New Era Of Banking: E-Banking

Nowadays information technology is not an additional service/feature provided by the banks, but a necessity in cutthroat market competition. Information technology, coupled with wireless, and mobile technology not only make the life of customers easier who want real time accessibility, but also give a competitive advantage to the banks. Banks, can now conveniently have inter-branch, or inter-bank transactions, but also to the customers who want to access their account.

E banking that is banking through internet is becoming popular, and upholds the reputation that one cannot access accounts any faster than through e-banking. Customers must logon to the website of banks using their identity, and security key to perform their activities using E banking from their homes, offices, or anywhere they want. This makes banking service easier as most people now perform their tasks remotely, thus less number of customers physically visit the banks, making it dependent upon the internet.

E-banking might not be as secure as tele-banking, reason being that while the transaction is not yet completed, and the connection with the server is reset, then the customer does not know whether the transaction has completed or not. Moreover, in tele banking at the other end, no one knows you have punched in what number, but in case of E-banking, there is always a chance of masquerading, and hacking.

The interbank data transmission of financial transactions is done through a special type of software called Electronic Data Interchange (EDI). It is an automated electronic mail, which transmits the information at a specified time in day. EDI is business-to-business transacting software, and is not a generalised one to be used by customers.

EDIs are very helpful, as they make fast, reliable, precise, and automated transactions without human intervention. Still some transactions require special treatment through a clearinghouse. Clearing houses are globally used centralised systems to batch process transactions in real-time.

Banks connected to CHAPS i.e. clearing house automated payment system should be fault resistant. Clearinghouses help banks by removing the risk of rolling back as clearing house transactions cannot be rolled back.

Banks maintain a database of records of all kinds of transactions taking place whether of clients, or interbank. Database is a collection of data in form of tables containing each detail of the entity. Credit risk is there as a client takes loan, and is unable to make their payment; banks must keep a track of defaulters, or potential defaulters by keeping a track of the database.

Obsolete database is of no use, thus must be kept posted with latest transactions. All the banks and their branches are connected to a centralised database, providing accessibility to the authorised personnel. A centralised database enables a client to transact from anywhere, any branch of any bank, and access his account.

Edwood Woodward is a financial expert. You may consult with him to take debt help and get more alternatives to make financial decisions of your life at http://www.moneysolve.co.uk.