online banking

Banking Terms -> online banking

• Online banking allows bank clients to keep track of their finances whenever they find it convenient. Financial transactions can be conducted through a secure website owned and operated by a bank, virtual bank, building society, or credit union. Online banking services have some common features, which generally fall into several categories. Transactional features pertain to the carrying out of financial transactions such as opening new accounts, applying for loans, wire transfers, bill payments, etc. Payments can be made to third parties, such as telegraphic transfers and bill payments. Non-transactional features are related to cobrowsing, check links, online statements, etc. These encompass viewing paid checks, downloading bank statements, and viewing transactions. Other features relate to the transaction approval process, management of multiple account users, and administration.
  
  Online banking services allow bill payment and other banking transactions over the Internet. With Internet and other advanced technology, bank customers do not have to go the nearest branch any longer. They can communicate and shop online and even do their banking. A major benefit of online banking is that clients do not have to wait for their statements to arrive so that they can check the account balance. This can be done every day by reviewing the online account. Clients can check transactions and balances and look for discrepancies so that they can deal with these promptly. With access to Internet, online banking can be used practically anywhere. Moreover, since monthly bills are paid over the Internet, bank clients do not have to write checks and post payments. After one enters the amount and the payee, the money is deducted from the client’s account automatically. Then, the good news is that if you want to go green, this is an opportunity to part with paper statements.
  
  Since it costs less to process transactions, clients pay less in many cases. Online banking is typically offered for a small fee, which can be very low. Bank clients even save on ATM fees and postage. Online banking is not only convenient but with some banks, it is included in one’s account plan. Clients may also have access to Western Union money transfers over the Internet and through mobile banking.
  
  Some customers worry that online statements are not as secure as paperless ones. However, reputable banks make it clear that their online statements are completely secure as they use sophisticated security tools and advanced security systems. In general, protection for the online account is secured through password authentication. Other security methods have been developed as well. One security method is the PIN/TAN system in which the TAN represents a one-time password serving to authenticate transactions. The PIN is used for login the same way as in other places. TANs are often sent to bank customers in the form of a list and by postal letter. Another security method is the so called signature-based online banking. Every transaction is signed and encrypted in a digital form. The keys to generate and encrypt signatures may be stored on a memory medium or a smartcard, depending on the type of implementation.
  
  With regard to attacks on online banking services, one way involves stealing valid TANs and login information by deceiving bank clients. Pharming and phishing are two ways to steal user’s information. Trojan horses and cross-site scripting are other ways to steal account information. Signature-based online banking is also vulnerable to attacks. Here, the user’s software is manipulated so that the system shows correct transactions on the screen while cons hide fake transactions in the background. Unfortunately, in most cases, the source of intrusion remains unknown.

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