Online Banking – Definition, How Does It Work, Features, Benefits & Others
Net banking even addressed by the term online banking, is a banking method wherein banking transactions are conducted over the internet.
Online banking started in the US, in the early 80s. Net banking software can provide corporate and personal banking services with features like account balances, current transactions, statements and payments.
In those days, online banking was restricted to just a few banks exclusively, however now with the development of technology and the rise in digitization, online banking method has become increasingly popular and common. Let’s understand in detail what’s online banking and how it works.
What’s net banking?
Net banking facility is referred to as online banking, which is an electronic facility offered by banks to you that permits you to access non-financial and financial banking services in just seconds.
Net banking facility eliminates the requirement to physically approach the bank. Internet banking permits you to easily access a different variety of banking services like money transfers, FD, and RD creation, tracking of transactions and others.
Any of those with an active bank account can use this net banking facility. To use the net banking facility, you must first ensure to register.
After you have registered, you can use the online banking facility. Still not clear? Understand this with an example.
Suppose you have a Citibank account and a CUB account, then you conduct your banking activities like transferring your funds from your account to another or checking your bank account balance, etc. you do not require visiting the banks.
For this, you can straightway open the Citibank netbanking and CUB net banking, to perform all your banking activities from the comfort of your home with just a click.
How does net banking function?
To access the bank’s online banking facility, you as a customer with internet access must register with the financial institution’s service and set up the passcode and other crucial customer verification credentials.
Banks now routinely assign customer credentials making it simple for the customers to get the hang of their online banking system, whether you as a customer have indicated the intention or not.
What are the features of net banking?
- You can conduct banking non-transactional activities, which include account balance viewing, ordering cheque books, checking current transactions, downloading m or e-banking applications, etc.
- You can conduct online banking activities like transferring money between linked accounts of customers, making bill payments, making loan applications, making bill payments, registering for utility bills, etc.
- Particular banks provide few of the net banking activities or services like personal account management.
- Few online banking podium support account aggregations, which permits you as a customer to monitor all your accounts in a single place, whether it is with your major bank or other financial institutions.
- Online banking facilities or services generally cost less as compared to traditional banking.
What are the benefits of using online banking?
- Online banks are available to you 24 X 7 as long as you have an internet connection.
- Permanent access to the banking account from anywhere through mobile, or desktop.
- It takes extremely little time to do your banking transaction using the online banking application. This eliminates the requirement of personally visiting the bank and standing in long queues for the banking transaction.
- Assists in accurately and immediately transferring the funds.
- Online bill payment is just one of the crucial benefits of online banking. In place of writing cheques or filling out one form after another for bill payment, you as a customer can simply visit the online net banking account to perform your banking transaction with just a single click.
Read on to know the drawbacks of using an online banking service
- In case there’s an outage of power or in case there is a slowdown in the server, you might not get access to your account through the online platform.
- While many of the banks are established with reputable online facilities, at times it may be tough to feel thoroughly comfortable with a bank with zero physical presence, particularly if you have parked a huge amount of money in its account.
- If the bank server is down or the net speed is very slow, your online transaction may not happen.
- It might be tough for beginners at first go to grasp and understand all the functionalities of net banking.
- Most banks ensure their sites are safe, however, no bank’s site is immune to hacking or cybercrime.
What’s the difference between mobile and online banking?
|Online banking||Mobile banking|
|The financial transaction takes place on the internet via the site of the bank.||Mobile banking is the internet-based facility offered by banks that permit you as a customer to conduct bank transactions through mobile devices.|
|It is accessed via the browser using your laptop, or computer.||It is accessed through the app using your mobile phone.|
|Has more functionalities than mobile apps.||Mobile banking comes with limited functionalities.|
|No requirement to download.||You must download the bank’s mobile app to use it on your phone.|
|It needs access to the internet generally through a wired connection or WIFI.||You can open your mobile if you have access to your phone data in most cases.|
How can you set up your net banking?
- You must input your personal information like your name, pin code, date of birth, your account details, etc. to set up the net banking account.
- PAN card details are a must to open your bank account.
- Username and passcode must be inputted well. Ensure to set a passcode that no one can access. Once you have set your passcode, you will receive an OTP on your registered mobile number to confirm your identification. After confirmation, your passcode will be set.
- You can now log in to your net banking using your username and passcode.
Note that the above process is true for all the banks’ net banking registration, whether it is CUB netbanking or Citibank net banking or net banking of any other bank.
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