Legal, Ethical & Regulatory Issues

                The online banking industry is a growing and a continually evolving business. This paper will identify and describes the legal, ethical, and regulatory issues that impact online banking the Websites. Business ethics examines ethical rules and principles within a commercial context involved in e-commerce are faced with the same if not more legal issues as any other business; these issues include, but are not limited to jurisdiction, contract, and legitimacy in the banking.

Banks such as Wells Fargo, Wachovia, and Bank of America using Websites to conduct electronic commerce should adhere to the same ethical standards that other businesses follow.” (Schneider, 2004). Ethics play an integral role in online banking because the potential for abuse is great. Each of the three selected business in the online banking industry have posted their ethical standards on their websites.

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                 There are many legal and regulatory issues that affect banking websites, trademark infringement, name changing and name stealing, protecting intellectual property, and advertising regulations as well as online crime and online warfare and terrorism. There are various legal, ethical, and regulatory issues that will be addressed in this paper and we will focus on the most important aspect and that is that e-business must comply with all of the same laws that other businesses.

Internet usage comes with it own risk but when doing banking business online people want to be assured that there are laws that will protect them in every situation. In most banks and most situations there are laws that are available to protect, most if not all, of banking transactions. Online bankers are subject to the same rights and protections of those traditional banker users. The government has made it their responsible for regulating usage, makes ethical laws and enforces those laws in order to make banking safe for all individual and business users. Some protections that the government has put into place for bank users are Privacy Protection laws, Federal Insurance, and several other programs to protection mortgages as well as capital requirements. All the laws associated with these banks cover online banking transactions. The laws that are in place to protect banks are all Federal laws and carry federal prison sentences. The sentences are in some cases carry fines of up to 10 years in prison. The government has made it a federal crime one of the highest crimes in judicial system. These laws are designed to keep people honest when doing business on the Internet as well as transactions made in banking institutions. The government has step in to make these regulations and laws to preserve an ever-growing economy and keep honesty in our banking system.

Ethics in the banking industry is much like any other industry. Ethics training is required for individuals to complete on a yearly basis. This training ensures that the people that work in the industry have the ability to do what is right in every situation. Following the ethical guidelines will help to enforce the laws that are put into place. These ethical beliefs are just what are required to ensure transactions are made correctly and legally in the online systems. Ethics is also required in maintaining the integrity of the banks that are represented in the online banking industry. Ethics, regulations, and laws are all designed to ensure that the industry and people who use the services in the industry be completely honest on both sides of the transactions.

Security & Confidentiality Issues

New technologies have improved the ability to electronically record, store, transfer and share any kind of data. While these new advances have potential for improving the services provided to customers online, they also create serious questions about who has access to this information and how it is protected. Additionally, this technology is threatened by potential unauthorized intrusion, such as computer hackers who have been known to tap illegally into private information on computer networks. These hackers threaten our security and confidentiality every day by getting unauthorized access and stealing our most valuable or sensitive information.  Privacy and security concerns are not unique to the bank industry; they are spread to personal information such as health or employment, and other e-commerce transactions.  The protection of this information has to be ensured by the company or bank in order for customers to continue the relationship with such.

The bank industry is a pioneer in handling security and confidential information of customers. By protecting their customers they protect themselves as well. Bank of America, Wachovia and Wells Fargo banks are very careful with the information and security management protecting it is their main goal and commitment as they all express it in their websites and in the face to face banks. The banks try to provide the best service in every aspect and they assure customers their responsibility toward the protection of the customer accounts going beyond their face to face business, it is maintained over the phone and online as well.

Bank of America, Wachovia, and Wells Fargo guarantee online security, in the case a customer reports fraud within 60 days of the incident, the bank compromises in refunding 100% of the amount to the bank account. The security of the consumers depends on the consumers as well, they expect customers to take some steps to prevent fraud like protecting passwords, installing a personal firewall, running and keeping an antivirus program updated all the time, using secure websites for shopping, using current web browsers, disconnecting from the internet when not in use, and not to downloading any programs that are suspicious.

These banks have programs that help identify some suspicious activity and are able to put on hold the accounts until they reach their customers and confirm the suspicious transaction. The three of them are secure websites that are encrypted with the highest level available, the privacy and confidentiality is protected by a Secure Socket Layer SSL, which makes it nearly impossible for any one other than the bans to read it. The companies that are affiliated sometimes have access to the information because they need it to perform or complete the job but these companies follow the ethical norms that are followed by the banks.

                Physical, electronic, contractual and procedural measures that comply or exceed applicable laws and standards are put in action to protect the customer information in all of the banks. The banks reinforce the fact the security of the consumer is number one priority over and over. They all provide employee training and have a code of conduct and ethics, maintain the policies and procedures to satisfy to its best their customers.

International Issues

Wachovia’s website is set up to give clear and concise instructions on many international transactions. There is a section of the website set up for international services. With that comes information on global contacts, trade information, compliance and regulatory information as well as payment information. Wachovia has done a good job at covering all bases for any international issues that may arise which is in partly due to that they have trade relationships with 3000 customers in over 130 countries. Utilizing the international services section should give all the information needed should any unforeseen customer issues arise.

Bank of America as the bank itself does not have international markets for branch office banking; however they are looking at global trade management. There is one site on Bank Of America LTD which is based out of London. Their primary profile is securities. All or any issues regarding Bank of America are handled via the web under the terms and conditions section or the customer service numbers given.

Wells Fargo has international as well as global services.  In order for Wells Fargo to ensure to dodge any possible international issue, they have applied security upgrades which would assist with customers looking to make international payments. This would apply to all online banking with Wells Fargo. If there are any other issues that may arise regarding international transactions, there is a support line on the website as well as a contact list in order to call them to fix any concerns or have any questions regarding an account.

Reference:

Ackemann E.C., (2006) Legal Issues, Ethical Issues, Privacy, and Security. Retrieved on March 18, 2007 from http://www.webliminal.com/Lrn-web09.html

Jennifer Land (2002) Retrieved on March 19, 2007 from http://www.libsci.sc.edu/bob/class/clis748/Studentwebguides/fall02/Land_webguide.htm#Top

Other Quote.com (2000) retrieved on March 18, 2007 from http://www.presidential.com/quotecom9_7_00.htm#ques4

Professional Responsibilities (1996) retrieved on March 19, 2007 from http://pages.stern.nyu.edu/~iwalter/PR_INTRO.pdf

Wikipedia (2006) retrieved on March 19, 2007 from http://en.wikipedia.org/wiki/Bank_regulation

https://www.home.wachovia.com/corp_inst/page/printer/0,,7_19,00.html

http://www.alacrastore.com/companysnapshot/1035493

http://www.actimize.com/index.php?option=com_content;task=view;id=131;Itemid=4

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