How does the western model of Internet Banking apply to Russia Literature review

How does the western model of Internet Banking apply to Russia - Literature review Example Recently many banks have adopted online banking. With its boom in the United States and the United Kingdom, online baking has subsequently spread to other areas, Russia included. Victor (2008, p. 724) asserts that although this is the era of internet boom in many regions of the world and that more developed countries are increasingly using the internet for various ways, the reality is that most of the developing countries are yet to fully adopt the internet and embrace it as a way of doing business. The online banking, commonly referred to as the internet banking is one of the newest forms of banking adopted by banks in the developed countries. According to Arnaboldi (2009, p. 1), â€Å"a few pioneering banks started to offer products via the internet in the mid-nineties.† This shows long the service has been on going in the European-banking sector. However, Russia and other Eastern Europe countries are yet to realize the dream of conducting most of their banking operations wi th convenience of their mobile phones and computers. Hopes of these people transforming their banking services and fully going digital are still alive, if the current changes and improvements in the banking sector are anything to go by. More and more, banks in the Russian region have embraced the need to go online, with many customers already subscribing to internet banking. While the previous technologies used in the country were unreliably painful to the customers, current innovative improvements in the sector provide hopes for a full transformation of the entire sector. However, not all western banking models are applicable in the Russian situation. A few modifications are necessary to make it compatible with the Russian customer base. This is because of the differences in customer base between the developed and the developing countries (Jaruwachirathanakul & Fink 2005 p. 302). The slow nature of the internet banking penetration rate of the people constrains the hopes of growing and expanding this sector to robust volumes such as in the United States and on the United Kingdom. Hopes for growing the sector are still high, as 10-12 per cent of the total bankable population are ready and more than willing. This percentage loves the convenience of the internet, as well as its efficiency. The biggest booster of this trend is the adoption of the emoney and the money kiosks industry. Most of the banks offering internet banking in Russia offer payment services. This is however, a misconception about the whole issue about internet banking, a notion held by most of these banks’ customers. Initially, banks offer banks offer iBanking services to their customers, with only the opportunity to make their payments. The biggest advantage for this service is its ability to reduce the transaction costs for the customers. However, banks miss out from making sales, which were potentially available for the banks to exploit. Mols (2000, p. 12) stresses on the important rol e-played by the internet to business organizations in marketing their products and services. according to Mols, (2000, p. 14), the increase in online marketing offers business organizations unlimited opportunities to advertise and sell their products and services. As such, many organizations have introduced online sales that allow customers to search and pay for the ownership of goods. Benefits accrued from online banking cannot be underestimated. In most cases, young men aged between 25