Online Banking Essay Example | Topics and Well Written Essays - 750 words

Online Banking - Essay Example Banks have had to adopt current technology in order to remain competitive, retain their customers and lower operation costs. Online banking was started in the 1980s by a few banks in the United States. Four major banks in New York adopted online banking to allow customers maintain electronic checkbook registers, check account balances, make fund transfers and other banking related activities. Online banking, also known as Internet banking, is part of virtual banking that began with telephone banking and automatic teller machines (ATMs). Virtual banking is a banking system that is non-branch based. Services are provided through various electronic media such as telephones, personal computers, ATMs and the Internet. Virtual banking has existed for quite some time and its transactions costs are quite low as compared to branch transaction costs. Banks are investing in various forms of banking systems to expand their geographical and market coverage with regards to banking systems. However, they are using different forms of banking, for example, some invest in bricks and mortar while others adopt the current ba nking system that uses the Internet (Cronin 42). The Internet is becoming the main channel of communication since its inception in 1969. Internet has recently gained popularity in the U.S. as the main medium for e-commerce. Its potential growth has come with opportunities and threats to businesses. The Internet is on the verge of becoming the main delivery and distribution channel. The growth and rapid diffusion of the Internet has made banking online an alternative banking system at the expense of traditional branch-based banking. Banks in the United States have started providing services via the Internet including Internet banking. Currently, the Internet has revolutionized the banking system and it is considered as an alternative strategic weapon that changes the operation system of banks. Banks are able to deliver services to customers in