Regulation on Internet Banking to Counterfeit Online Fraud Bima Danubrata Adhijoso ALSA Local Chapter Universitas Airlangga Research has shown that in late 1970s, Americans spend 1.5 hours in the Bank just to deposit one check.1 In the era where time means money, spends 1.5 hours to stand in long lines definitely waste your time. Efficiency is the main reason why in the early 1980s in New York, four major banks – Citibank, Chase Bank, Chemical Bank and Manufacturers Hanover – offered home banking services.2 Using the Videotext system, this media soon become an attraction of Banks to increase its interactive marketing capabilities.3 When the click-and-bricks euphoria hit the late 1990s, banks saw the rising popularity of the internet as an opportunity to advertise their services, including the internet banking. 4 However, due to the lacks of safeguards which guarantee the safety of internet banking, it took a long time for customer to finally acknowledge and uses internet banking in their everyday life. Nowadays, banks have realized that the internet has given the tremendous scope to reach new customers at reasonable marketing expense and permits disparate customer to effect financial transactions on one platform efficiently at a low cost. 5 In the European Union, there are 60 per cent of internet users that are using online banking. 6 Such statistic shows us how internet banking has become another distribution channel for banking institution and eases the customer in accessing their funds. Even when there is a substantial increase in the number of customers who take full advantage of internet banking services, issues on the security of internet banking are still in question. In its recent development, bank often uses encryption, biometric data, and personal
1 Crede Andreas, ‘International Banking and the Internet’, Van Nonstran Reinhold, 1997, pg. 271 2 Mary J. Cronin, ‘Banking and Finance on the Internet’, John Wiley & Sons, Inc, 1998, pg. 41 3 Edwards, M, ‘Corporate Videotex in Banking System’, Nelson Publishing, 1984, pg. 56 4 Ibid. 5 Philip Rutledge, ‘Law and Regulation of Internet Banking’ [Law and Regulation of Internet Banking], University of London Journal Publisher, 2016, pg. 17 6 Forrester Research, Inc. ‘How Customers Buy Financial Products’, Cambridge Mass USA 2015, pg. 57