The delivery of services via the internet to consumers or other businesses can be referred to by the generic term of e-services. There is a wide range of e-services currently offered through the internet and these include banking, loans, stock trading, jobs and career sites, travel, education, consultancy advice, insurance, real estate, broker services, on-line publishing, and on-line delivery of media content such as videos, computer games, etc. This list is by no means exhaustive and it is growing all the time. In this lecture, we will give an overview of eservices.
In order to bring some order to the discuss of these wide variety of e-services, we organize them into the following categories, namely
- Web-enabling services, which were previously provided by humans in office agencies and/or their branches. The primary purpose here is that these services help to save time and effort for the user; bring convenience, and improve the quality of life. In many cases, it can result in a reduced cost for the consumer.
E-services that fall into this category include
- Stock trading
In some cases, this may bring a new dimension to the original service, enhancing and altering it. E-education is an example of this. It may also bring into the catchments new groups of consumers of the service to whom it might not have been previously accessible.
- Matchmaking services. These take a need from an individual or business customer and provide mechanisms (from providers) for matching that need.
E-services that fall into this category include
- Jobs and employment sites
- Loans including mortgage loans
- Real estate sales
The advantage of this kind of matchmaking through the internet is that the ability to search electronically over a wider area to satisfy the customer need and to more precisely meet the customer need is greatly facilitated by both computerization and communication over the internet.
- Information-selling on the web. This group essentially sells information content of one sort or another and includes ecommerce sites that provide on-line publishing such as web-based newspapers
- consultancy advice
- specialized financial or other information
- Entertainment services. These provide internet-based access to videos, movies, electronic games, or theme sites. This E-entertainment sector is expected to grow rapidly in the next few years, with a convergence of TV and internet-based technologies.
- Specialized services such as auctions. Many different auction sites have appeared and these are discussed further in this lecture. It is not possible to discuss all the different eservices in this lecture and so we will briefly sample only a few examples for each category.
Web-enabled services include personal banking, stock trading, and education.
Security First Network Bank (SFNB;)was the first internet bank. It provides most of the banking services on the web. Therefore, you can do your banking with your fingers instead of your feet. Looking at e-banking, we can distinguish between twp distinct models:
- Pure cyber banks
- Traditional banks that provide e-banking to complement their retail banking SFNB. is a pure cyber bank, while the homepage of Bank of America illustrates the second model.
While not all banks offer the full range of services on the internet, banks in both the mentioned groups offer a varied range of services including
- personal banking
- commercial banking for both small businesses and large corporations
- financial services
- loan application services
- International trade including settlement instruments, foreign exchange transactions, etc.
There are significant advantages for either the individual or corporation as well as the bank in using e-banking. An individual doing personal banking on the internet can, amongst other things, pay bills, do account transfers, make queries on account balances, obtain statements, in some cases view images of checks, etc., and import transactions directly into home account management software. Furthermore, one can make such transactions 24 hours a day from any place with internet access around the world. In addition to these, a number of banks offer personal financial services including making personal loan applications on the internet. All these represent a large increase in convenience and time saving for the bank customer, saving him trips to the bank branch, queuing, etc.
The advantages to the banking institutions themselves include
- Reduction in the number of retail banking branches, saving rentals or ownership of the related properties.
- Reduction in staffing because of the reduction in paper processing as well as face-to face bank teller contact.
- Bringing about increase in the time the bank hangs on to the money before making the required transfers, leading to increase in interest received by the banks. These advantages are so significant that some banks offer customers a number of incentives to -switch to internet banking, such as free checks, reduced fees, increased deposit rates, etc.
E-stock trading and e-investing
Several companies such as E-Trade .Datek.on-line, American Express Financial Services, etc. allow you to trade stocks, bonds, mutual funds, etc. on the internet. These companies offer you to trade at a very small cost compared to discount brokers or full-service brokers. This has resulted in these on-line trading companies grabbing an increasing market share. In response to this, discount brokers including Charles Schwab and full-service brokers have also moved to introduce internet trading of stocks.
The steps involved essentially are the following:
- Place a request to trade, say buy a stock
- The system responds with current “on the web site” prices
- The internet trader has to confirm this trade or cancel it several companies allow one to create a simulated portfolio, which one watches over time without actually buying or selling the stocks in reality. An example of this can be found on the Smart Money site.
The major advantages to the person doing the trading are
- tThe reduced cost;
- The convenience of being able to trade anywhere in the world with internet access, e.g. while travelling; and
- Access to a wide variety of information on a number of sites.
In addition to actually allowing you to trade, these sites provide a considerable amount of information. The reduction in margins available to stockbrokers as a result of internet trading is beginning to have an effect on other more traditional forms of brokers. This has led to some traditional brokers also providing internet trading of stocks.
A number of e-universities are being spawned around the world. Again, three models can be seen:
- Pure cyber universities, such as Jones International University
- Traditional universities setting up new cyber vehicles for providing university education perhaps with other business partners. An example of this the Hong Kong CyberU .which was set by the Hong Kong Polytechnic University and Pacific Century CyberWorks.
- Traditional universities offering courses themselves on the internet. There are a number of web-based technology tools for this purpose. An example is Web CT. A number of so called “open universities” that previously provided distance learning have moved into providing an internet-based version of their courses. These traditional universities have a number of advantages. They can now reach a client base that is outside their catchment. They also expect to be able to deliver these courses at a reduced cost; however, the jury is still out on this. Another advantage a traditional university has on the internet over a new pure cyber university is that it has an established brand name. There are a variety of issues that need to be explored carefully when preparing to deliver educational material on the internet and these include the following:
- Does one use a distance learning model where the student uses a PULL model to acquire the material?
- Does one use a traditional lecture model using video streaming? This is a PUSH model whereby a teacher “pushes” the materials to the students.
The use of the ‘internet for education opens up many possibilities, namely use of quizzes, tests to provide the student with instant feedback on his/her mastery of the materials, use of graphics and animation to explain concepts, particularly those that have a dynamic character to them. It is anticipated that the internet will not only lead to cyber universities of one kind or another but will also have a marked effect on teaching and learning in traditional universities. One among some of the innovations that are being explored is the joint teaching by two universities on different continents in order to enhance the learning experience.
This has perhaps been the area in which there has been the greatest growth in eservices. Essentially, in most of these applications, the customer who could be an individual or business specifies his requirements in relation to the service.
The e-commerce site then does a search over its own databases or over the internet using mobile agents, or over other databases or web sites to look for one or more matches to these requirements. The information is then returned to the e-service provider site to give the customer the required service.
Before the internet, one might have gone along to a travel agent in order to book one’s travel requirements such as air tickets, train tickets, car hire, hotel, tours, etc. The travel agent would try his best to meet these requirements by providing information regarding schedules, pricing, promotions, as well as suggestions on changes to de itinerary. These bookings could be for individuals or corporations involving corporate rates, etc.
A large number of e-commerce sites have appeared, which address this precise market segment. These include trip.com travelweb.com, and priceline.com. These web sites work in exactly the same way. When a customer provides requirements, these sites do a search of their own databases or send agents our _ explore other web sites and respond to the consumer. Amongst the requirement that the customer could specify is an acceptable price.
A number of sites, such as priceline.com, require that provided the price specified is met, the customer cannot refuse the offer found. These ecommerce sites are beginning to grab an increasing part of the travel market. They are attractive to consumers because of the convenience, the ability to meet requirements such as specified prices, and in some cases like lastminute.com, a special customer need (i.e” booking at the last minute). These travel sites often also have a lot of information on promotions, suggestions,etc., which are useful for customers. These ecommerce sites are having a strong “disintermediation” effect. Disintermediation refers to the removal of intermediaries such as travel agents from the process involved in the purchase of the service.
A recent increasing trend has also seen the primary provider of a service such as an airline introducing internet based booking at reduced prices, further emphasizing the disintermediation effect.
E-employment and e-jobs
There are several different kinds of services provided here, namely
- sites where you can get advice on developing your resumes and can post your resumes on the web
- recruiters who use the web site to post available jobs, such as Hot jobsor Jobdirect
- employers who list available jobs on the web sites
- matchmaking facilities that search the internet for jobs for jobseekers based on a specification, such as
- matchmaking facilities to search the internet for resumes that best fit a job description given by a prospective employer use of agents to do the search These approaches of using the internet for e-employment or ejobs avoid many of the costs and difficulties associated with traditional approaches to advertising, such as high cost, limited duration, and minimal information.
In some areas, such as real estates e.g., the visualization ‘(3D’ facilities provided on the web allow one to either
- show visualizations of buildings at the drawing board stage, or
- allow people distant from the physical site of building to actually visualize it
This area of matchmaking and brokering services is expected to grow greatly in the near future with e-commerce sites exploiting new market niches. This is also an area with the greatest likelihood of disinter mediation, and traditional agents or brokers will have to build new dimensions to their services in order to survive.
This is expected to be a growing area of e-commerce in the future. A number of companies are gaining access to or have purchased large inventories of movies or other entertainment material with the view of allowing people to download this on the web. Sites here vary from theme sites that use a small amount of interactive entertainment to promote their products, such as Disney, to others that provide games either for a fee or are free coupled together with advertising that pays for the site. An important issue here is that the payments involved are relatively small for each transaction, and hence the use of micro payment techniques is likely to be of considerable importance here.
Electronic Commerce and Banking
“Banking is vital to a healthy economy. Banking as a business can be subdivided into five broad types: retail, domestic wholesale, international wholesale, investment, and trust. Of all these types, retail and investment banking are most affected by online technological innovations and are the ones that stand to profit most from electronic commerce. The role of electronic commerce in banking is multifaceted impacted by changes in technology, rapid deregulation of many parts of finance, the emergence of new banking institutions, and basic economic restructuring.
Given these environmental changes, banks are reassessing their cost and profit structures. Many banks feel that in order to be profitable they need to reduce operating expenses and maintain strict cost control. This philosophy is evident in the many mergers and acquisitions occurring in the banking industry. The challenge behind bank restructuring lies in adequately operational zing the notion of cost control.