Electronic banking (or net banking) refers to an application of the Internet that allows customers to dial into bank networks or their websites, by using their own telephones and computers, and to get a host of banking services directly on their home or office PCs.
Net banking offers the customer easy chair convenience and access to their account information from anywhere in the world, at any time of the day or night. That means, as long as you have a computer, a phone, a modem line and an Internet connection, you don't need to worry about bank holidays or taking time out to go to the bank, or standing in long queues for a simple transaction. You can access most of the bank's services from the comfort of your home/office Internet banking, Internet bank, online banking, virtual bank, cyber bank are some of the jargons being bandied about everywhere. But can all these terms be used interchangeably? Answer is yes and no. There is a slight difference. An Internet bank, or rather, an Internet-only bank is a virtual bank, or a cyber bank, one that does its business entirely on the web. Internet banking is a branchless banking. Internet banking and online banking can of course be used interchangeably. The fundamental principle here is the same that is, using the internet to perform banking transactions. An important difference between an Internet Bank and online banking is that you don't need any special software to access the Internet banking services. You just need a computer and an Internet connection. But to access the services of an online bank, special software is necessary, at least for some services. What attracts people to Internet-only banking is the convenience, as in free bill paying and the fact that there is no need to change banks if you relocate. Another important is the free service they offer.
The bank's costs are significantly lowered, since it has to support only a single online computer network. When a traditional bank goes online, it has to support large networks, additionally to its ATMs, branches, etc. These cost savings for the bank may be translated into significantly lowered fees or possibly no fees at all for the internet banking services. Some Internet banks offer24-hour Internet access to the account, no-fee checking, unlimited check use, and a VISA check/ATM card all for no charge. The interest paid in an Internet bank account may be varied. Some banks might offer low interest or no interest at all; some might offer high interest rates (higher than the rates offered by traditional banks). In the former case, the internet bank account may be used just to pay the bills.
Internet banks are technologically capable and may give more information than a traditional bank. Suppose you withdraw money from an ATM, the transaction will be revealed within an hour on the bank's website. If you have more than one account, transferring money to and from the accounts will be very easy.
Internet banking is changing the face of banking industry and is having the major effects on banking relationships. Internet banking involves application of Internet for delivery of banking products and services. It falls into four main categories, from Level 1 - minimum functionality sites that offer only access to deposit account data - to Level 4 sites - highly complicated offerings enabling integrated sales of additional products and access to other financial services- like investment and insurance.
A successful Internet banking solution offers :
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