Online Banking

With a reported one in three closures in the last ten years, the absence of banks from the high street is becoming more and more apparent. Where banks retain a physical presence, we see a mirroring of the supermarket experience, where the tasks of customer facing staff are automated and visitors are encouraged towards self-service via increasingly sophisticated Automatic Teller Machines (ATMs).

One of the main reasons cited for the closures has been a shift in consumer behaviour towards home banking, which has steadily accelerated in use since its introduction in the early eighties. At that point the service was basic (though still ground-breaking), with customers being enabled to check their account balance, pay a bill, and apply for a loan. As home internet broadband connectivity established itself towards the end of the eighties, banking moved online and the feature set expanded to include the ability to perform payment transfers, set up Direct Debits/standing orders and more, all from a web browser.

Modern online banking will typically employ multi-factor authentication for additional security, requiring evidence of who their customers are beyond a username and password. Many of today’s mobile devices include bio metric sensors that can supply this additional information whether this be gathered from a fingerprint reader or a facial scanner. It is predicted that additional security checks using location sensing or voice recognition may also be employed to limit fraudulent activity further.

Consumer concerns regarding security are justified and it is particularly encouraged to avoid using public Wi-Fi networks (for example coffee shops, pubs) for online banking or indeed any web transaction. Financial institutions should give clear guidance on this topic, advising how their customers are protected and instruction of how to minimise the impact in the event of any kind of breach. This can be flagged quickly, with banking applications now sending update alerts to connected mobile phones each time a transaction occurs on an account. 

With a greater familiarisation of e-commerce generally, an upward trend of online banking use is evident and additional environmental factors such as the COVID-19 pandemic has accelerated this further. Whilst contactless payments and their limits increased over the pandemic, the Bank of England have reported a continued decline in the transactional use of cash evidencing a significant fall in the use of ATMs and banks for its processing. The obvious factors of lockdown plus a want to avoid public spaces, discouraged non-essential travel and urged regular bank visitors to explore alternative solutions.

Another reason to visit the branch of a bank or ATM was for the purchasing of foreign currency or the processing of cheques, though with the use of these also in decline it has become less necessary. Most online banking applications now allow a photograph of a cheque to be submitted, so that these can be processed over the internet. In addition, most banks now offer a facility to order foreign currency via their online interfaces, with the option of having it securely delivered.

Many of the newer banks to the market have elected not to offer a bricks and mortar presence, so it can be concluded that they have a perspective that all the services they offer can be viably managed outside of a physical interaction. These digital banks are not to be confused with financial technology (Fintech) companies that offer a service overlay to automate and improve on those products already offered. The benefit of these newcomers is that they drive the innovation of web services forward and the more established banks need to (at the very least) catch up to retain the share of their client, enhancing the online customer experience for all.

Anxieties regarding the reduced use of cash and access to banks, (especially in relation to the elderly and vulnerable) has placed pressure on the Financial Conduct Authority (FCA) to restrict additional closures and maintain a ready availability of physical currency. Banks have responded by enabling replacement facilities within Post Offices and circulating mobile banking vans and community bankers amongst affected communities. The drive to use online services is a clear priority for banks with tuition and technical support for this facility becoming an integral part of the package supplied. 

The assumption here of course is that banking clients have access to an internet connection, though some parts of the population (particularly in remote and/or rural locations) may not have a phone line or are located too far from the exchange to be able to achieve a viable broadband link. Online banking has very low bandwidth requirements and consumes little data, so with such minimal overheads will work with most internet connections. The team at Freedomsat will look at any location specified and determine the best and most appropriate service available, whether this be provided using a local 4G cellular network or any of the various fixed satellite broadband platforms available.