Challenge Faced by Bank Regulator and Supervisor
Challenge Faced by Regulator and Supervisor Authority
INTRODUCTION
Nowadays, most people are familiar with new technology development of electronic banking systems. Its not only provide the basic services like fund transfer and bill payments, but also doing the advance including provide the loan and card application. Electronic banking can define as the use of electronic delivery channels for banking products and services. Electronic banking services generally offered in two ways either traditional bank that is combine traditional and electronic delivery channels or virtual bank that operate entirely through electronic banking channel without having a branch network. It makes the business operational more efficient, faster and easier than before. In addition, it also gives the opportunity by allowing banks to expand their markets and services and also reduce the operational costs. This new opportunity give much benefits but it also give the advantages when rise a various risk that need to realized by the bank management and the regulatory and supervisor authorities. They have to face a challenge including the authorizations, cross-border e-banking activities, money laundering, consumer education and protection and risk management to ensure the effective supervision in their operation either in home or host country where they doing their business.
I.AUTHORIZATION
The first challenge of bank supervisor is in giving the license and authorization to the virtual or traditional bank. Before giving the license or authorization, regulator or supervisor need to identify in what conditions of virtual or traditional bank proper to require a license. Virtual bank need to meet the requirement or regulations made by the supervisor in the home country to associate the risks might rise in running the business through electronic banking. For example in Box 1, Appendix a, that provide example of guidance for the authorization presence in Hong Kong SAR. Locally
INTRODUCTION
Nowadays, most people are familiar with new technology development of electronic banking systems. Its not only provide the basic services like fund transfer and bill payments, but also doing the advance including provide the loan and card application. Electronic banking can define as the use of electronic delivery channels for banking products and services. Electronic banking services generally offered in two ways either traditional bank that is combine traditional and electronic delivery channels or virtual bank that operate entirely through electronic banking channel without having a branch network. It makes the business operational more efficient, faster and easier than before. In addition, it also gives the opportunity by allowing banks to expand their markets and services and also reduce the operational costs. This new opportunity give much benefits but it also give the advantages when rise a various risk that need to realized by the bank management and the regulatory and supervisor authorities. They have to face a challenge including the authorizations, cross-border e-banking activities, money laundering, consumer education and protection and risk management to ensure the effective supervision in their operation either in home or host country where they doing their business.
I.AUTHORIZATION
The first challenge of bank supervisor is in giving the license and authorization to the virtual or traditional bank. Before giving the license or authorization, regulator or supervisor need to identify in what conditions of virtual or traditional bank proper to require a license. Virtual bank need to meet the requirement or regulations made by the supervisor in the home country to associate the risks might rise in running the business through electronic banking. For example in Box 1, Appendix a, that provide example of guidance for the authorization presence in Hong Kong SAR. Locally