What is Online Banking and How It Works?

What is Online Banking and How It Works

Online banking provides tremendous opportunities for clients of various credit institutions. Thanks to this service, now you can do most of the banking operations without leaving your home.

Why do you need Online Banking?

Today, Online Banking is a necessity that solves several problems with one click of the mouse:

  • Control over your accounts, cards, deposits, loans. The user can track all receipts and write-offs;
  • Request for new products. Using a personal account of the Internet bank, you can open a deposit, leave an application for a credit card or loan, register a new debit card, etc;
  • Instant money transfer between your accounts and cards;
  • Transfers to clients of your own or other banks;
  • Payment for services (utility bills, mobile communications, fines, etc.);
  • Repayment of loans;
  • Additional features. Users of Online banking can activate auto redemption, auto payment, etc.

How to access Online Banking?

To access Online Banking, the client needs to connect to this service. Let’s consider registration and authorization. To get a login and password for a personal account), the client can use several options:

  • an office of a credit institution;
  • an ATM;
  • the bank’s official website.

The last option is the simplest and fastest. To do this, the client needs to enter the number of the bank card, confirm the operation with the code from the SMS message. After that, you will receive an SMS containing a generated username and password for the first entrance to Online Banking. The client needs to log in to his/her personal account using this username and password and immediately change them to his/her own. Next, you need to confirm the change of username and password with the verification code from the SMS message.

When accessing Internet bank for the first time, the client needs to enter a username and password, enter the code for entering from SMS. It will come every time the client tries to enter the personal account. Without entering it, the system will not let the client into a personal account.

Advantages of Online Banking

The main advantage of Online banking is the ability to remotely manage funds in your accounts online at any convenient time and regardless of the client’s location.

This modern type of banking service allows you to independently make payments to a wide range of providers of various services without visiting a bank office. All the client needs is Internet access from any computer without installing any additional software.

In addition to the ability to remotely pay for various services, Online Banking has other advantages. Internet banking services open up wide information opportunities for the client (informing about the status of accounts, loans, deposits, connected banking services), financial opportunities (a wide range of payments, transfers; currency exchange), investment opportunities (investment portfolio management, services for stock and commodity markets), allow customers to block accounts if necessary, for example, if a bank card is lost.

Online banking allows banks to save staff labor costs and reduces financial costs. Due to this, the bank can offer more favorable rates and lower commissions for operations in these systems. In short, this service saves time and money for both customers and banks.

Cost of the service

The connection to the Internet banking system is free of charge. In addition, this service does not imply regular subscription payments. Thus, customers pay only for transfers of funds, which involves the payment of commissions, regardless of whether they are carried out via the Internet or at the bank’s office.

A significant part of online payments and transactions are still carried out without commissions, for example, payment for mobile and city phone numbers, some housing services and Internet providers. And this is not the whole list of free payments.

The target audience for Online Banking

The bulk of the service users are the most technically advanced clients and their number is constantly increasing. People understand that the use of modern information technologies has already become an integral part of our life. They understand the absolute advantages, benefits and prospects of these technologies.

Should users take any additional measures to ensure the security of their online bank account?

One-time passwords are sent to clients for operations. Only the clients have access to these passwords. Therefore, the most important thing on the part of users is to ensure that passwords are stored in a place inaccessible to other persons. This will prevent passwords from falling into the wrong hands, and accordingly, no one except the account owner will be able to make payments or other transactions on his/her accounts. Banks are constantly working to improve the literacy of customers who are users of online services.

Security rules when using Internet banking

  1. Never disclose your login and password to anyone;
  2. There must be a confirmation code of the operation or entry, which is sent by the bank in SMS every time the client enters the account or performs some kind of operation;
  3. Always double-check the address of the Internet bank page. There are a lot of phishing websites that copy the design of the original site and collect information. Distinguishing such a phishing site from a real one is difficult, so check the URL bar.

If you follow these 3 simple rules, you can keep your internet bank safe.

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