?lng=eng 
 Al­Bilad
 Bank
 http://www.bankalbilad.com.sa/en/ 
 IUCU
Bank 
 https://www.iucu.org/ 
 Citi
Bank
 
 http://www.citibank.com/us/index.htm 
 Al­
Arabi
Bank
 
 http://www.anb.com.sa/default.asp 
 Al­
Rajhi
Bank
 
 http://www.alrajhibank.com.sa/pages/default.aspx