Overview of online banking

							Online banking relates to electronic access to banking services from an interactive interface,
such as a web browser. Its availability allows access to accounts, transactions or to obtain
recent financial information.

The growing need for users to have access to the global financial network through wireless
technology such as cellular phones and laptops, etc, meant systems had to be put in place to
satisfy it.

There are basically five types of electronic banking and these include electronic banking via
data medium exchange, automated teller machine (ATM), e-banking, phone banking and
map-payment (also called electronic cash or POS).

The various methods have been developed for specific target groups. Hence, the traditional
media exchange is preferably used by larger businesses, while the use of phone banking is
more appealing to the individuals.

The familiar characteristics include transactional (account to account transfers), investment,
loan, online statements, transaction approval and wire transfer. Internet banking comes with the
ability to import data into personal accounting software, while in some instances online banking
platforms enable account aggregation (accessing all accounts in one place).

Financial institutions must adopt interoperability standards and protocols such as Extensible
Markup Language (XML) to facilitate data exchange between various users. The mechanisms of
electronic commerce provide procedures for debits and credits, billing, and electronic check,
managed by the Automated Clearing House (ACH).

Since the identification paper reduces the speed of electronic transfers, the personal
identification number (PIN) has been put in place, and it is associated with Public Key
Infrastructure (PKI) and smart cards. Syndication can help the performance, management and
analysis of different accounts by the ID and password.

Modern browser based internet banking systems are characterized by portal features, which
include accessibility, sophisticated security mechanisms (such as anti-phishing), notification
options (such as account balance changes through SMS or e-mail), mobile TAN procedures,
and arbitrary application name. All known Internet banking systems have been implemented
using proprietary software.

The modern home online banking services have their roots in the distance banking services
over electronic media which began around the early '80s. During that period the term online was
synonymous with the use of a terminal, keyboard and TV (or monitor) to access the banking
system.

Online services originated in New York in 1981 when four of the city’s major banks Citibank,
Chase Manhattan, Chemical Bank and Manufacturers Hanover initiated home banking services
with the use of the Videotex system.

In all the browser or client-based electronic banking systems, encryption of data transmission is
guaranteed by the banks. Https can use different encryption algorithms, which are regarded as
different levels of security.