they retrieve documentation, such as the banks ’ risk analysis, an independent edp audit report and the results of a penetration test. this test is a legal attempt to hack, conducted by an external organisation. as well as the national initiatives i just mentioned, there are international activities under way in the e - banking area. a good example of this is the work of the electronic banking group, or ebg, which is a working group of the so - called basel committee of banking supervision. this group is engaged in formulating international guidance and principles regarding e - banking. the ebg recently published its principles for risk management in electronic banking, which also include issues relating to consumer protection. one example is a principle that concerns appropriate disclosures for e - banking services. this principle states that banking organisations should provide on their websites some core information in order to assist customers in making informed choices. examples of such disclosed information could include contact details for the supervisory authority responsible for the supervision of the bank ’ s head office as well as details of access to national compensation or insurance schemes. the risk management principles for e - banking are currently presented to the banking sector for consultation. it is expected that the final version will be presented to the basel committee next month. around april, the principles will be published at the website of the bis ( www. bis. org ). beside the publications at our own website ( www. dnb. nl ), such as this speech, you also find a link to the site of the bis. besides the work of the basel committee that applies specifically to the banking sector, there is more general legislation in the form of eu directives. these affect e - banking as well. for example the directive on electronic commerce, which requires providers of electronic services to make information on prices and conditions accessible for consumers. another relevant directive for e - banking is that on the remote provision of financial services. this states for example that consumers have the right to recall an agreement if a supplier did not provide them with the terms of delivery, like prices, before entering into a transaction. conclusion to summarize : e - banking is a phenomenon which affects both banks and regulators. i hope i have made clear that this subject has the regulators ’ full attention, both nationally and internationally. as well as participating in international discussions on e - banking, the bank has undertaken various initiatives to include e - banking in its supervisory policy. this does not mean that we can afford to be complace

are provided by the same organisation. examples are account management, product development and infrastructure. the internet puts pressure on this integrated organisational structure. an important aspect of internet technology is that its development requires very high initial investment, but that the marginal costs of use are low. this raises the possibility that new, specialised suppliers are able to carry out certain specific activities more efficiently than the banks themselves. on the one hand, this situation offers the banks the option to outsource some of their operations to others, thus achieving cost reductions. on the other hand, it could bring unwanted pressure on parts of the banks ’ value chain, and ultimately lead to deconstruction of the chain itself. a practical consequence of this trend is that banks are developing into network organisations by way of alliances and cooperation with both financial and nonfinancial institutions. for example the cooperation between abn amro and kpn in relation to the launch of the ‘ money planet ’ internet site. a third consequence is that new suppliers can enter the market more easily. in the virtual world, barriers to entry are significantly lower. there is no longer a need for an extensive branch office network, for example. lower entry barriers mean more suppliers in the market, which intensifies competition. these suppliers may take different forms. they may be existing banks originating from other countries. these banks can use the internet to bring about a rapid internationalisation of their activities. various institutions have already set up electronic subsidiaries, which offer banking services on an international scale under a new brand name or under the name of the parent bank. examples include the bank of scotland ’ s electronic subsidiary eubos, which offers mortgages on the internet in this country, or ing direct, ing ’ s electronic offshoot, which is active in canada and elsewhere. new suppliers can also be pure electronic banks, or institutions from the non - banking sector. pure electronic banks are not linked to an existing physical bank. although they do not have the high fixed costs of a branch network, they do have to invest heavily in building up their reputation. it is interesting to note that the current market share held by such banks is still very small. the principal reasons for this are probably the lack of confidence resulting from the lack of a physical presence and the high cost of marketing the brand name. newcomers from the non - banking sectors can be existing non - financial institutions that offer a limited range of financial services through electronic channels. volkswagen in germany is one example. they offer