e-Banking

The vast development in technology has helped many people, industries, businesses and a lot more around the world. This development has helped one particular industry, the banking industry. Many people use banks to save their money and to use it wisely for their own use. Since technology has radicalised the use of banks on the high streets have decreased. They have created e-banking to aid people with their day to day lives and in some cases made it more convenient for people to use it. Even though we dwell on the positives there are also the aspect of security involved.

Online banking will soon displace high street banks, due to the main reason that mostly all of the banks have an online website where you can literally do all the banking you do in a local high street bank. The main reason banks now operate high street banks is not to lose customers who are from an older generation, who believe it is more secure and safe to save their money in a bank and also for people who problems. In my opinion sooner or later online banking will boom and unfortunately the high street banks will shut down.

Sole Online Banks

There were mainly three banks that offered banking only through the internet or through a call centre. The only one of the three that still currently runs banking through the internet is Smile. Smile is a trading division of the Co-operative bank. It was established as the UK’s first fully internet bank in 1999. Smile was the first to offer full-service accounts, savings, ISA’s, investments and credit cards through the internet. Smile still operates solely as an internet bank.

Egg was another former online bank headquartered in Derby, now trading under as the Yorkshire Building Society. The Egg brand was launched in 1998 by the UK banking arm of prudential plc, Prudential Banking plc established in 1996. Egg specialises in savings and general insurance but no longer provides loans, credit card or mortgage products. The credit card business was bought by BarclayCard and the remaining savings and mortgage businesses were bought by the Yorkshire Building Society.

First-e another online bank based in Dublin was a European online bank which operated during the Dot-com bubble. It operated on a license from a French bank. It gained 50,000 customers before shutting down in October 2001 after the Dot-com bubble burst.


ATM’s

Automated Teller Machines, more commonly known in Britain as a ‘Hole in the Wall’ or ‘Cash Point’, is a computerized telecommunications device that provides clients with access to financial transactions without the need for a clerk or a banker. This means people can get their money outside without the need for other people. The machine works when a customer inserts a plastic credit/debit card which has a magnetic strip. Once entering your own ‘unique’ card you then have to provide a PIN number to ensure your security and to make sure no one else can take your money. Most ATM’s generally accept all cards; however some only accept certain bank cards or a certain card. Using ATM’s people can withdraw cash. You can use ATM’s in other countries to draw out cash. There are also some ATM’s which allow people to pay in money and cheques.

Services

Standing Orders/Direct Debit transfers are services offered by banks to make banking a whole lot easier. Standing Orders are statements which you can use to move money between your own account and an organisation - they pay exactly the amount you choose and not the amount you owe. You can continue paying via standing orders for as long as you want or till a set date. You can also cancel them anytime you want using the bank. Direct Debit is when an organisation can collect the money you owe them, but they let you know in advance, how much they will withdraw, when and how often. These services are handy for paying regular amounts or bills.


Online statements are free information about your account. It shows how much is available in your account, how much you can withdraw, when the last payment was put into your account and a lot more. You can view and print them when you like and if you are environmental friendly you don’t need to print it out, but you can still view your statements without any hassle or thinking.

Security

Online banks have to guarantee that their customers can enjoy banking online without any issues or hassle. One of the main areas they target is security. They have to ensure that the customer information they hold will not fall into the wrong hands. Banks spent a lot of money ensuring their site is safe to carry out an online transaction. They ensure this by having security questions, back up passwords and having key cards. Key cards have come into use widely to ensure customer safety. So when you want to log into your online account you have to turn your key card on and it will generate a series of random number which then generates a unique code which is different each time. Many banks also have security questions like your mother’s maiden name, pet’s name, your best friend’s name etc. These security methods ensure hackers or fraudsters to access your or other accounts. However even though they are in place there are occasions when these systems fail.

Advantages

1.          It is more convenient

2.          You don’t need to wait in queues – more time to shop

3.          It is environment friendly i.e. less paper is needed

4.          It is more accessible

5.          There is no rush to finish it quickly unlike at banks

Disadvantages

1.          Job losses and deskilled people

2.          Older generation find online banking hard to use

3.          More prone to identity theft, fraud and hack threats

4.          Systems can crash e.g. the NatWest system crash which lost the company millions and customers

I haven’t got an online account as of yet, but I wish to in the future. I do sometimes help my mum to find some tools on her account and she says how better it is to bank online rather than staying in queues waiting for half an hour also to transfer a small amount of money. I wish to use online banking in the future to manage my funds effectively for my university education.