Explain the challenge's of the "e-banking regulations" ? Discuss the regulatory tools to overcome these challenges in detail? (Please Answer in 200 to 250 Words )
E-banking is the process by which customers can conduct financial transactions using their phones or computers instead of doing it through human interactions. In order to streamline e-transaction, there exist e-banking regulations. Changing dynamics in the development of technology have continued to create challenges to e-banking regulations.
Challenges of E-banking Regulations
Since e-banking depends on the internet, banks find it easy to provide their services to provide services from anywhere in the world. This creates a scenario where banks can easily try to avoid supervision and regulations through licensing. There are also legal challenges involved. This is normally due to the fact the e-banks who enter into a new market in a foreign country that previously had no regulations and new regulations are put in place, such e-banks can find themselves breaking laws unaware. Another key challenge is the issue of money laundering. With hackers and criminal IT specialist collaborating with rog employees, it becomes difficult to track and trace these criminal activities. Lastly, the operational challenges that bank regulators experience is the need to continually develop practices that protect banks and offer awareness on a regular basis on the need to adhere to those practices, this can be costly and time-consuming.
Adaptation is a key tool for regulators to stay up-to-date with current technological advancement to protect e-banks. Legalization is another key tool. E-bank regulators must continually find ways of finding new methods of conducting transactions and providing licenses. Lastly is harmonization and integration of e-banking regulations across the globe.