Research Of Internet Banking Risk Management

The impressive development of internet economy is the inevitable trend nowadays. With the impact of this trend, traditional bank business is experiencing dramatic transformation, the appearance of the internet banking is unavoidable under such circumstance. Every country's bank business is highly concerned about the internet banking with respect to its convenient management, low cost service and variation of transactions. Simultaneously, it is turning into the niche of the current bank business competition in the information epoch.Our internet economy has made incredible progress these years, as same as the internet banking business. Nevertheless, the initial stage of the development is relatively later than those developed countries, numerous transactions are still unexplored or at trial period. Also miscellaneous risks are derived from the virtuality, the characteristic of internet banking. The risk about operation, credit, law and etc. in practice, the supervision of the risk has already become the essential part of the internet banking management in every country.In regard to the risk of internet banking, risk management and the research its object, content and mode, it has significant realistic effect on accelerating the development of our internet banking business and improving its ability in the competition. The paper may be divided in five parts:In the first part, the risk of internet banking and its management are discussed. Internet banking exists huge risks while people enjoy its convenience. The risk of operation means: during the process of the bank management, the damage may occur in virtue of the lack of reliability and integrity in the inner control and supervise system. Secondly the definition of the risk of credit is due to the loss, negligence or other reasons of the internet banking transactions, the customers undertake the pecuniary loss. The negative public media lead to the credit risk of banks. Lastly the risk about law is arose when the trading parties infringe the related law or legislation.The necessity of the internet banking risk supervision and the challenge to traditional banks are going to be discussed hereby.The second part includes the goal of the internet banking risk management and legislate principles. There are three internet banking supervision objects: 1. Control the internet banking risk, improve the development of bank. 2. Protect consumer rights. 3. Match the international system and construct faultless internet banking risk management system. Four legislate principles with its own characteristic as following are derived from banking business development idea. 1. Safe principle 2. Benefit principle 3. Equal principle 4. International principle.Part three is going to debate the selection and application of our internet banking risk management system. For the sake of safe operation of our internet banks, it is not sufficient to rely on each department of banks alone, a specific organization should be made to administer it. Regarding to the United States and European countries' supervision department, the principle of the selection and application of the supervision department is addressed and the its liability is clarified as well.The contents and targets of the risk management of internet banking are expounded in the fourth part. The development of internet banking requires the supervision system not only should manage the normal risk base on the standard of traditional banks, also should consider the supervision of the internet banking includes more contents, more complicated methods and higher technical requirement. The supervision targets therefore should involve the supervision of the internet banks, the supervision of the customer and the supervision of other departments. The contents of the supervision comprise the supervision of the market permission, the supervision in the process of market operation and the supervision as to the secession of the market.The fifth part is going to address the method of internet banking risk management. The supervision method indicates the supervision theory and the supervision mode. It could be divided into supervision on the spot and supervision not on the spot. They have their particular features. The detailed discussion is made in respect of finding the suitable principle about internet banking risk management.