How Internet Banking Evolved

Internet Banking is defined as a method of carrying out banking transactions using a secured web site on the internet. The terms ‘Internet banking’ and ‘Online banking’ are used interchangeably and in most instances, it refers to the same. Internet Banking trails back to the 80’ as a US based institution first launched financial service to enable customers to view their statements online. In 1994, the first fully fledged online banking system was launched in Britain by the Federal Credit Union”.

The internet banking sector is growing by the year and many factors contribute towards is acceptability as a modern day transactional method. Among some of the factors which made it attractive to its customers are,

Reduced travel cost Saving on time Convenience Being informative Presence of Up to date information Versatility

Similarly, the bankers also prefer the dealings through Internet Banking due to,

Less cost per transaction processing Less physical resources are required for expansion More customer attraction with widened reach towards customers The ‘services’ provided by internet banking systems:

Internet Banking provides many services through secure web sites and some of these services are,

Viewing up to date account balances and transactions Fund transferring from one account to another Bill payments including payment of credit card and utility bills Wire transfers to overseas accounts Investment facilities in finance markets Management of loan accounts…etc.

When considering these services, total reliance in an online distant type of service might not be suitable for each and every transaction or service actions. Thus, implementation of internet banking in inappropriate circumstances might increase the vulnerability of such transactions towards the customer, the bank or to a third party.

But, it is estimated that, at present almost 50% of all account holders in a bank would be using internet banking as well. This goes on to show that the technology has invaded the society to an extent where it may be the norm in few years time.

Even at present, virtual banks are functioning in 3D virtual worlds such as in Second Life and it is possible for an ‘avatar’ representing you to enter such banks and do transactions although the services available at the moment is somewhat low.

Although a proliferation in internet banking would be a good thing, it is possible for it to move out of proportion and give rise to many fraudulent activities as well. Therefore, it is the duty of financial authorities to manage such proliferations with care and prevent any mishaps from taking place.