All banks today have a presence on the internet. Whether through a mobile app, a website or an internet banking portal, the internet makes it possible for you to access your bank account from the comfort of your home.
E-banking is an umbrella term for all banking services available online, from applying for loans on a website to simply checking your bank balance on your mobile app. Let’s go through the various dimensions of e-banking and how e-banking benefits everyone.
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What is E-Banking?
E-banking is a banking service that enables customers to access their bank accounts through the internet. Most, if not all banks offer e-banking services to their customers today in a bid to improve accessibility, financial literacy, transparency and reduce dependency on physical bank branches.
Customers access e-banking services through a mobile app like ICICI Bank’s iMobile app, SBI’s YONO app, IDBI’s Go Mobile app and Axis Mobile. They can also use the internet banking websites provided by their banking service provider.
E-banking is used for both financial transactions like making and receiving payments; and non-financial transactions like changing your PIN, checking your bank balance or updating your personal information.
What are the services provided by E-banking?
Going to ATMs, swiping debit/credit cards, and transferring money online, all of this comprises E-banking. Here is the list of various types of e-banking services provided today:
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Mobile/Internet Banking
Regardless of whether you use your bank’s webpage or mobile application to make a transfer, you are using internet banking.
Internet banking enables users to make seamless transfers, access personal details, make easy bill payments and so much more just with a stable internet connection!
If you do all these things on your bank application on your phone, it is called mobile banking.
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ATMs
Do you have to withdraw or deposit cash urgently? Automatic Teller Machines (ATM) allow you to do so seamlessly in just seconds. ATMs were the first form of digital banking that was introduced.
Enter your card/account details, enter the amount to be withdrawn, enter your ATM PIN and there you go!
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Credit/Debit Card:
You’re at a mall, buying clothes, and it’s time to pay. You swipe your card and ping! The transaction is successful!
Before debit cards, this transaction would have involved exchanging cash, calculating balance, and counting coins – tedious, and long.
The introduction of debit cards has allowed for transactions to be completed in mere seconds.
Credit Cards allow users to borrow funds up to a pre-approved amount and in addition to this, you can avail of a range of offers.
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Electronic Data Interchange (EDI)
Electronic Data Interchange is a digital mode of fund transfer across businesses.
EDI is a standard electronic format that tends to replace company paperwork like purchase orders and invoices hence reducing manual processing errors.
In this way, it helps reduce transaction costs across a supply chain.
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Electronic Fund Transfer (EFT)
Electronic Fund Transfer is a digital way of transferring funds.
While you transact online, there are a number of modes of payment you can opt for. National Electronics Fund Transfer (NEFT), Immediate Payment Service (IMPS) and Real-Time Gross Settlement (RTGS).
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Electronic Clearing System (ECS)
ECS is a provision that allows a customer’s credit card bill to simultaneously be deducted from that customer’s savings account. This allows the customer to avoid late payments.
Read: E-banking Guidelines
Benefits of E-banking
E-banking benefits everyone in the ecosystem – banks, customers, businesses, beneficiaries and even the economy and government at large.
Cost efficient
Internet banking is the least expensive mode of making and receiving payments. This results in huge cost savings for both banks and businesses. For customers as well, since there is no added cost of making the transactions, can enjoy a reduced cost of goods and services in general.
This is a big motivator for the public to switch from cash based transactions or bank transfers. Why is this important? A shift towards digital payments fosters economic growth by accelerating financial inclusion. It reduces the informal economy, increases tax revenue and improves financial transparency.
Accessibility and convenience
Customers enjoy 24×7 access to their bank account, allowing them to manage their finances any time, any where. With no obstacles except internet access, e-banking has made it possible for people even in the remotest of places to access world-class banking services.
This increased accessibility fosters customer loyalty and attracts new clients, expanding the bank’s customer base. Moreover, mobile apps streamline operations by automating routine tasks, reducing operational costs, and enabling data-driven decision-making.
Reduced errors
E-banking relies on software, automation and technology. This reduces the risk of errors significantly, since all financial operations are digital. Errors could include miscalculations and fraudulent transactions, which are common in manual processes.
Reduced errors are beneficial to both account holders as well as banks, since save time and money. Banks can streamline operations, reduce costs associated with rectifying errors, and improve customer satisfaction.
Is E-banking the same as Internet banking?
➡️ E-banking is a blanket term that covers everything from internet banking to NEFT/RTGS transfers.
➡️ Any kind of digital mode of fund transfer comes directly under Electronic Banking (E-banking). For example, internet banking, mobile banking, and other modes of online fund transfers like NEFT, RTGS, and IMPS all fall under Electronic Banking.
There was a time when even for normal fund transfers businessmen/customers had to visit banks 157848 times. Other financial services like investments and loans along with fetching simple personal account details were extremely tedious since they were not readily available.
E-banking and its evolution have modified lives. Banking at the fingertips is a dream come true and today, we face no more hassles of visiting banks for the tiniest of issues or services.
Similarly, banking has faced prominent evolution. From traditional banking to neo-banking the evolution of the fintech space has had a significant impact on businesses today.
Read more: What is Fintech?
Features of E-banking
E-banking offers a wide range of features designed to simplify your financial life:
- Account Management: View balances, transaction history, and account statements.
- Fund Transfers: Transfer money between your own accounts or to other bank accounts using options like NEFT, RTGS, and IMPS.
- Bill Payments: Pay utility bills, credit card dues, and other recurring payments with ease.
- Online Shopping: Make secure online purchases with your debit or credit card.
- Investment Options: Explore investment avenues like mutual funds, stocks, and fixed deposits.
- Loan Applications: Apply for loans and track their status online.
- Customer Support: Access help and support through online chat or email.
- Mobile Banking Integration: Manage your finances on the go through the bank’s mobile app.
- Security Features: Benefit from robust security measures to protect your financial information.
Types of E-Banking
The integration of the internet and computers into finance and banking has created several branches of e-banking.
Online Banking
Online banking is a type of e–banking that allows customers to access their banking accounts, view account activity, make payments and transfer money via an online platform.
Mobile Banking
Mobile banking is a type of e–banking that allows customers to access their banking accounts, view account activity, make payments, and transfer money via a smartphone or other mobile device.
ATM Banking
ATM banking is a type of e–banking that allows customers to access their banking accounts, view account activity, make payments, and transfer money via an automated teller machine (ATM).
Direct Deposit
Direct deposit is a type of e–banking that allows customers to have their paycheck, Social Security, or other income deposited directly into their bank account.
Electronic Funds Transfer (EFT)
Electronic funds transfer (EFT) is a type of e–banking that allows customers to make payments and transfer money electronically.
Electronic Bill Payment
Electronic bill payment is a type of e–banking that allows customers to pay their bills electronically.
Online Investing
Online investing is a type of e–banking that allows customers to purchase investments such as stocks, bonds, and mutual funds online.
Frequently Asked Questions
What is e-banking?
E-banking is the blanket term that covers everything from internet banking to NEFT/RTGS transfers.
Any kind of digital mode of fund transfer comes directly under Electronic Banking(E-banking).
What are the services provided by e-banking?
Some of the services provided by e-banking are mobile banking, NEFT, RTGS, IMPS, debit/credit cards, Electronic Data Interchange(EDI), and Electronic Clearing system(ECS).
Is e-banking secure?
Yes, e-banking is very secure. Banks use encryption and other security measures to protect customer data, and they are constantly improving their security measures to stay ahead of fraudsters.
What types of transactions can I do with e-banking?
You can use e-banking to transfer funds, pay bills, view account balances, set up direct deposits, and more.
Are there any fees associated with e-banking?
Some banks may charge fees for certain types of transactions, such as transfers to other accounts. However, many banks offer free e-banking services.
How is E-banking different from traditional banking?
E-banking differs from traditional banking primarily in its delivery method. Traditional banking relies on physical branches for transactions, while e-banking offers digital access to banking services through online platforms and mobile apps. E-banking provides greater convenience, accessibility, and speed, while traditional banking often offers in-person assistance and cash handling capabilities.
What are the key roles of using E-Banking services?
E-banking offers several key benefits. It saves time by allowing users to perform transactions without visiting a bank branch. It enhances convenience by providing 24/7 access to banking services. Additionally, e-banking often offers lower transaction fees compared to traditional methods. Security features in e-banking help protect financial information.
Can we use E-banking services for international transactions?
Yes, most e-banking platforms support international transactions. You can send and receive money to and from foreign accounts using services like wire transfers. Some banks offer specific international money transfer services with competitive exchange rates. However, it's essential to be aware of potential fees and exchange rate fluctuations when making international transactions.
