Internet Banking: Meaning, Structure, Process
The Internet has become very useful for both clients and organizations. It is prevalent in the bank service industry.
What is Internet Banking?
Normal banking transactions and fund transfer-related activities like auditing, payments of bills, investments, stock exchange activities, and many other activities can be made using these Internet Banking systems.
Financial institutions can solve banking transactions through the Internet to get quick solutions.
Structure/Forms of Internet Banking
Usually, the following four items are observed in the Internet banking structure:
- Net Presence
- Interactive Site
- PC Home Banking
- Full Internet Banking
Net Presence
It means standing at the primary level of Internet Banking. It represents insignificant participation in internet banking, with a hope to install it at a large scale soon.
Interactive Site
It is a personalized inter-communicative tool between banks and clients. Herewith the help of websites, a personal relationship is established with every client through e-mail, custom fill-out forms, etc.
PC Home Banking
The Internet is a global network of interconnected networks that can communicate and exchange information and data through satellites. In Internet Banking, clients can do all of their general banking activities.
Transferring funds from one account to another, checking account statements, paying bills, and examining the share portfolio can all be done through the Internet.
Sometimes, confusion arises between the PC Home Banking and Internet Banking systems.
Usually, the bank provides a PC home banking service through a financial software package in a diskette. Customers must use that software to transact with the bank offline through the bank’s private network.
Full Internet Banking
On the other hand, in full Internet Banking, clients can access their accounts anytime, from any place (where the Internet is available) rather than using a floppy disk or other secondary storage devices.
The Process Of Internet Banking: 10 Ways in Which Internet Banking Uses Website
World Wide Web (www) is the main platform of Internet banking. Banks usually join the www in the following 10 ways:
- Sign or maintenance of zero presence
- Shop window.
- Financial advice,
- The bank but not the banking.
- The exploding whale,
- Hub for Commerce,
- Facilitator of Payment Transaction,
- Selling Financial Products,
- Gateway to the Internet — Internet access provider,
- Account Transaction Services.
These are described below:
1. Sign or maintenance of zero presence:
Bank participates in the web with the logo, name, and telephone number. This was the very first method of entering the web. This was the least used method also.
2. Shop Window
Here, the bank provides information regarding itself and its products. Other information includes annual reports, different loan-related information, etc.
3. Financial Advice
A client can get information regarding various banking products by using the web. Rather they may get advice from the bank.
4. The bank, not the banking
A client can know the non-banking activities of the bank from this web.
5. The exploding whale
This web lets clients know the severely dangerous issues or get exquisite joyous information. This web also provides extra services in addition to normal banking activities.
6. Hub for commerce
There are some virtual shopping malls on the web. A client can transact in a shopping mall with the help of a bank. The bank operates these malls.
7. Facilitator of a payment transaction:
This web facilitates the payment of debts and collection of payables.
8. Selling financial products:
With the help of this web, the bank extends its financial products like credit cards, debit cards, online facilities, cash credit, etc., to the clients. This web works for promotional purposes.
9. Gateway to the Internet- Internet access provider
In this facility, the client at first dials their bank’s telephone number, and then the bank will help that client to enter into the internet
10. Account transaction service
In this stage of the web, clients can know the balance of their accounts, make any queries, pay bills, or transfer funds through the Internet.
Selected Concepts in Internet Banking:
- Electronic Money: Electronic money includes:
Electronic debit and credit system
Smart Card - True Digital Money
- Electronic Commerce
- Digital Currency
Electronic Commerce
In this modem age, willingness to transact, sample test, product and service quality, final buying and selling, and distributional! are done through the Internet. For this reason, it is called E-commerce.
Now e-commerce is an important aspect of Internet Banking. Internet banking is distinct from e-commerce. Auditing, payments of bills, investments, stock exchange activities, and many other activities can be made using these Internet banking systems.
On the other hand, all payments in e-commerce are made through the Internet. It is hoped that e-commerce and Internet banking will shortly be used in the same sense.
Digital Currency
it can be compared with cash currency. Digital current has a lot of features like traditional currency. It does not require the approval of banks or third parties to make payments.
Clients buy metaphorical cash tokens from participating hank. This electronic coin can be used like traditional coins from a local hard drive m which it is stored. In this way, buyers and sellers can transfer funds without help from a third party or other financial institutions.
