Online Banking

A little history on Banking:

Online Banking is another Online Service more commonly used now. Banks are where people take their money and trust it to be stored safely, whilst the money was in the bank the bank itself could use it to invest and trade therefore tying to make themselves more money. Overtime cash was replaced with cheques and people would go to the banks with their cheques which would be paid into the bank and would be treated like a note. However money doesn't exactly exist in a sense, gold and oil is the currency as they are what we perceive as most valuable and we use those to make our money as they are tradable.

                                                                                                           

How online Banking works:

When you get paid every month your employer sends the data of the hours you have worked and the money you have earn to the bank, they do not physically send the money to the bank as what you earn is just a figure of numbers, there is not a physical amount of your money sitting in the bank. Your employer sends money to the clearing house which gets distributed to various different banks and directly ends up in your bank. Money is now increasingly in data and not actually in physical form.

Security of Online Banking:

Online banking has struggled to make a big impact at first because people didn’t trust the online world to take care of their money. Many thought that the bank could view all their private information and that others could do so too. However they have introduced over the years ways to protect the customer from experiencing any of these problems, they have recently introduced what is known as a card reader, so before you can enter your account online you have to enter your pin in the card reader and it will generate a random number that you enter and this allows you to have access to your online statements and accounts. There are also various passwords you need and they are often extremely cautious on updating you on changes to the website to be sure that you do not get scammed.

The effects Online Banking has to the high street:

Banks do not really have a lot of money in them, however the money and gold is usually stored in the central banks. Due to this high street banks are becoming increasingly less important so they are closing down as they are not needed to store small amounts of money in any more.

Purely Online Banks:

There are few banks that are purely online, many people however choose to keep their money purely online this is for several reasons. Firstly it is more of a convenient way of banking and means you can pay bills online and it also means you would not have to change banks if you decided to relocate. Also they include free services such as 100% free checking. Bank costs are a lot lower if the bank only needs to pay for a single online network, this means they have more money and this can benefit the customer in various ways such as no fees or higher interests.

An example of a purely online bank is First Direct, they are extremely convenient because they allow you to sign up online and use all of the normal bank features online wherever you are. Another online bank, formerly known as Egg struggled being purely online, its credit card business was sold to Barclaycard and the business itself is now owned by Yorkshire building society.

Scopes of Online Banking for the Customer:

Online banking allows you to deal with your money directly without having to go to your bank; you are able to see the money that is in your account wherever you are and are also able to see your statements to track your spending. Online banking also means you can transfer your money to different accounts you may have or to other peoples account, all you need to know is their banks details. Online banking has meant now that you can pay your bills monthly quickly online and can make payments online without having to leave your home or give away any private information.

Scopes of Online Banking for the Business:

Banks find it a lot cheaper to work online, this stops them from having to have a physical bank where they have to employ people and rent a building. Instead they employ people who are highly qualified and work on the online side of the bank which is much more effective.

Limitations of Online Banking for the Customer:

Online banking does have some drawbacks; many people receive the Phishing email, which is when a person sends an email pretending to be your bank. They request you to send them your sensitive information such as your username, password, and credit card details. They sometimes even ask you to send them money directly or to certain bank details.

Limitations of Online Banking for the business:

There are not really any drawbacks for an Online banking business; however one limitation would be the customer service system. Some people prefer being able to physically see a person when they are talking to them and many people also prefer to be able to see physical paper with their details and bank statements rather than electronically. Some feel a lot safer when they can go to a physical bank and can imagine their money being there and the physical person dealing with their money. As a business this would mean less people may choose to use them, resulting in less loyalty and fewer word of mouth.

My own experience with Online Banking:

I use Online banking for 99% of the banking I do, I recently got a job and had to choose which bank I would prefer to keep my money with and I researched this by using their Online Banking websites. I use online banking to check my accounts, I was given a card reader where I enter my pin and it generates a random number I enter to continue into my account. They also send me letters updating me on the new features to the app or the website keep meaning constantly up to date so I don’t experience any type of scam. However when I did open up my account I did it in the bank itself as I was still not 100 percent sure I trusted the online banking procedures, but I am mow assured and haven’t been in my bank since.