Electronic Finance: A New Approach to Financial Sector Development?

by Thomas C. Glaessner, Stijn Claessens, Daniela Klingebiel

Overview

In recent years, the delivery of financial services has changed consistent with technological advances that have occurred. On-line banking, on-line trading and brokerage services, and capital markets are available and utilized in varying degrees in the industrialized nations of the world. Beyond the availability of services on-line, E-Finance is redefining the cost and competitive structure of financial services. This convergence of technology and financial services provides opportunities for emerging markets to leapfrog in the development and delivery of financial services. This paper identifies issues arising from the spread of E-Finance including the readiness of telecommunications infrastructure, public policy and regulatory requirements, and financial sector development approaches. It hopes to stimulate dialogue on the role E-Finance can play in supporting the World Bank's overall mission.

Product Details

ISBN-13:	9780821351048
Publisher:	World Bank Publications
Publication date:	03/01/2002
Series:	World Bank Discussion Papers , #431
Pages:	108
Product dimensions:	8.25(w) x 11.00(h) x 0.22(d)

Table of Contents

	Foreword	v
	Abstract	vii
	Acknowledgments	ix
	Executive Summary	1
	The Recent Past and Possible Future of Electronic Finance	5
	The New World of Financial Services	17
	Changes Needed in Financial Sector Policies	23
	E-finance Applications--and Implications for Government	39
	Annexes
Annex 1	Data Sources and Methodology for the Projections	47
Annex 2	Recent Reports by International E-finance Working Groups	49
Annex 3	Types of Online Trading Systems	59
Annex 4	Selected Smart Card Projects in Emerging Markets and Developing Countries	67
Annex 5	Selected E-finance Examples in Emerging Markets and Developing Countries	75
	E-Finance Web Links	81
	References	89
	Bibliographical Note	97
	Tables
Table 1	E-finance has achieved significant penetration in most industrial countries and many emerging markets	6
Table 2	Consumers and countries around the world are getting better connected, 1999	8
Table 3	Emerging markets' capital is increasingly owned, traded, and listed abroad, 2000	10
Table 4	The takeoff point for online banking depends on the level of connectivity	12
Table 5	E-finance will slash banks' net interest margins, 2005 and 2010	15
Table 6	The Internet is changing features of financial services	20
Table 7	A new paradigm is emerging for financial sector development	24
Table 8	Progress is being made in creating an enabling regulatory environment	28
Table 9	E-finance regulation has yet to address some outstanding issues	33
Table A2-1	Current e-finance initiatives by international bodies	50
Table A3-1	Fixed-income trading systems	62
Table A3-2	Major U.S. online stock brokerages	64
	Figures
Figure 1a	Capital raised by companies in American depository receipts, 1980-2000	9
Figure 1b	Value traded by companies in American depository receipts, 1980-2000	9
Figure 2	E-banking penetration: actual and projected rates for 2000, 2005, and 2010	13
Figure 3	Different service providers and delivery channels are combining to create a new world of financial services	18
	Boxes
Box 1	Mobile phones: The developing world's technological springboard	7
Box 2	The new world of financial service providers	17
Box 3	The massive shifts in stock markets and exchanges	19
Box 4	Leapfrogging around the globe: Estonia, Republic of Korea, and Brazil	21
Box 5	The institutional approach to financial sector development	23
Box 6	Enhancing connectivity in emerging markets by improving telecommunications regulation	25
Box 7	Privacy problems--the role of the public sector and private solutions	26
Box 8	Securities regulation, the Internet, and emerging markets	30
Box 9	Principles for managing risk in online banking	31
Box 10	Challenges for market regulation within and across countries	37
Box 11	Making creative use of existing public infrastructure: Post offices	40
Box 12	Smart cards: A clever way to leapfrog?	40
Box 13	Mortgage finance: The impact of the Internet	41
Box 14	Insurance: E-financeable?	42
Box 15	E-finance for small and medium-size enterprises	43
Box 16	Microfinance and e-finance--a viable match?	44
Box 17	FinNet: Toward a paperless infrastructure backbone for financial services	45

Editorial Reviews

Electronic finance, especially online banking and brokerage services, has reshaped the financial landscape. This work reviews these developments and analyzes their implications for consumers, governments, and financial service providers. Material presented here will stimulate discussion in the development community on the opportunities offered by e-finance for better financial sector development, sustained growth, and reduced poverty. Detailed information and Web links on public policy activities related to e- finance are provided. There is no subject index. Annotation c. Book News, Inc., Portland, OR (booknews.com)

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