Internet banking, also known as online banking or web banking, is an electronic payment gateway that enables customers to carry out different types of monetary transactions through the internet. The internet banking system is typically a part of a bank’s core banking network, which connects the various branches, and allows the customers to access their account anytime from anywhere in the world.
In fact, in the United States, there is a rise in the number of ‘internet-only’ banks — these banks work very much like the traditional banks except they don’t have brick-and-mortar branches. The zero expenditure on infrastructure and maintenance considerably brings down the operational costs for these banks. With the increasing demands for 24X7 banking services and diminishing geographical barriers, internet banking is emerging as the future of banking.
How internet banking works
The customers of the bank are assigned a unique customer number. Customers can use this unique customer number to perform all banking transactions through the bank’s secure website. The features available in the internet or online banking solution installed by the bank determines the types of transactions that can be performed virtually by a customer.
Typically, most of the banks allow customers to access their account balance, view a list of the recent transactions, carry out electronic bill payments and transfer funds.Some banks also allow customers to download their bank statements. Some advanced internet or online banking solutions enable features such as linking the credit card payments and miscellaneous transactions such as ordering a new cheque book or report loss of credit cardas well.
A good internet banking solution helps the bank offer a convenient, secure and simple virtual banking option to their customers. A good internet solution will have the following or, may be, even more features:
- Online banking transactions, such as viewing account balances and history, money transfers, canceling cheques, accessing electronic statements and making online payments
- Self-service function on different kinds of financial accounts
- Ability to process tax and personal finance information
- Alerts related to any monetary or non-monetary transaction
How to identify a good internet banking solution for your business
The first and foremost thing that one needs to keep in mind when selecting an internet banking solution for their bank is to not get something that looks wonderful as a standalone application but doesn’t meet their core-banking needs. A solution that simply plugs into the existing core banking system and can be updated when required keeps the transition hassle free.
Other features that one should look for is an intuitive, customer friendly user design. The ideal solution for your bank will address all your business and operational needs in a straightforward manner.
The business benefits of using a good internet banking solution
A good online banking solution has several benefits for the bank’s customers as well for the bank itself.
- Helps in customer retention: As internet banking facilitates self-service – it becomes easier for customer to do transactions as per their convenience. As customers have real-time access to their account information, customers find this method of banking more transparent and satisfactory. The interactive interface in a good online banking solution helps a great deal in good customer experience. Good customer experience translates into customer retention.
- Reduces customer support overheads: A good internet banking solution makes online banking so user friendly that it also requires very less or no intervention from the banking staff, which translate into huge cost savings for the banks.
- Increases business agility: Easy updates and upgrades are the key feature of a good online banking solution — this facilitates quicker time-to-market for new products and services.
- Reduces vendor dependence: After installing an internet banking solution that provides multiple features in a single interface, banks can do away with a lot of standalone third-party plugs-in and solutions; thereby, reducing dependency on multiple vendors for services.
Author Bio: Ryan North is a Professional Blogger and Entrepreneur at Enterprise Edges. He has been into the Core Banking Softwares reviews industry since 2001 and helped many companies establish their sales goals via content and brand campaigns.