Benefits of Online Banking

Published: 16th February 2006
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More people are signing up for new financial and banking services online. If your bank provides real-time online banking services, you may be able to access up-to-the-minute information about your accounts. Additionally, online banking services feature passwords and personal identification numbers (PINs) that you select. In the UK, banks are investigating the use of smart cards for accessing online banking services. Many online banking services therefore impose a second layer of security. And, with the popularity of personal online banking apparently soaring by the day, banks are now looking to expand their services to businesses online. Indeed, one-quarter of Internet users report using online banking services at one time or another.

More than 59% of respondents who use online banking services state that they have more confidence in online banking than branch banking. You can view all these new services by accessing your online banking account. YOU determine the level of online banking services needed for your company. 85% of customers use online services, but only 59% are willing to use online banking.

By late 2004, fully one-quarter of all adults, and nearly half of all Internet users, reported being online banking customers. Of all the major internet activities tracked by the Project since its inaugural survey in March 2000, online banking has grown the fastest. Despite the growing popularity of Internet banking many people still aren't aware of all the financial tasks they can do online. There are three aspects to what is broadly called 'online banking,' otherwise known as PC banking, Internet banking, home banking, or electronic banking.

Broadband users are more likely to sample a variety of online activities than dial-up Internet users, including online banking. However many online banking systems employ the direct-modem connection, so those transactions are not even transmitted over the Internet. Online banking can be carried out on any medium which can access the Internet including computers, iTV and mobile phones.

The RBI has drafted certain Internet banking guidelines that have to be followed by banks about to venture into online banking. Internet banking gives you access to your personal and business accounts online anytime, anywhere. If the banks attempted to move all liability for online banking losses to customers, 77 percent say they would abandon internet banking completely. Still, the proliferation of the Internet has given online banking a fresh transfusion of growth in the last two years.

As more banks succeed online and more customers use their sites, fully functional online banking likely will become as commonplace as automated teller machines. With real time, electronic online banking 24 hours a day, both the bank and the client have more control. To retain online customers and win new ones, banks will need to change many consumers' belief that online banking isn't safe.

However, online banking security fears are noticeably lower in countries, such as Germany, the Netherlands and Sweden, where banks have introduced two-factor authentication policies. Banks need to protect their online banking systems and their online banking customers from transaction fraud, Phishing attacks, and identity theft. Banks also need to educate their online banking customers about security precautions.

Make sure that you're banking over a server with enhanced-security technologies and that you use a browser that supports 128-bit encryption. Encryption translates your financial data into something like a secret code to transmit it over the Web.

If a Web site is using secure technology, its Web address begins with https and a tiny locked padlock appears at the bottom right of the screen.

The FDIC warned against relying solely on "single factor" authentication in its call to banks to improve their security measures for online banking. To give your a bit more insight into online banking, MSN has a great overview with a list of the top 10 online banks.

One of the main issues that holds back small businesses from adopting online banking is also security. Though it could be that bank customers are less concerned about security issues surrounding online banking than they are about potential problems with e-commerce sites. In fact, the banking industry has some of the most sophisticated electronic protective measures when it comes to online security. As an additional layer of security, Online Banking requires you to answer a security question each time you logon. If you bank online, remember to always sign off when you are finished banking.

There are many reasons why if you are a business owner and a consumer, should be doing your banking online. Using Internet banking will also increase the efficiency of paying money (bills, debts, wages, etc) as it can reduce the need for writing and sending cheques (which can take up to 5 days to clear). BACS payments can be created via internet banking to pay such money, which is also an efficient way of paying staff wages.

Online banking enables an individual or business to manage their finances any time, anywhere basis. Still, a comprehensive business case in transaction banking and brokerage with cost covering revenues is currently not in sight.

And with Online Banking you can check account balances, transfer money between accounts, and reorder checks any time, day or night. Banking applications are straining to keep up with growing customer bases anxious to view account details and transfer funds online. However, you only need to enter the account information once; your online banking site will keep those accounts available until you remove them.

Another development that bodes well for online banking is the expected development and introduction of bill presentment within the next several years.

Online banking and bill paying continue to gain in popularity, according to two recent surveys. However, most experts have been wondering what has taken online bill paying (and online banking) even this long to catch on. From online banking to free bill pay as well as online check ordering, credit reports and calculators.

Ease, convenience, and speed the key differentiators between traditional brick and mortar banking and today's new twist, online banking. Convenience the number of customers who choose online banking as their preferred method of dealing with their finances is growing rapidly. More than 71% of respondents said their top reason for banking online is convenience. Because of this convenience online banking looks set to increase in usage and it is predicted that over 40% of transactions will occur on-line by 2008.

Daniel J Lesser owner of runs an informational on online banking. He provides the latest information on web hosting and updates weekly.

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