Internet Banking: Making Banking Easier

Internet or Online banking is a term used for performing transactions, payments etc. over the Internet through a bank's secure website. Any transactions done using the internet mode or done through the gateway of the Internet is called Internet banking or Online Banking.

Fundamentally and in mechanism, online banking, internet banking and e-banking are the same thing.

Internet banking is a financial institution with no physical branches; everything is completed online. There is no ability to cash a check (cheque), deposit cash and such others. Online banking is the ability to access account information, make transfers, set up automatic payments and such via the Internet. Almost all financial institutions offer online banking as a means of reducing customers going to physical locations.

Online banking, also known as internet banking, e-banking or virtual banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website. The online banking system will typically connect to or be part of the core banking system operated by a bank and is in contrast to branch banking which was the traditional way customers accessed banking services.

Internet Banking:
To access a financial institution's online banking facility, a customer with internet access would need to register with the institution for the service, and set up a password and other credentials for customer verification. The credentials for online banking is normally not the same as for telephone or mobile banking. Financial institutions now routinely allocate customers numbers, whether or not customers have indicated an intention to access their online banking facility.

The traditional method of banking requires you to visit the bank physically and conduct the transactions like cash deposit, cash withdrawal, remittance of money etc. During this process, you can ask for the assistance and guidance of the employees of the bank.
 

However, the initiative of online banking reduces the effort. You will be using the company website and completing the transactions. With Internet Banking, you can also arrange alerts on whenever the payments are due.

Online banking allows you to access your accounts at any time, even outside banking hours. Carry out the banking activities in the evenings, including during weekends. Through Internet Banking, basic banking transactions such as paying bills and transferring funds between accounts can easily be performed at times convenient to consumers.

Internet banking facilitates fast and convenient account management and international business transactions. With the boom of Online banking services, you need not worry about going through the administrative overhead. There are fewer paperwork transactions, and you will be able to enjoy banking resources more efficiently. An Internet bank will offer customers just about every service that is traditionally available through a local branch.
Internet banking provides an array of services including functional budgeting and forecasting tools, financial planning capabilities, investment analysis tools, loan calculators and equity trading platforms.
Online accounts are easy to arrange and require lesser information than a traditional bank account. While working through Internet banking you have the option of you calling customer care or emailing the bank directly, if any problem arises.

Accounts can be directly funded from a traditional bank account via electronic transfer. Most direct banks offer unlimited transfers at no cost, including those destined for outside financial institutions. They will also accept direct deposits and withdrawals that you authorise, such as payroll deposits and automatic bill payment.

 

Different types of internet banking:

Internet Banking could be of the following:

1. Informational internet banking:

The fundamental level of banking does not allow the customers to view or maintain accounts and does not allow communication between the bank and the customers. Informational internet banking means providing basic information about their products or services like a brochure. It is meant for marketing purposes and there is no connection to the bank’s main computer system.

2. Communicative online banking:

Communicative online banking will allow for communication between the customers and the banks. It is generally limited to the interactions like account inquiries, account updates, loan or mortgage applications. Through communicative online banking, the customer may connect with the bank’s main computer system.

3. Transactional internet banking:

Transactional internet banking offers all of the benefits of a physical branch. This will include full control over your accounts, for activities such as deposits, withdrawals, transfers and updates.
In most banks there are 2 types
  • Retail network banking for individuals. 
  • Corporate network banking for firms companies etc.

Benefits of Online Banking

With the advent of the internet, everything has transformed into its electronic version. Banking is not far behind. Now when people have access to all kinds of gadgets like laptops, phones, tablets - banking is just one click away from making financial transactions!

The biggest advantage of internet banking is the convenience. It is much better than physically going to the bank in many ways: 
  • You can make a transaction from anywhere, you need not actually go to a bank counter, you have access from home, work or even when you are on a holiday.
  • You can make a transaction at any time - you need not abide by the working hours of the bank. 
  • You need not even worry about Sundays or other holidays - your account is accessible 24x7.
  • You can use any device with internet access for your bank activities - phones, laptops, desktops & tablets.
  • Banks offer a wide range of services - payment of bills, transfer of money, checking account transactions via the internet.
  • All the transactions are automatically updated immediately; therefore you always have access to your information without submitting any slips or documents. Thus your account is always up-to-date without any discrepancies since the process is completely automated
  • The best part about internet banking is that you can keep track of all your different accounts simultaneously. In case you have multiple accounts, you need not go to different branches of your bank. This saves a lot of time.
A lot of day to day activities have been made simple and easy with the introduction of internet. Internet has made the lives of customers simple, and the banking sector has not been left behind. Internet banking is a feature that has allowed customers to have access to all kinds of gadgets like laptops, phones, etc. and the customers can also utilize banking to their benefit. Internet banking provides a lot of convenience to their customers.

Here are the 6 Reasons or benefits to use online internet Banking:

Convenience: Internet banking facility is that choice which banks provide to their customers so that the customers can enjoy banking services at their convenient time, from a convenient location.

Monthly Statement Tracking: Customers who are accustomed to the use of internet banking can easily track the monthly, weekly and daily transactions of their accounts at any time. An SMS facility is also integrated with internet banking accounts of customers by the banks to notify them about the account activities and transactions.

Services: Through internet banking, you can avail various specialized services such as requesting for a cheque book, balance inquiry, fund transfer (national and international), credit card and utility bill payments, mobile direct-to-home/(DTH) recharge, tax payments, opening deposit accounts, etc. You can access any of these services on your bank’s website just through a click.

Easy to Use: Online banking is simple to comprehend and easy to use than conventional banking methods. Banks provide a welcome kit to the customers when they open a new account. The welcome kits typically include precise instructions for the users to understand the features of the facility and follow them accordingly.

Security: Banks ensure the safety of their customers’ accounts. They keep your valuable savings safe and secure through advanced encryption systems. Unauthorized access and malpractices are prevented. In fact, fund transfers through online banking is extremely safe.

Beneficial for the Environment: Online banking is a boon to the environment in several ways. It cuts down paper usage. It also reduces carbon footprints to some extent since the customers are not required to visit banks for availing most of the services.

We can summarise by saying that
1. Internet Banking allows you to bypass bank lines.

2. Conduct your banking transactions safely and securely without leaving the comfort of your home.

3. Round the clock access to all your accounts.

4. Pay your bills electronically.

5. Transfer money online.

6. You can also view all your recent financial transactions

7. A mobile application will make transactions convenient for you

8. You can make transactions from anywhere at any time.

Disadvantages of Internet Banking

Though there are many advantages of internet banking, but nothing comes without disadvantages and everything has its pros and cons; same is with internet banking. It also has some disadvantages which must be taken care of. These include the following: 

  • Understanding the usage of internet banking might be difficult for a beginner at the first go. Though there are some sites which offer a demo on how to access online accounts, but not all banks offer this facility. So, a person who is new, might face some difficulty.
  • You cannot have access to online banking if you do not have an internet connection; thus without the availability of internet access, it may not be useful.
  • Security of transactions is a big issue. Your account information might get hacked by unauthorized people over the internet.
  • Password security is a must. After receiving your password, do change it and memorize it otherwise your account may be misused by someone who gets to know your password inadvertently.
  • You cannot use it, in case, the bank’s server is down.
  • Another issue is that sometimes it becomes difficult to note whether your transaction was successful or not. It may be due to the loss of net connectivity in between, or due to a slow connection, or the bank’s server is down.

Is Internat Banking safe?

Internet Banking is safe because of the numerous safeguards put in place by the banks and other financial institutions to prevent fraud, theft and other mischievous activities online. There are more complicated passwords, multiple levels of confirmation and identification that generally ensure that your financial capital is safe.

Nothing in the financial world or any other world for that matter is 100% safe. Hackers, cyber criminals and other mischievous lot try and steal or fraud their way into people's capital.

So some of the things to do to ensure that this does not happen to you would be:
 
  • Make sure you do not share your identification ID or passwords to anyone. Even if you think they won't scam you, they may let slip this info and thus it can lead to possible theft.
  • Always use trusted machines to carry out any financial transaction like personal mobile phone or personal computer. Doing transactions on a public computer or someone else's phone raises risk of fraud.
  • Always make sure you logout/end sessions of online banking when done with a transaction. Not logging out may leave you susceptible to fraud if someone else gets hold of your device.
Other things you should do to be safe in Internet Banking include
  • Always use a trusted browser.
  • Never allow your browser to save your transaction and login passwords of the bank.
  • It is mandatory to setup 2 Factor Authentication. All major banks provide it and you should immediately apply for it. It uses a One Time Password for each and every single transaction you make.
  • Make sure that the Secure Sockets Layer (SSL) Certificates are not expired.
  • Always make sure you are entering details in a https: site.
  • Do not write down any bank related information in your mobile or laptop.
  • Always check your monthly bank statement to ensure proper debit and credit information. Any discrepancy should be immediately reported.
  • You can have seperate account for online transactions and keep the account balance to a minimum in amount. This ensures that even if someone has your credentials they cannot steal more than is available on the account. .

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