Internet banking is a system of banking that enables customers to perform various financial transactions on a secure website via the Internet. Internet banking offers large number of benefits for people involved in financial transactions. There is no need to visit your bank every time you need to transfer money. You can do so by internet banking from the comfort of your home. With net banking facility, one can not only transfer money, but also pay bills, check bank statements, check account balance, request for check book and do various other financial transactions.
To carry out a transaction using net banking, one should possess an active bank account, appropriate bank balance for transactions, bank account number, customer’s user ID, debit/credit card number, and Internet banking PIN number along with access to the internet.When a customer opens an account with a bank, he/she receives a welcome kit from the bank. This kit contains all the important documents including confidential information required by the customer including document with account number, Debit cum ATM card, ATM PIN, customer’s user ID, online banking password, phone banking password, check book, etc.
Customer need to complete a form for activating internet banking facility and submit it in person at a bank’s branch. Only once the net banking facility gets activated, customer can login to the website and enter user ID and password to access his account details and conduct financial transactions.
Internet Banking offers high-yield checking accounts as they are cost effective than brick and mortar made normal banks. Customer can complete investments, bill payments, checking, savings, credit cards, mortgages, etc.; from the comfort ofliving room.The major challenge in regulation of Internet banking is maintaining the security of banking to prevent hacking and various forms of security exploitation. Banksuses two-factor authentication that involves two steps security check while logging to online accounts. First step requires an initial log in, with a username and a password, while other step requires user to answer personal question.
There are two different security methods used for online banking.The PIN/TAN system where the PIN stands for a login password and TANs stands for one-time passwords for authenticating transactions. The online banking with PIN/TAN is done through a web browser that uses SSL secured connections. In second way, TAN is sent to the online bank user on his mobile phone via SMS that contains the transaction amount and details. In case of signature based online banking, all the transactions are signed and encrypted digitally.
With the continuous evolution of Internet banking, there is demand of new highly secure banking regulations. In future, we can see stricter authentication methods for accessing an account. Banks suggest customers to change their passwords regularly and keep them secret. Many banks provide user guidelines for using internet banking safely. One should not disclose his password to anyone and be very alert while accessing net banking at a public place.