Aktuelles » Online banking

Online banking, also known as virtual, internet or e-banking, is an electronic payment system that offers the clients of a bank or other financial institution the ability to handle a wide range of financial transactions by using the bank's website. As online banking is highly dependent on internet access and take-up, the first e-banking services appeared in the early 1980s in New York, when it was known as 'home banking'. Today, bank account management via online banking is in huge demand. Statistics show that 81% of bank clients in the US have used online banking services at least once in the past 12 months. Most banks are able to offer online every service traditionally provided at a local branch, including checking account balances or lists of recent transactions, paying bills or transferring funds to other people.

Mobile banking
While e-banking has been around for a while now, mobile banking is a relatively new service offered by financial institutions. Due to the growing popularity of smartphones, more and more banks are developing their own mobile banking applications. In 2015, 90% of bank clients in the US had used mobile banking in the previous 12 months to check their account balance or recent transactions.

Some banks are working intensely to develop new tools in addition to the traditional bank account management services available via their smartphone apps. For example, some banks in the UK now allow you to withdraw funds from an ATM using their mobile app instead of your credit or debit card. Meanwhile, a significant proportion of bank customers choose not to use mobile banking due to trust and security concerns.

Advantages of online banking
Convenience is one of the major advantages of online banking. It allows you to perform almost any banking transaction at any time, 24 hours a day, 7 days a week. Not only can you handle your day-to-day account management activities, you can also communicate with your account manager or open new accounts including savings accounts and pension funds. Another major advantage is that you can do all of this while paying smaller or no transaction fees, due to the reduced overhead and other costs for the bank if there are fewer or no physical branches to be maintained. Some banks have gone one step further and declared themselves to be branchless or internet-only institutions.

Disadvantages of online banking
While online banking is seen as the most convenient way of managing your bank account, sometimes a customer may prefer to receive consultation about more complex banking issues via a face-to-face conversation with a bank employee. Not having this option might be a major con if you are considering opening an account with a branchless bank. Another disadvantage of using online banking is its complete dependence on internet access. Although nowadays internet connections at home or in the workplace are commonplace, there can be situations where you have no internet access. This problem is even more significant when it comes to mobile banking. For example, if you go on holiday, you may choose not to pay for mobile internet and so the only internet connection available to you could be public Wi-Fi. Furthermore, it is advisable not to log in to your online banking when using a public Wi-Fi connection, as your smartphone or other device is more vulnerable to hacking when connected to an unsecured network.

This leads us to another disadvantage of online and mobile banking. Security issues are seen as the biggest drawback of online banking. Although financial institutions work intensely to prevent any data loss, as it may jeopardise their whole business, bank account information is considered to be one of the main targets for hackers and various computer viruses. Meanwhile, 48% of bank clients in the US choose not to use mobile banking for security reasons.