10-02-2012, 02:54 PM
Online Banking and Investing
Presentation Outline
Online Banking-introduction.
Two approaches in Online Banking.
Online Banking Regulations.
Advantages and Disadvantages of Online Banking.
Types of Online Banks.
Online Loans
ECN- Electronic Communication Networks
Online Trading.
Financial Aggregators.
Wireless Banking.
Security Measures.
Online Banking
By Online Banking you can
Manage your accounts online.
Transfer money between accounts.
Pay your bill online and keep convenient record of all payments.
Review your processed checks online.
Apply for loans online.
Trade stocks or mutual funds.
Track your recent account activity
Two Approaches of Online Banking
Dial-in Approach:
Requires users to have a separate finance software, so that they can do all the process offline and connect to the bank just for transactions.
Internet Approach:
Users directly log on to their bank website and complete all their work online.
Online Banking Regulations
The only federal regulations governing online banking are covered by the Electronic Funds Transfer Act of 1978.
The Fair Credit Reporting Act prevents institutions from selling or sharing credit-worthiness information about customers with affiliated companies .
Advantages of Online Banking
Online Banking is much cheaper for the bank. A survey says that Online Banking costs only 10% of branch services.
Normally internet banks offer better rates than traditional banking.
Pay bills online there by saving postal services.
Consolidated Bill Presentment services alert you when the bills are due.
The services are available seven days a week, 24 hours a day.
Advantages Cont…
Free Stock Trading – Offered by American Express Online.
Direct transfer of bank statements to the customers financial management software such as MS Money.
Free interactive help for the customers investment decisions.
Concerns..
Security concerns, like hackers accessing your bank accounts .
Need an account with an Internet Service Provider (ISP).
Switching banks can be more cumbersome online than in person.
Online banks generally do not have their own ATMs.
Must have basic computer skills and Internet knowledge.
Types
Online banking services are provided by two types of banks
1. Hybrid banks :
- Has both online and offline presence.
-Wells Fargo, Citibank, Bank of America
2. Internet only banks :
- Banks that have only online presence.
-NetBank, nBank, CompuBank
Hybrid Banks
Traditional brick and mortar banks turned to click and mortar banks.
These banks offer banking and other financial services online.
Has an edge over Internet only banks with large ATM network presence.
Generally they charge for online bill payment.
Internet only Banks
Has only online presence.
Provides lending, investing, checking services.
Offers lower fees and higher interest rates.
Accepts deposits by mail.
Provides free online Bill payment.
Insured by FDIC.
