Definition Of Online Banking
Although many financial institutions exist, a bank always stands out because of its key functions. A bank is an institution that conducts current accounts for their customers, pays their cheques drawn on them, and collects them for their customers. Banks also maintain their customers’ savings and fixed deposit accounts while providing loans for interested customers.
Since retail banks were established in the 13th century, the banking industry has experienced a revolution in its operations and impact. In today’s 21st century, a new form of banking called Online Banking has been birthed. Online Banking has simplified banking services and brought banks to people’s living rooms and workspaces. Does this sound interesting? Wait till you hear the full story of Online Banking.
What Is Online Banking
Online Banking is also referred to as internet banking, e-banking, home banking, and web banking. It is a banking system that allows customers of a bank to use an electronic payment system to conduct financial transactions through the bank’s website or mobile app.
Online Banking is a subunit of banks, and financial institutions have initiated it to ease their work operations and provide better customer service. Online Banking is a replacement for branch banking, requiring customers to visit the bank’s physical location to perform financial transactions.
However, with online banking, customers perform the same financial transactions from the comfort of their homes, offices, or schools. Thus, customers save the time they would have spent visiting the branch of their bank closest to them. Instead, they can use that time to carry out more productive activities. More so, online banking means that customers enjoy banking services 24/7, unlike traditional branch banking, which is limited to the bank’s operating hours.
It has helped banks reduce their operating costs as they no longer feel pressured to establish more branches across a city or country. Banks now make more profit by avoiding the overhead cost associated with running a physical branch.
Features Of Online Banking
Like traditional branch banking, online banking enables customers to perform the following operations:
1. Transfer Of Money Between Accounts
With online banking transferring money between accounts has been made easier and faster. Using the bank’s mobile app or website, you can move money from your account to a different one. And this happens within a few minutes on the same spot.
This feature has helped many people deal with emergencies in the nick of time. You can easily send money to your loved ones and friends without moving a muscle.
2. Make Payments
This feature is closely linked with the one mentioned above. Online banking has simplified the payment process for goods and services purchased from merchants. You don’t have to carry cash when visiting the supermarket to purchase groceries. The same goes for other consumable goods.
Online banking allows you to pay for goods and services by simply sending money from your account into the merchant’s account. You don’t need to visit one of your bank’s branches to carry out this financial transaction.
3. View Account Balance
Ease is one of the key benefits online banking provides, and you get to enjoy it in different instances. Viewing your account balance is one of them. At any point in time, you can easily bring out your phone and check the current balance of your account on the bank’s mobile app.
You are saved from the stress of walking into the bank to perform this transaction, even though it is a minor one.
4. Obtain Statement Of Accounts
Online banking has made checking statements of accounts very easier, unlike traditional banking, which requires you to walk into the bank to make the request and wait for minutes or hours (depending on the crowd in the banking hall) before you receive the report.
Using the bank’s mobile app, you can quickly check your account’s statement and evaluate recent transactions. You get to see how much was spent recently or how much was sent into the account.
5. Obtain Loans
To further reduce the need for customers to visit physical branches, banks have initiated the feature of providing loans via online banking. Customers get to apply for and receive loans after meeting certain requirements.
In this case, a loan application document and paperwork are not needed to be presented to the bank’s loan officer. Instead, you can apply for the loan while sitting on your sofa or in transit. Once it has been determined that you are qualified for the loan amount you requested, the money will be paid into your account. It’s as simple as that.
How It Is Done
Using the online banking services of a bank requires you to have internet access, and you will have to register with the bank to enjoy the service. You will also set up a password and other credentials for customer verification. This is to ensure security while using the service and prevent your money from being stolen by cybercriminals.
With the password and credentials, you can log in to the bank’s website and enjoy the features of online banking.
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