Study On The Effectiveness Of Risk Management Of Internet Bank In China

We are in a new era when IT advances unprecendentedly. The net revolution brings here news opportunity as well as challenge, and there is no exception to the financial industry. The highly expansion of E-commerce and IT bring about internet bank, and most banks throughout the world connected with the net one after another, and began to offer new financial services. In Oct 1995, the opening of First American Security net-bank, marked the beginning of a new form of banking system-internet bank.In fact, internet-bank is not a extension of banking computer system, but a combination of modem IT and convention financial system. Actually, it's a new reformed financial service. The rapid development of internet-bank not only changes the patterns and principles of the operation of the whole banking industry, bust also has an impact on the thinking model and norm of conduct in macro-economics. With the expansion of internet bank it' s much harder to manage the risk on internet-bank, and various problems like the security problem are intensified. So, the risk management of internet-bank is a vital part to the development of internet bank. Many warnings are indicated from their own experiences of many internet bank. And the success and failure of the internet-bank depend heavily on the risk management. Many stresses are placed on the risk management and most of the banks have rich experiences in that. We know here in China, the internet-bank is recently established and has only a short history, but undoubtedly, it's a tendency. Based on the advanced experiences from a broad, the biggest priority is the effectiveness of the risk management to ensure that Chinese banking ever the whole financial industry can operate safely.The risk management of internet bank can be made safer by scientificidentification precaution and handling, and by limiting its cost to the full to secure the whole internet bank. Thus, the internet bank can operate at its smallest lost and in it highest safety. The effectiveness of net-bank risk management require a clear goal of risk management, that is to establish a complete system of risk control to caution the risk effectively; to own an advanced net technology with a legal intellectual property, and a combination of technology and services; to find a law to abide by and to operate legally, and to find a good legal environment; to supervise it and to manipulate closely, and to establish a special institution to supervise the operation of the inner and outer banking system; to armed with talents with comprehensive knowledge of net-banking management.At present emphasis are placed on the effectiveness of internet-bank risk management to ensure a rapid development of internet bank, as well as a strong power against any risk for a steady operation and steady finance, at the same time, it's good to the entry of WTO and the challenge from the economic globalization. However, as to the risk management of internet banking, there are still many problems, such as incomplete technological safety, and not unified safety authentication. All of which influence the improvement of risk management. Meanwhile, there's not adequate law to secure a normalized operation of internet bank. Furthermore, there's no ending to all the setbacks, like the inadequate credibility and management principles. Due to the many problems preventing a normalized operation of internet-banking in China, the author here come up with some suggestions as to how to strengthen the risk management of the internet banking. It includes how to establish a sound institution of risk management and to better management principles; how to develop a net technology with a independent intellectual property to ensure a safer net banking; how to institute a social consultant agent and credibilitysystem to reduce the risk to the bottom line; how to strengthen the construction of the related laws to secure a fair just and order financial environment, how to strengthen banking supervision to secure a effective risk management; how to enroll...