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Online banking is the practice of making bank transactions or paying bills via the Internet. Thanks to technology, and the Internet in particular, we no longer have to leave the house. We can shop online, communicate online, and now, we can even do our banking online. Online banking allows us to make deposits, withdrawals and pay bills all with the click of a mouse. It doesn't get much more convenient than that.
History:
The precursor for the modern home online banking services were the distance banking services over electronic media from the early '80s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. Online services started in New York in 1981 when four of the city's major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex) was subsidised by the telecom provider and the UK, where the Prestel system was used.
The UK's first home online banking services
was set up by the Nottingham Building Society (NBS) in 1983 The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard connected to the telephone system and television set. The system (known as 'Homelink') allowed on-line viewing of statements, bank transfers, and bill payments. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct, 1994
Difference between online banking and traditional banking: Online Banking and traditional banking are very much similar to each other but the main difference between the two is in online banking, you can access your information and account, make payments and reconcile statements with the help of your computer rather than through phone or paper work. Instead of visiting your local bank branch, you can visit the website of your bank and accomplish various tasks with only a few clicks of the mouse. Online banking has become extremely popular among the customers and almost all the banks are providing these services to their account holders.
The functioning of online bank is same as a traditional bank which aims at holding the money of the account holders and lending it out to people respectively. Their function is to manage the loans and keep a track of finances of the account holders. A large number of people are now giving preference to online banking procedures because it saves a lot of time and effort for the account holders. Online banking is also beneficial for the frequent travelers who need to monitor their finances from a foreign place. If you want to take a debt from an online bank, you can make your application online and wait for its approval. Usually, the services of online banking are quicker as compared to traditional banking. This is because all the data is stored on the computers and accessing them is more convenient than searching all the paper work and documents of the bank.
Common Features of Online banking: Today, most large national banks, many regional banks and even smaller banks and credit unions offer some form of online banking, variously known as PC banking, home banking, electronic banking or Internet banking. The common features of online Banking includes….
Types of Internet Banking: Getting an idea about the various types of Internet banking products will help examiners review the associated risks. Currently, in the market place, the following three basic types of Internet banking are being employed.
Advantages of online banking:
Disadvantages of online banking:
Security Threats in Online Banking:
Banks and service providers require guarding against various types of online attacks. The purpose of an attack may vary. In operating systems of particular kind, attackers may try to exploit known vulnerabilities. During a short time frame, they also may try to make an unauthorized entry into a Web site repeatedly thus denying service to other customers. Types of attacks may include:
Online banking is the modern day banking.
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.
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