E-Banking
E-banking, also known as Internet banking or online banking, enables customers to perform various financial transactions through a virtual platform, eliminating the need for physical bank branches. Many traditional banks, like Bank of America and Chase, provide comprehensive online services that facilitate activities such as deposits, transfers, payments, account management, and loan applications. Some banks, such as Ally, operate exclusively online. This shift towards e-banking is supported by various electronic and mobile technologies, significantly impacting e-commerce by enhancing how individuals and businesses conduct transactions globally.
E-banking offers multiple benefits, including lower overhead costs for banks, which can lead to savings for customers, as well as the convenience of 24/7 access to financial services. However, the reliance on online platforms raises concerns over the security of personal account information. This concern has led to the emergence of the information security industry, which focuses on protecting data from unauthorized access or breaches. With continuous advancements in technology and security measures, the e-banking landscape is evolving to meet the growing demand for secure online banking options, especially as consumers increasingly rely on their smartphones and other devices for financial management.
On this Page
Subject Terms
E-Banking
E-banking, also referred to as Internet banking or online banking, allows customers of a financial institution an opportunity to conduct his or her financial transactions, such as day-to-day account statements to loan applications, in an online, virtual environment. Most traditional banks, such as Bank of America or Chase, offer extensive online services that allow customers to avoid brick-and-mortar locations altogether. These services include deposits, transfers, payments, account management, budgeting tools, and loan applications. In fact, there are several banks, such as Ally, that operate completely online. E-banking is built on a foundation of several electronic and mobile technologies, such as online data transfers and automated data collection systems. In the world’s global market, e-banking has played a significant role in the rise of e-commerce, especially in how people and businesses interact in the buying and selling of goods and services. Due in part to a rise in online banking, e-commerce has gained a significant foothold in the consumer environment and has increased the consumer base of many businesses exponentially because e-banking and e-commerce are not limited to specific geographic locations.
Overview
Modern banking no longer relies on geographic locations; instead, the industry has come to embrace consumers who prefer an online, virtual environment. In fact, some banks operate solely online. One benefit of e-banking is a reduction in overhead costs usually associated with a brick-and-mortar location that are passed on to the customer. Other benefits include convenience and instant access for the customer to manage financial accounts and holdings. E-banking also plays a large role in the success of the electronic commerce environment in a global market, allowing financial transactions to happen almost instantaneously, regardless of geographic location.
However, online security of account information is a concern for both the online banking industry and its customers. This has spawned the rise of the information security industry, or infosec, which is the practice of protecting information from unauthorized use, disclosure, access, modification, or destruction. Infosec applies to all information regardless of the form it may take and is comprised of two major categories: information assurance, which is ability to ensure data is not lost to a breakdown in system security, due to theft, natural disasters, or technological malfunction; and IT security, which is the security applied to computer networks where information resides. Improvements in information technology and related security elements are integral to the e-banking industry and foster reliable and effective security practices to protect proprietary and confidential information.
Overall, consumers are operating more and more in an online environment and are demanding online capabilities for their smartphones and other devices. Businesses and banks will continue to adapt toward this trend by providing secure applications and environments.
Bibliography
Cavusgil, S. Tamer, et al. International Business: The New Realities. Frenchs Forest, 2015.
Chau, S. C., and M. T. Lu. “Understanding Internet Banking Adoption and Use Behavior: A Hong Kong Perspective.” Journal of Global Information Management, vol. 12, no. 3, 2009, pp. 21–43.
Dahlberg, T., et al. “Past, Present, and Future of Mobile Payments Research: A Literature Review.” Electronic Commerce Research and Applications, vol. 7, no. 2, 2008, pp. 165–81.
Demirkan, H., and R. J. Kauffman. “Service-Oriented Technology and Management: Perspectives on Research and Practice for the Coming Decade.” Electronic Commerce Research and Applications vol. 7, no. 4, 2008, pp. 356–76.
Fox, Susannah. “51% of U.S. Adults Bank Online.” Pew Research Center, 7 Aug. 2013, www.pewresearch.org/internet/2013/08/07/51-of-u-s-adults-bank-online/. Accessed 22 Nov. 2024.
Gkoutzinis, Apostolos. Internet Banking and the Law in Europe: Regulation, Financial Integration and Electronic Commerce. Cambridge UP, 2010.
Hoehle, Hartmut, Eusebio Scornavacca, and Sid Huff. “Three Decades of Research on Consumer Adoption and Utilization of Electronic Banking Channels: A Literature Analysis.” Decision Support Systems, vol. 54, no. 1, 2012, pp. 122–32.
Lee, M. C. “Factors Influencing the Adoption of Internet Banking: An Integration of TAM and TPB with Perceived Risk and Perceived Benefit.” Electronic Commerce Research and Applications, vol. 8, no. 3, 2009, pp. 130–41.
“Penetration Rate of Online Banking in the United States from 2019 to 2023, with Forecasts from 2024 to 2029.” Statista, 27 June 2024, www.statista.com/forecasts/1285979/digital-banking-penetration-rate-usa. Accessed 22 Nov. 2024.
Santora, Marc. “In Hours, Thieves Took $45 Million in A.T.M. Scheme.” New York Times, 9 May 2013, www.nytimes.com/2013/05/10/nyregion/eight-charged-in-45-million-global-cyber-bank-thefts.html. Accessed 22 Nov. 2024.