Definition

Online Banking

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What is online banking?

Online banking is commonly referred to as internet banking. It is a simple method by which banking users can easily access their bank accounts through the internet from any part of the world. Furthermore, online banking facilitates the users to access the information and activities related to the bank to its users. Apart from few restricted activities, users may perform every activity without having to visit a bank physically.

Moreover, online banking is limited to some users only. Not every customer gets the opportunity to avail of online banking facilities. To avail online banking facility, one must register its bank account at the time of opening. It needs a valid ID and password to log in to internet banking to get access to the respective bank account.

 

Summary
  • Online banking is a facility offered by banks that let their customers access their bank details and carry out banking activities online without visiting the bank.
  • The advantages of online banking are- user-friendly platforms, time-saving and convenience.
  • The disadvantages of online banking are- the threat to cybercrime, difficulty to use for the novice, and restrictions regarding transactions.

Frequently Asked Questions (FAQ)

How does online banking work?

Online banking is not much different from a traditional bank. It simply operates all the banking activities through an online medium. If you are a beginner in online banking, the process might appear a bit troublesome initially. However, later, when you become accustomed to online banking, you would never go back to the process of traditional banking.

Nowadays, online banking has evolved with time and has become very popular as every activity done by physically visiting the bank is now done through online mediums.

For example, when opening a savings account, a person needs to fill out a form online rather than paper. The biggest advantage about it is that one can do it from the very comfort of their home at any given point in time. However, make sure that you use your wifi or internet connection rather than a public internet connection. It will keep your data safe from cybercrime. 

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You will also need to keep some documents hand that will prove your identity. Online banks also accept digital signatures, so the entire process becomes way more hassle-free than visiting the bank and standing in the queue for long hours.

What are the features of online banking?

The features of online banking are:

  • Online banking facility enables users to check their account balance.
  • Online banking allows opening a fixed deposit account.
  • Online banking users can also pay their utility bills such as electricity, telephone, etc.
  • It allows users to transfer funds from one account to another.
  • Users can also pay merchant bills through online banking facilities such as shopping bills, etc.
  • Individuals using online banking facilities may as well order a cheque book.
  • Online banking also allows users to buy general insurance.

What are the benefits of using online banking?

The advantages of using the online banking facility are stated below.

  • Availability

Online banking facilities are easily available round the clock. Users may easily access their bank details such as account balance and perform several activities through it at any given point of time from any part of the world. Users do not have to depend upon the bank and its operating hours to get their tasks done.

  • User friendly

The online banking platforms are extremely user-friendly. They are developed to cater to the needs of general citizens assuming that they are not tech-savvy. Users find it easier to perform their activities through online banking than physically visiting the bank.

  • Convenience

Using the online banking facility is convenient for users in various ways. For example, you no longer have to spend hours visiting the bank and standing in a long queue to wait for your turn. With online banking, it is just a matter of few seconds when it comes to checking account balance, getting bank statements: transferring funds, paying bills etc

  • Time-efficient

With an online banking facility, banking activities can be carried out quickly and easily within seconds. Moreover, it is less time-consuming than physically vising a bank and standing in queue for hours while waiting for your turn.

  • Activity tracking

It is easier to track down banking activities with online banking. For example, when you visit the bank, the manager might give you an acknowledgment slip or receipt, which you might lose in the future. However, with online banking, every acknowledgment note stays stored in your system or phone in the form of a soft copy that might end up being useful in the future.

What are the drawbacks of online banking?

The drawbacks of online banking are stated below.

  • Difficult to use for some

No matter how simple and user friendly the online banking platforms are, some people still find it difficult to use them. Some people might not have the resources that are required to access online banking facilities. Therefore, online banking is still a challenge for some people.

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