ICT in Banking

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.

Traditional Banking

ATMs: (Automatic Teller Machines)

Customers can do transactions without

having to queue.

This save the customers time,

Saves the bank a huge amount of

money since fewer staff are needed.

With ATMs customers can,

Check bank account balance;

Withdraw money,

Print statements

Transfer funds between accounts,

Pay utility bills

Customers are able to use almost any ATM in any bank, supermarket or garage and it is normally a free service.

Call Centers

Call centers save banks a lot of money because they could deal with a large number of calls from customers quickly and efficiently.

Call centers could be set up in countries where there are plenty of people who speak fluent English and are willing to work for a much lower wage.

Call Centers is a facility where large numbers of workers spend the day (or/and night) answering telephone calls from customers. The staff deals with customers from any branch around the country.

Online banking

Now the customers can open accounts, check their balances online, move money, pay bills and print statements from the comfort of their own homes.

Most major banks now offer online banking and some are offering Internet only banking. Without the overheads of running and staffing high street branches they can offer higher rates of interest to customers.

Drawbacks

With Online banking, bank fraud - on an industrial scale - could be done from outside, without having to rely on bank employees to pull it off.

Phishing sites are fake banking websites used by hackers to get the logon details of customers.

Trojans - bits of rogue software downloaded to people's computers without their knowledge –can be used to "sniff" keystrokes; this can be avoided to some extent using onscreen keyboards that work with mouse instead of physical keyboard.

But then the Trojans can take screen shots!!!

Advantages to the bank

There are many advantages for the banks that run an online 'branch'.

It allows customers to access their accounts 24 hours a day without having to have branches open.

The customers do all of the work themselves so staff numbers can be reduced.

No need of having high street branches, thus saving rental costs

Less staff are needed so staff costs, insurance, heating and lighting costs are saved.

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 incentives.

Advantages to the customer

There are many advantages to customers who use an online banking service.

You can do almost everything from the comfort of your own home

You can bank at a time convenient to you, 24 hours a day, 7 days a week

You don't need to queue up in a branch to be served.

You don't need transport or have to waste time driving to the bank and trying to find a parking place

You can get instant statements for your account(s).

The savings rate offered are often better than the High Street as online Banks pass on their cost savings.

It is easy to compare deals between banks and special offers

You can apply for a loan or a mortgage directly from the web site and get an answer very quickly.

Disadvantages for the bank

Fraud is expensive. Banks lose a lot of money from fraud and online crime.

There is a need to be always one step ahead of criminals so investment must be made in coming up with new ways to keep customer accounts secure.

Less Customer contact and so it is harder to build personal relationships with their customers

It is difficult to convince a customer to buy an offer through website than meeting him in person.

Banks have to employ specialist web developers and expensive computers to run the site.

If the web site goes down then customers cannot access their accounts.

Disadvantages for customers

Security worries, hackers might hack the bank details.

Can’t get to see who they are dealing with. If there are problems to sort out, then it is much

easier to explain the problem face to face rather than having to use email or telephone.

You can't deposit cheques or cash. You will need to visit the branch or send by post.