Competency and Risk Involved in E-Finance

 Competency and Risk Involved in E-Finance
EXECUTIVE SUMMARY
E-finance has been defined in terms of the provision for using electronic communication and computation for financial services and markets. In the present paper, the widespread use of E-finance and its implications will be analyzed. The aim of the work will be to assess the potential implications of such an excessive popularity of the E-finance both from efficiency enhancement as well as exposure to risk.

Regarding the information technology’s widespread use, one popular view is that it fundamentally transforms the mechanism of financial service industry along with financial markets. Whereas, another view advocates that internet represents the latest in a long line of electronic technologies that have reshaped the financial industry (Fight, 2002).
Today, financial services like the internet banking, brokerage, trade settlements, mortgage and loans, insurance etc. are offered through internet. All these form the part of E-finance. This popularity has fundamentally changed the value preposition of working of financial institutions by redefining the core operation mechanism, customer relationship management etc. This paper attempts to visualize the fundamental changes in the industry and their impacts on the overall working.

All over the world and specifically in Nepal, According to a study conducted, the current trend in Nepal for private banking system has witnessed a shift from traditional branch banking system to a stand-alone banking model as a consumer movement or a shift towards e-delivery channels like Internet, mobile phones etc has been the basic characteristic. In Nepal itself, majority of banks have started delivering the credit and deposit products by electronic means. With the venture of banks into the electronic arena, new opportunities have been found in the banking sector involving new operational and strategic risks.

On the basis of the above discussion, it can be said that the phenomenon of e-banking as a moderate or poor mean because of the fear of unknown and unavailability of resources. Although from the responses it can be seen that speed, convenience and cost factors are considered to be better as compared other sources of banking.
Thus it can be said that the augmented use of e-finance will definitely result in efficiency enhancement of the financial service sector as well as customer satisfaction but this will also expose the risk of security, frauds etc. Therefore proper risk measures should be implemented before enhancing the use of electronic means of services. In context of Nepal, still there is a long way for e-finance to go further and explore the new horizons.

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1 INTRODUCTION
E-finance has been defined in terms of the provision for using electronic communication and computation for financial services and markets. In the present paper, the widespread use of E-finance and its implications will be analyzed. The aim of the work will be to assess the potential implications of such an excessive popularity of the E-finance both from efficiency enhancement as well as exposure to risk. The present work outlines the issues related to e-finance. Although the E-finance system is not of recent origin, but as a result of improvements and evolution in the information technology infrastructure, e-finance has become an essential tool to support any business and deliver greater value to its customers. A direct impact on the banking, international business, financial services and investment etc. is evident in the global economy (Franklin, McAndrews and Strahan, 2001).

1.1 Research Background
E-finance is all about the web-enabled finance function including all the areas of global financial service industry. E-finance is much more than a web front end for financial services. By redefining the core activities, changing the interaction mechanism to address the prime customers and moving up the value chain through creation of better value for shareholders, it basically changes the fundamental value proposition of the finance function. In the conversion process of traditional transactions into the e-finance, the technology enablers play the key role. Through e-finance transformation, finance changes the role from just a transaction processing to a true business partnering. It holds far reaching implications on the interactivity with different stakeholders such as customers, suppliers, employees etc (Franklin, McAndrews and Strahan, 2001).

Regarding the information technology’s widespread use, one popular view is that it fundamentally transforms the mechanism of financial service industry along with financial markets. Whereas, another view advocates that internet represents the latest in a long line of electronic technologies that have reshaped the financial industry (Fight, 2002).
According