Net Banking : Introduction, Meaning & Advantages of Net Banking
Net Banking: The internet banking has changed the banking industry. It has major effects on banking relationships. According to the Internet researcher Morgan Stanley, the web is more important for retail financial services than for many other industries. Internet banking involves use of Internet for delivery of banking products and services.
Meaning of Net Banking
Net banking (or Internet banking or E-banking) allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution, which can be a retail or virtual bank, credit union or building society. To access a financial institution’s online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password (under various names) for customer verification. The password for online banking is normally not the same as for telephone banking. Financial institutions now routinely allocate customer numbers (also under various names), whether or not customers intend to access their online banking facility. Customer numbers are normally not the same as account numbers, because a number of accounts can be linked to the one customer number. The customer will link to the customer number any of those accounts which the customer controls, which may be cheque, savings, loan, credit card and other accounts. Customer numbers will also not be the same as any debit or credit card issued by the financial institution to the customer.
2) Advantages of Net Banking:
Banks and financial institutions enjoy many benefits from net banking. They can be given as follows :
a) Information about Products : Banks and financial institutions use the world wide web to publish their corporate image on the global level. They can furnish detailed information about the products, services they offer. They can give information about the terms and conditions of their services. If today one wants to know about services provided by American Express or Citibank or Standard Chartered Bank, one need to visit these institution or seek information over the phone. The person can simply surf their respective web pages on the internet.
b) Elimination of Manual Processing of Data : There is total elimination of manual processing of data in terms of internal routine like inter-branch reconciliation, monthly salary processing, posting and finalisation of financial accounts and annual statements consolidating the transaction distributed at several centres, etc. resulted in productivity improvements in leaps and bounds. The tasks which were earlier handled by 10,000 workers can now be performed by a mere 500 to a maximum of 1,000 workers. The bank employee was outside the realing of business policy and planning. He was attending simple clerical processing. But now-a-days he has become a knowledge worker. He is no longer bored with monotonous repetitive figure – calculation and duplication of records.
c) Sale of Products : It helps in selling products to individual customers and to corporate customers by banks, insurance companies, stock brokers, mutual funds, etc.