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Continuing technological innovation and competition among existing banking organizations and new entrants have allowed for a much wider array of banking products and services to become accessible and delivered to retail and wholesale customers through an electronic distribution channel collectively referred to as financial service. However, the rapid development of financial service capabilities carries risks as well as benefits. The author expects such risks to be recognized, addressed and managed by banking institutions in a prudent manner according to the fundamental characteristics and challenges of financial service services. These characteristics include the unprecedented speed of change related to technological and customer service innovation, the ubiquitous and global nature of open electronic networks, the integration of financial service applications with legacy computer systems and the increasing dependence of banks on third parties that provide the necessary information technology.