History of Banking online

Online banking has been designed with one idea in mind: convenience. No more do you have to through arduous and long processes with banks nor is there a bucket load of admin to go through when needing to make a transaction. Online banking has allowed banks to capture value from their customers and allowed firms to ensure that transactions and payments are made a lot easier.

The internet has empowered people over the years and made sure that they can do some things that people from earlier generations would never think would be possible. One of these things would have to be doing your banking on the internet in the comfort of your own home. Long gone are the days are standing in long queues at the bank in order to pay accounts or deposit money. The story of online banking is a fascinating one, and it starts off in New York City where the early signs were not promising.

Online banking was initially established in New York in 1981, when four commercial offered home banking services via the videotext system. Unfortunately, it never kicked off as expected in the States and was not deemed a success.

Fast forward to 1994, and one of the world’s leading software developers, Microsoft, developed Microsoft Money which allowed 100 000 households to access their bank accounts online – a brand new experience. During this time, the Stanford Credit Union created something that would take the world by storm in a few years, the first online banking website. This really kicked off in the United States of America and by 2001 Eight US banks had over 1 million users making use of their bank’s online banking facilities. This meant that 19 million American households were doing their banking online – something that would not have been predicted in 1981. It was at this time that banks known as direct banks, which are banks without a physical branch, started begun to offer their services mainly online. This is when banks really started to realise that online banking was well on its way to becoming a global phenomenon.

Another major part of the online banking story is when apple launched their iphone in 2007, which allowed people to bank directly from their smart phone. Move forward another 2 years, and buy 2009, 54 million homes in the USA were making use of online banking – allowing them to save time and money and making life a lot easier.

Online banking has ultimately changed the way we do business these days. It allows for swift business transactions in a way that many people would never have thought would have been possible. The way people do business over the years has changed, and the banking industry has changed with it.