Banks are financial institutions which accept money in the form of deposits and lend money in the form of loans and mortgages. The banks are governed by the Federal Reserve and every individual’s account is insured, which makes it a safe place to deposit their money.

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Gone are the days where it required the customer to go to a bank to make a financial transaction. The evolution of Online Banking has brought about a seeping change to the whole financial industry. Customers can now bank online from their homes. Make Transfers, Check your Account Balances, View your statements or order your statements online, Make Bill payments or Order your check books, all online from your home. All it requires is a computer and an internet connection. And if you are going to think it’s going to cost you anything, your absolutely mistaken, all the above services are performed absolutely free of cost.

Citibank which is one of the leading financial institutions has only 4 locations in the whole of England. All the four are in London, however the number of customers Citibank has in London is enormous. How is it possible? Online banking makes it possible. It’s cheaper, faster, efficient and more reliable.

Is it Secure: A lot of people are apprehensive of ordering products and utilizing various online services apart from banking to make a purchase or pay for a service? Why? Because websites are hacked very easily today and your credit card number or debit card number can be easily accessed. However banks, when they offer Online Services, make sure that their website is secure and safe for customers to conduct transactions online. A bank today virtually takes responsibility as it’s dealing with the most wanted product, MONEY. It takes all the necessary protection and precaution to see to that their websites are secure.

So a customer can forget about his card numbers being hacked as banks assure their customers that their money is safe. If you're like most people, you've heard a lot about online banking but probably haven't tried it yourself. You still pay your bills by mail and deposit checks at your bank branch, much the way your parents did. You might shop online for a loan, life insurance or a home mortgage, but when it comes time to commit, you feel more comfortable working with your banker or an agent you know and trust.

Online banking isn't out to change your money habits. Instead, it uses today's computer technology to give you the option of bypassing the time-consuming, paper-based aspects of traditional banking in order to manage your finances more quickly and efficiently.

Origin of online banking

The advent and growing use of the Internet and the popularity of personal computers and mobile phone users, presented both an opportunity and a challenge for the banking industry. Customers today want Email and SMS alerts of all their financial transactions and latest updates.
For years, financial institutions have used powerful and efficient computer networks to automate millions of transactions everyday. Today, paper records are most often used only at the point of sale as a customers receipt. Now that its customers are connected to the Internet via personal computers and mobile phones, banks envision similar economic advantages by adapting those same internal electronic processes to home use.

Today banks view online banking as a very powerful and a value added tool to attract and retain new customers, while helping to eliminate costly paper handling and teller interactions in an increasingly competitive banking environment. Paper records are also difficult to maintain and is destroyable.

Virtual banks

If you don't mind foregoing the teller station at the banks and kind bank officers, a "virtual" or e-bank may save you very real money. Virtual banks are banks without bricks- it means that they do not exist physically. From the customer's perspective, they exist entirely on the Internet, where they offer pretty much the same range of services and adhere to the same federal regulations as your physical bank does.

Virtual banks pass the money what they save on overhead like buildings and tellers along to you in the form of higher yields, lower fees and more generous account thresholds.
Brick-to-click banks

Almost all large national banks, many regional banks and even co-operative banks, thrift institutions, credit unions and other depository institutions offer some form of online banking, otherwise known as PC banking, home banking, electronic banking or Internet banking. Those that do are referred to as "brick-to-click" banks, both to distinguish them from brick-and-mortar banks that have yet to offer online banking, as well as from online or virtual banks that have no physical branches or teller stations whatsoever.

Most of the large banks now offer fully secure, completely functional online banking for free or for a very small fee. Citibank, one of the largest depository institutions encourage their customers to go online and bank with them. Smaller banks offer limited access or functionality, for instance, you may be able to view your account balance and statements but not initiate transactions online. As more banks succeed online and more customers use their sites, completely functional online banking definitely will emerge as commonplace as automated teller machines.

The challenge for the banking industry is that it has been to design this new service channel in such a way that its customers will readily learn to use and trust it. After all these banks have spent generations earning our trust; they aren't about to risk that on a Web site that is frustrating, confusing or less than secure.

Advantages of online banking

- Convenience: Unlike your normal physical bank, online banking sites never close. They're available 24 hours a day, seven days a week, 365 days a year and they're only just a mouse click away
- Ubiquity: If you are out of station or even out of the country on a tour or on an official trip, when you’re facing a money problem, all you have to do is log on to the internet and transfer funds from one account to another and take care of your needs and business 24 /7
- Transaction speed: Online banking initiates speedy transactions and they are very cost effective and is generally quicker than the transactions conducted at the ATM’s or at the bank
- Efficiency: Feel free to access, manage and control all your bank accounts, including Individual Retirement Accounts, CDs, even securities, from one secure site
- Effectiveness: Manage your money, investment, bank accounts without even going to the bank. Get email and wireless alerts on your transactions. Get your statements online. Make your bill payments online and transfer funds, all for free

Online banking is banking at your convenience. All banks today are encouraging customers to bank online rather than going to the bank and making transactions. This helps the customers to save money and time. The transactions conducted online are absolutely free and within the customers control too. All you need to do is just log on and make life easier for yourself. Transactions like bill payments, viewing of statements, requisition of cheque books and directing the bank to make auto debits are increasing features of online banking. When you have the opportunity to bank from home, why do you want to go to a bank.

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