Fundamentals Of Online Banking
Online banking has completely transformed the way banking activities were done in the past. As against traditional banking, this method of banking system enables you monitor your account, carry out financial transactions and pay bills, among others, through the computer. This saves you from making several trips to the bank and also helps you avoid the long queues at the counters. In fact, online banking is fast gaining grounds because of its convenience, speed and cost-effectiveness. The best part is that your account can be accessed from anywhere in the world and anytime of the day, as the system operates round the clock.
History and overview
Banking on the internet or what we call online banking today is said to have envisioned in the early 1980s. However, it was mostly in the experimental stage during that time. It is in October 1995 that the concept originated in the U.S. it was then that Presidential Savings Bank announced the concept of doing bank transactions with the click of a mouse. Other banks such as Chase Manhattan and Wells Fargo, among others immediately followed suit. Initially there were a lot of apprehensions regarding the service and authenticity of online banks. This is because here you do not get to meet your neighborhood banker personally unlike traditional banking system. Moreover, customers often encountered online frauds and technical failure. However, due to its convenience, speed and low-cost of service, online banking became a preferred banking option in a matter of just a few years.
In the process, two types of online banks started evolving. The first one operates solely online. The second category includes the major commercial and conventional banks that started to set up its online banking systems. Gradually, internet banking started to gain tremendous momentum not only in the US, but other parts of the world. Currently, it is estimated that by 2012, over 60 million families in the US will use online banking and will continue to grow at an alarming rate.
Uses and benefits
By now it is obvious that online banking has become a way of life for people because of its round-the-clock service, transactional speed and efficiency as well as its ease of operation. You can just log on to your bank account at anytime of the day and from any part of the globe.
Both transactional activities and non-transactional activities can be carried out in a matter of no time and the transaction is secured as banks use highly sophisticated technology to manage and protect all your assets and transactions effectively.
Key issues
Technical issues arising due to untrained technical staff and lack of awareness from customers often lead to serious issues in online banking. Security is also a serious concern in this system of banking. Although transaction is carried out in safe platform, phishing and spamming by hackers are also prevalent in internet banking. This is an area where both banks and customers require increased awareness.
It may take a while for online banking to replace its traditional counterparts completely. However, with its highly optimistic future, the system of banking is estimated to grow at an exponential rate.