BY ESHNA THAKUR, 3rd YEAR AT NEW LAW COLLEGE, PUNE
Introduction
In the era of modernization, we are witnessing the extensive advancement and widespread use of technology. Nowadays, it has become possible to access everything online; from bank services to medical facilities. Banking service includes paying bills in an efficient way, promotion of cashless economy, easy availability of viewing account statements and many other things. Internet banking or E-banking, also called online or virtual banking is an electronic system of payment, which can be done through an electronic device; such as mobile phones, desktops and laptops, with the help of internet connection. It includes various ranges of transactions using internet connection as the main medium. Online banking has become a popular mode of transaction and has been emerging prominently ever since demonetization took place in November, 2016. Online banking eliminates the need of updating your passbook to know your total account balance, thus making it easier for us to keep a track of our records all the time.
Usual online banking services include -
Transactional services
Non-transactional services[1]
While transactional activities include transfer of funds, payment of bills, transactions and applications related to loans, non-transactional activities include stoppage of payment, requesting of cheque book, online statements etc.
Advantages of Internet Banking:
Convenient - An online banking account is easier to operate as there is less pen- paper work involved and a person can finish his transactions while sitting at home with a sound internet connection as the only pre-requisite. The services are available all the time except in certain exceptional situations, like those of maintenanceor upgradation.
Cheap - Often people need to travel to the bank for a minute’s work, but it leads to other expenses like that of transportation, operational cost of banking services. The same can be prevented by online mediums of banking, while not compromising on the quality of service.
Transfer services - Internet Banking has made it easier for accounts to have automatic funds with the help of electronic funding, thereby making the process of transfer easier than ever.
Easy to monitor - Any person who uses internet banking has his data recorded, as the details of transaction are either mailed or messaged to the customer, which makes it easier to keep a track of their spending and enables them to monitor their expenditures without having to go to bank.
Faster transaction - The speed of transfer is instant in cases of online banking. On the contrary, customary banking requires you to be physically present to fill in all the details and the process couldstillconsumea considerable amount of time.Additionally, banks and ATMs are not available at everyone’s doorstep and traveling to the same can also add to the amount of time; but with the help of internet banking, it has become extremely convenient to transfer or receive funds in the click of a mouse.
Discounts - The payment of bills through debit card and credit card helps in availing offers from outlets, which are considered to be an add-on benefit.
Contributes in cashless economy – With the help of internet banking, we can promote cashless economy.[2]
Disadvantages of internet banking:
Expensive start up - For the efficient working of internet banking, there is a lot of effort that needs to be put behind. Internet banking has high initial start-up cost, pertaining to the procurement of advanced hardware and software, computers and installation costs.
Maintenance - Since internet banking works 24*7, it is obvious that it is backed by a support system and even that support system needs maintenance in order to achieve great results.
Training to the bank staffs - Clearly internet banking is still not used inthe entire country as there are people who are not well-equipped with technology. In banking sector, the staff also comprises of aged people, who are not adept at technology and hence it becomes a challenge for to train them in a proper way.
Transactional error and communication - In case there is a server problem, the transaction is unsuccessful and there is lack of direct communication between the employee and customer which causes a sense of uncertainty in handling the failed transaction.
Mandatory internet connection - In India, there are many rural areas and even urban or sub-urban areas where internet connection is poor and it becomes difficult to use online banking facilities at the convenience of the residents of these areas.
Security - The major drawbacks and challenges faced in internet banking is security concerns. Since every detail is collected and saved online, it has the potential of getting exposed to hacking, leading to the misuse of personal information.
TYPES OF INTERNET BANKING FRAUDS –
Card skimming
Card skimming is the unlawful practice of duplicating and capturing of magnetic stripe and PIN information on debit or credit cards. Skimming can happen at any bank ATM or by means of a compromised EFTPOS (Electronic funds transfer at point of sale) machine. The card and PIN are encoded onto a counterfeit card and used to make fraudulent withdrawals and exchanges.
Spam
Spam is an electronic 'garbage mail' which stores undesirable messages sent to your email address or phone number. These messages are majorly commercial or sponsor able, and cause much irritation due to their large volume. They largely attempt to convince a user to purchase a product or invest in a scheme. They may endeavour to fool you into unveiling your account balance or credit card or debit card details.
Spywares
Spy wares such as Viruses and Trojans are destructive projects that are stacked onto your PC without your insight. The point is to harm data and execution of your PC or to flood your inbox with advertisements. Viruses spread by contaminating PCs and continue duplicating themselves, thereafter. Trojans show up as veritable applications and later install themselves into a PC to screen action and gather data.
Phishing
An individual's very own details are acquired by fraudsters acting like bankers, who skim a site like that of an individual's bank. They are approached to give details about themselves and their record to the bank on the pretext of database upgradation. The number and password are then used to complete the transaction for their sake without their insight. Phishing includes a type of spam that falsely accesses an individual’s internet banking information. Just like online- banking clients, phishing messages may also target online destinations or payment facilities. Commonly, a phishing email will ask an online banking customer client to follow a link so as to update personal bank account details. On the off chance that the connection is followed, the casualty downloads a program which catches their banking login and password details and sends the same to a third party.[3]
Conclusion
As it is said that “Change is the law of life”. We are switching to better technology and developing with every passing day. Internet banking has been a game changer in the history of banking system. It has provided us with several new opportunities. It is a well- known fact that the advent of internet in banking sector is of great significance. It has emerged as a key asset for achieving higher productivity and controlling banking activities. We also need to focus on its loopholes, keeping in mind the frauds done on a daily basis due to poor security. However, as an apparatus of modern living, it has become a vital part of our being. There are numerous services now being offered with internet banking. As we adventure into the future, the role of technology in the development of the banking sector will continue to increase.
REFERENCES [1]Anuj Agarwal, ‘Advantages and Disadvantages of Internet Banking’ Tough nickel (May 7 2020) <https://toughnickel.com/personal-finance/Advantages-and-Disadvantages-of-Internet-Banking> [2] ‘E- banking (Internet Banking): Meaning, Advantages and disadvantages’ Freebcomnotes< available at: https://freebcomnotes.blogspot.com/2017/02/e-baking-internet-banking-meaning.html> [3] ‘Internet banking frauds’Worldjute.com<http://www.worldjute.com/ebank1.html>
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