Online Banking

Online Banking

Thesis Statement

“Online banking has emerged as the most innovative means of banking in last few decades. It provides many social, economical and political advantages along with the social challenges.”

Introduction

With the development of internet, the development of banking sectors also happened, and new era of banking has come forth. This new era or development in the banking industry is known as e-banking. E banking comprehends the range of financial transactions, in the past era the exchange of financial transactions only happened tangibly. Some of the drawbacks of e banking can be security issues, fraud, and theft issues. Because of these issues, people feel reluctant to do their financial transaction via online banking. Online banking also contributes in political and social setting along with the economical benefits.

Discussion

History of Online Banking

Development of online banking concept is evolving concurrently with the advancement of world wide web (WWW). The idea of online banking dates back to the era of 1980s when programmers of banking data bases brought the idea of online transaction. The finance and banking institutions of US and Europe started programming experiments and researches on home banking concept in 1980s. Computers and internet at that was not so developed that is why fax machines and telephones were used to facilitate the customers of home banking. Extensive prevalence of Internet and programming facilities gave a way to more possibilities for further developments in home banking.

The first online banking service in UK was established by the Nottingham Building Society (NBS) in 1983. Though the facility was not very well developed and had imposed restrictions on the number of transactions and execution of different functions of account holders but the basis for online banking emerged from there which was later followed by others. It is sadi that the online banking service of Nottingham Building Society was derived from the Prestal system installed and used by the postal services department of UK. In October 1994, first online banking service of US was introduced by Stanford Federal Credit Union, a financial institution.

Development in the services of online banking was inspired by the concept of online shopping started by many companies. Use of credit cards by means of internet was promoted by online shopping services. In order to comfort the working staff, numerous banking organizations were already set on to establish data ware housing facilities. Improvement in these data bases was greatly used during the advancements in ATMs.Despite of having few pros and cons, online banking has revolutionized the banking sector. Many banks work on the concept of only internet banking. In contrast to their forerunners, these banks do not work on the idea of brick and mortar bank branches rather distinct interest rates and online banking features differentiate them.

Stakeholders and their Issues

Internet banking provides many advantages to the banks to sustain the competition, to improve mass customization, to save costs, to attract and maintain customers and to improve the marketing and communication activities. Online banking also act as gateways that provide services for identification and authorizations ...