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.

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.

—L. L. Lundin, MA