An Overview of Online Banking

The majority of financial and banking institutions now offer online banking as a natural extension to their customer services. In addition, there are some dedicated Internet banks that do not have a bricks and mortar presence. Online banking and bill payment through this method can provide several benefits for the customer. However, there are also important issues that need to be addressed and considered when using this service.

Online banking management

The most important element of banking online is the ease of use. Customers with online access are able to manage banks accounts and finances because there is immediate onscreen access to all the transactions that have taken place on their accounts, usually up to the minute of access. This eliminates the need to wait for weeks to receive paper statements, by which time the account might have an adverse balance resulting from unknown activity, causing interest charges to be debited from your account.

Similarly, if the customer has more than one account with the bank, online banking provides the facility to be able to move money between accounts instantaneously.

General benefits

Online banking also allows you the ability to be able to order cheque and paying in books without the inconvenience of having to drive into town, find a place to park and wait in queues. Banking through this process is also available twenty-four hours a day, therefore allowing customers to access personal and business accounts at any time, even when at home in the evening and weekends. Similarly, you will be able to access your account from anywhere in the world that has Internet or wireless connection.

Another important benefit that online banking provides the customer with is the advantage of being able to download information from their account direct to their home computer. This process allows customers to be able to budget and manage their finances, for example by comparing actual transactions against what had been forecasted.

Credit and debit card usage

It is easy now to shop with credit and debit card as almost all retail outlets accept this form of payment. However, maintaining control of this type of spending is important to avoid creating an unmanageable debt level. With online banking such control is readily available in the same manner as one’s main banking accounts, where credit/debit cards will be readily available for checking. Moreover, in the case of credit cards, the facility is made available to ensure you are always aware of the remaining balance, the next amount of interest to be added and the date the next payment is due.

Bill payments

Bill payment is another beneficial aspect of online banking. As long as the customer has the banking details of the person to whom the payment is being made, instant payment can be arranged using the online options. Furthermore, where regular payments are being made, for example monthly amounts, it is possible to arrange and manage regular standing orders and direct debits on line.

All of these benefits save time, money and cost. In addition, some banks will allow you to choose for paperless online statement production and, in at least one case, may provide an incentive when this facility is chosen.

Timing issues

One important element to remember when operating an online banking account is the timing process by which banks operate. In this respect it needs to be borne in mind that a payment or receipt can take a few days before it is either credited to or debited from the bank account. It is therefore essential to a) make sure that sufficient funds are in the account to cover payments being made within the next few days and b) ensure bill and credit card payments at least two days prior to the due date to ensure overdue charges and other penalties are not levied on these accounts.

Security concerns

The other aspect of online banking that a customer has to be concerned about is the security of their personal data. It is important to ensure that the chosen online bank has the latest security software and protection in place before choosing which online banking service to use. It is similarly important that a customer never gives out their bank account details to any organisation online unless they are convinced it is a reputable source. Failure to abide by this rule can lead to personal information being stolen and potentially monies being withdrawn from their account.

Another form of protection that is essential when using an online banking service is to ensure your computer is fitted with the latest virus protection software and has a personal firewall. These must be updated on a regular basis to protect against data theft.

Finally, it is recommended that when customers’ bank online they do not use the operating system option of remembering passwords, or storing those passwords on their computer, as this adds extra protection to their bank account in the event of their computer being stolen.

Online banking can provide significant advantages to the customer as long as every effort is made to protect your personal identity and data.