Online banking , also known as internet banking , is an electronic payment system that allows customers from banks or other financial institutions to perform various financial transactions through a website financial institution. The online banking system will usually connect to or be part of the core banking system operated by the bank and is different from branch banking which is the traditional way customers access banking services.
Today, "virtual banks" (or "direct bank") have only an internet presence, which allows them to lower costs than traditional traditional-and-mortar banks.
Video Online banking
Operasi
To access an online banking facility of a financial institution, customers with internet access need to register with the agency for services, and generate passwords and other credentials for customer verification. Credentials for online banking are usually not the same as phone or mobile banking. Financial institutions are now routinely allocating subscribers, whether customers have indicated their intention to access their online banking facilities. The customer ID is usually not the same as the account number, because a number of customer accounts can be linked to a single customer ID. Technically, customer IDs may be associated with any account with a customer-controlled financial institution, although financial institutions may limit accessible accounts, say, checks, savings, loans, credit cards, and similar accounts.
Customers visit secure websites of financial institutions, and enter online banking facilities using pre-defined customer and credential numbers.
Each financial institution can determine the types of financial transactions that customers can transact through online banking, but usually include obtaining account balances, recent transaction lists, electronic bill payments and funds transfer between customer accounts and other accounts. Most banks set limits on transactable amounts, and other restrictions. Most banks also allow customers to download copies of bank statements, which can be printed at the customer's premises (some banks charge a fee to send copies of bank statements). Some banks also allow customers to download direct transactions into customer accounting software. The facility can also allow customers to book checks, statements, report credit card losses, stop payments on checks, suggest changing of addresses and other routine actions.
Maps Online banking
History
Precursors
Precursors for modern home loan banking services are remote banking services via electronic media from the early 1980s. The term 'online' became popular in the late 1980s and refers to the use of terminals, keyboards and TVs (or monitors) to access the banking system using telephone lines. 'Home banking' can also refer to the use of a numeric keypad to send tones to a telephone line with instructions to the bank. The online service started in New York in 1981 when four major banks in the city (Citibank, Chase Manhattan, Chemical and Manufacturing Hanover) offered home banking services. using videotex system. Due to the commercial failure of videotex, this banking service has never become popular except in France (where the use of videotex (Minitel) is subsidized by telecommunications providers) and the UK, where the Prestel system is used.
Internet and customers are reluctant
When the click and brick euphoria hit in the late 1990s, many banks began to view web-based banking as a strategic imperative. The bank's appeal to online banking is clear: reduced transaction costs, easier integration of services, interactive marketing capabilities, and other benefits that drive customer lists and profit margins. In addition, online banking services allow institutions to incorporate more services into a single package, thereby enticing customers and minimizing overhead costs.
The wave of mergers and acquisitions swept the financial industry in the mid and late 1990s, greatly expanding the bank's customer base. After this, banks look to the Web as a way to retain their customers and build loyalty. A number of different factors have led bankers to divert more of their business into the virtual domain.
While financial institutions took steps to implement e-banking services in the mid-1990s, many consumers hesitated to conduct monetary transactions over the internet. Broad adoption of electronic commerce is required, based on trace search companies such as America Online, Amazon.com and eBay, to make the idea of ​​paying items online widespread. In 2000, 80% of US banks offered e-banking. Customer use grows slowly. At Bank of America, for example, it took 10 years to get 2 million e-banking customers. However, significant cultural changes occur after Y2K fears end. In 2001, Bank of America became the first bank to reach 3 million online banking customers, more than 20% of its customer base. For comparison, larger national institutions, such as Citigroup claim 2.2 million online relations globally, while J.P. Morgan Chase estimates to have more than 750,000 online banking customers. Wells Fargo has 2.5 million online banking customers, including small businesses. Online customers prove more loyal and profitable than regular customers. In October 2001, Bank of America customers execute 3.1 million electronic bill payments, totaling more than $ 1 billion. In 2009, a report by Gartner Group estimated that 47% of US adults and 30% were in online UK banks.
The early 2000s saw the emergence of branch banks as an internet institution only. These Internet-based banks bear a lower overhead cost than their brick-and-mortar counterparts. In the United States, deposits in most banks are directly insured by the FDIC and offer the same level of insurance coverage as traditional banks.
The first online banking service in the United States
Online banking was first introduced in the early 1980s in New York, USA. Four major banks - Citibank, Chase Bank, Chemical Bank, and Hanover Manufacturers - offer home banking services. Chemical introduced the Pronto service to individuals and small businesses in 1983, enabling individual clients and small businesses to maintain electronic checkbook registers, view account balances, and transfer funds between check and savings accounts. Pronto failed to attract enough customers to break even and was abandoned in 1989. Other banks had similar experiences.
Since its inception in the United States, online banking has been regulated federally by the Electronic Funds Transfer Act of 1978 .
The Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all its members in October 1994.
First online banking in the United Kingdom
Almost simultaneously with the United States, online banking arrived in the UK. The first online home banking service in the UK known as Homelink was established by Bank of Scotland for Nottingham Building Society (NBS) customers in 1983. The system used is based on British Prestel link display system and uses computers, such as BBC Micro, or keyboard (Tandata Td1400) connected to telephone systems and television sets. This system allows online report submission, bank transfer and bill payment. To initiate a bank transfer and bill payment, a written instruction which provides details of the intended recipient should be sent to NBS which regulates details on the Homelink system. Typical recipients are gas, electricity and telephone companies and accounts with other banks. Payment details to be made are entered into the NBS system by the account holder via Prestel. The check is then sent by the NBS to the payee and the suggestion that provides the payment details is sent to the account holder. BACS is then used to transfer payments directly.
First online banking in France
After a period of testing with 2,500 users starting in 1994, online banking services launched in 1998, using Minitel terminals that are distributed freely to residents by the government.
In 1990, 6.5 million Minitels were installed in households. Online banking is one of the most popular services.
Online banking services then migrate to the Internet.
Bank and World Wide Web
Around 1994, banks saw the increasing popularity of the internet as an opportunity to advertise their services. Initially, they use the internet as another brochure, without any interaction with customers. The initial websites display photos of officers or bank buildings, and provide customers with branch maps and ATM locations, phone numbers to request more information and a list of simpler products.
Interactive banking on the Web
In 1995, Wells Fargo was the first US bank to add account services to its website, with other banks immediately following. In the same year, Presidential became the first US bank to open a bank account via the internet. According to a study by the Online Banking Report, at the end of 1999 less than 0.4% of US households use online banking. As early as 2004, approximately 33 million US households (31%) used some form of online banking. Five years later, 47% of Americans use online banking, according to a survey by Gartner Group. Meanwhile, in UK online banking grew from 63% to 70% of internet users between 2011 and 2012.
Features
Online banking facilities usually have many of the same features and capabilities, but also have some specific applications. Common features are broadly divided into several categories:
- Bank customers can perform non-transactional tasks through online banking, including:
- See your account balance
- View recent transactions
- Download a bank report, for example in PDF format
- See images from paid checks
- Order a checkbook
- Download periodic account reports
- Downloading apps for M-banking, E-banking, etc.
- Bank customers can perform banking transaction transactions through online banking, including:
- Fund transfers between customer linked accounts
- Pay a third party, including bill payments (see, e.g., BPAY) and third party funds transfer (see, e.g., FAST)
- Purchase or sale of investment
- Loan applications and transactions, such as reissue of registration
- Credit card application
- Sign up for utility bills and make bill payments
- Financial institution administration
- Management of multiple users who have different levels of authority
- Deal approval process
Some financial institutions offer special internet banking services, for example:
- Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow customers to monitor all their accounts in one place, either in their primary bank or with another.
Advantages
There are several advantages of using e-banking for both banks and customers:
- Permanent access to bank
- Access anywhere using your phone or computer
- Less time consuming
- Methods are very safe and secure
- Helps transfer money immediately and accurately
- Easy to use
Security
The security of customer financial information is very important, without which online banking can not operate. Similarly reputation risk for the bank itself is important. Financial institutions have set up various security processes to reduce the risk of unauthorized online access to customer records, but there is no consistency with the various approaches adopted.
The use of secure websites is almost universally embraced.
Although single password authentication is still in use, it is in itself not considered safe enough for online banking in some countries. There are basically two different security methods used for online banking:
- The PIN/TAN system where PIN represents passwords, used for login and TAN representing password once to authenticate transactions. Tans can be distributed in different ways, the most popular is sending a list of Tans to online banking users by postal mail. Another way to use Tans is to generate them with the need to use a security token. These generated TIT tokens rely on unique time and secrets, stored in security tokens (two-factor authentication or 2FA).
- More advanced TAN generators (chipTAN) also include transaction data into the TAN creation process after displaying them on their own screens to allow users to find man-in-the-middle attacks by Trojans trying secretly manipulating transaction data in PC background.
- Another way to provide TANG for online banking users is to send TAN from current bank transactions to a user's mobile phone (GSM) via SMS. SMS text usually quotes amount and transaction details, TAN is only valid for a short time. Especially in Germany, Austria and the Netherlands, many banks have adopted this "SMS TAN" service.
- Usually online banking with PIN/TAN is done through a web browser using secure SSL connections, so no additional encryption is necessary.
- Signature-based online banking where all transactions are signed and digitally encrypted. The key for signature creation and encryption can be stored on any smartcard or memory media, depending on its concrete application (see, eg, Spanish ID Card DNI electrÃÆ'³nico ).
Attack
The attacks on online banking used today are based on user scams to steal valid login and TUD data. Two notable examples of such attacks are phishing and pharming. Scripting and keylogger/Trojan horse cross-site can also be used to steal login information.
The method for attacking a signature-based online banking method is to manipulate the software used in a way, that the correct transactions are displayed on screen and fake transactions are signed in the background.
The 2008 US Federal Official Insurance Technology Insidenation Report, compiled from suspicious bank activity reports quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $ 30,000. That added to losses of nearly 16 million dollars in the second quarter of 2007. Computer intrusion increased 150 percent between the first quarter of 2007 and the second. In 80 percent of cases, the source of the intrusion is unknown but occurs during online banking, the report said.
Another type of attack is the so-called man-in-the-browser attack, a variation of a man-in-the-middle attack where Trojan horses allow remote attackers to silently modify the destination account number as well as the amount in the web browser.
In reaction to an advanced security process that allows users to cross-check transaction data on secure devices, there are also combined attacks using malware and social engineering to convince users themselves to transfer money to fraudsters on the basis of false claims (such as claims the bank will require a "test transfer "or claims the company has falsely transferred the money to the user account and he must" send it back "). Therefore, users should never make bank transfers that they have not started themselves yet.
Countermeasures
There are some countermeasures that try to avoid attacks. Digital certificates are used against phishing and pharming, in a signature-based online banking variant (HBCI/FinTS) the use of "Secoder" card readers is a measure to reveal the software-side manipulation of transaction data.
In 2001, the US Federal Financial Institutions Audit Board issued a guideline for multifactor authentication (MFA) and then must exist at the end of 2006.
In 2012, the EU Agency for Networking and Information Security recommends all banks to consider their user's PC systems that are infected by malware by default and therefore use a security process where users can cross-check transaction data against manipulations such as (provided that mobile security is maintained ) SMS TAN where transaction data is sent together with a TAN number or a standalone smartcard reader with its own screen including transaction data to the TAN creation process while presenting it previously to the user (see chipTAN) to counter man-in-the-middle attacks.
See also
- Current account
- Direct bank
- Phone Upgrades (Citibank Products Circa 1990)
- Guide for E-payments
- Mobile banking
- On-line and off-line
- Open banking
- SMS banking
- Single sign-on
- Phone banking
References
External links
- Gandy, T. (1995): "Banking in e-space", Banker, 145 (838), p. 74-76.
- Tan, M.; Teo, T. S. (2000): "Factors influencing the adoption of Internet banking", Journal Association for Information Systems, 1 (5), pp. 1-42.
Source of the article : Wikipedia
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