Online banking /ˈɒnˌlaɪn ˈbæŋkɪŋ/ or Internet banking includes all banking operations and transactions on the Internet. If my bank account has an online facility, I can pay my bills, check my balance, transfer money, apply for loans or an overdraft, set up regular payments, and settle my credit card bills on the Internet. I can do this from the comfort of my home or even while traveling on a train or bus using my smartphone.
Investopedia.com says the following about Internet banking:
“Online banking allows a user to conduct financial transactions via the Internet. It is also known as internet banking or web banking.”
“Online banking offers customers almost every service traditionally available through a local branch including deposits, transfers, and online bill payments.”
This type of banking has been around since the early 1980s, in fact, before Internet banking. Customers had a monitor, terminal, and keyboard. They accessed their accounts using their landline telephone.
The meaning of ‘online’
The term online today means on or via the Internet. If somebody is online, it means that they are using a smartphone, tablet, laptop, or smart TV that is connected to the Internet. Online banking is part of the broad term fintech. Fintech stands for financial technology.
Since the advent of the Internet just over three decades ago, many online services and activities have emerged, including:
- Education (online learning, e-learning)
- and hundreds of other services and activities.
Online banking is common today
At the beginning of this century, banking online existed, but was used by less than 2% of individual and corporate customers. As people became more familiar with Internet tools, an increasing number of customers applied for online banking services. Over the past decade, neobanks have entered the marketplace in a big way. A neobank exists only online.
Today, every bank globally has a strong Internet presence. Millions of people who regularly use a banking app on their smartphones never visit their bricks-and-mortar branches. This change in consumer behavior has resulted in the closure of hundreds of thousands of bank branches in North America, Europe, Japan, Australasia, China, and most of the emerging economies.
Customers say that online banking’s main advantage is being able to access their accounts and carry out transactions whenever they like from any location, as long as they have Internet access.
If you have not tried Internet banking, ask your bank about it. They will probably offer you the choice of Internet or telephone banking, or perhaps both. You need a username and password and may have to add some extra code before accessing your account online.