Bank of Beirut is in the process of completing its eBanking application suite by providing various new services. IT News had the opportunity to interview Najeeb Ghanem IT Manager and Osmat Ayyash Electronic Banking Department manager who gave us insight on the future of the E-Banking in one of the Lebanon's most prominent banks.
How do you see the reality of eBanking in Lebanon?
NG: Lebanon is still witnessing an increase in the number of Internet users. This increase is mostly among the young generation and university students. We believe that this increase will be followed by an increased number of online transactions. Online transactions contribute to the bank cost reduction, streamline single data processes and provide simple client transactions.
It is expected that by 2005, there will be as much as 30 million Internet E-banking application users in the region. In addition to internet popularity, the mobile sector is also growing rapidly among population and it seems that it is being more widely used than the internet due to its simplicity of use, portability and being less demanding, hence providing online transactions through mobiles is a more promising electronic media through which the bank can benefit. Estimates show that 22% - 26% of Lebanese population is Internet users, out of which 15% to 20% do online transactions.
Electronic Medias are getting cheaper and more conveniently used in Lebanon and the region; in this sense, eBanking activities are on the rise and are subject to a large increasing in the coming couple of years.
How difficult is eBanking to be implemented? What are the obstacles facing such an implementation on both the legal and technical side?
OA: The implementation of a new service in a bank is never an easy task. This is especially true when the
service requires high technologies. Using the right methodology is the only way towards a successful implementation of such a service. This is accomplished through following the four stages of planning, evaluation, selection, and implementation. In the planning stage, business needs along with the priorities are defined. In the evaluation phase, the application is studied in greater detail. The business and marketing sides are evaluated to check whether the time of implementation of a specific service will yield to the opted results.
Then, we select the best fit solution, that is to say, the right application from among the several available choices according to our business needs, time, and our budget. Implementation phase is where all specifications and requirements, identified in the previous stage, are developed, tested and quality assured prior to the final launching of the service. This methodology is expected to minimize risks when launching new services. Other difficulties however emerge from regulatory issues. In the case of Lebanon, regulations are not upto-date as one would expect.
Hence the gap between the pace of technology evolution and the Lebanese government regulatory legalizations is considerably big as compared to other foreign countries pace. This gap hampers to some extent Lebanese banks from launching a complete set of online transactions similar to foreign banks.
However, to keep a minimum level of competition with foreign local banks, the situation reaches a stage where banks cannot wait anymore for regulatory resolutions to be issued, and for fear of staying behind and
watching the competition taking over, banks simply move on with developing the necessary terms and conditions to provide secured online transactions, and hence gaining the competitive advantage. For example, the ATM sector still hasn't been formally legalized in Lebanon. Same goes for online banking services particularly financial transactions.
The high cost of Internet in Lebanon is also one of the main obstacles confronting the eBanking progress. Despite the fact that Lebanon enjoys a highly advanced ICT infrastructure, the various governments have not been encouraging taking advantage of such an advanced infrastructure. The reasons are either political or economical. Services that take advantage of the advanced infrastructure may due to economical issues.
Some believe that this is not merely an economical issue, but also a political one. The governments have not till this point encouraged the use of high-speed Internet connectivity. So the infrastructure is very ready, however at the high cost which most users cannot afford.
How much have foreign banks affected local banks in general and Bank of Beirut in particular?
OA: Bank of Beirut (BOB) is a retail bank. This is what makes our strategies in IT initiatives focused on delivering retail solutions to the customer. In general, we follow the rule which states:" don't try to reinvent the wheel". In this sense comes our strategy in looking towards certain foreign banks for inspiration. The applications are already there, we simply have to choose the best fit application and customize it to our business needs at the right time. So yes, we are influenced not only by some foreign banks, but also by some financial institutions, universities and as such, but after studying our own needs.
What steps are being taken up on the security issue?
OA: Despite the low number of Internet users in Lebanon, security threats exist not only in Lebanon but also anywhere, anytime. This is especially true with electronic transactions. Risk can never be eliminated but it
can be minimized to a great extent. With the help of advanced security measures applied worldwide nowadays, bankers are able to minimize these security threats. Encryption, firewalls, and other security measures (both on the hardware and software level) help in minimizing security breaches and hence protecting online financial transactions.
What happens in case of security failure? Do customers get compensated especially in the absence of enough regulations in Lebanon?
OA: The previously mentioned terms and conditions prepared by the bank detail all possibilities that might take place during the financial/non-financial online transaction execution and explain to the customer in details all risks involved. These terms and conditions should be approved and signed by the customer prior to providing the service to identify liabilities. This is where the regulations set by the government have to play a more active role. The fact that the government has not issued clear terms and conditions regulations, led the various financial institutions to adopt their own private policies to protect themselves and the customers.
Hence both parties have to abide by the rules set by the financial institution. In general, a secure system dedicated to fund transfer and bill payments, can guarantee the reliability and safeness of the customer's online transactions. Here also comes the role of the bank in deploying a proper solution to forbid a certain customer, or hacker misusing or breaching an online application.
The risk is always there; however our job is to minimize it to the maximum.
What are your future IT plan and your IT road map?
OA: Our ultimate goal is becoming one of the leaders in the eBanking sector and to benefit from, the market entry stage in this regard. Customer Relationship Management CRM) is the most efficient solution to better communicate with our customers and to ensure their satisfaction. Our primary focus in the coming years is to implement the CRM culture at the bank supported with the best fit tools which help in achieving this goal.
Can you tell us about your total banking solution (Hardware and Software)?
Najib Ghanem: Bank of Beirut adopt bankmaster to support his core banking operation, bank-master has been developed by MISYS one of the world's largest software companies. With the support of bank master software the computer system of bank of Beirut can be broken into the following areas: online banking solution providing a full range of retail, corporate and trade banking services offered by: branch power application from MISYS, trade finance application from Morgan Lab (now Surecomp after recent acquisition, equity trading from FINOLOG a software company originated in Lebanon and has a wide clients-base in France, a client centric, multi-currency, multi-lingual, and multi branch approach.
We are servicing around 60.000 clients in 25 active currencies and 45 branches. It provides a set of wide functions, including core accounting; interest processing, and standing orders. Surrounding by a line of business modules supporting the bank's operations, from deposits and loans to treasury and trade finance, including housing and personal loans, credit / debit cards, Investments, placements & borrowings, foreign exchange. The architecture supports all of the bank's banking channels, from branches and ATM's to the call centre and the Internet banking, breaking down into the following channels:
A 7x24 call centre facility with variety of services from simple enquiry to credit card support.
An SMS services that instantaneously inform our clients on their ATM or POS transactions.
A Euronet switch has been installed to online authorize our debit card transactions.
All Bank of Beirut customers may securely enjoy the use of our online internet banking.
The computer center is equipped with Fire fighting, AC and with dual UPS to complement the resilience of the hardware. The 2 HPUNIX servers are loaded with the core banking software and they are backing up each other. The data resides on a redundant Storage Area Network (SAN) from HP shared by the 2 Hosts.
؟ Globally with are using the Computer Associate Unicenter software to protect our infrastructure and to maximize the use of our resources. In addition, we have established in Broumana few miles away from our computer center, a disaster backup site for the core banking, the swift and other applications.
What about the integration of your different solutions with your core banking application?
NG: We have many applications, (L/C, Capital market. Online banking, Telephone Banking - IVR, call center, etc) around our core banking that need online interfacing. We are using the API facilities made available from Mysis to access our database.
Currently we are in the process of installing middleware that unifies all the interfaces. All the applications will go through this middleware to access our core.
How does your solution handle any new retail banking products?
NG: Unfortunately the current release of the core banking does not support product definition. For the release a each new product, we have to develop specific application that takes days, if not weeks.
Rami Sahyouni
© IT News 2004
