Online Banking

1
Online Banking
2

• In the past, banking took place on the High
  Street. The branches were only open 9am-3pm
  Monday to Friday, which was very inconvenient for
  people who worked full time. Banks had to employ
  many staff to deal with customers as this was the
  only way that services could be provided. This
  all changed with the invention of Automatic
  Teller Machines (ATM).

3
ATMs

• The first ATM was installed into a bank 35 years
  ago. For the first time, customers could get
  hold of their money without having to queue.
  This saved the customers time, it also saved the
  bank a huge amount of money since fewer staff
  were needed.

4

• Modern ATMs provide customers with their bank
  account balance, they can issue money, print
  statements and even take cash deposits. Customers
  are able to use almost any ATM in any bank,
  supermarket or garage anywhere in the world.

5
Behind the ATM is a host computer that sends the
correct messages to the customers bank
6

• Call Centres were the next major step forward for
  banks. Customers could now telephone the centre
  using either a free number or local cost number
  and find out information on their accounts
  without even leaving home
• We will do more on call centres later

7

• The latest development in banking is now Internet
  or on-line banking. It is estimated that within
  3 years, 26 million adults will use online
  banking in one form or another, either through
  their home PC or interactive TV.

8

• Initially, banks developed websites to inform
  customers about their new savings and mortgage
  accounts. However, the launch of the first
  Virtual banks such as Egg, Smile and IF changed
  all that. These new banks were among the first
  to offer on-line banking facilities to customers.
  For the first time, customers could open
  accounts, check their balances online, move
  money, pay bills and print statements from the
  comfort of their own homes.

9
Advantages

• The advantages to the banks were immense. The
  customer paid for the call. The customer did all
  of the work themselves. Traditional banks are
  extremely expensive to run, high street rental
  for a branch costs hundreds of thousands of
  pounds per year. On top of that are staff costs,
  insurance, heating and lighting costs. It has
  been estimated that banks can save between
  50-250 on the cost of transactions through the
  use of on-line banking.

10
More advantages!

• Banks can attract new customers to their online
  business for a fraction of the cost it takes to
  get one through the door of a high street branch.
  Because of the lower operating costs, internet
  banks can offer very attractive accounts. They
  usually have higher rates of interest for savers
  and lower rates of interest for borrowers. An
  advertisement in a Sunday newspaper about a new
  internet account can generate in excess of
  200,000 hits on the website in a day. A
  traditional bank could never cope with this level
  of enquiries by customers

11
So whats the catch?

• Many of the early web page designs were poor.
  What customers really need with an online banking
  service is fast access to information. Early
  designs made too much use of graphics and the
  navigation around the site was complicated.
  However, modern online banking websites are very
  fast, efficient and easy to use. Look at the
  http//www.lloydstsb.co.uk website for an
  example. Competition is fierce and so website
  design makes use of the latest technology. It
  can cost anything up to a million pounds to
  redesign a website, and banks often do this every
  six months.

12
Security

• Online banks use extremely strong encryption
  methods to ensure that customer information is
  kept confidential. Details passed to the bank
  are scrambled before they leave the customers
  computer by a secret code called the Cypher.
  It would take literally centuries for a normal PC
  to break the code and extract the information.
  This level of security is applied in order to
  give customers confidence that their passwords
  and bank details will remain secure.

13

• Parliament has passed legislation called the
  Computer Misuse Act 1990. This makes it
  illegal, punishable by prison, to access a
  computer system without authority. Therefore,
  hackers (or disgruntled employees) can expect
  severe punishment if caught trying to access
  confidential information.

14

• If customers do experience a problem whilst
  banking online, they usually have the Call
  Centre. However, many of the call centres are
  not open 24 hours a day. So the customer might
  find there is no one to answer their questions.

15
Task

• Answer the questions on the worksheet
• Word process your answers
• Answer questions using full sentences (for
  revision purposes)
• Presentation can be found on
• G/year 10/BCS/Online Banking.ppt
• Save as online banking in your Application of ICT
  folder