FREE ESSAY ON ONLINE BANKING

ONLINE BANKING

Banking Online
Imagine banks without tellers, desks, brochures, or ATM's. Picture, a virtual bank,
residing inside of a computer, projected by images on a computer screen. US financial
institutions are moving towards virtual banking"; a strategy making bank services
available to customers any time and place they need them. Banks are offering more
services as virtual banking becomes more popular, while the number of traditional
teller-staffed branches are declining. 
Bank customers are moving away from traditional banking and becoming dependent on
electronic transactions using ATMs and PCs. Thanks to this technology, financial
institutions are using software programs, online services, and even the internet to allow
customers to check balances, pay bills, and transfer funds among accounts. Bankers
promise that, in the near future, we will be able to buy certificates of deposit, mutual
funds, other investments, and even apply for loans electronically. 
Many people's best option is to plug into their bank through software. Intuits Quicken,
Microsoft Money, and Managing Your Money are the top home budgeting programs allowing
users a way to harness their assets through their PC. In order to use this software
properly all a customer needs is a personal computer, software and a modem. On-screen
instructions, laden with colorful graphics and pictures, explain how to select and work
on various tasks. The system automatically calculates and updates account balances and
keeps records of bills. By charging $5 to $20 a month for these services, banks will cash
in on the high-tech superhighway.
Internet banking differs from traditional PC banking in several ways. Banks have already
set up home pages on the Internet to provide information to their existing and potential
customers about upcoming services. In most home banking ventures, the bank sends
application software to the customer. The customer then dials into the bank using their
modem, downloads and uploads data, and runs the programs they previously installed on
their computer, sending back a batch of requests such as transfers between accounts. 
With Internet banking, on the other hand, potential customers already own the software
they need to do their banking: an internet browser. The actual banking software resides
on the bank's server in the form of their home page. The company can easily present new
information, change prices, or introduce new products without expensive advertising and
mailings. In addition, the virtual bank can implement system enhancements online so that
they do not interfere with normal business. By not commuting to banks customers save time
and money. If cash is not an issue at the time of a transaction, then Internet banking is
very useful.
This new concept may catch on and become a profitable venture for banks. Early entrants
in the Internet banking market will benefit on multiple fronts. These banks will appeal
to a vast market and attract educated, professional, affluent and efficient people. The
new customers will cut bank costs by visiting branches less frequently and switching from
paper to electronic transactions. More importantly, by developing internal expertise
today, banks can position themselves to react quickly to competitive moves and consumer
trends as the financial services industry evolves. These banks will see the benefits as
early players and enjoy the public relations boost that comes from being market leaders.
Once people accept this more efficient way of banking, there will be less need for
offices. This method is not at all a way to end banks, more like a convenient addition
for customers. This technology is in the future, but at the same time just around the
corner. Online banking will become a great way for people to control their money.