History
The word “e-banking” stands for electronic banking. It was first presented as an idea on 1970, eventually becoming a practice for some banks in 1985. However, Internet usage was not very common or cheap for most consumers at that time, making e-banking a service for high-level bank costumers only. With the explosive growth of the Internet in the late-1990s, e-banking became increasingly accessible to average people, causing usage to grow exponentially. Internet banking transactions have become a part of life for many people in developed countries.
Function
Electronic or online banking was developed alongside the Internet itself. Banks use Internet websites to offer their customers access to personal financial information online. Electronic banking allows people to realize financial transactions without having to go to their banks in person. Through electronic banking, clients can look at their bank accounts and make transactions, such as money transfers and bill payments, any hour of any day of the week without any restrictions. (However, while users may post transactions on weekends and holidays, banks do not complete these transactions until the next normal working day.)
Benefits
The benefits of electronic banking extend to both companies and individuals. Since clients do not need to go in person to a bank for each transaction, they may make urgent transactions more quickly than they would have been able to without the Internet. If clients are expecting payments from another company or an employer, there is no need to wait for the money or stand in line at the bank. Companies can now focus on other important tasks they need to do instead of spending hours to complete a simple bank transaction.
Warning
Not only can clients make their bank transactions faster and easier than with traditional banking, they can also carry out other Internet transactions that are directly related to their online banking accounts. However, by making most aspects of the banking process simpler through electronic banking, financial institutions have also opened up new ways for people to commit fraud. Electronic banking can be a much easier way of gaining access to someone’s account and transferring funds to inappropriate entities.
Considerations
Banks are developing more tools to help protect their clients’ electronic accounts. Clients need to provide a specific password to access their accounts and a specific user name. If they forget any of this information, they must answer security questions that prove their identity so they may regain access to their accounts. However, as banks strive to make electronic banking more secure, clients must consider their own actions and how they affect the safety of their accounts. Bank customers should not give information to any party that cannot prove its legal validity. Consumers must be careful and always investigate whom they are dealing with.