[ronnierules]

A. Internet Banking in the United States: -

• An average industry estimates indicates the about 13 million US households banked online by the end of 2000 – twice as many as in the previous years.

• At the beginning of 2001, 37% of all US national banks, including nearly all of the largest national banks, were offering full transactional capabilities online – a near twofold increase in little over a year.

• Banks offering Internet-based transaction service – and there are more of them each day – should be well positioned to compete in the financial markets of the future.

 New Risks: -

• Internet banking poses risks that are different from those that bank supervisors customarily dealt with in assessing credit, market, or interest rate risk.

• First, banks must manage the unprecedented speed of technological change, and assess how it relates to their technology investments and their ability to provide consistently high-quality customer service.

• Second, bank is increasingly dependent on third parties to provide the necessary Information Technology.

• Security is another area of significant risk. So far, relatively few financial institutions have reported being victimized by online security violations.