Online Banking

In the UK, the first online banking system was set up by the Bank of Scotland in 1983 – but the recipients included gas, electricity and telephone companies and other banks; and not their customers. Only in October 1994 were online banking services offered to members of the public, first by Standford Federal Credit Union.

Nowadays, there are hundreds of Online Banks – some acting as another resource for standard brick and mortal branched banks, others based purely online.

Banks now operating Online in the UK

Abbey National Building Society	Darlington Building Society
Ahli United Bank	DirectLine
Alliance & Leicester	Dudley Building Society
Anglo IrishBank	Dunfermline Building Society
Amber Homeloans	The Ecology Building Society
Bank of Ireland	Earl Shilton Building Society
Bank of England	Egg
Bank of Scotland (HBOS)	First DirectBank
Bank of Wales	Ipswich Building Society
Barnsley Building Society	ING Direct
Barclays Bank	Kensington Mortgages
Bern Savings Bank	Kent Reliance
Birmingham Midshires (HBOS)	Legal & General Bank
Bradford & Bingley Building Society	Lloyds TSB Bank plc.
Britannia Building Society	LombardDirect
Bristol & West plc	The Leeds and Holbeck Building Society
The Bath Building Society	National Westminster Bank (Natwest)
The Beverley Building Society	National Counties Building Society
The Buckinghamshire Building Society	Newbury Building Society
The Cambridge Building Society	Newcastle Building Society
The Cheshire Building Society	Northern Bank
C Hoare &Co	Nationwide Building Society
Cahoot	Nottingham Building Society
CapitalOne bank	Standard Chartered Bank
Catholic Building Society	Standard Life Bank
Cheltenham & Gloucester	Sun Bank
Chelsea Building Society	The Stroud and Swindon
Chesham Building Society	The Swansea Building Society
Chorley & District Building Society	Tesco
Citibank	Tipton and Coseley
CIS	TSB Bank
Close Brothers	Ulster Bank
Clydesdale Bank plc	Vernon Building Society
Co-operative Bank	Virgin Direct
Coutts	Woolwich plc
Coventry Building Society	West Bromwich Building Society
Cumberland Building Society	Yorkshire Bank

As mentioned in ‘E-Commerce’, these are a few of the benefits, detriments and my uses of Online Banking

For the User

The benefits of Online Banking – for the user

• They can transfer money far quicker and at any time of the day
• No queuing – so it is convenient and less time consuming and tedious
• There is the convenience of not having to leave the home so it makes dealing with money that little bit less stressful
• Instant information from the bank – so no need to wait and waste any more time than necessary
• No need to fill in cards as all details are stored
• Charges are often lower than for ordinary accounts and accounts may offer higher interest rates

The detriments of Online Banking – for the user

• Computer illiterate people may find this difficult and complicated
• Online banking is open to fraud and scams and people can lose money (although, whether or not it is more open to fraud than normal banking is debatable)
• Money cannot be obtained from the computer – you still obviously have to go and withdraw from a bank
• In an attempt to keep personal details secure banks have users enter a pin or some other sort of pass code that allows them, and only them, access to their information – this can be annoying to the customer because although it is there for their privacy and protection, it is one more thing they need to remember
• When the site becomes updates or upgraded, you may have to re-enter your account information

For the Company Owner

The benefits of Online Banking – for the company owner

• Online banking allows the banks to reach out to more customers than previously possible through traditional banking branches
• Can reach out to a broader variety of customers – not just those within distance of their location branches
• Saves money as it is cheaper than opening a new branch in a new location – this allows them to offer their customers reduced transfer fees and other savings so they become more price competitive against other banks
• Also cheaper for banks as there is less paper and postage involved

The detriments of Online Banking – for the company owner

• Online banking requires lots of personal information and some customers will find it difficult to give this away over the internet with confidence
• Many people feel uncomfortable with new things and aren’t willing to work out through the learning curve when it comes to their money
• Even though the reduction in the use of paper is good for the environment, many customers prefer to have a paper trail for when they pay their bills
• No interaction with their customers so there is less trust and commitment from them – so they won’t feel as bad switching to another bank is there is no relationship
• Online banks cannot accept cheques or cash

My uses of Online Banking

As I do not have a bank account at all, I have never personally trialed online banking. But even if I did I am not sure whether or not I have enough trust in online banking just yet. I am well aware that there are some people with hacking skills and knowledge that the idea of having my personal and financial details online is a bit scary for me. A family friend was almost scammed once until the bank actually got involved and had to sort out the problem – so this hasn’t improved my confidence in Online Banking. I would much prefer taking the trip to my local bank if it means I have personal interaction with the person who is handling my account and my money.

Security

Online Banking basically has two different main methods of security – the PIN/TAN system, and signature based banking

• PIN/TAN – the PIN represents a password used for the login, and the TANs represent one-time only passwords. TANs can be dispersed in many ways such as; postal letters, security tokens or by SMS.
• Signature based – all transactions are authorized and encrypted digitally.

Internet only Banks

A few examples of Online-Only Banks include ‘egg’, ‘First Direct’, and ‘Smile’. Internet-based banking has formulated out of the success brought about by Banks offering online services to customers. By offering better interest rates and better features, online banks distinguish themselves from their forerunners.

The benefits of Online Only Banks

• Convenience – because it’s all online
• You wouldn’t have to change banks if you move house
• Free services e.g. free checking
• May give more information than a traditional bank site, as it is technologically adept
• Savings from being based only online and not having to support branches, are passed on to customer

The detriments of Online Only Banks

• You are stuck with any ATM fees the company gives you as they obviously don’t have any physical branches near your home
• You have to mail in your deposits
• If a payment is due on a specific day, you have to put in a check request days in advance

Ways in which Online Banks and Online Only Banks Entice Customers

Online Bank Example - NatWest

• At the top of the home page there is a company quote, giving positive feedback on the bank

• At the bottom of the home page there are various links to customer services that hope to make their experience on the site as comfortable as possible

• The layout of the site attempts to be simplistic but formal and friendly in order to appeal to as many customers as possible as helpful but professional.
• There is a search panel at the top to help customers navigate and find exactly what they are looking for

Online Only Bank Example - Smile

• The animated advert at the top centre shows the latest offers - this captures customers' attention

• Animated pictures showing more offers also draws customers attention to them

• Smile's layout is a bit less formal than that of NatWest, but is consistent and the site is as user friendly as possible with tools such as site map and important information at the bottom

Both sites seem just as eager to promote it's latest deals on offer, and seem to share the aim of wanting a simplistic layout that will appeal to customers who want an easy, preferably inexpensive, banking experience.

Ecommerce

 

Ecommerce is

                ‘A term for any business, or commercial transaction, that involves the transfer of information. It covers a range of different types of businesses, from customer based retail sites, through auction or music sites, to business exchanges trading good and services between corporations.’

Ecommerce has opened up a new window for business to expand and adapt to modern technologies and has resulted in companies evolving to become semi-online based – not only this, but it has also resulted in new completely online businesses.

                                

Online Shopping

Online shopping now coexists alongside the shops on the high street – allowing people the option to go down to the high street or supermarket; or to simply do it online. With the development of Online Shopping customers are now able to adapt their way of shopping to suite their wants and needs.

As well as providing a whole new shopping experience for customers, Online Shopping has opened up a new way of selling to the owners. They now have the option to expand, rather than through the opening of more stores over a wider area, but via the internet.

For the User

The benefits of Online Shopping for the User

• There is no need for you to leave the house – you can select your groceries or clothing from the comfort of your own home
• When shopping online there are no queues to wait in before paying
• You can shop online 24 hours a day 7 days a week, even when the actual shop or supermarket may be closed
• If you are shopping online it is far easier and quick to make comparisons on a variety of products aspects such as price, brand or contents/materials
• There is no need to carry the items that you buy – this allows you to buy in bulk without the concern of how you are going to transport everything home
• Often when buying online you can find certain items cheaper as the shop can offer special deals because having a website is cheaper than opening a new store
• Many retail/supermarket sites offer customers the opportunity to leave reviews – this means new customers can read about the items they are considering and make an informed decision about whether or not to purchase
• Products bought are delivered straight to your door
• Shops can offer a wider range of products online compared with in store so there is a wider selection to choose from
• Many shopping sites, especially online supermarkets, allow you to save certain ‘regularly bought’ items – so next time you want to shop online you can access your favourite items far more quickly and easily
• Some shops give recommendations, judging by your frequently bought products, on other products you may be interested in

The detriments of Online Shopping for the User

• You cannot try out the goods you are considering – you cannot try on clothes or see the conditions of food
• There may be additional costs for postage and packaging
• You have to wait until your order is delivered – you don’t have it immediately
• When shopping online you have to pay by credit or debit card – your computer cannot take cash

For the Company Owner

The benefits of Online Shopping for the Company Owner

• Having a website is less costly than opening a new store – and it doesn’t require more staff who earn salaries which adds to the cost of stores
• They can analyse sales because they are able to monitor sales in a straightforward system online and can evaluate various things e.g. most sold product and least sold products. These analyses can help them improve their business
• Their website assists in making them price competitive because selling products online is cheaper, as it is more direct, so they can pass on these savings to their customers
• A website increases accessibility to customers because it allows them to access the store twenty-four hours a day, seven days a week and three hundred and sixty five days a year
• They match other competitors with their website because when other leading retailers begin launching website, they would want to ensure they aren’t ‘behind the times’ and that they too have a website
• A website allows a company to branch out into countries in which it doesn’t necessarily have stores because a person only needs a computer, and money, to be able to order from abroad
• Selling from a website allows them to offer a broader range of products – this could increase profit
• A website would help them establish their brand name

The detriments of Online Shopping for the Company Owner

• Despite most people becoming more confident in providing personal information online, there are still lots of people – potential customers – for whom security concerns are keeping them from shopping offline
• Personal interaction is limited so the company owner has to work a lot hard to form a relationship and generate trust with their customers
• Due to the online shop branching the company possibly overseas – there will be an increase in delivery difficulties and if there are any problems, it will be them and not to shippers that have the responsibility
• Being online makes it more difficult for customers to contact the company with any problems or queries – this may prevent them returning as they may find the provided ‘Help’ information insufficient
• Involved employment of people whose sole responsibility is to keep the website updated with all the latest stock but also up-to-date with latest technology and customer requirements

My uses of Online Shopping
I have found the option of shopping online particularly useful, particularly over the previous summer holidays whilst shopping for sixth form, as it has allowed me to browse clothing without having to go out into town day after day. My only problem was that, as I do not have a credit or debit card, I had to use my Mum or Dad’s when paying – but, luckily for me, they didn’t have much a problem as the payment process was always trouble-free and uncomplicated. Despite the off-putting aspect of being unable to try on the clothes I am considering, I am not deterred as most online shops offer free returns. I appreciate and like the benefits such as online discounts, and also think it is nicer to have all the products laid out neatly in front of me rather than strewn around a shop. I enjoy online shopping as I find it easy, fast, and believe I obtain the full potential from online shop as to me it has become just a leisurely and straightforward as actually going to the shop, but with the comfort of not leaving home.

Online Banking
Every mainstream bank of today now offers its services online. Online banking allows people to check their bank balance, make a payment, cancel standing order and transfer funds from their computer – or, for those with internet of their mobile, whilst on the go.

For the User

The benefits of Online Banking – for the user

• They can transfer money far quicker and at any time of the day
• No queuing – so it is convenient and less time consuming and tedious
• There is the convenience of not having to leave the home so it makes dealing with money that little bit less stressful
• Instant information from the bank – so no need to wait and waste any more time than necessary
• No need to fill in cards as all details are stored
• Charges are often lower than for ordinary accounts and accounts may offer higher interest rates

The detriments of Online Banking – for the user

• Computer illiterate people may find this difficult and complicated
• Online banking is open to fraud and scams and people can lose money (although, whether or not it is more open to fraud than normal banking is debateable)
• Money cannot be obtained from the computer – you still obviously have to go and withdraw from a bank
• In an attempt to keep personal details secure banks have users enter a pin or some other sort of pass code that allows them, and only them, access to their information – this can be annoying to the customer because although it is there for their privacy and protection, it is one more thing they need to remember
• When the site becomes updates or upgraded, you may have to re-enter your account information

For the Company Owner

The benefits of Online Banking – for the company owner

• Online banking allows the banks to reach out to more customers than previously possible through traditional banking branches
• Can reach out to a broader variety of customers – not just those within distance of their location branches
• Saves money as it is cheaper than opening a new branch in a new location – this allows them to offer their customers reduced transfer fees and other savings so they become more price competitive against other banks
• Also cheaper for banks as there is less paper and postage involved

The detriments of Online Banking – for the company owner

• Online banking requires lots of personal information and some customers will find it difficult to give this away over the internet with confidence
• Many people feel uncomfortable with new things and aren’t willing to work out through the learning curve when it comes to their money
• Even though the reduction in the use of paper is good for the environment, many customers prefer to have a paper trail for when they pay their bills
• No interaction with their customers so there is less trust and commitment from them – so they won’t feel as bad switching to another bank is there is no relationship
• Online banks cannot accept cheques or cash

My uses of Online Banking
As I do not have a bank account at all, I have never personally trialled online banking. But even if I did I am not sure whether or not I have enough trust in online banking just yet. I am well aware that there are some people with hacking skills and knowledge that the idea of having my personal and financial details online is a bit scary for me. A family friend was almost scammed once until the bank actually got involved and had to sort out the problem – so this hasn’t improved my confidence in Online Banking. I would much prefer taking the trip to my local bank if it means I have personal interaction with the person who is handling my account and my money.


Online Auctions
Online Auction sites, such as EBay, have risen out of the internet and have grown to offer far more than any real-world auction possibly could. They provide an online environment where people can buy and sell new or second-hand goods to people all over the world

For the User

The benefits of Online Auctions – for the user

• Unlimited range of products as people can put anything they would like to sell on, so whatever the user is looking for they are bound to find – either new or used
• Anyone can buy and sell, from and to anywhere
• Personal details are never given out to other users but are stored by the auction company which acts like a ‘middle man’
• Sellers can set a time limit for the auction of the product, and a minimum price – if this is not met, the item is not sold, so they can insure they get a price they are happy with
• It is easy to find great bargains on auction sites, especially when buying used goods
• Online auctions encourage recycling as people can re-sell items instead of simply throwing them away – with the incentive of making a bit of money
• Even though they have to pay for postage and packaging, sellers can include this in the buying price
• With many auction sites, such as EBay, users can choose to immediately buy products at a set price rather than auction for them, if they wish
• Buyers and sellers can message each other if they have any queries about the product
• On a lot of sites, buyers can decide whether or not they would like the item sent by post, or if they would prefer to pick it up themselves
• There is an age restriction – this prevents young people from getting into financial difficulties
• Ratings – either out of 5 stars or by percentage- and reviews about sellers allow buyers to make a somewhat informed decision when choosing whom would be reliable to buy from

The detriments of Online Auctions – for the user

• The biggest problem is probably that pictures and product descriptions can be misleading and false
• Postage and packaging can be expensive as people from all over the world can auction or buy products
• Because auctioning sites are open to everyone, it is open to people creating fake accounts
• Especially when it comes to used products, the history is unknown to buyers – so if it has been faulty and unreliable, or (in extremes) if it has been stolen, they do not know
• Deliveries can be delayed, lost or broken on the way – and it is difficult to decide what to do as neither parties are really to blame
• If you are unhappy with a product bought from an online auction site it can be very difficult, and sometimes impossible, to return it
• Another particularly big problem is that other users may be unreliable

For the Company Owner

The benefits of Online Auctions – for the company owner

• They don’t need to pay for the storage and transport of any goods
• The customers self-analyse using the ratings so there is no need for them to investigate every single user
• Users have to pay to sell something on the site – but they don’t expect any work from the company in return other than advertisement on the site – so it is ‘easy money’
• There is an endless variety in products which can be shipped all over the world so online auctions appeal to everyone, everywhere

The detriments of Online Auctions – for the company owner

• It is difficult to start up an auction site and build up trust and a large customer base
• If a user is not trustworthy the company are held responsible for any problems e.g. the buyer not paying or the seller not sending the product, and often have to pay out refunds or some other sort of compensation
• The company cannot prevent people from creating false sites as it is open to anyone

My uses of Online Auctions
I personally am not a member of an auctioning site – but both my parents and my older siblings have EBay accounts and all find the site straightforward to join, extremely useful and easy to use. My parents did have a problem once however when a buyer pulled out of a sale after it had been agreed, but other than that their experience of the years has been relatively trouble-free. Through my families’ accounts I have experienced both selling and buying things from EBay and I have never had a problem. I find the star and percentage ratings really useful when buying a product and have managed to find some great bargain buys. I feel that overall online auctioning is a great resource for bargains and unusual products – that is, presuming everyone is honest. The only reason I am not a member myself is due to the age restriction.