【Abstract】This paper presents the challenges facing Malawian banking industry in its quest to implement and improve banking service delivery through offering (Ib) Internet banking services. The paper investigates and discusses the challenges being experienced and suggests some solutions that could be used to ameoliate the situation .As the business environment is becoming volatile and competitive; banks have taken initiative to survive the battle for customers. In a way to keep abreast with changes in technology and to keep demanding and discerning customers to provide better and improved services, Malawian banks are now offering Internet banking. The paper notes that internet banking in Malawi has the prospects of developing fully if all the issues affecting it are dealt with holistically. Internet banking offers many opportunities to the banks and customers in terms of its convenience, fastness, time saving, efficiency and effectiveness. It is available twenty four hours a day and can be accessed by customers in their convenient time .Internet banking is very efficient and has aided banks to cut down operating costs. Despite the apparent success, Malawi Internet banking industry has a long way to go. For instance, Internet banking penetration is very low and the rate of adoption is at snail’s pace. In addition, Internet banking industry faces a lot of challenges towards the development and implementation. The major challenges include; obsolete technology, lack of legal framework, high cost of equipment, lack of technical know-how on the part of end-users and lack of technical expertise on the part of service providers. In view of this, the paper offers the following solution; training of technical staff and end users on (ICT) Information Communication Technology, providing legal framework, subsidizing of ICT equipment, civic educating bank customers and the general public, and introducing new and improved internet technology.
　　【Key words】IB；IT；ICT；ISP；MALSWITCH；NPS；PC；RTG；RBM；NBM
　　
　　For a long time banking has been a highly information sensitive activity that relies heavily on (IT) Information Technology to acquire,process and deliver information to all different users. With the change in technology,banks today are making sure that that they constantly innovate and update their services to retain the demanding and discerning customers to provide reliable,convenient and expedient services.(Tan and Teo,2000).Driven by the challenge to expand and capture a larger market share,banks are investing more in bricks and mortar to enlarge geographical and market coverage.Others have considered a new approach to deliver banking services via a new medium called Internet banking. (Tan and Teo,2000).Since its inception in 1969, Internet banking has evolved from sole domain of computer nerd and the academic to a main stream channel for communication (Nehmzow,1997).Recently, it has rapidly gained popularity as a potential medium for electronic commerce. (Crede, 1995).
　　Internet banking refers to the system that enables bank customers to access accounts and general information on bank products and services through a (PC) Personal Computer or other intelligent device. (Comptroller’s Handbook,1999).Tan and Theo (2000) defined Internet banking as provision of retail and small value banking products and services through electronic channels as well as large value electronic payments and other wholesale banking services delivered electronically.
　　“The development of electronic banking in Malawi dates from the year 2002 when the (RBM) Reserve Bank of Malawi established (MALSWITCH) Malawi Switch to facilitate the implementation of a clear, secure and guaranteed electronic payment infrastructure”.(MALSWITCH, 2008).MALSWITCH provides a national network which links all the major banks in Malawi.MALSWITCH acts as a platform for electronic payment systems such as the (RTG) Real Time Gross Settlement system for electronic settlement,the Electronic Check Clearing.Ever since its inception in Malawi, the development and penetration of internet banking has been at snail’s pace.Despite the apparent fact that Internet banking offers many opportunities to both customers and banks, Malawians have underused it. For instance,it has been noted that most bank customers make long queues in banking halls and at (ATM) Auto Teller Machines to pay their bills and carry out other banking transactions instead of taking advantage of the new technology.(Ngalande, 2002).Malawian bank customers have for a long time complained of spending long time on queue in banking halls and at ATM’s for their financial transactions. Sometimes customers travel long distances to have their money transferred between accounts.(Chimombo, 2008).This has led to public outcry for banks to provide better and improved services and banks are under pressure to meet customers demand or they risk losing customers.
　　Despite its availability, the Internet banking industry is facing a lot of challenges which are hindering its development and implementation. Some of them have been highlighted in the subsequent paragraphs;
　　Firstly, one such challenge is lack of technical expertise on the part of service providers.Most of the (ISP) Internet Service Providers do not have enough human resources with technical expertise to run and operate the system. As such,when the system crashes or breaks down,it takes long time to reinstate it back.(Saidi, 2010).Meso and Jensen,(2004) concur with Saidi,they observe that there has been acute shortage of technical staff to design, install operate and maintain the network when it breaks down.Furthermore,lack of technical support for end users is another serious limitation.This entails that numerous ICT initiatives and projects have to be delayed or even postponed due to shortage of people with proper technical skills.This results in most of the end users to get frustrated with the service and opt to use traditional banking branch.
　　Poor or obsolete technology is another challenge to the implementation and development of Internet banking service.Chimombo (2008) points out that the beauty of Internet banking technology and one of the fundamental reasons for its large uptake globally is that it rides on existing technology, computer,local area network plus leased line or phone. To the contrary,Malawi has obsolete technology and the network infrastructure is outdated.Connectivity is enormous issue barrier for the diffusion of ICT in Malawi.Slow connection and nonexistent of internet connection are a major problem.As the country is not connected with a fiber cable,most of the internet access is based on satellite internet services.This makes it on one hand very expensive and on the other hand extremely slow.This result in many bank customers shun internet banking adoption.(Bichler,2008).As a result, many potential users and adopters become frustrated or irritated to use the service as they spend much time to log in or sometimes fail to log in altogether due to slowness of the internet or non availability of the internet.In the long run they shun the service.
　　In addition,high cost of internet and equipment presents another challenge to internet banking development and penetration.Malawi just like other developing countries,the average of total cost of using a local dial up connection for 20hours is $68 per month. These costs include usage fees and local telephone time but not telephone line rental.ISP subscription rate ranges from10$ to 100$ a month.There is a broadband network in Malawi, but it is priced out of reach of most individuals (Meso and et al, 2004).Because of its exorbitant charges, the internet and equipment makes customers to prefer using traditional branch banking because it does not cost a penny to do the transaction because they cannot afford to buy the equipment and pay for the internet service.
　　Furthermore,lack of legal and regulatory framework is another challenge.Chimombo (2008) argued that although technology exists in Malawi and that bank customers may be demanding the service,there has to be legal or regulatory framework to be put in place to spur change in the banking practice.In Malawi,the Communication Act of 1998 does not mention computer cyber crimes per se.For instance,online fraud, supposing an individual’s legitimate username has been used to make unauthorized bank transfer;the law does protect the customer.There is lack of legislation that adequately supports innovation in payment systems.Lack of legal implication in case a customer loses money through online fraud makes most of the bank customers to stick to old bank branch account and not adopt Internet banking,since their personal savings are not guaranteed of being protected from fraud.(Mdwazika and Banda, 2009).This has resulted in many potential adopters to shun the technology.
　　Another challenge is that Internet banking is concentrated in urban areas. Large population in Malawi lives in rural areas.As internet is only concentrated in urban areas,it is difficult for customers from rural areas to access the service,they have to travel long distances.(Mdwazika and Banda, 2009).They spend much time and money on transport to reach places where they can access internet.This is in itself tends to discourage rural bank customers from adopting and using internet banking service.
　　Finally, lack of technical know-how is another challenge to Internet banking development and penetration in Malawi. High illiteracy levels in Malawi imply that a good number of bank customers are denied access of services.For instance,only a few people can read,write or posses the skills to operate a computer.Internet banking requires these prerequisite to access its service. (Saidi, 2010).This means that it is unlikely for illiterate customers to adopt and use internet banking service because they do not have the prerequisites to operate internet.This is making adoption and usage rate to be at a snail’s pace.
　　In spite of these challenges,there are some ways to curb them.Firstly, on lack of technical expertise, there is need for training of technical staff on the part of end users on ICT so that they will be able to design and offer supporting services to end users.(Meso,et al,2008).The more the number of staff with technical expertise the faster they will be able to respond quickly to emergencies.For instance, restoring the system if it crashes or breaksdown.In turn,this would minimize end users’ dissatisfaction with internet and help to retain end users to continue using the system.
　　On poor and outdated technology,there is need for provision of new and improved internet technology.Malawi government in conjunction with NEPAD protocol on the ICT broadband infrastructure network are developing both submarine and terrestrial broadband network across African countries to ensure that there are cheap and high quality communication services.Under this initiative,Malawi is connected to Mozambique and Zimbabwe via fiber cables and this has functioning since 2009.This is a tremendous step for Malawi because Mozambique is connected to South Africa.There is also fiber cable to Europe and another to India.This makes internet banking users to have faster and improved network connection and easily access or carry out transactions with countries while abroad (Bichler,2008).This means the problem of poor and slow connection would be sorted out making internet connection to be faster.Thus attracting new customers to adopt and use and at the same encouraging old customers to use Internet banking once more.
　　Furthermore,on lack of legal and regulatory framework, there is need for legislation (National payments system act) that governs the operations of the (NPS) National Payments System.Countries that do not have a payment system resort to contractual law.Nevertheless,legal risks may exist, unless the agreements have been tested in the court of law to ascertain their legal validity.(Mdwazika and Banda,2009).Governments have considerable power in creating an environment that enables financial institutions to use technology delivery channels.The pre condition for this type of channel is a broad regulatory environment that supports the use of electronic payments. Financial contracts should be enforceable, telecommunication policy should foster wide spread access and privacy and data securing must be ensured. (Focus note,2006).
　　On high cost of equipment, there is need for creation of deliberate policy to allow duty free of ICT related products like computers or to enter the country at a subsidized fee and making sure that internet charges are within the reach of ordinary people. For instance, Malawi government for a specific period subsidized and allowed all ICT related products like computers to enter the country duty free.This led to the increase the number of people owning computers.As a result, the more the number of computer owners increase.The more the people with technical know-how on computer operation,thus increases the number of adopters and users of the service.
　　Last but one, on internet banking being concentrated in urban areas, the introduction of mobile phone technology can help to address this challenge.Duncan (2010) observes that the introduction of mobile phone technology can help to increase the adopters and users using internet banking from the rural areas.This entails that banks can make partnership with cell phone service providers to introduce mobile phone banking.This would allow rural customers to directly access their accounts or carry out banking transactions such as paying bills and funds transfer using their hand sets.This would lessen the hurdle of traveling long distance to access internet service and on the other hand minimize transport cost they would have incurred. In this way rural banking customers would be easily reached and this would also reduce congestion in banking halls.
　　Finally,on lack of technical know-how,banks need to make sure they train end users on basic computer skills such as computer operation and internet.At the same time,“banks like the (NBM) National Bank of Malawi try to provide its customers with some basic knowledge on the importance of internet banking,when they come to banking halls to pay bills and transfer funds”.(Fwatsani Mhango:Personal Interview,2011).This can be done straight in the banking halls. The bank’s technical staff needs to demonstrate to its customers on how some of the services can easily be done on internet rather than visiting banking halls.This will spur customers who did not know the service to adopt and use it and also help to reduce congestion in banking halls.
　　In conclusion, the paper has discussed the challenges facing the development and implementation Internet banking industry in Malawi. The paper observed that despite Internet banking being well known,it remained underused as many Malawian bank customers prefer to use traditional banking branch.From the discussion,lack of technical expertise, poor technology,lack of legal framework,lack of technical know-how and high cost of internet charges and equipment remain main challenges.The solutions include; providing training to staff on ICT,free duty on ICT equipment,introduction of new and improved internet technology and need for legislation that govern the operations of the national payments system, introduction of mobile banking services, providing of basic computer skills to end users. It can therefore be concluded,that Malawi’s Internet banking industry has the potential of developing fully.However,it should emphasized that for it be successfully developed, there is need for all the players involved such as the banks, stakeholders and policy makers to cooperate and work hand in hand so that all the challenges outlined are addressed holistically.
　　
　　【REFERENCES】［１］Bichler, M, Robert.(2008).Southern African Digital Divide .A Malawian Case Study. The International Journal of Technology, Knowledge and Society.Volume.4.Melbourne: Common group publishing com.
　　［２］Bichler, M, Robert.(2010).Information and communication Technology in the republic of Malawi. An Assessment of Progress and challenges Ahead.Centre for Advanced Studies and Research in Information and Communication Technologies and Society.
　　［３］Crede, A.(2010) Electronic Commerce and Banking Industry. The Requirement and Opportunities for the new payments Systems using the internet. The Journal of Computer Mediated communications.
　　［４］Chimombo, Z.(2008) Online Banking .Is Malawi ready for it?.Retrieved on www.iobmalawi.com.2011/07/17.
　　［５］Duncan,E.(2010).Malawi Launches Mobile banking. Retrieve on: www.mobile-financial.com.2011/06/30.
　　［６］Mhango, F .(2011/02/14) Personal Interview. Blantyre: National Bank of Malawi.
　　［７］Meso, N. Peter, M, Jensen, and Victor A Mbarika.(2004).Cyberspace across sub–Saharan Africa. Technological Desert towards Emergent Sustainable Growth
　　［８］Ngalande, E, E, Dr.(2003). The importance of financial system modernization in Africa.Johannesburg: The Perago User Group Conference.
　　［９］Nehmzow,C.(1997).The Internet will shake banking medieval foundations. Journal of Internet banking and Commerce.
　　［１０］Saidi,E.(2010/04).Towards a Faultless Mobile Commerce Implementation in Malawi.Journal of Internet Banking and Commerce.
　　［１１］Tan,M and Thompson,S,H Teo.(2000).Factors influencing the adoption of Internet banking.Journal of the Association for information system.
　　［１２］Smith,C.(2003).Business Initiatives Focusing on ICT developing in Africa based on NEPAD objectives.South African Journal of Information Management. South Africa:Afrikaans University, Focus Note no.32.(2006).Using Technology to build inclusive Financial System.
　　［１４］Internet banking.(1999).Comptroller’s Handbook. USA: Comptrollers ‘of the Currency Administrator of National Banks.
　　［１５］Welcome to Malawi Switch. (2008).MALSWITCH．
　　［１６］International Telecommunication Union. Telecommunication Development Bureau.MACRA.Telecommunication Status in Malawi.6th Telecom Indicators meeting. Geneva．