Daily Life Activity: Before and After Digital Payment Systems and Mobile Banking PDF

Daily Life Activity: Before and After Digital Payment Systems and Mobile Banking Activity Before Digital Payment Systems After Digital Payment Systems Paying Bills Shopping Sending Money Managing Finances Receiving Salary Travel and Currency  Activity...

Daily Life Activity: Before and After Digital Payment Systems and Mobile Banking Activity Before Digital Payment Systems After Digital Payment Systems Paying Bills Shopping Sending Money Managing Finances Receiving Salary Travel and Currency  Activity Before Digital Payment Systems After Digital Payment Systems Instant mobile payments, recurring Paying Bills Physical visit, cash/check payments payment options Online shopping, contactless payments Shopping Cash or card in physical stores via mobile Instant P2P transfers with minimal/no Sending Money Bank visit, high fees, longer wait time fees Real-time tracking, budgeting tools in Managing Finances Manual tracking, limited transparency banking apps Direct deposit, instant access via mobile Receiving Salary Physical cash/check, bank deposit trips banking Digital wallets with multicurrency Travel and Currency Pre-travel exchange, high fees options Main Topic 3: Introduction to E-Banking Digital Payment System and Online Banking Prepared by: Ariane K. Villamor, MBA  To define Electronic Banking and understand its origin Learning To identify and describe Various Types of Digital Payment Systems Objectives To discuss application of E-Banking in Global Finance To evaluate the advantages and disadvantage of Electronic Banking Electronic Banking also known as online banking or internet banking, is a system that allows individuals, companies, and organizations to conduct financial transactions through electronic means. It includes services ranging from traditional internet banking to mobile banking apps, digital wallets, and other digital payment solutions.  !960s-1970s AUTOMATED TELLER MACHINE The introduction of ATMs marked the beginning of electronic banking, A brief 1980s-1990s ONILINE BANKING history of With the advent of the internet, banks began offering online services, E-Banking 2000s MOBILE BANKING The proliferation of smartphones led to the development of mobile banking apps, 2010s- FINANCIAL TECHNOLOGY and ELECTRONIC BANKING present The rise of financial technology (fintech) companies has transformed the banking industry, with innovations such as digital wallets, blockchain, and cryptocurrencies.  Mobile Banking Apps These apps allow users to check balances, transfer funds, pay bills, and deposit checks directly through their smartphones. Various Types of Digital Wallets It allow users to store payment information Digital Payments securely and pay for goods and services by scanning QR codes or tapping their phones at enabled terminals. Some common types include: Cryptocurrency Payments a digital currency, which is an alternative form of payment created using encryption algorithms. Encryption technologies mean that cryptocurrencies function both as a currency and a virtual accounting system. Peer-to-Peer (P2P) Payment Systems It enable direct transfers between users without going through traditional banking channels, providing convenience for small transactions and personal transfers. Contactless Payments and QR Codes Various Types of It allow users to store payment information securely and pay for goods and services by scanning QR codes or tapping their phones Digital Payments at enabled terminals. Internet Banking Portals It allow customers to perform various banking activities securely from a computer, including accessing accounts, managing loans, and investments, and setting up recurring payments. Impact of E-Banking to Global Finance E-Banking plays a transformative role in global finance by enhancing transaction speed, accessibility, and security across borders.  Application of E-Banking in Global Finance E-Banking also supports real-time transactions, which is essential for financial markets where timely and accurate information is crucial for trading and investment. Cross-Border Forex Transaction Investment Portfolios Supply Chain Finance Payments allowing investors to buy and providing liquidity and payment E-Banking platforms facilitate Allowing firms and investors to sell assets, monitor options that cater to the fast and efficient international react quickly to market performance, and adjust international nature of modern money transfers changes. portfolios based on global supply chains. financial trends  Electronic Banking Advantages Disadvantages Convenience Cybersecurity Risks Speed and Efficiency Technical Issues and Downtime Cost-Effective Dependency on Technology Accessibility Risk of Digital Fraud Enhanced Record Keeping Privacy Concerns Security Features  "The advance of technology is based on making it fit in so that you don't really even notice it, so it's part of everyday life.” Bill Gates  SUMMARY Electronic Banking has revolutionized the way financial transactions are conducted by combining technology with financial services to deliver seamless, efficient, and globally accessible banking. While it offers numerous advantages, E-Banking also presents challenges that need to be addressed through advanced security protocols, regulatory frameworks, and continuous technological improvements. Understanding these aspects is crucial for users and institutions to leverage the full potential of E-Banking in a secure and responsible manner. Do you have any questions? GLOBAL FINANCE AND TECHNOLOGICAL INTEGRATION  01 Define and explain the concept of technology integration in global finance and its significance. 02 Describe how technologies like blockchain, AI, and data analytics are transforming global financial services. OBJECTIVES: 03 Examine the role of electronic banking in facilitating international trade and investment. 04 Analyze the challenges and benefits of technology integration in global finance, including issues related to regulatory compliance and foreign exchange risk management. GLOBAL FINANCE AND TECHNOLOGY INTEGRATION Global finance has increasingly integrated with technological advancements, reshaping financial markets and enabling cross-border transactions with unprecedented speed and efficiency. This integration, sometimes termed "FinTech globalization," involves using technology in various aspects of global finance, from payment systems to trading, asset management, and currency exchange. CORE CONCEPTS AND FUNCTIONALITIES OF ELECTRONIC BANKING: TYPES OF ELECTRONIC PAYMENT SYSTEMS: Electronic payment systems are central to electronic banking, enabling both domestic and cross-border transactions. They encompass various platforms such as bank transfers, mobile wallets, and international remittance services, each serving a different function in the financial ecosystem. DIGITAL TRANSACTION SECURITY PROTOCOLS Security protocols are essential to maintaining the integrity of electronic transactions. Encryption, tokenization, and multi-factor authentication are just a few measures that safeguard users against fraud, hacking, and data breaches. ROLE OF ELECTRONIC BANKING IN GLOBAL FINANCE Electronic banking facilitates international commerce and investment by providing reliable and rapid transaction channels, reducing the need for physical interaction in banking services, and helping manage foreign exchange processes. It serves as a bridge across financial systems globally, promoting economic growth and financial inclusion.  KEY TECHNOLOGIES BIG DATA BLOCKCHAIN ANALYTICS Financial institutions leverage Decentralized digital ledger big data to understand market systems that enhance ARTIFICIAL trends, customer behaviors, transaction transparency, speed, and security. INTELLIGENCE and financial risks, helping AI algorithms help banks them make data-driven predict customer needs, decisions. identify fraud, automate routine tasks, and manage investment portfolios. IMPLICATION FOR GLOBAL FINANCE Reduced Transaction Costs Increased Efficiency Blockchain’s peer-to-peer architecture Automated systems reduce human error reduces the need for intermediaries, and processing time, crucial in handling minimizing transaction fees in cross- large-scale financial data in real time. border payments. Enhanced Decision-Making Compliance and Security Data analytics enable better-informed Technology facilitates better tracking and investment and lending decisions, while reporting for regulatory compliance and AI-based credit scoring can help assess enhances cybersecurity in global risk more accurately. transactions.  CHALLENGES HIGH INITIAL COSTS 01 Integrating technology into global finance Implementing technology solutions can be expensive, particularly for smaller financial institutions. offers immense benefits but also brings specific challenges that require careful PRIVACY CONCERNS 02 Data protection is critical, as financial systems handle management. Here are some of the critical sensitive customer information. challenges facing global finance as it REGULATORY UNCERTAINTY embraces technology: 03 Rapid tech development often outpaces regulatory frameworks, leading to potential legal conflicts and ambiguity. THANK YOU  Previous Lesson FINANCIAL RISK MANAGEMENT IN E-BANKING Impact on Traditional Banking Benefits of Digital Financial Services Risks Associated with E-Banking Emerging Trends in Fintech and Digital Currencies Risk Management Strategies REGULATORY ENVIRONMENT AND COMPLIANCE Ariane K. Villamor, MBA TOPIC OBJECTIVES: By the end of this topic, students will be able to: Identify and explain the key international and Philippine regulatory frameworks governing electronic banking, including data protection, anti- money laundering (AML), and cybersecurity laws. Analyze how these regulations are applied in real- world scenarios. Compare international and Philippine frameworks to understand similarities, differences, and implications for global and local financial institutions. WHY DO YOU THINK REGULATIONS ARE CRITICAL IN E- BANKING? Does Money Heist happen in Real Life?  Hackers used malware to monitor the bank's systems and obtain SWIFT credentials (used for international fund transfers). BANGLADESH They sent fraudulent transfer MONEY HEIST requests to the Federal Reserve Bank. $81 million was successfully transferred to accounts in the Philippines before the fraud was detected.  Exposed vulnerabilities in global banking systems, particularly in SWIFT messaging networks. WHAT’S THE Prompted stricter regulatory scrutiny IMPACT OF on cybersecurity and AML compliance worldwide. THIS HEIST? Encouraged banks to enhance digital security protocols to prevent similar incidents. REGULATORY DETECTIVE: INVESTIGATING E- BANKING FRAMEWORKS Objective: To familiarize students with the key regulatory frameworks governing electronic banking, focusing on data protection, anti-money laundering (AML), and cybersecurity laws, through an engaging, collaborative activity.  INSTRUCTIONS The class will be divided into 3 groups Data Protection Scenario: A bank accidentally exposed customer data due to a server misconfiguration. AML Scenario: Suspicious transactions involving multiple accounts have raised concerns about money laundering. Cybersecurity Scenario: A hacker breached the bank's e-banking platform, stealing funds and client information. Each group will: Research key laws and regulations relevant to their assigned scenario (e.g., Data Privacy Act of 2012, Anti-Money Laundering Act, Cybercrime Prevention Act). Identify at least two regulatory requirements or best practices applicable to resolving the scenario. Suggest two actionable steps the bank could take to comply with the regulations and mitigate risks. Each group will present their findings in 5 minutes, explaining: The core issue in their scenario. The applicable regulatory frameworks. Recommended actions to ensure compliance and prevent future issues. 1. DATA PROTECTION LAWS INTERNATIONAL PHILIPPINES General Data Protection Republic Act No. 10173 Regulation (GDPR) GENERAL DATA PROTECTION REGULATION (GDPR) Governs data privacy and security across the European Union. Key Provision: Requires customer consent before processing personal data. DATA PRIVACY ACT OF 2012 (REPUBLIC ACT NO. 10173) Ensures the protection of personal information in the Philippines. Key Provision: Obligates organizations to report data breaches to the National Privacy Commission (NPC).  2. ANTI-MONEY LAUNDERING (AML) LAWS INTERNATIONAL PHILIPPINES Financial Action Task Force Republic Act No. 9160 (FATF) FINANCIAL ACTION TASK FORCE (FATF) The Financial Action Task Force (FATF) provides global guidelines for combating money laundering and terrorism financing, requiring nations to implement robust legal and institutional frameworks. Key Focus: Monitoring high-risk customers, including politically exposed persons (PEPs). Reporting suspicious transactions to authorities. ANTI-MONEY LAUNDERING ACT (AMLA) OF 2001 (REPUBLIC ACT NO. 9160) The AMLA combats money laundering by requiring financial institutions to maintain transparent and accountable transaction records. Key Provisions: Reporting transactions over PHP 500,000 within one banking day. Freezing and investigating suspicious accounts.  3. CYBERSECURITY LAWS INTERNATIONAL PHILIPPINES Cybersecurity Act of 2018 Republic Act No. 10175 (EU) CYBERSECURITY ACT OF 2018 (EU) This regulation enhances cybersecurity across digital platforms by requiring organizations to implement effective risk management and reporting mechanisms. Key Provisions: Comprehensive cybersecurity risk management systems. Regular audits and compliance checks. Incident reporting to cybersecurity authorities. CYBERCRIME PREVENTION ACT OF 2012 (REPUBLIC ACT NO. 10175) This law criminalizes various cyber offenses, including hacking, identity theft, and unauthorized access. It aims to protect individuals and businesses operating in the digital space. Key Provisions: Imposes penalties for illegal cyber activities. Establishes collaboration between law enforcement and private sectors to investigate cybercrimes.  SUMMARY These laws collectively ensure the safety, transparency, and accountability of financial and digital systems worldwide. From protecting personal data to combating illicit financial activities and securing cyberspace, compliance with these regulations is crucial for maintaining public trust and fostering economic stability. F inancial R is k Management in E -B anking Course Objectives: By the end of this module, students will be able to: 1. Analyze the impact of electronic banking on traditional banking practices. 2. Evaluate the benefits and risks associated with digital financial services. 3. Explore emerging trends in fintech and digital currencies. by Ariane Villamor MB A E -B anking: Impact and E volution Shift to Digital Cus tomer Behavior Operational Changes Traditional brick-and-mortar Customer expectations and E-banking has led to cost reduction, banking has transitioned to digital- behaviors have changed due to the automation, and scalability in first approaches. rise of e-banking. banking operations. Benefits of Digital Financial Services E nhanced Access ibility Reduc ed Cos ts Digital services provide Digital financial services convenient access to streamline transactions and financial services for lower costs. customers. F inancial Inclus ion Digital services expand financial inclusion to underserved regions. Risks of Digital Financial Services Operational Risks Cybersecurity Threats System failures, outages, and Data breaches, fraud, and IT skills shortages pose hacking incidents are challenges. significant risks. Regulatory Risks Reputational Risks Compliance with local and Customer dissatisfaction and international regulations is publicized breaches can crucial. damage reputation. Emerging Trends: Fintech and Digital Currencies AI in Banking Artificial intelligence is transforming banking operations and enhancing customer experience. Blockchain Technology Blockchain is revolutionizing financial transactions, offering transparency and security. Digital Currencies Cryptocurrencies, stablecoins, and CBDCs are reshaping the financial landscape. R is k Management Strategies 1 Proactive Meas ures Risk assessments, fraud detection systems, and regular audits are essential. 2 Regulatory Complianc e Adherence to AML and KYC standards is crucial for mitigating financial risks. 3 Cus tomer Awarenes s Educating users on secure banking practices is paramount. The Future of E -B anking AI-Powered Security AI will play a crucial role in enhancing security and customer experience in e-banking. Global Adoption Global adoption of e-banking will continue to rise, impacting traditional banking systems. Innovation in Ris k Management Innovation will drive further advancements in financial risk management. Case Study: A Data Breach 10M $50M Data Stolen Financial Loss A major bank experienced a data The breach cost the bank $50 breach, resulting in the theft of 10 million in financial losses and million customer records. reputational damage. Conclus ion Managing financial risk in the evolving e-banking landscape is crucial for success. By embracing innovation, implementing proactive measures, and staying ahead of emerging trends, financial institutions can navigate this complex and dynamic environment.