The general manager of channel services in the CBA's retail banking services division, Phil Heaney, told ZDNet Australia security issues were unlikely to deter people and businesses from adopting electronic banking practices.
The CBA, like all of Australia's banks, is turning to electronic channels to reduce the cost of servicing its customers and deliver more efficient service. The CBA is one of the largest in Australia, with around 10 million customers - more than two million of which have registered with the banks online service, NetBank. As of September last year the bank had AU$103 billion in funds under management.
Heaney said "in terms of the volume of transactions and the amount of money that moves through systems today, you can look at incidences of skimming: In one sense they're fairly dramatic but in the relative scheme of things they're relatively minor."
"That's not to underplay the importance and the relevance of them, but sometimes we can present these things as if the whole security is at risk and the whole thing is falling apart, and confidence is gone and what have you, and I don't think we're anywhere near that at all."
Heaney believes people are becoming comfortable with the technology, after using electronic banking in one form or another for around 15 years or more, and the bank now has over five million registered password holders for its telephone banking service. "If you think about it from a technology point of view the only difference between telephone banking and Internet banking is the device the customer is using," he said.
"I think customers are very comfortable with telephone banking but again I think sometimes stories...get a bit of a beat up, and I think that probably creates more uncertainty and fear than what the reality of the situation actually is."
The Commonwealth Bank entered the "home and office banking" market in the mid-to-late 1980's when it introduced the capacity for customers to use their computers to dial-in to the bank over telephone lines and perform transactions on their PCs, according to Heaney. The same infrastructure was used to provide early versions of telephone banking.
"This was in the days where before we had tone phones," said Heaney. "You could actually put a mitt - like a little keypad - over the voice part of the phone, and it would convert signals down an analogue line, to computers at the other end."
Electronic banking has come a long way since then. With the advent of Web browsers opening up the virtual world to the masses, online banking has taken off. A recent survey noted that the percentage of Internet users tending their financial services online almost doubled, from 20 percent in 2000 to 37 percent in 2002.
"We've had two iterations now of our online banking platform, NetBank," said Heaney. "Our initial version was you downloaded the software onto your PC and ran it from the PC, and then we upgraded that and moved to a browser version, and in terms of the back-end software it was pretty much the same interface for both of those systems."
A common theme in the Commonwealth Bank is to have all the systems running on a common infrastructure. "If you do it right, once you've [integrated the back-end legacy systems] for one then you can continue to get a lot of leverage and reuse out of that infrastructure," said Heaney. Where previously different technologies were suited to the branch, mobile or Internet banking channels Heaney makes the point that IP technology allows you to have one back-end system supporting the different front-end interfaces.
While IP technology is traditionally seen as a way to centralise or outsource functions, in the case of the Commonwealth Bank the technology is viewed as a way to gain benefits from centralisation that has already occurred. "A lot of information has been centralised [throughout the 1990's]," said Heaney. "What we're doing now is improving the processes that have been associated with that centralisation."
The main benefits will be the elimination of paper flows, the ability to obtain real time information and make decisions based on that, and provide a common interface to the customer independent of what platform the customer chooses to contact the bank on, according to Heaney.
Not just the bank's branches but also its Automatic Teller Machines are being upgraded to run on an IP network. The Commonwealth Bank recently replaced over 1,000 of the 3,000 proprietary ATMs it owns, with the vast majority now running on IP networks. All ATMs located in branches are on the IP network, and 600 of the 1,000 offsite ATMs are on the IP network.
This will improve the uptime of the ATMs according to Heaney, as the ATMs will let the bank know immediately they go down, and the cause of the problem.
Heaney said the move to an IP network would not improve security at all. "All the data over our lines is all transmitted encrypted, all passwords, PIN details ... [are] all fully encrypted and the communications medium really doesn't alter that level of encryption," he said.
Telephone banking are disadvantages to people with hearing impairments (even totally deaf) or hard of hearing that prevents them using it so the only way they use is Internet banking!!