Online banking makes it possible for clients to carry out financial transactions on secure websites, run by their actual or virtual bank or credit union. There are many proponents of online banking as compared to traditional banking, but there are also a lot of people who favor the traditional variety. Advantages of online banking include 24/7 access to cash, less paper mail, transaction speed, sophisticated tools, available for use, ant others. At the same time, it may take some time before you learn how to use these tools and manage your account. Even large banking institutions upgrade their websites and online software periodically, and you may need to re-enter some of the account information. Some people prefer traditional banking because they want to actually see money change hands. This cannot happen with online banking. Traditional banking is also associated with face-to-face contact and interacting with real tellers. If a problem occurs, one can easily ask a bank representative or manager to deal with it. On the downside, this can take longer if everyone in the office is busy handling other tasks. We can say for sure that both online banking and traditional banking have their pros and cons. Online or Internet banking applications share a large number of features and capabilities, but some of them are specific. The common features are generally of the following types, listed in detail below.
Among the common features is the capacity to carry out financial operations, such as an account to account transfer, a wire transfer, paying a bill, applying for a loan, or opening a new account. Others are investment sales or purchases, loan transactions, and payments to third parties, such as bills and wire transfers. However, if you were to try to make this possible by means of traditional banking, it would probably take hours. Indeed, convenience is the major advantage that Internet banking has over the traditional variety – convenience and time-saving. Other online banking options and services available to technology-savvy clients include viewing recent transactions, downloading bank statements, and more.
What are some unique features of online banking? One is personal financial management support. An example of this is inputting data in personal account software. Sometimes it is possible for clients to monitor and control all of their accounts at the same time. This is called data aggregation – regardless of whether all of these accounts are with one bank or each one is with a separate institution. If you have several accounts, as most people do in the United States (at least five), and you had to monitor them all the traditional way, this would mean going to every separate financial institution and having to do all this on the spot. Can you imagine the hassle, the time all this would take, and the pain of it all?
With online banking, the biggest concern clients have is security. Today banks offer secured sites, protected through single password authentication, which is similar to how most secure Internet shopping sites work. However, this is often not seen as secure enough for Internet banking. There are two main safety and security methods, applied in the field of online banking. These are the PIN/TAN system and signature-based online banking.
As you know, the PIN is a password, whereas the TAN is a single-use password to verify transactions. TANs are given out in several ways. Sometimes a list is sent in the mail; other times, they are generated by means of a security token. Finally, sometimes they are sent via SMS to the client’s cell phone.
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