Online Banking
Online banking is an electronic payment system providing a possibility to a client of a certain bank to conduct some financial operations and transactions via the Internet, without attending the bank’s office. Options available online differ from bank to bank, but usually include all basic functions that don’t require complex verification and preparation. For example, in most online banking systems it’s possible to transfer money to another person or pay a bill, but not possible to get a mortgage.
How Online Banking works
Nowadays, almost every bank has some of its services available online to some extent. To begin using online banking, a bank’s client needs a card, a device and an Internet connection. It’s required to create an account in the bank’s online system (it might be a website, an application, or both), using the client’s bank card details to link online and bank accounts. Each user gets a customer’s number, which is different from a banking account’s number. It’s usually possible to link several banking accounts to one customer’s number, if the customer controls more than one account. Then it’s necessary to create a strong password, or provide another type of credential, and in some cases a multifactor authentication is used to log into an account, which requires combining more than one credential for additional security. Once the client has created the account and the password, he or she can log in to the secure electronic banking service and start using all of its accessible features.
The procedure of starting is rather simple for long-time Internet users, though less experienced users might need guidance. In some banks, clients can get such a guidance at the office, and also get professional advice on how to use online banking and secure their accounts.
Online Banking available options
Electronic banking services traditionally allow basic operations with one’s account. Since the very emergence of first similar systems of remote banking, the first implemented options were checking the balance of a bank account, paying bills, applying for loans and transferring funds between the accounts.
Nowadays, a wider range of options is provided by most banking services, which include such possibilities as viewing the history of transactions, applying for credit cards and other forms of credit, ordering checks, controlling and enabling credit payments, reporting significant changes of personal information, opening new accounts and some other options. Now it’s also possible to deposit paper checks online by taking photos of the check and stating the sum.
The full list of available options differ from bank to bank, but a certain number of financial activities are usually inaccessible in most systems. Such activities as buying traveler’s checks, transferring huge amounts of money under certain conditions, mortgage and other big loan final registration requires the client’s presence at the bank’s branch, and a direct communication with a bank employee.
Pros and Cons of Online Banking
Since the system of online banking has become available to a broad public, its main advantages made it extremely popular and widely used.
These advantages are the following:
- Performing transactions online without visiting a bank’s branch saves significant amounts of time. And, considering the possibility of using online banking at any time convenient for the user, the user doesn’t have to plan visits to the bank strictly during the working hours. Instead of that, online banking allows its users to pay the bills, transfer money and perform other important financial actions immediately at any moment they need it, anywhere they have access to the Internet.
- Reducing costs of service is another important advantage of online banking, as it decreases the pressure of basic operations being executed at the branches. Thus, maintaining an online service is usually more profitable than having a bigger network of branches.
- 24-hous access to account and transaction history makes it easier to notice and prevent fraudulent activities.
At the same time, there are some disadvantages as well:
- Security issues are among the main concerns when dealing with online banking. When an account creation process is done correctly, with a strong password and multilevel security, there are usually no safety problems. Although, the users must be constantly vigilant when employing online banking services, it’s highly recommended to avoid using open public Internet networks and be alert when sharing details of the account or bank card. The possibility of hacker attacks is also not completely eliminated.
- The limits put on the services are connected with other significant disadvantages. As it’s usually impossible to operate large sums of money, that might be inconvenient for some clients.
- The quality of the Internet connection might also bring troubles, as unexpected disconnections may result in cancelling of the transactions in process or even failed operations.
