Mobile/Internet Banking

The first projects related to online banking were implemented by Western banks back in the 1980s. Depositors were given the opportunity to check their accounts by contacting the bank’s computer by phone (this service was called Home banking).

The development of the Internet has allowed leading banks in the world to introduce systems of access to information, and then to operations with accounts. In 1995, the world’s first online bank, the Security First Network Bank, was created in the United States. The main reason for the creation of this bank was the fact that there was a restriction on banks opening branches in other US states. It has been successfully operating to date, being one of the best banks of its kind.

The first online bank in Europe was Advance Bank, a subsidiary of the Dresden Banking Group (Germany), which began its operations in 1996. At the same time, the new term branchlessbank (non-branch) is used in economic literature – a bank that operates exclusively on the Web. For example, in Europe there are two banks serving people on the Internet only.

The same online banking institution is the Dutch ING Direct, operating in more than 5 European countries, and Egg, whose activities are mainly represented in the UK and France. Along with stationary banks that provide Internet banking services, online banks and online loan companies are successfully operating in the West – organizations that do not have a single physical branch for working with clients: all banking operations are performed via the Internet. The only exception is the connection of the client and the bank staff via telephone in emergency case. The cost of attracting and retaining customers for online banks is quite high. The task of banks is to transfer users from the stage of obtaining information to the stage of electronic transactions.

Internet banking is highly developed in Europe, where the leaders in the popularity of this type of service are the Netherlands, Germany and Denmark. In Sweden, 73.7% of the total number of Internet users use such online services. The USA holds the second place in this statistical data.

In the United States, almost all the largest banks provide Internet banking. The Internet operations accounts 3% in the USA, and 4% in Europe of the total volume of all banking operations. Despite certain difficulties, Internet banking is developing quite rapidly – because in the face of severe competition from traditional banks, Internet banks are forced to offer a significantly higher percentage – up to 4% per annum, while traditional banks rarely offer more 0.5-0.6%.

In the West, the number of banking operations carried out through the network has already exceeded 30% of the total volume of transactions conducted by customers of banking institutions. The number of Internet banking customers in Europe and the United States has already exceeded 120 million people, while in Europe alone Internet banking turnover is today 5 billion euros. According financial statistics, 62% of the banks surveyed provide real-time transaction information on the Internet.

In the United States, almost all the largest banks provide Internet banking services, including Citicorp, Bank of America, Wells Fargo, Bank One, First Union. A total of 86 banks from America’s 100 largest banks provide Internet/mobile services. Despite the fact that all banks try to provide their customers with a full range of financial Internet services, some banks have their own specific features in Internet services.

So, Wells Fargo allows its private customers to integrate their system with such personal finance accounting programs as Microsoft Money and Quicken. Citibank allows the client to draw up an annual payment scheme for utility and other services. According to various analytical companies, the number of users of Internet banking services in the United States varies greatly: from 8.8 million to 28.5 million people. The main service that customers of US banks use through the Network is to receive an account statement. All analysts predict a high growth rate of new users and an increase in demand for various types of Internet banking services.

Due to concerns about transaction security and the traditionally high share of settlements using paper checks, the United States is somewhat behind Europe. Nevertheless, about 50% of Americans with current accounts and deposits use remote services. Thus, we can conclude that the Internet banking service continues to conquer more and more countries every year. The number of users of this service is steadily increasing, which ultimately will affect the quality of the service provided. Note that the number of Internet banking users is firmly held by the countries of Northern Europe (Sweden, Finland), despite the fact that the United States is the pioneer in organizing the first online/mobile banking.

• Wesley Cook