The concept of Internet Banking rose from Global Financial Houses whose primary objective was to ensure that customers were tuned to their finances from any part of the world. The main transactions include Online Money Transfer and Online Lending. Online Banking services are hassle free and guarantees data confidentiality and security. Individuals residing in one country could use the internet as a medium to transfer funds from that country to another, provided the country he is transferring the money too has a branch located. The basic modus of operandi is conducted by allowing users to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society. Other major transactions that are commonly secured through Online Banking Services include Electronic Bill Payments, Loans, Investments and Banking Statements. The Financial Institute Administration features allow it to manage the Online Experience of their end users and the Hosting administration features allow the hosting company to administer the solution across the financial institute.
Features that are unique to Internet Banking include Personal Financial Management Support, Personal Accounting software & account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions. Protection and Security is provided through Single Password authentication. In most countries shopping websites are not considered secured enough for personal Online Banking Applications, hence the use of single password. Basically a couple of methods are approached to secure transactions. The first one used is a combination of a Pin (Personal Identification Number)/ TAN (Transaction Authentication Number), where Pin represents a password used for login and Tan a one time password to authenticate transactions. Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed. The second option is signature based online banking where all transactions are signed and encrypted digitally. The Keys for the signature generation and encryption can be stored on smart cards or any memory medium, depending on the concrete implementation.
The Advent of the Internet has leveled the advantages that were previously held by Global Financial houses. It has afforded open access to customers in the global marketplace by being a cost effective delivery channel. It has changed the outlook of the Banking Industry and has helped develop customer relationships. Its prime focus is to improve customer access, facilitate the offering of more services, increase customer loyalty & attract new customers. Online banking services are continually evolving, and as the services expand, it will keep getting better for customers. (Banking Consultant for a Major Financial Institute in
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