Advantages And Disadvantages Of Internet Banking Information Technology Essay

Advantages And Disadvantages Of Internet Banking Information Technology EssayInternet bounding is a fact of life for numerous an(prenominal) individuals to twenty-four hour period with a ill-tempered lifestyle. Some individuals will harbor a brick and mortar bank that offers Internet banking in addition to spill to the brick and mortar location. Other banks exist only on the Internet that do not amaze a physical location.BenefitsInternet bankings major benefit to sum up holders is convenience. It caters an throwaway holder to monitor usage of his cast and perform basic transactions online for his banking account.ConsiderationsIf an individual opens an account at an online-only bank such as ING Direct, access is limited to their account. If the bank account proprietor dismiss not find a location with Internet access, she will be unable to perform transactions on her banking account.DisadvantagesWhen using an Internet banking account, the account owner may have no face to f ace interaction with a bank employee if the bank does not have a brick and mortar location. This tolerate kick in resolving disputes more than difficult as the account holder will have to make a phone c all in all and possibly wait on hold, or be forced to send an email.Bonuses on that point be some Internet banking companies such as ING Direct that will allow a node to receive a monetary bonus for opening an account with them. The bonus varies based on the promotion the Internet banking comp any(prenominal) is mental testingning at the time. specimen Conducting your banking over the Internet can be you at a significant attempt of scams and fraud. Make surely when using your internet banking account you are accessing it through with(predicate) a secured network, and n of all time provide your account password to anyone.Online banking versus brick andmortarPosted on April 9, 2008. Filed under Banking,Investing and Saving Online banking is something that no one could have p redicted. Now you are able to access your accounts at any time, make payments and see your statements from home with surface going to the topical anesthetic banking first. Online-only banks have also sprung up with no actual branches, right a virtual account that promises high savings rates and a slew of conveniences. For the average person, it would be perfectly acceptable to have both an online banking account and a brick and mortar bank.Online banks generally have the best rates as they strive to cut be by hiring a limited amount of workers (no tellers needed) and avoiding the costs of buildings, atms etc. The downside is a limited access to money and the inability to go to the bank and talk to a person if you need to. Most online banks will allow you to pay bills online, however, they do not offer easy withdrawals like the thousands of offline brick and mortar banks.Brick and mortar banks are best for raft who demand guest service. From the availability of many a(prenomi nal) banking options, fee-free ATMs open 24/7 and the candy at the corner of the banking desk brick and mortars have it all. They also have many costs that cut into savings rates, and make their lines of recognize and loans more expensive. Brick and mortars offer a high level of comfort to customers, ensuring them that their money is right around the corner when they need it, rather than just a digital number on a computer screen.For long term savings, an online bank is the winner hands down. Savings rates at online banks are overmuch higher and the fees are much lower. An online bank is perfect for an emergency fund, or other savings that you do not need on a daytime to day basis. A brick and mortar savings account will never become obsolete, it is far too convenient, even though the rates are traditionalisticly much lower. Keep just enough in a brick and mortar account to utilize it conveniently, and keep the substantial savings at an online bank to earn more in interest. For most people, two accounts is now the necessity.Traditional Banking Vs OnlineBankingInternet banking works in a similar manner to traditional banking, the major difference existence the way one is making payments, accessing his account and personal details, and reconciling statements. Rather than visiting the local branch of his bank, the customer uses his computer to complete transactions. Internet and traditional banking have their pros and cons to consider. The choice of online vs. brick-and-mortar banking is often based on ones lifestyle and priorities.As a major advantage of internet banking, the customer can accomplish triune tasks in the comfort of his home. Efficiency is what makes online banking attractive to customers they can pay bills, move money between different accounts, check multiple accounts, and much more. Banking is fast and drop a lines customers blue-chip time. Transactions are completed in seconds and one can print out the receipts for his personal records. The customer may access his account at any crumplen part of the day, even during weekends and holiold age. Moreover, the online account may be accessed from any place around the world, provided that internet connection is available.Online bank accounts make banking expedient, convenient, and inexpensive. some banks charge fewer fees for the online banking run they offer. Furthermore, banks have higher interest rates on savings accounts and certificates of touch on, and offer more financial operate and products. Customers dont need to bribe envelopes and stamps, run to the post office at the last minute, and risk being late on their payments. Monthly bank statements and bills can be accessed electronically. Finally, online banking employs sophisticated tools that patron manage ones money and accounts with ease. Despite increased security measures and the availability of anti-virus and anti-spyware programs, identity theft is still a concern. Other threats associated with onl ine banking include phishing and hacking of online accounts.Time is among the precious commodities, especially for multi-taskers. On the other hand, some people prefer to visit their local bank and interact with the teller in person. Customers can turn to the banks special account representative or even to the bank manager. Clients are physically present when cash is handed over to them and when they place valuable items in their safety deposit boxes.When customers hold their money in banks, they expect to have them available when required. The Federal Deposit Insurance Corporation offers coverage of up to $100.000 if banks cannot cover their clients accounts. Most banks have increased the level of security by installing more surveillance cameras and hiring a larger number of security guards. With traditional banking, customers are better protected against identity theft. However, security is still a concern with traditional banking. While criminals cannot hold a gun to ones person al computer, they can rob a bank the traditional way.Inconvenient locations, fixed schedules, and more limited financial services are some of the disadvantages associated with traditional banking. In contrast to internet banking, customers opting for traditional banking services need to draw money before using it.The FDIC (Federal Deposit Insurance Corporation) pays up to $100,000 of coverage, in case that a bank cannot cover its accounts (both online and traditional). However, protection from identity theft is an aspect of banking that traditional banks take better care of.Disclaimer This article is provided for educational and instructional purposes only and should not be considered a substitute for maestro and/or financial advice. The information found in this article is provided AS IS, and all warranties, express or implied, are disclaimed by the author.Top 5 Reasons to employ OnlineBankingIn recent years online banking has become increasingly popular, and many consumers have benefited from being able to conduct all of their banking transactions online without having to resort to queuing in the local bank or spending time trying to get through automated switchboard in order to speak to someone on the phone.Online banking allows you to run your day to day finances, and manage your bank account, with ease and convenience, and with this method of banking you are always in go over. With online banking you get to enjoy convenience, ease, speed, and increased control, which is why so many people now decide to conduct their banking transactions online rather than at a branch. The main reasons many people opt to use online banking are1. The net in convenience When you use online banking you can conduct your transactions from the comfort and privacy of your own home, so you wont have to worry about going out to your local branch, spending time queuing up, and trying to fit your banking commitments into your busy day, which can be particularly difficult for tho se that work full time.2. No time constraints With regular banking you are restricted in terms of when you can contact or call in to the bank in order to conduct transactions, and this can prove difficult for those with busy lifestyles and full time jobs. However, when you opt for online banking you can conduct transactions at any time of the day or night, which doer that you can effectively manage your account around the clock.3. Do eitherthing you need to online You will find that you are able to conduct pretty much any banking transaction that you can perform by phone or visit to your branch by going online, other than withdrawing and depositing cash. This means that you can effectively control your finances from the privacy of your own home.4. Increased security Banks now use very secure software to take in the safety and security of customers, making it safer than ever to bank online. Just remember never to link to your bank account from an email link, as this could be a fal se link, and do not save your banking passwords and security details on a shared computer that could give others access.5. 24 hour access to your account With online banking you can access your account 24 hours a day, conducting transactions such as making bill payments, checking your balance and statements, setting up or cancelling direct debits and standing orders, and more.Gone are the days when you could only gain access to you bank between the hours of 9.30am and 3.30pm.How brick howitzer Banking Model will become a thing of past- Robin TrehanThe reason is that maintaining bank locations is highly expensive and hurts the bottom line. Each physical branch generates a laundry list of expenses, including rent, insurance, real estate taxes, utilities and employees. AttachmentFOR IMMEDIATE RELEASEPRLog (Press Release) Sep 01, 2009 How brick Mortar Banking Model will become a thing of past- Robin TrehanA penny saved is a penny earned. That is why the banking industry needs to f all out to shift to an online model for business banking. There is no longer any need for a bank to have several brick and mortar locations in every city.The reason is that maintaining bank locations is extremely expensive and hurts the bottom line. Each physical branch generates a laundry list of expenses, including rent, insurance, real estate taxes, utilities and employees. If the branch is placed in a major metropolitan area such as New York, Chicago or Paris, operating it is even more costly.It makes much more sense for the bank to provide only ATMs in metropolitan area and locate its main center of operations in a suburb. Customers can well and quickly handle their banking business online, at an ATM or even over a mobile phone at any time of the day or night. The technology keeps getting more sophisticated even checks can now be deposited using a picture taken by a cell phone. Even if they are out of the country, customers who bank online can access their accounts at any ti me with ease.The savings realized by eliminating unnecessary branch locations can be passed on to the banks customers in the form of a higher interest rate.However, there can be some challenges when it comes to moving business banking out of the building and into cyberspace. Like many new ideas and ways of doing business, it will take some time for people to get used to. Banks need to make sure that all their business customers understand how online banking works and why it is a safe option.It can be helpful to point out that online banking is actually in many ways more secure than the traditional model. For example, customers can be quickly notified via email or text if there is unusual account activity or if an account is close to being overdrawn. They can then take appropriate action (a balance transfer, for instance) immediately rather than having to wait to visit a branch.Online banking is sincerely an idea whose time has come.The internet has come a long way since Tim Berners Lee discovered it under two decades ago. There have been remarkable establish to create value added services from the internet, among them online banking. The capacity to use internet to deliver online banking services is yet to attract due attention from scholars on the impact of online banking on the efficient delivery of services by the bank (Harnando, Nietoa, 2006). The most obvious contribution online banking has brought to the banking industry is the reduction of overheads that would have otherwise been incurred particularly in singing to the staff and advertising and others services like information technology as no special software is needed (wikipedia 2007online). The reductions in costs in those areas have undoubtedly added positively to a bank bottom-line. The emerging consensus on the future role of online banking is that it can be used to add value to overall banking services as appertaining service delivery, but online banking has failed to marshal potent force to d islodge physical banks branches.The reason why online banking is yet to dislodge the brick and mortar traditional branches is because risk management on online banking applications have not walked with tandem with other advances in information technology. The imperfections of technology sometimes mean that online banking may not be a perfect substitution for a bank branch, and some functions (such as depositing cash) might still require the need to have physical branches for some foreseeable future.There are three major ways in which financial institutions exploit the internet (Ramakhrishnan, 2001), or basically online banking means these three things. They can do it for information purposes whereby the bank can disseminate information about its products over the internet. Secondly, online banking can be about communication with a certain identifiable set of people (in this case a customer) about matters of interest to them such as account information. Thirdly and at the highest lev el, online banking can be transactional, whereby a customer may give the bank a certain mandate to operate the account in a certain way, like to make payments to a third party. This would happen without the customer stepping into the banks hall.Numerous risks abound in online banking, and it is impossible to discuss here them all (Comptroller, 1999). But the main ones are,Credit riskInterest rate risksForeign mass meeting risks,Transaction risks,Compliance risks,Reputation risks.Risks arise from events, foreseen and unforeseen, that may have an unfavourable effect on the banks earnings or capital. The risks are not particularly uncommon to online banking, but they become more potentially threatening in online banking.Bank management for online banking system may be ill advised to leave these risks to the IT department to handle. Many of them require the management careful considered exercise of discretion. This may involve the establishment of effective management controls over t he online banking risks, for instance accountability and appropriate insurance directives for containment of these risks. New online banking projects that have a risk factor should be reviewed by the management and they should ensure that adequate technical expertise is available at all times.For securities risk management strategy, the banks should have in place adequate identification (authentication) of online banking customers before a transaction is carried out. Measures should also be in place to ensure that such customer cannot deny he transacted over the internet.Measures should also be in place before embarking on an online banking project to protect customers privacy and notice Your Customer rules for online banking customers should be stricter than usual (Basel, 2001).