E-banking is a process by which computers are used to process financial transactions. It began in the 90s during the birth of PCs. First, this method of banking started with the use of automated teller machines. Later it is developed into online banking. The main aim was to lower costs for banks, but the benefits stretched out to customers as well.
Most banks start out with websites that allow customers to know about the financial services on offer. In the fully-fledged online banking model, customers are able to do a lot more than simply know about banking services.
They can actually use all banking services from a computer that has internet access. Besides processing financial transactions, customers are able to print statements, apply for loans, monitor accounts, and even make e-bill payments from the comfort of their homes.
Much of this has been made possible by, computers and internet technology.
Why is Online Banking Important?
As more and more banks realize the possibilities that online systems open up for business, the adoption of this model of service is spreading worldwide. The benefits that come along with it are not worth passing up, especially for banks that want to remain a cut above the rest.
This opens doors for international banking, where financial institutions can reach out to clients all over the world. Since services are rendered on a website, this allows for 24/7 banking all year round, for as long as customers can access the internet on secure networks.
Many entrepreneurs have capitalized on this opportunity by inventing innovative financial services such as online payments and international funds transfer.
This level of convenience has benefited many people. Queues at banks have reduced, services are more efficient, and customers enjoy the flexibility. Among the biggest beneficiaries of online banking are the aged and people with physical, cognitive, vision, or hearing impairments.
Concerns with Online Banking
As beneficial as online banking is, it has also faced several concerns, key among them being security. Incidents of credit card fraud were rampant in previous years. A lot of this has been due to poor security systems to protect online financial systems.
This is the reason why some banks have been reluctant to roll out online services. Customers, on the other hand, shy away from online banking when they hear of stories where other people were defrauded while trying to make transactions online.
However, concerns about secure online banking are slowly fading away, and all thanks to encryption and security technologies. Banks are now able to secure their websites to allow customers to perform transactions and access financial accounts without compromising on privacy. To deter fraud and unauthorized access, some banks track IP addresses that customers use to access online services. They even monitor spending patterns and revenue streams to detect unusual activity on customer accounts. All of these security measures have been made to reassure customers that online banking can be secure. At the core of this, information technology continues to play a vital role in making e-banking over the internet possible.