Internet banking also known as Online banking or e-banking is one of the most recent technological innovations, which is becoming a need for every common man. It uses Internet as a medium for delivery banking services. Today, banking is not limited to branches, where a person goes to bank for withdrawal of cash or request a statement of accounts or to deposit a check. An inquiry or transaction can be handled online without any reference to the branch any time through Internet Banking. Secure website on which online transactions are carried out is managed by virtual bank (no branch network).
Mainly, there are three types of Internet banking.
- Informational banking: This is primary (basic) level of Internet Banking used to know the information of bank’s products and services.
- Communicative banking: In this type of Internet banking some communication (interaction) is possible between bank’s system and customer through email to know account details (statements), loan applications and to update static files (name and address changes).
- Transactional banking: This level of Internet banking helps in performing transactions like accessing account, paying bills, transferring funds, etc.
Benefits of Internet banking:
Internet Banking provides benefits to both banking systems and customers
- Fast: Normal banking is slow and time consuming, as customer needs to wait in tiresome queue for request of statement or transaction. But in Internet banking transfer of money (funds) from one account and other can be done in minutes.
- Convenient: Customers can access many accounts in a bank efficiently. They can carry out financial transactions comfortably from home, if they have Internet.
- Cost effective: Bank can handle thousands of customers at a time through Internet Banking. The administrative (official) work of bank can be reduced highly as bank operations can be performed by less number of cashiers and clerks.
- All time accessibility: Bank account can be accessed any time (24 hours of a day and 7 days of a week) and from anywhere (at any location). Customers can easily transfer money from their accounts or receive money in their accounts electronically. Acceptability of digital signatures in all banks is of great advantage.
- Flexibility: Customers can easily apply for loan and get it without going to local bank. Bank accounts can be used to buy or sell stocks and securities through Internet banking. Without any paper work and without visiting bank, new accounts can be created and old accounts can be closed through Online.
Disadvantages of Internet banking:
Though Internet banking is very helpful for users, it has certain disadvantages.
- Security: If customers are not careful, then computer hackers can easily hack the account information for unauthorized use.
- Identification: It is an inconvenience for customers if asked for photo identification.
- Customer service: As there is no face-to-face interaction with bank employee and account holder, when problem arises, often there may be slow response as mail is used to discuss about the problem.
- Internet accessibility: If the Internet goes down at the customers end or at the banking office, then account cannot be accessed.
In order to have safe and secure Internet banking, customers should maintain their computers high secured and should not reveal any personal information like password, user name and pin number to anyone. This can avoid risk of scams and fraud to a large extent. When security procedures are taken care, Internet banking is easier, faster, and pleasant to both customers and bankers.
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