E-Banking: Features, Advantages, Disadvantages, Attacks, Frauds Commerce YouTube Lecture Handouts Part 1

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E-Banking: Features, Advantages, Disadvantages, Attacks, Frauds | Commerce
  • E-banking is a safe, fast, easy and efficient electronic service that enables you access to bank account and to carry out online banking services, 24 hours a day, and 7 days a week.
  • To access a bank and online banking facility, a customer with internet access will need to register with the bank for the service, set up a password and other credentials for customer verification.
  • The credentials for online banking are normally not the same as for telephone or mobile banking.
  • Financial institutions now routinely allocate customers numbers, whether or not customers have indicated an intention to access their online banking facility.
  • Customer numbers are normally not the same as account numbers, because a number of customer accounts can be linked to the one customer number.
  • Technically, the customer number can be linked to any account with the financial institution that the customer controls, though the financial institution may limit the range of accounts that may be accessed to, say, cheque, savings, loan, credit card and similar accounts.
  • The customer visits the financial institution՚s secure website, and enters the online banking facility using the customer number and credentials previously set up.
  • Each financial institution can determine the types of financial transactions which a customer may transact through online banking, but usually includes obtaining account balances, a list of recent transactions, electronic bill payments, financing loans and funds transfers between a customer՚s or another՚s accounts.
  • Some financial institutions offer special internet banking services, for example: Personal financial management support, such as importing data into personal accounting software.
  • Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.
  • Most banks set limits on the amounts that may be transacted, and other restrictions.
  • Enable customers to download copies of bank statements, which can be printed at the customer՚s premises (some banks charge a fee for mailing hard copies of bank statements) .
  • Enable customers to download transactions directly into the customer՚s accounting software.
  • The facility may also enable the customer to order a cheque book, statements, report loss of credit cards, stop payment on a cheque, advise change of address and other routine actions.

Features of E-Banking

A bank customer can perform non-transactional tasks through online banking, including:

  • Loan applications and investment transactions, such as repayments of enrolments
  • Transaction approval process
  • Downloading bank statements, for example in PDF format
  • Viewing images of paid cheques and Ordering cheque books
  • Funds transfers between the customer՚s linked accounts
  • Paying third parties, including bill payments (e. g. , BPAY) and third-party fund transfers (e. g. , FAST)
  • Viewing account balances & recent transactions

What is Electronic Banking?

Electronic Banking

Digital Payment Methods in India

Digital Payment Methods in India

Advantages of E-Banking

  • Low-cost banking service
  • High liquidity
  • High interest rates
  • Quick Access - special aid in emergencies
  • Monitoring service
  • Quality service
  • Convenience
  • Transfer Service
  • Online payment
  • Eco friendly (no use of paper)
  • Faster Service (no postage stamps)
  • Economical (less transaction costs)
  • Discounts, coupons, waivers and cashbacks
  • Digital record of transactions
  • No black money dealings
  • Less minting of coins and no circulation of counterfeit

Disadvantages of E-Banking

  • Security Issues
  • Transaction issues due to technical error
  • Insecurity among customers
  • Training and development costs to the bank
  • Awareness among the customers
  • Financial jargon
  • Trust and responsibility
  • Lack of personal contact
  • Data theft and Fraud
  • Digital data record maintenance risk
  • Electricity Power based service
  • Remote areas internet accessibility