What is 'Online Banking'
Online banking allows a user to execute financial transactions via the internet. Online banking is also known as "internet banking" or "web banking." An online bank offers customers just about every service traditionally available through a local branch, including deposits, which is done online or through the mail, and online bill payment.
BREAKING DOWN 'Online Banking'
Online banks do not provide direct ATM access, but they make provisions for consumers to use ATMs at other banks and retail stores, and they may reimburse consumers for some of the ATM fees charged by other financial institutions. Reduced overhead costs associated with not having physical branches typically allow online banks to offer consumers significant savings on banking fees; they also offer higher interest rates on accounts. Online banks handle customer service by phone, email or online chat. Online banking is frequently performed on mobile devices as Wi-Fi and 4G networks have become widely available. In the United States, prominent online banks include Ally Bank, Bank5 Connect, Discover Bank, GE Capital Bank and Synchrony Bank.
Advantages of Online Banking
Convenience is a major advantage of online banking. Basic banking transactions such as paying bills and transferring funds between accounts can easily be performed at times convenient to consumers. In effect, consumers can perform banking transactions 24 hours-a-day, seven-days a week. Online banking is fast and efficient. Funds can be transferred between accounts almost instantly, especially if the two accounts are held at the same banking institution. Banking accounts can be monitored more closely thanks to online banking. This allows consumers to keep their accounts safe. Around-the-clock access to banking information provides early detection of fraudulent activity that has the potential to cause financial or damage loss. Online banking allows for the opening and closing of fixed deposit and recurring deposit accounts that typically offer higher rates of interest.
Disadvantages of Online Banking
For a novice online banking customer, using systems for the first time may present challenges that prevent transactions from being processed. Although online banking security is continually improving, such accounts are still vulnerable when it comes to hacking. Consumers are advised to use their data plans, rather than public Wi-Fi networks when using online banking, to prevent unauthorized access. Additionally, online banking is dependent on a reliable internet connection. Connectivity issues from time-to-time may make it difficult to determine if banking transactions have been successfully processed. On occasion, consumers may prefer face-to-face interactions for more complex banking issues.
First online banking services in the United States
Online banking was first introduced in the early 1980s in New York, United States.Four major banks — Citibank, Chase Bank, Chemical Bank and Manufacturers Hanover — offered home banking services. Chemical introduced its Pronto services for individuals and small businesses in 1983, which enabled individual and small-business clients to maintain electronic checkbook registers, see account balances, and transfer funds between checking and savings accounts. Pronto failed to attract enough customers to break even and was abandoned in 1989. Other banks had a similar experience.
First online banking in the United Kingdom
Almost simultaneously with the United States, online banking arrived in the United Kingdom. The UK's first home online banking services known as Homelink was set up by Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983. The system used was based on the UK's Prestel viewlink system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly.
What is Personal Internet Banking?
Personal Internet Banking is one of the fastest, most convenient ways to access your Bank accounts, view balances, transfer funds and pay your bills online. Using your unique log on credentials (Username and Password) you can perform banking transactions online, whenever and wherever you want, from a secure PC with Internet access.
What banking transactions can I perform with Personal Internet Banking?
Personal Internet Banking allows you to make transactions online and manage your accounts, balances, bill payments and deposits:
- View balances and transactions on your deposits, loans, credit card, and mortgage accounts
- Pay bills to virtually anyone in the United States with complimentary online Bill Pay service
- Review the last 24 months of transactions for Personal Internet Banking
- View your eligible Checking, Savings, Select Credit and Credit Card account statements for the last 2 years through eStatements
- Online Check Images - Personal Internet Banking customers with a checking account who are enrolled in the RecordCheck® service can view and print their posted checks images right online
- Transfer funds between your Bank accounts (this is an ideal way to pay your Bank accounts quickly)
- With the Bank to Bank Transfers service, you can move money between your Bank accounts and other financial institutions, credit unions and brokerage accounts
- Initiate wire transfer requests to another person, business or financial institution in the U.S. or internationally through Personal Internet Banking
- View information about your mortgage account including escrow and payment history
- Obtain quotes for several insurance products
- View your investment and brokerage balances
- Request a credit card line increase
- Apply for Bank select accounts and services
- Order new checks
- Request copies of statements
- Request a Stop Payment for an Bank check
- Access to Credit Card Rewards Program website to view and redeem Credit Card Rewards Points
- Email our Customer Relationship Center anytime for information on products and services
- Online Password Reset - Customers who forget their Internet Banking Password can select a new Password to gain immediate access to Personal Internet Banking. No more waiting for a confirmation in the mail