Banking has changed a lot through the years. It used to
consist of paying in your money yourself and then it developed into cheques
that would be read as a note. However now it has changed as you can do everything
you need to on the internet, without having to physically go into your bank.
Furthermore money does not exist in that state, gold and oil is used as the
currency because they are more valuable and tradable. Less money is kept in the
banks as it is usually kept in central banks.
How Online Banking works:
Online banking works so that you can do everything directly
without having to physically go to the bank, this including, transferring money
and viewing your bank statements. Your employer sends your money to a clearing
house which then gets distributed to various different banks and directly ends
up in your account, therefore making it easier for you to receive your payment.
You can also view your personal statements to see where you have spent your
money and where your money has come from. There are also apps which tend to be
easier to use and it is quicker to access on your phone wherever you are.
Security
Many people do not like to use online banking as it is
perceived to be unsecure. This is because scams can happen online and it makes
you vulnerable and it is much easier for hackers to get hold of your details
online. An example of this is when you receive an email from someone who you think is your bank when really they just want you
to give them your details. However over the years the security of online
banking has improved, one improvement is the card readers which some banks
provide their customers where you put your card in and enter your pin and it will
create a random number in which you type in online and this allows you to
access your online account.
Online Banks
There are a few banks that do not have the actual bank
buildings but are just online. This can benefit the bank as there would be no
spending cost of running the banks itself, only the spending costs of operating
online. It would also benefit the customers as it means there could be no fees
or higher interests. Furthermore the customer can receive many more services
which other banks may not offer and personal statements could be a lot easier
to read online without having to look through numerous papers. An example of a
current online bank is First Direct which is also linked with HSBC direct
banking and it is convenient to use all its services online. Another example is
a former bank called Egg which had problems with being online so its credit
card business was sold to Barclaycard and the business is now owned by
Yorkshire building society.
Scopes of Online Banking:
The scopes of online banking are that you can move your
money around in your account by yourself and you can make a payment to someone
online without the hassle of physically doing it. Similarly money can be
transferred very easily because it is now increasingly in the form of data.
Also the card reader makes online banking more secure as it reads your card
online so there is no fraud with your personal banking. It is much more
convenient for banks as they find it cheaper to work online.
The limitations of online banking include that the reason it
has happened very slowly is because it can be unsecure as it makes you more
vulnerable to hackers. The security of online banking can be dangerous because
of phishing and not being aware of whom you are giving your banking details to.
Also if there are any problems with your bank account, it can be hard to sort
out online and this can cause difficulties.
Personal Experience:
My own experience I have with online banking is having an
app on my phone that connects to my own online banking account in which I can
check my statements. I find this useful as it is very easy to access when I am
out and about. On the other hand, I also have a card reader at home to use when
transferring money and I found that it takes a while to get used to as I didn’t
understand how to use it at first.
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