THE LEADING Jamaican commercial banks are now ready to embrace the e- commerce age and are no longer deterred by customers possessing only local currency cards when trading on the Internet.
So declared Bank of Nova Scotia (BNS) boss William Clarke at the Kiwanis Club of downtown Kingston luncheon address given at Le Meridien Jamaica Pegasus, New Kingston on Monday.
As the guest speaker he drew attention to recent concerns expressed in the media regarding the country's preparedness for e-commerce within the financial sector. He noted in particular Minister of Industry, Commerce and Technology and Industry, Phillip Paulwell's comment at a seminar in May of this year that "the use of the Internet locally has progressed at such a remarkable pace that government is now seeking to develop a comprehensive policy to drive and promote electronic commerce in Jamaica".
There are many people in Jamaica who have questioned why with both the local and global march of e- commerce, Jamaican banks still exhibit a reluctance to support it. Mr. Clarke concurred and cited a number of sources to lend support to the growth of e-commerce in Jamaica.
He said: "In May 1999, The Financial Gleaner reported that e-commerce was booming in Jamaica and that there are several advantages for Jamaican businesses trading electronically namely minimal capital outlay and availability of local expertise and technology.
The Jamaica Tourist Board (JTB) launched its web site in 1996 and in 1998, reported that an average of 135,971 people visited the site each month. In March of this year, a new web site - www.Jamaicainsiders. com was launched and in two months, received 125 requests for holiday bookings and some 75,000 page reviews. There are just over 40,000 Internet users in Jamaica. Businesses must be ready to capture this local market and the international market as well."
Mr. Clarke said that research shows that between 85 and 90 per cent of all banking transactions occur electronically and that on line banking will reduce costs substantially.
He added that Scotiabank is interested in facilitating e-commerce and many of its merchants are interested in this new method of doing business.
It is now apparent that financial institutions have a central role to play in the expansion of e-commerce and as with any other industry, consideration has to be given to the degree of investment made, but as Mr. Clarke said, "it is very clear, if you do not log on, you will be left out."
The funding of e-commerce companies did not escape his attention. "As lending institutions we will have to give special attention to making funds attractive to companies who want to purchase software, develop web sites, and electronically revolutionise their operations," said the BNS boss.
Although e- commerce should be acknowledged and embraced, it cannot be refuted that it poses unique risks to the financial institutions. Why? Because all transactions processed over the Internet are comparable to mail order/ telephone order merchant sales, the customer is never face-to-face. The merchant does not get an imprint of the customer's card and the merchant cannot obtain the cardholder's signature.
"Security is a major issue with any new or emerging technology, and we must be practised in acquiring the latest security features to protect our clients and the bank. As a result, there are Internet security requirements which are central to the successful employment of this technology and to maintaining confidence in the system.
Web sites must employ, at minimum, encryption technology to protect cardholder information from being seen on the open Internet during a purchase transaction, he said.
. Although the Internet offers an impressive range of choices, consumers must exercise caution for just as in the real world, fraud, invasion of privacy, and poor quality products are present in the virtual world," he said. Mr. Clarke called for businesses in Jamaica to establish a corporate firewall which is appropriate technology that blocks intruders from getting at internal company information such as data and messages outside connections to the Internet.
E-commerce is all about becoming a part of the global economy, and as chief executive officer of Headstrong, one of the new crop of dot.com. companies Patrick Litre says, "Being global in the new economy is like an inside joke - you have to be there to get it."
