LL.M. (Banking Law) / During the last ten years technology evolved to such an extent that it was inevitable that banks would have to adapt their traditional understanding and methods of banking. This led to banks introducing various products and services such as internet banking, mobile banking and emoney. The advantages of these products are being able to access your bank account on the go, within minutes, without having to go into the bank and having face-to-face interaction. These products are automated and computerised. This decreases the bank’s need for human capital and therefore the banks offer these services at lower charges than normal banking as we are accustomed to. Prima facie these new products seem like the ultimate banking experience, being able to effect payment to a creditor outside of banking hours from the comfort of your home with the push of a button and even at lower rates. This ease of use without face-to-face interaction, however, inevitably led to fraudsters entering the arena with easier methods at their disposal to defraud unsuspecting victims through various trojan horses and man-in-the-mirror techniques which do not require the fraudsters to alter the victim’s identity document in order to present it to the bank’s teller to withdraw the victim’s money. These attacks are highly advanced and the victim will normally not even know that an attack has been launched on his account. With these new methods of committing fraud, the legislature had to implement certain standards the banks have to adhere to in order to protect sufficiently the bank’s customer against these attacks and to avoid the customer suffering losses.

The Internet has had and will continue to have a major impact in the way in which banking business is conducted. This dissertation primarily considers the allocation of risks associated with Internet banking and in doing so considers the role of trade usage in Internet banking. The question of what the Internet is and more specifically what constitutes Internet banking is addressed. In order to have an understanding of the allocation of risks in Internet banking a good understanding of the traditional bank-customer relationship is necessary. The contractual basis for this relationship is discussed. The duties of the bank and the customer are discussed. In this regard the duty of a bank to act in terms of its customers mandate, the banks duty of confidentiality and the customers duty to exercise reasonable care are considered. The concept of a customer is briefly discussed. As trade usage plays a significant role in the contract between the bank and its customer, attention is given to the requirement for the recognition of a trade usage generally and more particularly in South Africa. The effect of Internet banking on the traditional bank-customer relationship is considered. The fact that a bank is still required to act in terms of its customer's mandate but is unable to identify is examined. As most Internet banking contracts impose an obligation on the customer to take security precautions and also limit the liability of banks, consideration is finally given to the possibility that the practices of banks in regard to Internet banking may have acquired the status of trade usage in this particular sphere of banking. / LL.M. (Banking Law)

The Internet has had and will continue to have a major impact in the way in which banking business is conducted. This dissertation primarily considers the allocation of risks associated with Internet banking and in doing so considers the role of trade usage in Internet banking. The question of what the Internet is and more specifically what constitutes Internet banking is addressed. In order to have an understanding of the allocation of risks in Internet banking a good understanding of the traditional bank-customer relationship is necessary. The contractual basis for this relationship is discussed. The duties of the bank and the customer are discussed. In this regard the duty of a bank to act in terms of its customers mandate, the banks duty of confidentiality and the customers duty to exercise reasonable care are considered. The concept of a customer is briefly discussed. As trade usage plays a significant role in the contract between the bank and its customer, attention is given to the requirement for the recognition of a trade usage generally and more particularly in South Africa. The effect of Internet banking on the traditional bank-customer relationship is considered. The fact that a bank is still required to act in terms of its customer's mandate but is unable to identify is examined. As most Internet banking contracts impose an obligation on the customer to take security precautions and also limit the liability of banks, consideration is finally given to the possibility that the practices of banks in regard to Internet banking may have acquired the status of trade usage in this particular sphere of banking. / LL.M. (Banking Law)

University of Macau / Faculty of Law