Banking is something that has been present since time immemorial. Well, it just wasn’t referred to as “banking” or “finance” back then, but doesn’t mean it wasn’t there. From the earliest form of barter systems to the historic age of gold and silver coins, to the present-day paper currency notes; we are now in the process of switching to plastic money and other paperless forms.
Technology, often called the “Yardstick of Human Evolution”, and its development of decades, is what has made all of that possible. Even the current direction towards which the modern ways of finance are heading to are guided by technological advancements being made every day.
During this very never-ending process of technological innovation came, in 1983, the UK’s first Internet Banking Service known by the name “Homelink”, developed by Nottingham Building Society with backing from Bank of Scotland. Homelink enabled customers to view statements, transfer money between accounts, pay bills and arrange loans online. The system even included an e-commerce feature, letting customers compare prices and order goods from several retailers as well as arrange holiday’s via Thomas Cook and send electronic messages to other Homelink users.
“The system was massively ahead of its time,” says John Sinclair, an early Homelink user.
However, despite good investment, Homelink lasted only two years and died out by 1985; probably because of the cost of using online services at that time.
Nowadays there are about 1.2 billion online banking users globally according to research from leading fintech analysts, and numbers are expected to reach to 2 billion by 2021!
But, just for a bit of nostalgia, let’s take a step back and look into a few advantages of tradition banks and is it still a good idea to let them handle our hard-earned money:
· Simple organizational structure: Traditional banks either already have or are in the process developing this so as to reduce overhead costs.
· Flexibility: This might be conventional but having a traditional system of branches at various locations where one can just walk-in and carry out big deposits quite conveniently.
· Focus: traditional banks might be old-school but are also a little smart by focusing on their core competencies rather than trying to excel at everything.
Apart from this, due to limitations of the technology at hand, conventional banking systems still provide some exclusive advantages. However, they do have some drawbacks for the modern-day customers:
· Time consuming: Due to easy access to bank branches, crowd management isn’t the best in traditional banks; probably something even we have noticed personally.
· Service fee: Even though it might be very less impacting but is a matter of concern for people with smaller bank balances.
· Poor customer service: This also is a point we can consider but certainly cannot generalize about.
The revolution in digital media and related platforms (like servers, computers, mobile phones etc.) have contributed to this process of evolution of banking over the years. But, without a doubt, it was the invention of the internet which really took the industry to much greater heights than ever imaginable, to the next level. More than this, it gave birth to ideas which grew into services and “applications” designed either solely for online banking (like Paytm, PayPal etc.) or incorporated it within as a part of its function (Amazon, Uber, Swiggy).
In the modern era, technology and functionality go hand-in-hand. The development and continuous evolution of internet banking has a made are lives much more comfortable on daily basis. Some of those many advantages include:
· Online transactions: Almost all transactions today, from paying due bills, booking a travel holiday, buying your groceries or even lending money to our friends and family seem effortless, all credit to internet banking services.
· Fast and safe transfers: Wired transfers and other services allow multiple transactions across the globe instantaneously and without any physical exchange of money; making money an abstract entity.
· Soft copy of all transactions: This make things much easier to manage as we will never again need to bother about copies of receipts, bill payment confirmations or tax invoices.
· Mobility: Access to almost every bank service from any place on the planet and at any time is probably the biggest advantage of this technology.
These advantages might make internet banking “man’s best friend”, the ultimate tool.
But, let’s not forget…
“One man’s tool, another man’s weapon”
And so, Internet banking brings with it its own risks and dangers:
· Security: A topic one can debate for hours; 100% security is still something none can guarantee and hence, at the end of the day our earnings are still at risk, and who knows, even bigger than before.
· Transition issues: People with less access to technology or, in some cases, even less likeness towards it might never wish to completely switch to such a modern system.
· Bank relationship: With less physical interaction with people, this technology can kill the “human factor” in buyer-seller relationships (especially in daily retail of goods, like on Amazon).
“Technology is an endless road that man paves and develops every day to reach the future.”
It is impossible to foresee ALL the good and bad effects of that development.
Mobile banking, courtesy to the rise of “smartphones”, is the next step in this towards the good side, but cases of internet fraud and online money laundering make us look back and rethink about the idea as a whole.
