What it is:
Online banking enables bank customers to handle account management and perform account transactions directly with the bank through the internet. This is also known as internet banking.
How it works (Example):
Most banks offer customers the option of online banking. Customers are able to access to all of their accounts through an internet connection using the banks own website or a commercial software package such as Quicken or Money.
Online banking allows customers to monitor accounts, download transactions, transfer funds between accounts, including checking, saving, and money market/CD accounts, management investments, and handle loan activity, including applications and repayments. Clients can transfer funds to their bank accounts, and pay bills either electronically (with an account transfer) or by having the bank issue paper checks directly to the payee.
Banks have set up security systems to ensure that transactions conducted online are protected from internet security threats. Most banks use an industry-standard Secure Transaction software and protocol to manage the security on their systems.
Why it Matters:
Online banking has made personal and business banking faster, more efficient and safer.