EMERGENCE OF E-BANKING AND E-COMMERCE :EMERGENCE OF E-BANKING AND E-COMMERCE WHERE SOCIETY MEETS TECHNOLOGY…


ACKNOWLEDGEMENT :ACKNOWLEDGEMENT We would like to thank the Dept. of Saraf and Prof. Subhashini as well as Bank of Baroda’s interviewees for their positive and open attitude to our research questions. Also we want to thank Samba’s Financial Control & Planning Group for providing us with the case study, and all other groups and divisions who responded to our need.


EXECUTIVE SUMMARY :EXECUTIVE SUMMARY The aim of the thesis is to look at the emergence and evolution of e-banking in Saudi Arabia, with particular emphasis on the processes of how banks implement E- banking to improve their capabilities as well as to create new value strategies. Specific questions addressed are (1) how e-banking has been developed, (2) how banks align their demand and supply-side factors, and (3) what has been the role played by E-banking in shaping the strategic direction of banks. The answers to these questions are grounded on the results of empirical research recently conducted on a major Saudi bank.


LITERATURE REVIEW :LITERATURE REVIEW ‘e-banking refers to the provision of retail and small value banking products and services through electronic channels. Such products and services can include deposit-taking, lending, account management, the provision of financial advice, electronic bill payment, and the provision of other electronic payment products and services such as electronic money.’


WHY E-BANKING? :WHY E-BANKING? Creating new markets Reducing operational costs and workforce Faster, easier and more reliable service to clients Development of Corporate image


QUESTIONS RAISED :QUESTIONS RAISED Does it actually improve their competitive position and image? Is it yielding the anticipated results? Is it a healthy change? Does it balance the demand and supply side?


LET US ANALYSE THROUGH A CASE STUDY :LET US ANALYSE THROUGH A CASE STUDY This case study investigates the implementation of e-banking at Samba, one of the major Saudi banks. It provides a brief overview of Samba and some of the key events shaping its developments in almost 25 years of existence. It then looks at the particular development of e-banking through the conceptual lens of the ‘Diamond of Alignment’.


SAMBA :SAMBA Took over two branches of Citibank in Riyadh and Jeddah in 1980 and established itself with a very wide scope and bosomed internationally. By 1997 had 43 branches across Saudi Arabia and became second largest bank in terms of net income.


HOW COME? :HOW COME? Because of two major events which required SAMBA to restructure itself and realign its strategy: Merger with the USB in 1999 Transfer of its management from Citibank to local management


THE RESULTS :THE RESULTS Became one of the largest banks in middle east It became independent and open to change with new employees coming in


WHAT NEXT? :WHAT NEXT? Due to the change came the evolution of E-banking


ON WHAT BASIS? :ON WHAT BASIS? Based on the concept of socio-technical constituencies: ‘dynamic ensembles of technical constituents (tools, machines, etc.) and social constituents (people and their values, interest groups, etc.), which interact and shape each other in the course of the creation, production and diffusion of specific technologies’


HOW? :HOW? By using 2 phases of ‘Diamond Alignment Theory’: 1.Constituent’s perceptions, goals, actions and resources 2.Nature and Maturity of technology


HOW ‘DAT’ WAS USED? :HOW ‘DAT’ WAS USED? PHASE 1: CONSTITUENTS’ PERCEPTIONS, GOALS AND RESOURCES: This dimension stresses upon the resources available in the firm and how to use it to achieve the pre-defined strategies and goals.


PHASE 1: CONSTITUENTS’ PERCEPTIONS, GOALS AND RESOURCES :PHASE 1: CONSTITUENTS’ PERCEPTIONS, GOALS AND RESOURCES Goal was technology oriented DEFINE SPAN (Saudi Payment Network) SAMA (Saudi Arabian Monetary Agency) DEFINE again


HOW ‘DAT’ WAS USED? :HOW ‘DAT’ WAS USED? PHASE 2:NATURE AND MATURITY OF TECHNOLOGY This dimension states the importance of the nature of the technology and its maturity in regards to the strategies used to achieve the objectives.


PHASE 2:NATURE AND MATURITY OF TECHNOLOGY :PHASE 2:NATURE AND MATURITY OF TECHNOLOGY DEFINE IBM


FACTORS AFFECTING THE PHASES: :FACTORS AFFECTING THE PHASES: Intra- and inter-organizational governances Target constituents’ perceptions and pursuits Nature of target problem Interacting technologies/constituencies


SUMMARY :SUMMARY In the phase 1 SAMBA relied on external technology like DEFINE and taking up the Citigroup method In phase 2 it developed its own technology