E-Banking

Banking Online

The idea of online banking began in the 80’s with home banking and phone banking. These types of banking allowed the user to manage their money from home. Today, online banking has evolved with many different bank companies offering internet banking only. This also allows the user to access their account from home instead of visiting a bank branch.

ATM

The ATM (Automated Teller Machine) is one form of online banking that has become available to users since the late 1960’s. The ATM began as an idea of self service within bank branches and common use of the ATM started around 1968. The ATM allows users to withdraw cash from their account without visiting a branch. The user would simply enter their bank details into the ATM and choose how much they wish to withdraw from their account. Overall, the ATM can be very useful and convenient to users in need of money quickly. Another advantage of the ATM is that anyone with bank details can use one (For example, a tourist in another country can have money in their account converted into the currency of that country).

Online Statements

Online bank statements (also known as electronic statements) are very similar paper statements except the electronic statement can be viewed online. One advantage of the online statement is that less personal information is contain there and only contains bank transactions. However, due to online fraud and hacking, online statements can be easier to obtain.

Transfers Online

The idea of online bank transfers involves transferring money between accounts electronically. This can be much easier and quicker for users to transfer money. Bank companies can also keep track of transfer information easily.

Standing Orders

Standing orders can also be made online to transfer a fixed amount from a payer’s account to the receiver’s account. Online standing orders are used to pay rent or mortgages. However, the ability to pay standing orders online means that it can be more convenient to make the payments.

Direct Debit

The direct debit transaction is another form of bank service that can be made online. Direct debit is similar to standing orders except direct debit transactions allow the payee to withdraw money from the payers account for fixed amounts periodically. Direct debit can also be used to pay periodically payments such as rent or mortgages. Using online services, direct debit transactions can be made more convenient for the user.

Smartphone Banking

The popularity increase in smartphones means that banking companies have created apps for banking purposes. The apps allow users to make transactions, payments and look up information using their smartphone instead of a branch or computer. The app banking services have proven popular as smartphone banking has increased by 40% in Europe alone according to statistics.

Online Information

Online services also allow users to look up information about banking services. Other banking information can also be found online including branch locations for example.

Using the example of branch location information, websites of banking companies offer a ‘branch locator’ service. Here, a user can enter a postcode to find their nearest branch. A certain radius can also be entered to filter through branches. 

By signing up to a bank, users can also choose to receive E-mail notifications, reminders and alerts about recent activity. These E-mail alerts are convenient for users as a variety of alerts can help remind the user about important information.

Disadvantages of E-banking

Despite the advantages and convenience of online banking, there are disadvantages that would mean certain people would use branches instead. The issues with online banking would also affect different groups of people.

One disadvantage of online banking would security issues. As money and personal details are involved, security for banking websites must be secure for the customers of the bank. Although bank websites are secure, some people do not feel safe sharing their personal details with banks and other financial companies. An example of a group of people would feel unsafe would be older people as some would prefer visiting a bank branch instead.

Another disadvantage of online banking would be less skills required for bank work. This would mean that bank companies would require skilled workers of skilled jobs as computers can do these jobs much quicker. Therefore, this would be a disadvantage to skilled workers as there is a potential threat of unemployment.

One final disadvantage would be the lack of personal communication between customers and bank workers. The idea of online banking means that customers use only their computer or smartphone to cover all their banking needs. Therefore, there would be no communication for the bank customers.