How Can Malaysian Banks Make Internet Banking Successful Finance Essay

As all of us know, the banking industry has experienced intense changes during the last decade. There are mergers and acquisitions between banking institutions, increase in sizes which they operate and the combination of banking with other financial services. It is known that all the changes made by bank nowadays are to increase public's access to financial services and to achieve customers' satisfaction. In respect of customers, the recent changes in banking are more likely to benefit them as they are able to choose between small and large banks for their financial services. Sooner or later, there comes the likelihood of transformation of brick-and-mortar banking to internet banking in the banking industry from all over the world.

So, why does this transformation become an issue which concerns all in the industry? First of all, internet banking suits the busy lifestyle of many individuals. It has become increasingly popular and many consumers are able to conduct all their banking transactions online without having to queue in the local bank. Working in a similar manner to brick-and-mortar banking, internet banking differs in the way one is making payments, accessing the account and personal information, and reconciling statements. By just a click, customers can easily perform their banking transactions and activities in front of their computers or mobile devices with an access to internet. This banking technology innovation somehow helps all the financial institutions to reduce labour cost and save the funds for other usages like investment. This not only can enhance the company's position in the market, but also can help to keep track with the advancement in technology.

Internet and brick-and-mortar banking have their advantages and disadvantages to consider. The choice of internet banking versus brick-and-mortar banking is often based on one's lifestyle and priorities. After all, it depends on the people who prefer to have accounts either at the brick-and-mortar bank or internet banking.

Brick-and-mortar banking

By definition, brick-and-mortar bank is a company or business that has a building, store or shop which is made of bricks for operational and commercial purposes. It must possess a physical store in order to provide services to customers and offer face-to-face customer experience.

The first idea of banking dated back to 1800 BC in Babylon where people started to make loans. The first brick-and-mortar bank appeared to be a temple in ancient Greece. Inside the Greece temple, people had conducted financial transactions such as deposits and loans. During the times of Roman, banking activities were very active and thus, brick-and-mortal banks had gradually begun to grow at that particular time. The banking services during that time allowed bankers to lend money easily to those who needed it. Most of the bankers were private individuals and they often conducted transactions through face-to-face. In renaissance period, banking became more identical to modern banks in terms of bank's functions. They were normally operated by big families such as the family of Medici, Bardi and Peruzzi. In Malaysia on the other hand, Bank Simpanan Nasional was once called Post Office Savings Bank where people keep their money in a post office. Till then, with the establishment of National Savings Bank, it has focused its efforts on restructuring the organization and facilitating the regulations so as to provide convenience and better service to the storage keepers in every corner of the country.

As time goes by, most of the banks have been starting to operate in offices at this modern decade. With the legislations introduced by government, banking rules and regulations were formulated and strengthened in order to enhance the establishment of all financial institutions. Brick-and-mortar banking has been a good financial service provider to those customers who demand face-to-face customer services. Not only does it offer a high level of comfort to customers, it also ensures their money is right around the corner when the customers need it rather than just a digital number on a computer screen.

Advantages and disadvantages of brick-and-mortar banking

No doubt, brick-and-mortar banks have their pros and cons over other banking systems. First and foremost, its ability to offer a higher quality of customer services especially face-to-face conversations between customers and the bankers is one of the brick-and-mortar banking's advantages. The bank's staffs are able to give advices on savings, deposits, loans as well as investment options to their customers. When the customers face problems or doubts regarding to their banking activities, they are able to visit any of the bank branches and have a direct discussion with the bankers to solve the obstacles. Besides, the brick-and-mortar banks also provide the automated recordings to answer the customers' questions through phone calls. Acquiring the advantages from these facilities, customers can understand more about the products and services which are offered by banks.

On top of that, brick-and-mortar banking offers a wide range of products. Brick-and- mortar banks offer savings and deposits facilities as well as loans for automobiles and houses. Some banks may provide advisory services for their customers too. Moreover, it maintains a fully-developed automated teller machines (ATMs) network so as to enable the customers to deposit and withdraw funds through ATMs 24 hours a day and 7 days a week. With the advancement of technology lately, brick-and-mortar banks have developed their ATMs in providing the check deposits services. Also, the availability of bank branches throughout nations and overseas has made brick-and-mortar banks convenient to provide services and satisfy customer needs as much as they can. They are able to utilise resources as well as mobilise the funds effectively. Besides, it can lower the overall risk such as the risk of non-performing loans.

However, brick-and-mortar banking has its weaknesses too. It has to bear an extremely expensive operation costs in maintaining their physical branches. Each physical branch generates a list of expenses which includes rent, real estate taxes, utility bills and wages. For instance, in order for brick-and-mortar banks to maintain their operation smoothly, they need to spend more money to recruit as well as to train their employees the skills which deal with customer services. In addition, if the bank branches are located in major metropolitan areas, their operating costs will be even higher. To find a suitable location for a bank to operate is also one of the drawbacks for brick-and-mortar banks. As these banks have to bear a higher maintenance costs to maintain their premises, they normally are able to offer lower interest rates to their customers only.

Furthermore, brick-and-mortar banking is not as convenient as internet banking. Though brick-and-mortar banks offer automated teller machines which enable their customers to conduct banking transactions such as savings and deposits, customers will have to go to local branches with ATMs services whenever they want to conduct their banking transactions. They might need to spend their time driving or walking to the bank. Besides, customers can only do their banking transactions during bank operations from Monday to Friday. Thus, it is way too time consuming to conduct banking activities in a brick-and-mortar bank.

Each banking system has its own pros and cons. Therefore, every bank has to further improve their products and services in order to compete in this ever-changing global environment.

Internet banking

Online business or e-commerce, a business which is based on internet to sell or trade products or services, has no physical presence in conducting the business. This goes about the same with internet banking. In this case, internet banking is when the bank provides services and allows the customers to conduct financial transactions through the use of internet. Most of the banks have their own brick-and-mortar banking as well as internet banking whereas some banks operate with brick-and-mortar only.

Internet banking has few special features which the traditional brick-and mortar-banks do not possess. One of the features is that every customer can access to their account 24hours a day and 7 days a week which allows them to manage their financial activities and cash flows easily. With just a click, internet banking provides financial services which the customers can make payments and transfer funds easily and efficiently.

The history of internet banking traced back to 1980s when banking services were provided through the phone. Later, internet banking services were started in 1983 in UK, and the services were provided by Bank of Scotland to its customer of Nottingham Building Society only. At that time, people connected telephone with their computer in order to conduct internet banking activities such as payment and money transfer. However, a check must be sent to the payee in order to make the payment a success.

Nonetheless, in year 1995, internet banking services were offered to regular clients or citizens when presidential savings bank allowed regular people to use the internet banking services. Sooner and later, all banks around the globe have started to adopt internet banking services and that is where the popularity of internet banking begins around the world. Yet, there are people who do not trust internet banking services although banks have given up their best in providing a good internet security system. Some still prefer conventional brick-and-mortar banks which give them more confidence as compared to internet banking.

Advantages and disadvantages of internet banking

Advantages of internet banking can be categorized into few terms and first of all, we would like to discuss about the convenience of internet banking. Having an internet banking account is simple and user-friendly. For those who have experienced it, they would know that opening an internet banking account is easy and it saves up time whenever we need it. As people are getting busy nowadays, internet banking allows us to do banking transactions 24/7, whenever and wherever we are. Unlike traditional banking, internet banking is just a mouse click away. It allows you to do transactions faster and safer. It makes us easy in comparing the services, interest rates, information and promotions offered by the banks.

Internet banking has vast features. With internet banking account, we can pay bills, track our savings, transfer money, and check our statements anytime. Imagine, if we need to go to the bank to check our bank statements or to transfer money, you will find out that queuing in a long line and wasting your time are unavoidable. In fact, this case might be different if you are using internet banking system. Customers may request alerts via e-mail or text messages in some situations or at some specific time. It reduces the number of times the customers have to check their accounts simply by logging in the bank's website.

Lastly, the advantage is about the ease of services. Internet banking not only saves us from paper clutter of all the billing statements mailed to our office or home, but also saves trees with those electronic billings, which do not include any papers. Every individual can keep those billings as long as the account is valid and need not worry about the place where they keep it. If we are still new with the internet banking system, we are encouraged to visit the bank's website for a free demo or tutorial so that we will be able to learn the needed skills shortly and effectively.

Even though internet banking offers convincing services to the customers, it may bring few disadvantages too. Security and safety of using internet banking are the most concern of all. As all of us know, internet banking does not need us to show our identification code and signature. This means that everyone can make transactions with their accounts as long as they have identification number and password. Although signatures and identification code are quite difficult for unauthorized parties to forge, those numbers can be hacked by using some designated software. Consequently, one is susceptible and vulnerable to fraud cases once they involve in internet banking services.

Availability of internet banking has eliminated some brick-and-mortar banking too. Due to the reduction of operating costs, internet banking eliminates and lowers the number of bank branches. As some banking processes need to be dealt with face-to-face conversation instead of phone, mailing or text messaging, elimination of brick-and-mortar banks has worsen the situation. Customers might not have sufficient physical locations to conduct the banking transactions anymore. Furthermore, if you use a bank which does not have a physical location, you will have to mail your deposits to your online bank. For this case, you may have to wait for one or two weeks in order for your deposits to be received or processed. Sometimes, mailing can be failed due to any invalid reasons that you would not know in some situations too.

Moreover, the accessibility of internet banking is one of the disadvantages due to maintenance and periodic upgrade of the system. Depending on the schedule, this case might happen at any odd times which the information could not be available to customers. Also, online bill payment of most banks does not provide the date once the funds are sent. Hence, it is of utmost importance for us to read the terms of service of bill pay so as to keep informed of the duration the bank takes to send your payment. This indeed can avoid any late payment to your respective parties.

Last but not least, it concerns about the customers themselves. Customers must have some basic computer skills and internet knowledge in order to get familiar with the internet banking. If the customers could not fully utilize the functions and resources provided by internet banking, they might find it troublesome to use internet banking as compared to visit the brick-and-mortar banks.

Differences between brick-and-mortar banking and internet banking

Operation method.

Brick-and-mortar banking is where the banks conduct their services via physical offices and branches whereas internet banking is a virtual bank that offers services through internet.

Interest rate offered

Internet banking offers higher interest rates and other money-saving benefits as compared to brick-and-mortar banking as they are operated based on cyberspace which in turn causes a lower overhead costs. Besides striking to cut down their operation costs by hiring a limited amount of workers, internet banking avoids the costs of buildings as well as the utility costs. On the other hand, interest rate is not the strong point for brick-and-mortar banks. Each brick-and-mortar bank has hundreds or even thousands of branches with each costing millions to build and fill with workers. Therefore, brick-and-mortar banks have to bear and overcome their higher daily operation costs.

Customer service

Brick-and-mortar banks offer face-to-face services when dealing with customers' doubts. Besides, by using automated recordings, bankers will answer customers' calls in order to clear off their doubts. In contrast, internet banking does not offer face-to-face conversation and services to their customers. Communication devices such as email, instant messaging and so forth are usually unable to clear the customers' doubts and solve their problems effectively. This is usually caused by misunderstanding or misinterpreting of the message given by bankers. Internet banking does not offer easy withdrawal services to their customers too.

Accessibility of money,

Brick-and-mortar banks usually offer quicker and easier access of money. Apart from a network of automated teller machines, it also provides easier non-electronic deposits. On the other hand, internet banking is usually slower in transferring and depositing money. The internet banks will accept the check deposits or paper check but it takes a longer time to deposit. This is because the check deposits have to mail to the banks and it takes several days before the funds are available to be accessed. Besides, the customers of internet banking have to expose to a higher fees as most internet banks do not maintain their own automated teller machines(ATMs) network, thus, their customers have to pay fees when they use ATM to make any withdrawals.

The degree of convenience and flexibility of services

The best of internet banking is they offer the superb online system or web interface for their customers to perform a wide range of banking transactions such as paying bills and transferring funds electronically through their web sites. Besides, it offers a very convenient and effective approach for the customers to manage their finances as the information on the web site is always updated and current. In contrast, brick-and-mortar banking does not offer this kind of services. When the customers want to do any banking transactions, they have to visit any of the local bank branches in order to complete the transactions. Therefore, in terms of convenience and flexibility, internet banking is more superior to brick-and-mortar banking.

The existence of gap between brick-and-mortar banking and internet banking is common in the banking industry. Each banking system has their own advantages and disadvantages in respect to fulfill the customers' needs. To choose the best alternative for our banking activities, it depends on our needs and convenience up to the point where we are fully satisfied with the services provided.

The transformation from brick-and-mortar banking to internet banking

Although internet banking is less time and cost consuming in conducting all sorts of banking activities, the transformation from brick-and-mortar banking to internet banking is not a simple job since there are lots of applications, database and technical skills needed to maintain the whole internet site.

In the process of transforming banking system from brick-and-mortar to internet banking, there are four major phases that a bank should go through in order to adopt internet banking into the banking business. The four major stages are:

Information Presentation

In this stage, it involves the urge to launch a basic online presence mainly to present information to the customers. This stage can be one-way communication or two-way communication. For instance, one-way communication is when banks inform their customers about the banking services they can utilise through internet whereas two-way communication might involve certain amount of interactions which the users are allowed to send emails to the bank regarding enquiries, suggestions or complaints. The main objective of using internet in this stage is mainly for marketing purposes, which are important in enhancing the image and branding of a specific bank. Until now, the bank does not set any formal structures for the Internet unit. All the internet-based activities are more towards driving individual interests. This will be the beginning stage for a bank to improve their customer services through providing more information about its banking services. At this moment, Internet is used as an information channel other than the traditional marketing method.

Transaction Stage

After the presentation of information, the first introduction of internet system might drive customers to retrieve more information, interaction and transaction. On the other hand, the demand for different services through internet banking increases in this stage. Thus, the bank will invest more money into internet banking system. A small technical group of staff will be set up for establishing and maintaining the bank's website. As it is mainly used to carry out basic transactions such as paying bills and transferring money from one account to another, internet is claimed as a cost-efficient supplementary channel to banks' branches in promoting, transacting and delivering services.

Internet Unit Formation

In this stage, Internet Unit is formed and it has its own structure. Marketing-related and technology-related activities are separated. The online unit starts to be a stand-alone unit and conducts their own activities which align with their objectives. The bank will expand the range of services offered and pay more attention to customer demands by gathering more important information from its customers. In order to meet customers' needs, the bank may have to join forces and cooperate with other partners. At the same moment, it begins to make things more complicated. The internet site will be customized according to customer requirements. More technical features such as connecting the Internet with mobile telephony and offering the customer online services are required.

Core Business Redefinition and Transformation

After all the efforts are done from information presentation, transaction stage and internet unit formation, this is the time where the bank focuses back on their core business. By having internet banking, it eliminates geographic and time constraint. Not only does it use as an interface between bank and the customers, internet banking also helps the bank to collect more suggestions and complaints from the customers. Consequently, the bank needs to update and improve according to their needs besides solving the problems that occur in the internet site. This will enhance customer loyalty towards that particular bank.

The "brick-and-mortar" traditional branches become a thing of past in Malaysia banking industry, and the Internet Banking fully dislodge the "brick-and-mortar" Malaysian banks in future. Discuss.

Internet banking is truly "an idea whose time has come". As the saying goes, internet banking has gradually become well known among the users who perform banking transactions. With the advancement in technology and exposure to cyberspace, many people are computer and internet savvy nowadays. Rather than having to visit a bank branch, customers can just easily and quickly handle their banking business online at any time of the day or night. Even if they are out of the country, customers are able to access their accounts online with ease. Through a wider provision of goods and services, customers may find that internet banking incorporates vast benefits over brick-and-mortar banking. Unlike the usual method of share trading and remittance, internet banking allows us to carry out these tasks with just a mouse click.

All these gains have far outweighed the advantages of brick-and-mortar banking. There is no longer any need for a bank to have several brick-and-mortar locations and that is why the banking industry needs to proceed to move to an online model for business banking. Having to spend huge expenses in maintaining bank locations, each physical bank branch will need to generate a list of other expenses like rent and insurance as well. All these reasons have caused a lower interest rates provided by brick-and-mortar banking to customers. Conversely, the reduction in operating costs has benefited internet banking on extra spending. This is because they are able to manage to cut a break by offering higher interest rates on customers' savings. Having excess funds saved on operating costs, internet banks are able to use them as investment purposes. Customers will therefore earn a higher interest rate earned from investment portfolios.

Nevertheless, there are still some limitations of technology which sometimes indicate that internet banking may not be an ideal substitution for a physical bank branch. Some functions such as depositing and withdrawing cash might still require the need to have physical branches for some foreseeable future. Personal details and account information might be vulnerable to other unauthorized parties over the internet as well. Hence, that is why people say internet banking is yet to dislodge the brick-and-mortar bank branches as its risk management on internet banking applications have not walked in tandem with other advances in information technology.

As what we have learnt in the lecture class, it is of utmost importance for banks to manage risk management since they require to keep track with their fundamental objective and maximize shareholders' wealth. By definition, risk management is the process in which managers identify, assess, monitor and control risks associated with a financial institution's activities. Sometimes, it is hard to handle risk management with the complexity and wide range of financial products. The same goes to internet banking where vast risks are abound in it.

Credit Risks

There is a potential variation in net income and market value of equity of a bank resulting from this nonpayment or delayed payment in this risk. Borrowers might not return or repay the borrowed principal and interest within the credit term. These are called non-performing loan (NPL).

Reputational Risks

These risks may involve in costly court case, a decline in bank business, customer loyalty and revenue perhaps. Bank management for internet banking system may be ill-advised to leave these risks as there is a potential that negative publicity regarding the bank's business practices may cause a severe impact to the bank as a whole.

Compliance Risks

Compliance risks are the current and prospective risks to earnings or capital arising from violations of laws and ethical standards. It normally arises in situations whereby the rules governing certain bank products of the Bank's clients may be ambiguous. Besides being exposed to fines and payment of damages, the internet bank might face diminished reputation, limited business opportunity and reduced expansion potential.

Interest Rate Risks

The movement in interest rates of a bank might cause changes in asset and liabilities returns and values. By analyzing interest sensitivity ratio, the bank is willing to take the risk as it can predict the likelihood and future direction of the interest rates.

Foreign Exchange Risks

These risks occur from changes in foreign exchange rates that affect the values of assets, liabilities and so forth denominated in currencies which are different from the bank's domestic currency. Foreign exchange risks can be minimized by financing part of the bank's activities in whole or in part in the local currency.

Transaction Risks

Transaction risks are caused by fraud, error or the inability to deliver products or services. It is evident in each product and service offered, in the efforts to gain strategic advantage and in the failure to keep pace with changes in the financial services marketplace.

As all of us know, we cannot foresee the risks that may be aroused from bank incidents. Any unwanted phenomena that happen may bring an adverse impact on the banks earnings or capital. Unfortunately, all these risks are getting threatening in internet banking. Bank management team has established efficient management controls over the internet banking risks. Apart from the appropriate policy directives, they ensure that adequate technical expertise is available at all times for containment of these risks. Precaution against the likelihood of misused customer information by unauthorized parties should be stricter than usual whenever a transaction is made.

However, let us look at one example of internet banking whereby the company is on the right track in introducing the usefulness of internet banking while keeping well its brick-and-mortar bank branches in every physical locations. Perhaps, its internet banking services may fully dislodge its brick-and-mortar banking in the future.

CIMB Bank

This bank provides a wide range of products and services to all kinds of customers. Their core business includes consumer banking, investment banking, Islamic banking, asset management and insurance. For example, MMU students will utilize the function of CIMB clicks when it comes to fees payment or account enquiry. This is a site where people can conduct their personal banking and business banking online. The services provided are easily accessed and the transactions can be conducted within seconds. The homepage of CIMB clicks is shown as follows:

Ultimately, it may take some time for people to get used to it when it comes to moving business banking out of the building and into cyberspace. Like many new ideas and ways of doing business, there sure will have some challenges or obstacles to face during the process of transformation. The capacity to use internet to deliver efficient online banking services is yet to attract the attention from public. Banks need to ensure that all their customers understand how internet banking works and why it is a secure option to conduct banking transactions. It can be helpful to point out that internet banking is actually more secure than the brick-and-mortar model in many ways.

- The emerging consensus on the future role of online banking is that it can be used to add value to overall banking services as effective service delivery, but for now, internet banking has failed to marshal strong force to dislodge physical banks branches. Hence, internet banking still needs a huge improvement in order to fully replace brick-and-mortar banking in the future.

How can the Malaysian banks make the Internet banking as a successful and profitable service? Discuss.

Locally, internet banking services have been launched successfully and it has become a thriving channel for Malaysian banks. Certain measures and future advancement should be implemented in order to make internet banking a much ideal choice for customers from all over the world.

It is vital for banks to meet the demand and need of customers by offering more rewarding and satisfying internet banking services. Malaysian banks can come out with new products by applying product differentiation and utilize value added services to increase the performance of internet banking. Services such as share trading and remittance should be enhanced and improved so as to satisfy those interested customers in investing in investment options. Products such as wealth management, structured investment products, bank assurance and Islamic financial products should be introduced in internet banking as well. Moreover, research and development department is required to identify the customer's needs and demands which differ individually. In accordance to these requirements, Malaysian banks will be able to innovate and offer a broader range of new products and services through internet banking. Besides, the department needs to take note of the time and cost for customers which in turn will enable the banks to attain competitive advantage and long term sustainability.

In addition, Malaysian banks may take essential steps to hire groups of skilled technicians or companies which offer more well-established software for the containment of risks. In this manner, the banks can protect and safeguard their customer's privacy and confidentiality from harm as the possibility of being hacked by unauthorized parties is omnipresent. With the presence of anti-hacking software, customers will eventually feel and perceive a sense of security through the use of internet banking. To illustrate further, those customers who have experienced this kind of services will give a positive and pleasing feedback to the respective bank. This will indeed be rewarding to the bank as it gains loyalty from its customers besides having a high profitability on the increased percentage of sales.

Moreover, due to deficiency in technology terms, Malaysian banks should seek help and aid from foreign banks especially Europe countries in the area of internet banking. Those countries which are well-known and well established in technology are able to tackle the problems and establish a good network with Malaysian banks. In fact, the internet banking service is originally designed and publicized from them as they are more advanced in technology, technical and mechanical aspects. They are more familiar with the operation of internet banking and ways to fully maximize its potential and profitability. Without any prejudices and biases, it is sensible and wise to seek help from those superior countries in gaining financial benefits towards internet banking of all local banks.

Furthermore, the internet banking can cause Malaysian banks to penetrate to a new market. Internet is a global system of interconnected computer networks and it is not restricted by geographic boundaries. So, it is easy for banks to enter into a new market and provide their services to the customers of the new market without any restrictions. For an instance, Malaysian local bank such as CIMB Bank has been successfully entered into a new market which is in Singapore. Thus, Malaysian banks should upgrade and maintain its systematic information system of internet banking so that customers from other countries can be benefited from the vast advantages provided by internet banking. This not only can boost up the profitability of the Malaysian bank, but also enhance its company position and overall reputation.

Besides, during the previous period when internet banking services are not exposed much among the customers, the traditional black and white paper work are utilized to process the customers' requests or transactions such as transfer of account, check requisition to withdraw money and what not. When a particular customer enquires the banking services, for example bills payments, he or she may have the trouble filling up an application form or bank draft to request for bill payments. However, with the existence of internet banking, Malaysian bank can make it a profitable service by eliminating paper usages in all transactions. As it does not include any papers, electronic billings are always retrievable in customer's personal account whenever they need it. On top of that, it also helps in eliminating irrelevant procedural steps, reducing the duration of process and maximizing the value obtained for customers and banks. It indirectly increases the process and productivity level by the efficiency of internet banking.

However, the success of internet banking is determined not only by banks or government support, but also by customers' acceptance of it. Therefore, adoption rate among internet banking users is a concern raised by Malaysian banks. During the past few years, online banking acceptance has gained special awareness and banks move towards implementing internet banking as part of their overall tactic. Generating additional revenue, improving customer service, extending marketing and increasing cost saving are business benefits of the internet banking. Thus, if a bank manages to increase the adoption rate of using internet banking, the profitability of Malaysian banks might be boosted up as they may charge commissions on those users. Conversely, some people out there are not computer savvy and they are not confident enough to utilize the internet banking services. In this case, Malaysian banks should conduct a special training on how to use computer and internet banking so as customers will have the same level of Internet usage and some degree of Internet experience. Ultimately, the adoption rate of internet banking will increase if customers have the perceived ease of use and perceived usefulness.

In order to gain competitive advantages in internet banking, the reduction of overhead costs in internet banking has enabled online banks to retain excess funds. These funds can be used for other potential benefits or purposes such as investing in foreign exchange, stock options, asset portfolios and so forth. The return gained from all these investments can be distributed among internet bank's accountholders as interest rates. Thus, a higher interest rate provided by internet banking may attract more customers in subscribing an internet bank account. This not only can benefit customers in terms of interest rates, but also will add to the overall company's performances as a whole.

Conclusion

As all of us know, internet becomes more important for commerce and the existence of internet banking has flourished the company position and profitability in the market. Besides eliminating the need for physical branch offices, reduction of overhead expenses has helped banks to retain their excess funds. Banks can then utilise the resulting savings to reduce their loan interest rates or increase their deposit rates, drawing new customers without sacrificing earnings. This also allows banks to enter new geographic markets without the costs of acquiring existing banks or of starting up new branches, further increasing growth potential. All these potentials have made internet banking a necessity for those customers who apply the usefulness of internet banking. Ultimately, it is still based on individual needs on whether they will use internet banking instead of brick-and-mortar banking.

We know that the transformation from brick-and-mortar banking to internet banking is yet to consider. It might fully dislodge brick-and-mortar banking in the future, but not for now. There are much imperfections of technology to improve so that customers can be benefited from being able to use internet banking. Bank management teams should exert effective controls over some limitations whenever bad conditions in internet banking occur. They need to think of the possible solutions on how to deal with hacking or being exposed to fraud and theft cases. As we mentioned before, internet banking is getting threatened by various types of risks and any adverse impacts can happen at anytime without warning. Hence, it is of utmost importance for Malaysian banks to implement effective measures in curbing these obstacles.

In a nut shell, making internet banking a successful and profitable service is one of the Malaysian banks' goals. Experts need be hired in advance so as to upgrade and maintain the information system in a day-to-day basis. They must be available at all times in order to avoid the risks in some unforeseen future. Through all the measures and suggestions given on how to make internet banking a successful and profitable service, Malaysian banks might be flourished in the future as more and more people are exposed to the usefulness and effectiveness of internet banking. Hence, there is a possibility that internet banking might fully replace brick-and-mortar banking in the future.

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