Virtual Banking

1
Virtual Banking

• Comparison between ING Direct (success) mbanx
  (failure)
• Short description of virtual banks
• Technology - encryption
• Business - business plan, services
• Laws - privacy

2
Technology - Encryption

• ING Direct efficient use
• Authentication - sign in
• Session key (agrees on common random number -
  algorithm)
• Browser with 128 bit encryption
• Scrambles info before sending it
• Trillions Trillions of possible keys
• Most insecure is the cache memory

3
Technology - lagging

• mbanx what a mess
• Same technology - 3 years later
• Back office transactions all hand processed
• mpulse software problems

4
Business - business plan

• ING Direct - well done
• Found a niche - branchless reputation
• Wise selection of products to offer
• Premise save your money - target market
• Effective marketing-through financial planners
• Prime customer service - online, telephone, mail

5
Business - business plan

• mbanx unclear vision
• Minority of new customers
• Bad marketing - bad targeting
• Lagging in technology
• No support by BMO
• Gave too much to the client - not profitable
• Money losing products

6
Law Privacy security

• Not a major factor for failure
• Applies for both cyber banks
• Both member of CDIC
• Both used temporary cookies
• Personal Information Protection Electronic
  Document Act January 2001
• Privacy of customers personal data

7
Summary Who is still in business today?

• ING Direct still up and running
• Better use of technology
• Straight forward business plan - good targeting
• mbanx out of business
• Lagging in automated technology
• Unclear business plan unprofitable
• Merged with call center of BMO