Internet banking, also known as online banking or web banking, isan electronic payment gateway that enables customers to carry out different types of monetary transactions through the internet. The internet banking system is typically a part of a bank’s core banking network, which connects the variousbranches, and allows the customers to access their account anytime from anywhere in the world. Internet banking has changed the way people used to bank and the way in which banks used to operate two decades back. With advancement of banking technology and extensive outreach of the internet, banks have become far more accessible and friendlier than what they used to be. Internet banking has also made banking flexible –there are no geographical barriers and most of the banking services are available round the clock.
In fact, in the United States, there is a rise in the number of ‘internet-only’ banks — these banks work very much like the traditional banks except they don’t have brick-and-mortar branches. The zero expenditure on infrastructure and maintenance considerably brings down the operational costs for these banks.With the increasing demands for 24X7 banking services and diminishing geographical barriers, internet banking is emerging as thefuture of banking.
How internet banking works
The customers of the bank are assigned a unique customer number. Customers can use this unique customer number to perform all banking transactions through the bank’s secure website. The features available in the internet or online banking solution installed by the bank determines the types of transactions that can be performed virtually by a customer. Typically, most of the banks allow customers to access their account balance, view a list of the recent transactions, carry out electronic bill payments and transfer funds.Some banks also allow customers to download their bank statements. Some advanced internet or online banking solutions enable features such aslinking the credit card payments and miscellaneous transactions such as ordering a new cheque book or report loss of credit cardas well.
A good internet banking solution helps the bank offer a convenient, secure and simple virtual banking option to their customers. A good internet solution will have the following or, may be, even more features:
- Online banking transactions, such as viewing account balances and history, money transfers, canceling cheques, accessing electronic statements and making online payments
- Self-service function on different kinds of financial accounts
- Ability to process tax and personal finance information
- Alerts related to any monetary or non-monetary transaction
A good banking solution makes banking easy for all kinds of customer segments: Retail, Corporate and SME customers. Apart from the generic features listed above, a good internet banking solution also provides comprehensive set of features targeting each of these segments.
How to identify a good internet banking solution for your business
The first and foremost thing that one needs to keep in mind when selecting an internet banking solution for their bank is to not get something that looks wonderful as a standalone application but doesn’t meet their core-banking needs. A solution that simply plugs into the existing core banking systemand can be updated when required keeps the transition hassle free.Other features that one should look for is an intuitive, customer friendly user design.The ideal solution for your bank will address all your business and operational needs in a straightforward manner.
The business benefits of using a good internet banking solution
A good online banking solution has several benefits for the bank’s customers as well for the bank itself.
- Helps in customer retention: As internet banking facilitates self-service – it becomes easier for customer to do transactions as per their convenience. As customers have real-time access to their account information, customers find this method of banking more transparent and satisfactory. The interactive interface in a good online banking solution helps a great deal in good customer experience. Good customer experience translates into customer retention.
- Reduces customer support overheads: A good internet banking solution makes online banking so user friendly that it also requires very less or no intervention from the banking staff, which translate into huge cost savings for the banks.
- Increases business agility:Easy updates and upgrades are the key feature of a good online banking solution — this facilitates quicker time-to-market for new products and services.
- Reduces vendor dependence: After installing an internet banking solution that providesmultiple features in a single interface, banks can do away with a lot of standalone third-party plugs-in and solutions; thereby, reducing dependency on multiple vendors for services.
Future of internet banking solution
Banking technology is evolving by the day — what’s new today will become obsolete tomorrow. Therefore, creativity and innovation is the key to sustain in this competitive market. Some of the expected future trends for the internet banking solutions are:
- Omni-channel experience: Instead of thinking about channels, banks will think about giving customers an omni-channel experience that optimizes the customers journey.
- Creative offering: 30 years back when the first internet banking service was launched, no one could think that technology would revolutionize the banking industry at such a large scale. To stay on the top of their business, even now, banks will have to evolve with their learning experiences and offer their customers what has never been offered before.
- Intuitive, friendlier user interface:User interface, like today, will always be a make or break factor for the customers. With growing competition in the domain in the coming few years, user interface is one factor that will evolve a great deal to provide customers an effortless, seamless banking experience.
- Customizable internet banking solutions: “Customized” and “personalized” will be the two buzz words in the internet banking solutions world in the coming few years. With customers demanding more and more personalized banking experience, the need for customizable solutions will increase.
Big players in internet banking solution domain
Finacle Online Banking solution by EdgeVerve is currently one of the leading internet banking solutions. The solution is being used by approximately 195 banks in 65 countries.
FinCraftTM Internet Banking is another popular player in the market with an interface ready for almost all types of CBS prevalent in the banking space.
Other popular internet banking solutions are from Temenos Group AG, Strands, Fisa-System and Dais Software.