Sunday, 11 November 2012

Online Banking

Online Banking       

Online banking is the virtual world of banking, where access is available to find out information from any computer at any time. It offers features such as checking transactions, applying for different bank cards, loans, share schemes, ways to save and much more. Online banking has been available since 1995 and is growing and advancing everyday becoming a more popular way of finding out important information and dealing with problems or changes.
  There are many useful features and services available online besides the usual transactions. For example, it is possible to apply for credit cards, manage investments, and pay bills through your online account portal. You can also perform more mundane tasks such as ordering new cheques, requesting additional deposit slips, or reporting a lost or stolen debit card. These features open up the virtual world of the future, which will save money for banks as fewer buildings will be needed and furthermore less paper will be needed for documentation.
Internet banking has many benefits including:
It saves time as a simple login is needed from a computer to access bank balances compared to having to travel to an ATM machine.
More time to look for best possible scheme for the individual.
Manage money at the suited time of the user. Instead of having to adjust your personal schedule to conform to the restrictive hours of branch offices, you can check your balance and perform most transactions online from the comfort of your home.
24 hour help and support is available.
Pay bills. This is useful as it can be done at convenience of a person’s own home and bank buildings often have irrational opening hours which can mean payments are made late; the internet prevents this.
Other services such as car insurance are available, and quotes can be quickly obtained online, this is beneficial for the bank and user.
Keep track of account all the time.

Internet banking has some downfalls including:
Phishing occurs a lot and this means personal data and money can be stolen from bank accounts quite frequently. Banks try to prevent this by having strong security with pin numbers, secret questions, pass phrases, passwords and now I.D numbers. An I.D number consists of choosing a ten character word and upon sign in the website bank will ask for say 'character 3' and other choices. This is the strongest prevention of fraud so far.
If your bank operates only online or simply does not have a branch office in your local area, you will not be able to reach a representative in person for discussion of account issues. Normally this is not a problem, but sometimes customer service by telephone or email can be spotty and may prove to be more of a hassle if you have a serious issue that is not easily resolved. Some banks are better than others in this department.
Not all services are available online and this can mean if a branch isn't local, people may not be able to solve some problems or be able to carry out a transaction; this at the worst case could lead to being in trouble with the bank and government with being in debt.

A normal bank would usually have an online site and a shop in store, however there are banks that operate entirely online such as egg, which started back in 1998 and has grown since. They have a large number of customers but a very low number of employees simply because they just operate online, according to Wikipedia they have approximately 1100 employees. This is a very big advantage that egg has over typical banks, having low numbers of employees reduces the cash output.

Advantages for the customer
You can get your latest online statement, because yet again online banking is open all day round, anytime of the year unlike high street banks, this makes online banking very convenient for a busy person working 9-5.
With online banking you can make instant transfers to anywhere in the world within a couple of clicks, unlike high street banks it usually would take 3-5 working days for the funds to be transferred.
Most banks have developers working behind the scenes to develop banking applications for popular platforms such as iOS and Android; this is a great advantage because it means you do not even have to be on a computer to make a transfer.
There is usually no paper! You receive all statements to your email address. This saves paper which is an added bonus.
If your bank details get intercepted banks usually offer a compensation scheme. The banks are that confident nothing will happen to your information.
All your details are stored securely and you do not have to store them in your household.
Disadvantages for the customer
Banks tend to have a very complex security procedure, although people will always try and access your information. This can be very time consuming.
No in person contact with bank staff, if you do it all online you have no human interaction.
The process to log in can be very lengthy, either to the customers Internet connection or due to all the security questions the customer has to answer.
When entering in your information it is very easy to press a wrong button, and if you do press a wrong one you usually have to start right from the beginning again.
Not everyone has a computer, and not everyone knows how to use one, the world is just adapting to the digital side of it now.

Advantages for the bank
<!Banks such as egg operate just online, this saves paying for a shop floor/premises, this saves them a lot of money, and they can then invest that money into security for their site.
Adapting their system to use online banking will attract a lot of new customers as in this day and age a lot of people are now on the move and do not have time to go to a bank; they would prefer to do it online.
An online bank doesn’t have to employ as many employees as a usual brick and click one.
Advertising is much easier and you have a wider audience to entice them to sign up.

Disadvantages for the bank
They invest a lot of money into their security system. This can be very expensive, but also pays off after a while.
Some of the customers enjoy going into the bank and having a face-to-face interaction, online banks will loose a lot of customers to this.

Advantages for the employees
New jobs will be created and this will help improve the current economic climate.
Working in IT will give you a range of new skills.

Disadvantages for the employees
Some employees will have to be retrained to use the system.
Eventually they may no longer be required to work there, as sooner or later everything will become fully automated.

Online Banking basically has two different main methods of security – the PIN/TAN system, and signature based banking
PIN/TAN – the PIN represents a password used for the login, and the TANs represent one-time only passwords. TANs can be dispersed in many ways such as; postal letters, security tokens or by SMS.
Signature based – all transactions are authorized and encrypted digitally.

My Personal Experience of Online Banking
I personally have had no experience with online banking, however members of my family have and although they think it’s a great service and will use it when they have to, they would rather prefer to go into the bank its self and do it there as they find it’s less risky. I have however recently set up for online banking and plan on using it for the more simple things such as checking my balance etc. as these things won’t put me at risk. 

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