E-banking is defined as the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels. E-banking includes the systems that enable financial institution customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet. Customers access e-banking services using an intelligent electronic device, such as a personal computer (PC), personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone. While the risks and controls are similar for the various e-banking access channels, this booklet focuses specifically on Internet-based services due to the Internet’s widely accessible public network. Accordingly, this booklet begins with a discussion of the two primary types of Internet websites: informational and transactional.
ADVANTAGES
° Bank availability 24h, 7 days a week, 365 days a year
° No time limit access into account
° Immediate realization of payment operation orders
° Advance value date fixing when sending orders
° Monitoring account balance in different time periods
° No additional commission for executed payment operations
DISADVANTAGES
° Compelled to have Computers with Internet Access
° Phone bills can increase
° Hackers may intercept data and defraud customers
° If the bank's server is down, you can't use it
° Many banks don't show you how to use online banking
° Your internet connection must be working in order for you to have access
FEATURES
Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific.
The common features fall broadly into several categories
Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)
Electronic bill presentment and payment - EBPP
Funds transfer between a customer's own checking and savings accounts, or to another customer's account
Investment purchase or sale
Loan applications and transactions, such as repayments
Non-transactional (e.g., online statements, check links, cobrowsing, chat)
Bank statements
Financial Institution Administration -
Support of multiple users having varying levels of authority
Transaction approval process
Wire transfer
Features commonly unique to Internet banking include
Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.
The impact of E-transaction and authentication issues in banking
It's hardly great news that there has been tremendous growth in the use of the Internet and other electronic facilities to process financial transactions. According to the Federal Deposit Insurance Corp., transactional Web sites have more than doubled each year for the past six years, growing from one in 1995 to nearly 2,500 in 2000.
This growth is a reflection of the fact that over the past few years, financial leaders have been considering various ways in which to allow their customers to transact business using the Internet. This objective is now reaching beyond the financial services industry into non-electronic business segments, such as the building supply industry. Furthermore, this growth is likely to continue to climb as the number of Internet users, Internet connection speed, and the number of transactional Web sites continues to increase. The number of adults using PC banking is also growing. With this growth, there is an increased awareness of the benefits of using online transaction processing, thereby fueling the thought that all business should be electronically facilitated.
Gartner predicts that worldwide business-to-business (B2B) e-commerce will total $3.6 trillion by 2003 and $8.5 trillion in 2005. Online financial activity had a slower start, but has had steady growth, from 6 million users in 1998 to 27.5 million users in 2000. During 2000, only 30 percent of the Internet-capable households were using some form of Internet banking, indicating that there is tremendous room for increased use.
