Banks are financial
institutions which accept money in the form of deposits and lend money
in the form of loans and mortgages. The banks are governed by the Federal
Reserve and every individuals account is insured, which makes
it a safe place to deposit their money.
Gone are the days where it required the customer to go to a bank to
make a financial transaction. The evolution of Online Banking has brought
about a seeping change to the whole financial industry. Customers can
now bank online from their homes. Make Transfers, Check your Account
Balances, View your statements or order your statements online, Make
Bill payments or Order your check books, all online from your home.
All it requires is a computer and an internet connection. And if you
are going to think its going to cost you anything, your absolutely
mistaken, all the above services are performed absolutely free of cost.
Citibank which is
one of the leading financial institutions has only 4 locations in the
whole of England. All the four are in London, however the number of
customers Citibank has in London is enormous. How is it possible? Online
banking makes it possible. Its cheaper, faster, efficient and
Is it Secure:
A lot of people are apprehensive of ordering products and utilizing
various online services apart from banking to make a purchase or pay
for a service? Why? Because websites are hacked very easily today and
your credit card number or debit card number can be easily accessed.
However banks, when they offer Online Services, make sure that their
website is secure and safe for customers to conduct transactions online.
A bank today virtually takes responsibility as its dealing with
the most wanted product, MONEY. It takes all the necessary protection
and precaution to see to that their websites are secure.
So a customer can forget about his card numbers being hacked as banks
assure their customers that their money is safe. If you're like most
people, you've heard a lot about online banking but probably haven't
tried it yourself. You still pay your bills by mail and deposit checks
at your bank branch, much the way your parents did. You might shop online
for a loan, life insurance or a home mortgage, but when it comes time
to commit, you feel more comfortable working with your banker or an
agent you know and trust.
Online banking isn't out to change your money habits. Instead, it uses
today's computer technology to give you the option of bypassing the
time-consuming, paper-based aspects of traditional banking in order
to manage your finances more quickly and efficiently.
Origin of online banking
The advent and growing use of the Internet and the popularity of personal
computers and mobile phone users, presented both an opportunity and
a challenge for the banking industry. Customers today want Email and
SMS alerts of all their financial transactions and latest updates.
For years, financial institutions have used powerful and efficient computer
networks to automate millions of transactions everyday. Today, paper
records are most often used only at the point of sale as a customers
receipt. Now that its customers are connected to the Internet via personal
computers and mobile phones, banks envision similar economic advantages
by adapting those same internal electronic processes to home use.
Today banks view online banking as a very powerful and a value added
tool to attract and retain new customers, while helping to eliminate
costly paper handling and teller interactions in an increasingly competitive
banking environment. Paper records are also difficult to maintain and
If you don't mind foregoing the teller station at the banks and kind
bank officers, a "virtual" or e-bank may save you very real
money. Virtual banks are banks without bricks- it means that they do
not exist physically. From the customer's perspective, they exist entirely
on the Internet, where they offer pretty much the same range of services
and adhere to the same federal regulations as your physical bank does.
Virtual banks pass the money what they save on overhead like buildings
and tellers along to you in the form of higher yields, lower fees and
more generous account thresholds.
Almost all large national banks, many regional banks and even co-operative
banks, thrift institutions, credit unions and other depository institutions
offer some form of online banking, otherwise known as PC banking, home
banking, electronic banking or Internet banking. Those that do are referred
to as "brick-to-click" banks, both to distinguish them from
brick-and-mortar banks that have yet to offer online banking, as well
as from online or virtual banks that have no physical branches or teller
Most of the large banks now offer fully secure, completely functional
online banking for free or for a very small fee. Citibank, one of the
largest depository institutions encourage their customers to go online
and bank with them. Smaller banks offer limited access or functionality,
for instance, you may be able to view your account balance and statements
but not initiate transactions online. As more banks succeed online and
more customers use their sites, completely functional online banking
definitely will emerge as commonplace as automated teller machines.
The challenge for the banking industry is that it has been to design
this new service channel in such a way that its customers will readily
learn to use and trust it. After all these banks have spent generations
earning our trust; they aren't about to risk that on a Web site that
is frustrating, confusing or less than secure.
Advantages of online banking
- Convenience: Unlike your normal physical bank, online banking sites
never close. They're available 24 hours a day, seven days a week, 365
days a year and they're only just a mouse click away
- Ubiquity: If you are out of station or even out of the country on
a tour or on an official trip, when youre facing a money problem,
all you have to do is log on to the internet and transfer funds from
one account to another and take care of your needs and business 24 /7
- Transaction speed: Online banking initiates speedy transactions and
they are very cost effective and is generally quicker than the transactions
conducted at the ATMs or at the bank
- Efficiency: Feel free to access, manage and control all your bank
accounts, including Individual Retirement Accounts, CDs, even securities,
from one secure site
- Effectiveness: Manage your money, investment, bank accounts without
even going to the bank. Get email and wireless alerts on your transactions.
Get your statements online. Make your bill payments online and transfer
funds, all for free
Online banking is banking at your convenience. All banks today are encouraging
customers to bank online rather than going to the bank and making transactions.
This helps the customers to save money and time. The transactions conducted
online are absolutely free and within the customers control too. All
you need to do is just log on and make life easier for yourself. Transactions
like bill payments, viewing of statements, requisition of cheque books
and directing the bank to make auto debits are increasing features of
online banking. When you have the opportunity to bank from home, why
do you want to go to a bank.