Internet Banking

As the Bob Dylan songs says, "The Times They Are A-Changin'" and with the growth of home Internet use, they have changed quickly in the last decade. Access to information, products and finances are only a mouse click away. We can complete our Christmas shopping, communicate with long-distance friends, and catch up on current events from the comfort of home. Conducting personal business is no longer dictated by store hours and time commitments. This is especially true when it comes to online banking.

We're a nation that loves convenience and choices - two things that Internet banking offers. With it, bank clients can streamline their finances, choose when to bank, and have instant access to accounts. Consider that a typical online transaction can take just under three minutes in comparison to the same transaction at a bank, which takes an average of 10 minutes, not including drive time. In fact, according to a recent survey, Americans are conducting e-commerce and examining banks statements from their PCs at rates faster than in the time those things could be accomplished apart from the computer.

Granted, some have questioned the security of online banking, however it has proven itself to be one of the most valuable assets banks can offer their clients today. Increased security measures such as encryption have made it one of the safest methods of conducting business with a bank. The development of Personal Identification Numbers (PINs) and/or passwords have allowed bank clients to authenticate and protect their accounts. As features have become more sophisticated and user friendly, banks have seen tremendous growth in online services, which many bankers can be attributed to increased clientele confidence, as well as the appeal of choices online banking provides.

One of the largest areas of growth is online bill pay. While many first-time users come to online banking to access and manage their accounts, a large majority then begin looking into the online bill pay service offered by their bank. Banks are witnessing more and more users who are receiving their bills electronically. Recent studies show that users who pay their bills online report not only being satisfied with the experience, but with their specific banking institution, suggesting that users have strong confidence in their bank's ability to secure identity. Good news to banks with online services, similar reports also show that those who pay bills online retain their business longer at a particular bank than those who do not use a bank's online service. Clearly, the options provided by Internet banking create a win-win situation for banks and their clients.

Another boon to online banking has been the ability to shop for a loan. Applying for a loan is quick and convenient when done online. Everything a client needs when completing the application is located on the bank's Web site. Clients even have access to instant online assistance. These types of services have been hugely successful, allowing consumers the ability to seek the best terms while bringing about a new level of competition between banks who are seeking to expand their bottom line.

With the use of personal finance programs such as Quicken, Microsoft Money or Turbo Tax, data can be easily imported. Some banking programs even provide users with the ability to monitor all of their accounts at one site regardless if they are with the main bank or with another institution.

Benefits of Online Banking:

1. Because conducting transactions online saves the bank money, those savings may be passed on to clientele in the form of lowered fees and high-yield savings rates, for example.

2. Users have instant access to their account information and ability to conduct transactions 24/7.

3. Ability to link accounts. Linking various accounts to one another makes it easier to move money seamlessly between online bank accounts.

4. Users of online banking have the ability to purchase CDs, apply for a mortgage and pay bills online.

5. With Internet banking, savings is a snap with an automatic savings account that electronically deposits money into a savings or money market account.

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