Problems encountered in E-Banking in Selected Banks in Quezon City
BSBA- Banking and Finance (student) Acaso ,Maribeth Cabudoy, Eva Monilla. Nordeliza M. Naval, Arnel
Chapter1 IntroductionElectronic banking is sometimes defined as the provision of retail and small value banking products and services through electronic channels either through mobile devices, Automated Teller Machines (ATMs), or even the internet. It is also often used to describe processes in which customers can perform banking transactions without visiting a physical institution. In the Philippines, e-banking made an auspicious debut when automated teller machines (ATMs) were introduced in the 1980s revolutionizing how we viewed the usual, brick-and-mortar bank structure. Today, ATMs have become a common customer delivery channel that is mainly in urban centers and sometimes even in the countryside. Aside from ATMs, other innovations have taken place such as phone and internet banking which again provide customers the ability to access banking services from various locations and at a 24-hour by 7- days basis. With these developments, customers are able to enjoy the many conveniences and lower costs that are offered by the said innovations. However, it seems that there have been several major challenges and issues faced to the e-banking growth and the e-business in general. (http://www.bsp.gov.ph/publications/speeches_archives.asp?id=66&yr=2004) Our research aims to determine the problems that might encounter in doing e-bank. In this paper, we will cover security issues and different impacts regarding the traditional banking method. We are concerned about the issues presented because we thinks that these issues are very important and relevant today, a lot of people save money and really trust banks with their money. In addition, we want this research paper to be read by many students who are in no knowledge about certain issues about e-banking. Lastly, we will provide and recommend different solutions about the issues regarding E-Banking.
1.1 Background of the studyElectronic banking is one of the first things that come to mind when one thinks about the future of banking. It is generally assumed that electronic banking is new and that it will replace or supplement many channels of delivery of retail banking services. The term electronic banking as used here refers to any banking activity accessed by electronic means. It includes automated teller machines (ATMs), automated call centers, digital cash, Internet banking, screen telephones, and so on. These channels of delivery can be used for presenting and paying bills, buying and selling securities, transferring funds, and providing other financial products and services. Banking has never been more important to our society than it is today. The advance of communication and computer technology and the availability of the Internet have made it possible that one can do most banking transactions from a remote location even without stepping into a physical financial structure - that is, the emerging of e-banking. Electronic Banking has greatly serviced both the general public and the banking industry. This has resulted in creation of a better enabling environment that supports growth, productivity and prosperity. Further, E-banking has helped banks in better monitoring of their customer base. This is a useful tool in the hand of the bank to device suitable commercial packages that are in conformity with customer needs. As e-banking provide opportunity to banking sector to enlarge their customer base, a consequence to increase the volume of credit creation which results in better economic condition, Besides all this E-banking has also helped in documentation of the economic activity of the masses. The Internet makes it possible to bring both customers and suppliers
together to share critical business information (Gup, 2003). E-banking helps banks relay and show to their clients how good their services are and that the services they offer are of better standards. Through E-banking the company can show the clients that they are better than competitors and can give them satisfaction guaranteed.Filipinos have time and again basked in the distinction of being some of the most technology-savvy people in the world, readily snapping up and testing new ways of doing things. But the banking industry in the Philippines forms one of the most conservative sectors in society, treading only very carefully on new trends. It was in the 1980s were the introduction of automated teller machines (ATMs) that e-banking made an auspicious debut in the Philippines and in a way revolutionized how we viewed the conventional, brick-and-mortar bank structure. Today ATMs are widespread all over the country. Other innovations have also come like phone banking, internet banking, and mobile banking. Their common denominator is that they further enhance customer convenience by making banking transactions feasible on a 24 by 7 basis from the work place, from the home, and indeed from wherever the customer can use a mobile phone. However, pure e-banking has not yet fully replaced the bricks-and –mortar structure although pure internet-only bank do exist. Indeed, there have already licensed one pioneer internet-only bank in the Philippines. What we are seeing today are more like bricks-and-clicks, the incorporation of e-banking into the more traditional banking structure. Security is still a major concern although the technology to protect transactions is already pretty good and keeps getting better. For the Bangko Sentral, this is a major reason for regulating e-banking activity both from the perspective of prudential regulation as well as consumer protection. However, the Bangko Sentral welcomes the full development of e-banking.
Back in 1999, a Business World Online-commissioned study by Hunter Consulting showed that banks in the Philippines were cautious adopters of technology, notwithstanding the dot-com boom at that time. But they did say they are going to make some IT investments starting the year 2000. An online survey conducted in the first half of last year by ACNielsen showed, among other things, that more and more Filipinos have been using the internet to transact with their banks. Another survey conducted in the second half of 2002 revealed that internet banking is expected to drive e-commerce in the Philippines in the next few years. In June 2003, a bank survey was conducted to 21 banks belonging to the Business World Top 1000 Corporations reveals that the Philippine banking industry is just as cautious as it was years back. Most of the banks are focused on traditional IT banking applications and systems. Some have ventured into newer types of applications, such as e-banking and e-commerce, but the survey shows that they only started transition to new systems at the beginning of the century. Only a handful has dared to venture into new technologies in the late 1990s. The 21 banks in the survey represent almost 50% of the 44 banks listed in the Business World Top 1000 Corporations 2002 edition. Interviews with the banks’ e-banking point persons reveal that some banks are waiting for market responses. Even big commercial banks won’t join the e-banking fray, for instance, simply because it’s the trend. Bank executives responsible for e-banking strategies said their strategies hinge on benefits they could derive from e-banking. New technologies should be able to either drive down cost, improve efficiency or improve custom service.
The survey results could be disappointing, considering that an informal survey conducted by Business World Online reveals that the market could just be ready for the new technology. In an online poll of Business World Internet Edition readers reveal that they are using the internet to bank. Even then, issues like access and security are still prevalent among reader-respondents. The good news is that these issues are being addressed by the banks themselves, their solutions providers and regulatory bodies like the Bangko Sentral ng Pilipinas (Central Bank of the Philippines, or BSP). The bad news is that BSP may not be quick enough to respond to "e" trends, some critics say. Whether the banks are ready or not, solutions providers assure that the solutions are readily available. They are just waiting for the market to mature. Interestingly, the e-banking survey also reveals that while Philippine banks are focused on traditional banking applications, they are not tied down to old solutions. The survey shows that many of them have adopted new computer platforms. Also, majority of the survey respondents said they plan to install new e-banking and even e-commerce applications starting this year up to 2005. Even thrift banks are aggressive in going into e-banking. One bank said it is even making a "major IT systems upgrade" and is allotting 90% of its budget to this upgrade. This online report focuses on results of the informal online poll, as well as a discussion of e-banking strategies, readiness of Philippine-based solution providers to meet banks’ requirements, and regulatory issues.In June 30, 2003, 36 banks have been authorized to engage in e-banking activities ranging from phone banking, internet banking, and mobile banking. ( http://www.bworldonline.com/OnlineExclusives/ebank/inside.php?id=001
(http://www.bsp.gov.ph/publications/speeches_archives.asp?id=66&yr=2004) E-banking services could be highly demanded and desirable to accommodate the sudden, rapid growth that has occurred in other information-intensive industries such as travel and securities brokerage. The development of e-banking service has encouraged the adoption of a decentralized approach to give banks more needed flexibility to distribute Internet access to a much larger number of employees and potential customers. But while making transactions online, the online bankers are always concerned about the hackers and anti-social elements. Hacking enables the unethical hackers to penetrate the accounts of online bankers, and spend their money. Availability of confidential information which is just secured by a user name and password makes it vulnerable to such threats. Most of the banks try to make their sites secured by implementing latest network security software. However, there have been plenty of cases in which web surfers were accidentally exposed to the financial details of online bankers. Internet security had a setback when in 2004; Morgan Stanley admitted a serious security flaw in the system of the latest online banking operation. This flaw allowed customers to access account details of other clients. Transaction/Operations risk arises from fraud, processing errors, system disruptions, or other unanticipated events resulting in the institution’s inability to deliver products or services. This risk exists in each product and service offered. The level of transaction risk is affected by the structure of the institution’s processing environment, including the types of services offered and the complexity of the processes and supporting technology.In most instances, e-banking activities will increase the complexity of the institution’s activities and the quantity of its transaction/operations risk, especially if the institution is
offering innovative services that have not been standardized. Since customers expect e-banking services to be available 24 hours a day, 7 days a week, financial institutions should ensure their e-banking infrastructures contain sufficient capacity and redundancy to ensure reliable service availability. Even institutions that do not consider e-banking a critical financial service due to the availability of alternate processing channels, should carefully consider customer expectations and the potential impact of service disruptions on customer satisfaction and loyalty. The key to controlling transaction risk lies in adapting effective policies, procedures, and controls to meet the new risk exposures introduced by e-banking. Basic internal controls including segregation of duties, dual controls, and reconcilements remain important. Information security controls, in particular, become more significant requiring additional processes, tools, expertise, and testing. Institutions should determine the appropriate level of security controls based on their assessment of the sensitivity of the information to the customer and to the institution and on the institution’s established risk tolerance level.
Statement of the problemThe main purpose of the study is to assess the problems encountered in E-Banking in the selected banks in Quezon City.Specifically, it ought to answer the following Sub- problems: What is the demographic profile of the respondent in terms of the following variables. 1.1 Ages 1.2 Gender 1.3 Status 1.4 Occupation 1.5 Estimated Monthly Income 2.0 How do the respondents rate the problem encountered in E banking in the selected banks in Quezon City in terms of:Internal Environment2.1 (a) The essence of E banking usage to Filipinos.2.1 (b) Difficulties of introducing the concept of online banking to the local market.2.1 (c) Readiness to cater to Filipino online users banking needs.2.1 (d) Most popular electronic delivery channel used.2.1 (e) Security flaws in the system of online banking operation.2.1 (f) Security risk exposure of electronic delivery channels such as ATM, Online, Mobile, and Telephone.2.1 (g) Security controls for safe guarding customer.
2.2 External environment 2.2 (a) E-banking over the Traditional banking or Over-the–Counter. 2.2 (b) The convenience of e-banking to consumers. 2.2 (c) Trust on e-banking services. 2.2 ( d ) Problems Encountered in using ATM, Online Banking, Mobile Banking, and Telephone Banking.3.0 Is there any significant difference on how the respondent rate the problems encountered in e- banking in selected bank in Quezon City when grouped according to their profile. What alternative course of action is necessarily to address the problems encountered as perceives by the respondents. Scope and Limitations of the StudyThe focus of this study is mainly based in the selected banks in Quezon City. It involves on the problems encounter by the consumers and the financial institution in e-banking. Give information about electronic banking. What regulatory approaches given by BSP to the banks engage in electronic banking? And finally, what strategies the local banks do to make sure that the transactions of the consumers are safe and secure.
Significance of the StudyThis study aimed to contribute information about e-banking. E-banking is the long-sought answer to the need of the increased globalization and sophistication of our corporate and consumer markets to do banking transactions conveniently, and Quezon City is not an exception to that. We intend to find out the problems encountered in e-banking in the selected banks in Quezon City like Banks of Philippine Islands (BPI), PSBank, and Land Bank of the Philippines.Definitions of TermsE-Commerce- to buy and sell stuff over the Internet in other words the paperless exchange of business information using electronic data interchange (EDI), e-mail, or electronic funds transfer. M-Banking or (Mobile Banking)- a financial transaction conducted by logging on to a bank's website using a mobile phone.Online Banking- allowed individuals to performbankingactivities at home, via the internet.Mobility -This refers to the ability to move spontaneously and independently.online banking Hacking - to the re-configuring or re-programming of a system to function in ways not facilitated by the owner, administrator, or designer.Regulatory. - To control or direct according to rule, principle, or law.Innovation. This refers to renew something that exists and not, as is commonly assumed, the introduction of something new.E- Banking or (electronic banking). This refers to the automated delivery of new and traditional banking products and services directly to customers through electronic delivery channels.Ages- it refers to the respondent’s span of life when the research was conducted.Gender- this refers to the classification of respondents according to male or female.Respondents- these are the persons intended to be the subject of the study who where ask to answer the questionnaire such as bank manager.
Chapter 2Review to Related Literature and StudiesBanking has never been more important to our society than it is today. The way BillGates (2008) announced that « banking is essential, banks are not ». This quotation means that the traditional bank branch is going to vanish in order to be surrogated by electronic banking which continues to attract new users. The banking industry believes that by adopting new technology, the banks will be able to improve customer service level and tie their customers closer to the bank.2.1 Local literature and studiesA decade after the Bank of Philippine Islands launched its internet banking arm, BPI ExpressLink, the bank continues to innovate and seek the feedback of its clients to improve the online system. Now focusing on the small and medium enterprises, BPI Express Link seeks to make life easier for the new entrepreneur or even the business veterans. In traditional banking, an SME owner would have to call the bank and inquire about their bank accounts, or visit the bank to get copy of their bank statements or to pay their taxes. Calling the process of lining up to a bank teller to do one's banking as something "too 20th century". Bess Basa, BPI vice president and cash management head recalled the difficulty of introducing the concept of online banking to the local market back in 2001. “The innovation of internet banking was not warmly received by the locals. The first to embrace the new product were the expatriates and foreign companies...," Basa said.(Sep 30, 2010, http://www.entrepreneur.com.ph/features/article/online-banking-to-help-smesbpi)
The Philippine Savings Bank (PSBank) is installing not one, but two levels of security measures to ensure that its online clientele base is safe from fraud.PSBank, a subsidiary of the Metropolitan Bank & Trust Co. (Metrobank), presently serves nearly 40,000 bank clients enrolled in its online or Internet-based banking services. The second largest thrift bank in the country has a deposit and borrower base of over 350,000. PSBank senior vice president and E-banking head Jaime L. Araneta said that it has applied the so-called two-factor authentification system to secure its online banking users. Aside from the standard personal identification number (PIN), password or code, and repetition of procedures demanded entering the online site; PSBank has given a device to each online user for additional security.Araneta explained that the two-factor authentification gadget looks like a USB or keyholder. It will generate random codes every time the user makes a transaction.After making the standard entry process, the user simply presses a button and the gadget generates a random code. He added that should anyone other than the authorized user get hold of the gadget, that person cannot access the online account since the two-factor authentification gadget does not have the original details.PSBank is the only thrift bank that offers the additional security feature. It is also the only thrift bank independently offering online banking services, and it widely believed to approximate the online banking services of commercial banks.ATM-service provider BancNet offers online banking services to its member banks, but these are limited to plain-vanilla services like balance inquiries. Electronic banking (e-banking) is still in its early days but already users are demanding. (www.google.com)Online banking is a service that can only grow what with the technology available in the market today and the speed by which it is utilized in the banking community. Also taken
in consideration is the mobility of the market. The level of technology today dictates that banking institutions learn to adapt, and thus offer banking services taking advantage of such technological advancements.It is now common to find households with a desktop computer at home, more individuals are getting laptops, notebooks, and netbooks, and the mobile phone technology have become very sophisticated.The annual growth of broadband technology is 30 percent, and the penetration rate for online banking is practically the same. The services offered by online banking are: account information (balance inquiry, view account statement, download, view summary of transactions), view statement (view/download transactions in past two months), bill payments (immediate or advanced payments to accredited billers or merchants), fund transfer (move PSBank funds from one branch to another under the same name, or to family with PSBank accounts), manage accounts (enroll or un-enroll account, assign nicknames to the account, modify functionalities of enrolled accounts as bills payment source, fund transfer, funds transfer target), customer service (feedback on inquiry with customer service associates), customer feedback (helps the bank improve/expand services), online loan application (apply for auto, business, home or personal loans, get updates via SMS or email regarding application status), and online tool (December 21, 2010,www.adwarps.com/...Philippines)Automated Teller Machines (ATM) are certainly a convenience. But while machines are available 24/7, they do malfunction every now and then. One of the glitches an ATM user dreads is not getting the money being withdrawn although the receipt states that
the cash has been dispensed. This is more than an inconvenience.One of the BPI’s clients complains about this malfunction of machines. Then, Mike Bernabe, the vice president for ATM channel of BPI, assures clients, at least BPI customers that the problem of ATM’s failing to dispense the withdrawn amount can be resolved and the money restored to where it rightfully belongs. The important thing, he says, is “to get the ATM receipt and call our 89-100 hotline and file a complaint with a nearby BPI or BPI-Family branch at the same time or even after.”Bernabe says, even without the complaint, the bank would be able to trace and make adjustments. “The bank has an internal reconciliation system that covers situations like this.” He says the machine will automatically adjust/reverse the undispensed withdrawal within five minutes from the time of the transaction if set parameters/reconciliation criteria are met.He adds that adjustment/reversal will be effected during the batch processing sometime in the evening or, if the machine fails to make the correction, the following day during a manual reconciliation. Is it possible for the machine to “fix” itself and dispense the cash after the client has left allowing somebody else to collect the money? The chance of this happening is quite remote, according to Bernabe, but on the off chance it happens, he says an electronic journal/record of the machine will show such occurrence.Bernabe also assures BPI clients that the bank has instituted several control measures to prevent felons, who install contraptions that capture the money to prevent it from being dispensed, from victimizing ATM users.
The bank also has a way of verifying such incidents if these people succeed in tampering with machines despite all the precautions.Bernabe says, as in my case, if there are people who can attest to the fact that a problem did occur, that would mean greater reassurance for the ATM user. He advises clients to call BPI’s hotline immediately or lodge a complaint with the nearest BPI/BFB branch—or do both. He says people in the branches will attend to the complaint immediately regardless of when and where the transaction occurred. ( http://showbizandstyle.inquirer.net)It’s now evident that people in developing countries have access to the internet and mobile phones like never before, which (as I recently wrote about) may lead to increased economic growth, job creation and good governance. A huge piece of this broad puzzle is mobile banking, and utilizing mobile phones to bring financial services to people who wouldn't otherwise have access to banks ("unbanked").A new study, released last month by the Consultative Group to Assist the Poor (CGAP) and GSMA, estimates that there are more than one billion people worldwide who are unbanked, yet have access to mobile phones. And by 2012, that number is expected to grow to 1.7 billion people.Part of the study focuses on survey information from mobile money users in the Philippines. The country, which has two leading mobile banking companies (Smart and Globe) and 1.6 million previously unbanked users, can offer insight into the issue, according to the study. Some of the survey’s findings, which are highlighted here,
indicate that most mobile banking users in the Philippines use it to send and receive domestic remittances. Microfinance Analyst Mark Pickens shares some other key findings on the CGAP blog: * One-half of mobile money users in the Philippines were previously unbanked. * Most of unbanked non-users know telephone company brands better than bank brands, and they often view mobile banking as easy. * Still, only 21% feel mobile banking is a product for them.Aside from these findings, Pickens points out in an earlier blog post that a big goal is to help mobile phone operators work toward offering new and “more sophisticated” services to mobile banking customers. The report also insists that these phone companies should base these offerings on the needs and lives of poor, unbanked consumers.( http://blogs.worldbank.org/eastasiapacific/philippines)2.2 Foreign literature and studies According to Salehi and Azary, (2008), strong banking industry is an important in every country and can have a significant affect in supporting economic development through efficient financial services. But there have been several major challenges and issues faced to the e-banking growth and the e-business in general. One major obstacle addressed most is the security concern. Security is one of the most talked about issue in e-banking because basically e-banking increases security risks, risky environments and also because of the fact that security issues are the biggest concern in e-banking.
Security breaches fall into three categories, first is the breaches with serious criminal intent, which are frauds, theft of commercially sensitive or financial information. The second category is the breaches by casual hackers which are defacement of web sites or denial of service. The third one is the flaws in systems design and/or set up leading to security breaches which are genuine users seeing and being able to transact on the other users' account. All of these threats mentioned above have severe implications whether it is financial, legal or by reputation. A lot of banks nowadays are searching for errors in their systems a hundred times a day to lessen the breaches mentioned above. The most sensitive and highly built computer systems such as those computer systems that are used for storing tons of confidential information tend to be the most comprehensively secured and it is also highly designed to prevent breaches in the system. Some banks have a tendency to have reasonable perimeter security; there is not enough segregation between internal systems and poor internal security. And with this, some people can easily breach the lighter or the poor internal security. It is very easy to point out the security risks in e- banking; also it must be put into consideration that the Internet could remove some errors launched by manual processing. This lessens the risks to the integrity of transaction data. As the e-banking advances there could be large security gains if the banks would focus their attention on security risks. Some banks needs to have or needs to apply strategic tactics to information security, promoting best practice security controls into systems and network as they are developed, rigorous testing of security system concern in e-banking.
allow computer hackers to gain access to your bank account, which is the most common internet banking problem. This can lead to unauthorized and criminal transactions being conducted without your knowledge. By the time you get your bank statement and detect such transactions, it may be too late.In internet banking, you have to make sure that the banking session is secure, as in many instances you may encounter proxy websites. These proxy websites can easily access your bank account, if they can crack your user name, password or pin number. Due to such security problems, many people are apprehensive about internet banking.Sometimes, internet banking can be time consuming and tedious, as many websites take quite a long time to get started. Besides this, your internet bank account may also take considerable time to get started. You may also encounter technical difficulties and connectivity problems while conducting internet banking transactions. Of course, there is a customer care department in almost every bank to look into such matters, but often you may not be able to get the necessary assistance due to the congestion in the computer and telephone network. On the other hand, in normal banking, you can simply converse with the bank officials to sort out any problem.However, with the advances in technology, many banks have taken the adequate measures to ward off any problems related to the security of internet banking. Customers can also follow some simple precautionary measures, like not disclosing the password and pin number to anyone, changing the password at regular intervals and installing antivirus software to ensure security and safety of their internet banking transactions. Online banking tutorials are also provided by many banks to help familiarize people with internet banking. So, you can avail this facility to use internet effectively, for making your day to day financial transactions.( http://www.buzzle.com/articles/internet-banking-problems.html)
1.2 Conceptual FrameworkConceptual framework discussed the flow of the study to be taken. The study used the system approach. The system of three (3) frames is composed of input which went through the process of operation and emerged as the output.
CHAPTER III Research MethodologyThis chapter will discuss the design and procedures to be undertake in the conduct of our study. It presented the research design, population and sampling technique, respondent of the study, instruments used, and statistical treatment of data.3.1 Research DesignThe research design of our study utilized the descriptive method which is designed of us to gather information about the present existing conditions needed in the chosen field of the study. We use a survey study to measure the existing problem.As used in this research, gathered and treated are data on bank customers profile such as age, gender, status, occupation, and the estimated monthly income.3.2 Population and Sampling Technique3.3 Respondents of the StudyThe researchers will able to gather information from bank customers of selected banks in Quezon City. The population under consideration in this study includes every target and accessible bank customers of BPI (Bank of Philippine Islands), Land Bank of the Philippines, and PSBank.3.4 Instruments UsedIn this study, the instruments to be use are questionnaires, which are necessity for descriptive method. The contents of the questionnaires were designed to collect relevant information needed for the research from respondents. Two (2) questionnaires were made; the first questionnaire contains questions for the bank customers (external environment) for the information needed about the problems they encounter in doing e-bank, while the other was for the bank executives (internal environment) for the 3.5 Statistical Treatment of DataThe data to be collected in this study will organize and classified based on the research design and the problems formulated. The data will be coded, tallied and tabulated to facilitate the presentation and interpretation of results using the following:
Frequency and PercentageThe percentage and frequency distributions will be used to classify the respondents according to personal background variables such as age, gender, status, occupation, and the estimated monthly income. The frequency also presents the actual response of the respondents to a specific question or item in the questionnaire.On the other hand, the percentage of that item will be computed by dividing it with the sample total number of respondents who participates in the survey. The formula used in the application of this technique is: %= (f/n) x 100 Where: %= percentage f= frequency n= total sample RankingThis is a descriptive measure to describe numerical data in addition to percentage. Ranking is used in the study for comparative purpose and for sharing the importance of items analyzed.Weighted MeanAnother statistical technique to be used is the weighted mean. It is use to determine the average responses of the different options provided in the various parts of the survey questionnaire used. The method is used in conjunction with the Likert Scale. It is solved by the formula: X= ∑ fx / n
Where: X = weighted mean ∑ fx = the sum of all the products of f and x, f being the frequency of each weight and x as the weight of each operation n= total number of respondentsChi- squareIt is used to determine the significant differences between the perceptions of the respondents. The values of chi- square or a given distributions are computed by Findings the difference in between each observed value and the corresponding expected value; Expressing the square of the differences as a fraction of the expected value; and Summing Thus, the formula used for computing the chi- square values is presented below:= Where: = observed frequency = expected frequency
The computation for the degree of freedom is necessary in order to obtain the critical value (P). The formula is: df= (r-1)(k-1)Where:r = number of rowsk = number of columnsdf = degree of freedom HypothesisHo = there is no significant variation between the obtain/actual and expected frequenciesHa = There is a significant variation between the obtain/actual and expected frequenciesWhere:Ho = Stands for Null HypothesisHa = Stands for Alternative Hypothesis.