Internet Banking
Introduction
•What is Internet Banking?
Internet Banking is when a high street branch or virtual bank allows their customers to
handle their financial affairs online through a secure website, offering a range of
traditional services along with some online benefits
•Effects on the Customer
•Effects on Business Strategy
•Effects on Technology
•Security Risks
Customer View
•24-hours a day, 7-days a week
•Statements in chronological view
•Pay bills or Transfer money
•Can apply for additional services
• Can set up Direct Debits and Standing Orders
•Can change account details
•Businesses are able to perform their banking without leaving the office
Advantages Disadvantages
Customer can control their Details may be at risk of fraud
financial affairs from anywhere
in the world via the Internet
Lack of face-to-face contact
when applying for new services
Can get benefits using on-line
only banks over high street
Customers are required to
branches
remember their Password and
Login details
Can fit into busy lifestyles and
work patterns
May become victim to a
phishing attack
No need to wait or queue for a
service
Business Strategy View
•May need to treat their customers differently
•Must provide lots of help and support
•May need to focus on reassuring staff
•Need to be careful not to mislead or not fully inform customers
•Need to fully explain the security risks with Internet Banking
Advantages Disadvantages
Banks can reduce costs by Change in job roles to
converting their customers to their accommodate on-line services
on-line service
Fraud can result in large losses
Can centralise their account
information
May be difficult to reassure the
customer of site safety
Staff working hours can be more
flexible or change altogether
More dependency on servers and
bigger problems if failure
Can provide their customers with
on-line benefits (for example
egg.com)
More widespread access possible
Technological View
•Allows the customer and business to familiarise themselves with the system
•A modern and impressive alternative to high street banking
•Must have a secure tunnel between the site and the bank’s server
•Software updates need to be controlled carefully to minimise disruption
•There is also Mobile Banking.
Advantages Disadvantages
Allows millions of users to Required to continuously
access the bank’s services at keep software up-to-date
once
Target for Hackers
Can stop a majority of
security threats and Increased problems if
breaches through an server failure or other
efficient firewall and equipment
encryption
Security
Hackers may gain access to bank details via different methods
•Phishing
•Keystroke Logging
•Trojans
•Users not being aware of whose watching their details
•If session has not been logged out correctly, fraudsters may be able
to access details
How have banks improved security?
Hardware security devices
Barclays are to issue “chip and pin” readers to their online banking customers.
Lloyds TSB trialling keyring size “token” devices which generate a 6-digit key which must
be entered online.
Non-online (Out-of-channel) Measures
HSBC plans to call a predefined number with a specific password each session which must
be entered
HSBC also employs staff in India who keep an eye out for unusual account usage and flag
this so the customer can be contacted to confirm it
Ensuring the latest security standards are kept up with i.e. 128bit (and above) encryption
Providing customers with information to help them stay safe (such as how to spot hoax emails)
More than just this!
Banks must stay one step ahead of the criminals, and to do this means implementing new
measures all the time
Disadvantages of new security measures
Customers lose some of the convenience
Hardware devices must be in use every time the customer needs access –
What happens at internet cafes or public internet access terminals etc.?
More security steps means more time taken to even get to their own
account view
Faulty hardware devices must be physically repaired / mailed out
Phone calls to confirm things could get tedious
Users must keep up with latest security updates too – such as browser security
EXPENSE!
Keeping up to date and one step ahead costs a lot of money, hardware
measures must be paid for, updates to systems for new measures need
specialist staff to put them in place, current staff must be trained in new methods
and customers must be made aware of all changes
Conclusion
•Internet Banking is safer than the media portrays it.
•Business have to change the way they operate to accommodate new
technology.
•Customers and Banks can save money though using internet
banking.
•The success of internet banking relies on trust.