Online Banking

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					Online Banking
   In the past, banking took place on the High
    Street. The branches were only open 9am-
    3pm Monday to Friday, which was very
    inconvenient for people who worked full time.
    Banks had to employ many staff to deal with
    customers as this was the only way that
    services could be provided. This all changed
    with the invention of Automatic Teller
    Machines (ATM).
   The first ATM was installed into a bank
    35 years ago. For the first time,
    customers could get hold of their
    money without having to queue. This
    saved the customers time, it also saved
    the bank a huge amount of money
    since fewer staff were needed.
   Modern ATMs provide customers with
    their bank account balance, they can
    issue money, print statements and even
    take cash deposits. Customers are able
    to use almost any ATM in any bank,
    supermarket or garage anywhere in the
Behind the ATM is a host computer that sends the correct messages to the
                            customer’s bank
   Call Centres were the next major step
    forward for banks. Customers could
    now telephone the centre using either a
    free number or local cost number and
    find out information on their accounts
    without even leaving home
   We will do more on call centres later
   The latest development in banking is
    now Internet or on-line banking. It is
    estimated that within 3 years, 26 million
    adults will use online banking in one
    form or another, either through their
    home PC or interactive TV.
   Initially, banks developed websites to inform
    customers about their new savings and
    mortgage accounts. However, the launch of
    the first ‘Virtual’ banks such as Egg, Smile
    and IF changed all that. These new banks
    were among the first to offer on-line banking
    facilities to customers. For the first time,
    customers could open accounts, check their
    balances online, move money, pay bills and
    print statements from the comfort of their
    own homes.
   The advantages to the banks were immense.
    The customer paid for the call. The customer
    did all of the work themselves. Traditional
    banks are extremely expensive to run, high
    street rental for a branch costs hundreds of
    thousands of pounds per year. On top of
    that are staff costs, insurance, heating and
    lighting costs. It has been estimated that
    banks can save between 50%-250% on the
    cost of transactions through the use of on-
    line banking.
More advantages!
   Banks can attract new customers to their online
    business for a fraction of the cost it takes to get one
    through the door of a high street branch. Because of
    the lower operating costs, internet banks can offer
    very attractive accounts. They usually have higher
    rates of interest for savers and lower rates of interest
    for borrowers. An advertisement in a Sunday
    newspaper about a new internet account can
    generate in excess of 200,000 hits on the website in
    a day. A traditional bank could never cope with this
    level of enquiries by customers
       So what’s the catch?
   Many of the early web page designs were poor.
    What customers really need with an online banking
    service is fast access to information. Early designs
    made too much use of graphics and the navigation
    around the site was complicated. However,
    modern online banking websites are very fast,
    efficient and easy to use. Look at the website for an
    example. Competition is fierce and so website
    design makes use of the latest technology. It can
    cost anything up to a million pounds to redesign a
    website, and banks often do this every six months.
   Online banks use extremely strong encryption
    methods to ensure that customer information is
    kept confidential. Details passed to the bank are
    scrambled before they leave the customer’s
    computer by a secret code called the ‘Cypher’. It
    would take literally centuries for a normal PC to
    break the code and extract the information. This
    level of security is applied in order to give
    customers confidence that their passwords and
    bank details will remain secure.
   Parliament has passed legislation called
    the ‘Computer Misuse Act’ 1990. This
    makes it illegal, punishable by prison, to
    access a computer system without
    authority. Therefore, hackers (or
    disgruntled employees) can expect
    severe punishment if caught trying to
    access confidential information.
   If customers do experience a problem
    whilst banking online, they usually have
    the Call Centre. However, many of the
    call centres are not open 24 hours a
    day. So the customer might find there
    is no one to answer their questions.
   Answer the questions on the worksheet
   Word process your answers
   Answer questions using full sentences
    (for revision purposes)
   Presentation can be found on –
      G:/year 10/BCS/Online Banking.ppt
   Save as online banking in your
    Application of ICT folder

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