The Rise Of Digital Banking

Convenience way of operating banking transactions: Online banking is a highly profitable channel for financial institutions. It provides customers convenience and elasticity and can be provided at a lower cost than traditional branch banking (Williamson, 2006). The convenience of online banking is helping people gain greater control of their finances and contributing to changing patterns in cash withdrawal and day to day money management. (Beer, 2006)

Internet banking refers to an online facility which provides an alternative channel for delivering banking or financial services and enables individuals to access their accounts anytime and anywhere through a bank’s web site (Z. Liao, Z., and M. T. Cheung, 2012). In other words, online banking named as E-banking, internet banking or virtual banking. Generally, the operation of online banking is connect to the core banking system designed by bank and then contrast to branch banking which refer to traditional way of bank customers accessed to banking services. Nowadays, internet banking is one of the most important businesses in electronic business around the world (Ariff et al, 2012). Most of the conventional banks have to operate and provide the online banking service to their customers as needs by

When you drive up to your bank or walk up to your teller, your main goal is to complete your transaction and move on with your day. The last thing on your mind is how that transaction is taking place. You don’t care what happens behind the scenes as long as your money is where it needs to be and is safe. As the banking and finance industry has transformed, so has the process of how your money is handled. To accompany those changes, regulators and lawmakers create laws designed to protect consumers, banks, and the economy as a whole. As you will learn, the history of the banking industry has changed drastically over the last two thousand years and even more so in the last century with the advance of technology. It only makes sense that those lawmakers must continue to update and invent new regulation to further protect those interested parties. My goal is to demonstrate just how rapidly and radically the finance industry has changed and how new elements being introduced to finance and banking will adapt the industry and the regulation.

Simply, the banks perform financial intermediation with the deposits of the customers/ business and then lending out that money to earn profits. The banking system concern, it plays a vital role in any country economy by encouraging investment activities as well as money savings. Moreover, online baking, providing debit and credit cards, ATM facilities, providing safe custody of valuable items and lockers are some of the facilities provided by banks to make their relationship with the customers more effective and efficient.

The change and advancement in technology are a significant factor in the banking business. Technology has led to tremendous improvements in this industry. Since the commencement of this millennium, people have shown great love for their mobile phones (Ozaki 1992). It necessitated the invention of mobile applications (APPs). From the introduction of the mobile banking, APP people rarely go to the banks. All their transactions get done simply by the stroke of a finger. Businesses face a challenge of adapting to changes in the technology sector. Mobile banking either through actual investing or any other means is on the rise.

As their name suggests, they only execute their operations online. Customers can only be in contact with their money over the internet since they do not have any physical branches. Because online-only banks require lower overhead costs, they have the capability to offer more free services and higher interest rates compared to a traditional bank. Online banking provides many customers the convenience of handling their business at any physical location as long as they have access to internet. This is possible because of the variety of services that online banks provide despite limiting interaction to only the internet. Some of their services include applying for loans online, transferring funds and paying bills online. While the convenience of being able to access banking through the internet is worthwhile, there are limits to it. For example, making large deposits to the bank is limited and can only be made through the mail, they don’t service cashier checks for transactions, and withdrawing money from the account is very inconvenient. Luckily, the role of the internet in financial transactions is becoming increasingly prominent so that spending money online is more accessible, but it is important to understand both the benefits as well as restraints of online banking. Nowadays, many large brick-and-mortar banks have caught on and provide some online services in attempts to

In this essay I will be writing about Online Banking, its use, how it evolved, impacts and how it benefited the global businesses. In late 1980s, the term online banking became popular. But in 1990s, the financial institutions implemented the online banking services. Initially it took some time to adopt the customers to do monetary transactions through online banking. Afterwards, with increasing use of computers, internet and World Wide Web, banks introduced new form of banking called Online Banking. It is a service from a bank to perform banking transactions through internet. Transactions like paying bills, transferring funds, applications and payments over loans & mortgages, accounting statements viewing, viewing account’s transaction history, looking for products and services provided by banks, getting answers of queries instantly.

In fact, we can trace the true origins of the most recent surge of technological developments as far back as thirty five years ago when the Atari 2600 was released and the impact that it had on game programming. In the early 1990’s we saw pagers take off and the birth of computer games as well with the success of computers. However, it wasn’t until the mid to late 1990’s when the Internet took off that the changes in technology were happening more in succession. For example, the flip phone was only about a decade ago and in the past eight years, the iPhone changed everything as technology started merging to include Internet, GPS, camera and video capabilities on the smartphones. Network of computers and the Internet that connects them to each other from the basic technological structure that underlies virtually all-electronic commerce (Schneider, 2015, p. 61). Technology has changed the way the world does business and the way we now communicate and interact with each other. Technology’s growth has translated into a shift from traditional business and the way it is conducted. The role of technology has allowed a leading bank such as JPMorgan Chase to implement innovative use of new technology to increase revenue. For example, JPMorgan Chase reported that 41 percent of its customers that used mobile banking in 2013 alone to make their deposits. JPMorgan Chase views technology as an opportunity to improve their relationship

. Mobile services not only offer a new, convenient channel for existing customers of banks, the technology will also provide access to 3 Bnstrong global unbanked population

In recent years, banks all-around the world have buckled down to develop digital banking platforms to keep up to date with

By the mid 1990’s most of the major banks now offered online Bill Pay to all of its customers for a small monthly fee (6). By this time, online banking has begun to grow rapidly, along with the concerns for customer security. Like with many changing technologies, many customers of online banking become skeptical of how well the technology could protect them. With growing concerns from customers, banks began increasing their security with online accounts (7).

Technological advancement has had a gigantic effect in the banking industry. Over the past few decades, the financial services industry has changed considerably with banking transforming from the pen and paper method to the computers and internet method. The pen and paper method took weeks or even months for the transaction to be eventually completed, and then the dramatic introduction of the computer and internet method which changed that time frame to only a matter of seconds to be completed, which reduced the amount of time and labor needed to complete a transaction significantly. Banking is considered one of the most important economic sectors with it being severely influential and responsive to any little change, whether it is domestic or international. Some extreme changes that were brought about by the development of this new technology turned into a globalized nature for the financial services industry. One stroke of a key on a computer could and would change a person 's life extensively or even have a global impact. The new technologies that were created and introduced changed how the consumers managed their money from that time on. Technology has helped to protect peoples’ hard earned money and make it much more impossible for people to be able to write out bad checks or even holding up a bank. The advancement in technology however, also came with some security risks as most things do, that could affect the money that people trusted with the bank and

o Technology: In a technology driven world, it is important that banks in the industry ‘move with the time’. With respect to the big four, these banks have now introduced internet and cell phone banking as well as banking from the ATM; making the industry highly competitive. This technology aims to make banking for the client simple and accessible from anywhere. This new technology is aimed, once again, at the medium to high-income earning clients, who have access to these technologies.

Although, electronic banking provides many opportunities for the banks, it is also the case that the current banking services provided through internet are limited due to security concerns, complexity and technological problems (Sathye, 1999 & Mols, 1999). According to Financial Services Authority (FSA) 2010, banks face several risks but notably are; Safety situations around ATMs, abuse of bank cards by fraudsters at ATMs and the danger of giving your card number when buying on line. Security risk is a major source of concern for both customer and the bank. Since E- banking services are offered using network, it is exposed to risk environments hence leading to security breaches. The consequences of security threats are potential financial, legal and reputational implications.

The creation of money is possibly one of the greatest accomplishments of human civilization. Since the beginning of humanity, individuals have used money as a way to pay for goods and services. Over the years, money has been used in various forms and continuously changes to best fit modern society. Our society no longer has to depend on gold coins, cocoa beans, or anything else of intrinsic value that has been used in the past. In today’s society, we use paper currency, which is fairly convenient and easy to carry around with us. Over the past decade, our economy has experienced tremendous changes due to the introduction of new cutting edge technologies. Millennials are accustomed to a digital world and most likely will experience the transition from paper money to digital money. The advancements in technology over the past several years has allowed consumers the opportunity to buy and sell goods over a computer network known as the Internet. The internet is a much more convenient way of shopping compared to fighting crowds of people at your local mall during the holidays. We must start to prepare ourselves for the digital age of currency, an age in which a small amount of our money will actually be tangible. Many individuals are concerned about the privacy and security issues that may arise from the transition to digital currency. However, the more research you do on digital payments, the more you will realize that it is very safe and efficient when compared to paper money.