Online Banking - A friend or foe?

Technology today has changed the face of many businesses across the world. In the Banking industry, the advent of online banking has definitely eased it for the consumers and banks as well.

UAE has seen many banks recently urging their customers to use the online banking facility for their own advantage.

A slow start towards this evolving technology, but UAE is adapting to online banking quite well. Karim Beg, Head of Consumer Finance and Marketing for RBS UAE says, “RBS UAE is a leader in e-banking, providing comprehensive e-banking services, over and above the typical offerings of balance enquiries and transactions, online statements, bill payments, fund transfers and service requests.”

The customer penetration figures on internet banking stand currently at 60 per cent. Most banks encourage their customers to register online once they have opened their bank accounts at the bank’s branch.

Feasibility of online banking

HSBC offers customers flexible and convenient banking services, through its award-winning Personal Internet Banking service, says Abdulfattah Sharaf, CEO of Personal Financial Services Middle East, HSBC Bank Middle East.

“We encourage customers to do on-line banking as it is fast, secure and allows customers to manage their money at their convenient.”

On the other hand, Standard Chartered Bank believes the online banking has become increasingly popular and a way forward given the technology era.

For the bank, it is a safe way to access bank accounts and carry out a number of operations fast and efficiently through a secure and interactive website.

The practicality and variety of services it can provide through a touch of a button, has ensured its current level of popularity.

Apart from having 24-7 access to one’s bank account, the banks also send customers regular communications based on their usage of channels encouraging them to register for Internet Banking.

Awareness on the use Online Banking

Raising awareness is something the banks feel they still need to achieve as some customers are still not net savvy.

Karim Beg feels that RBS provides a comprehensive suite of channels that are specific to e-banking.

“RBS undertakes strategic initiatives on an ongoing basis to highlight the importance of online channels to the customers.

“We run creative promotional campaigns to encourage them to enquire and transact using e-banking as an easy, secure, and efficient way to access our range of products and services,” says Beg.

Online banking does have the advantage of saving time, not to forget the ability to access your account from anywhere in the world as well as the cost efficiency.

Some common services offered online include the balance enquiry, online statements, bill and utility payment, opening new account, opening new term deposit, paying the credit card bill, making a transfer to other accounts locally and worldwide, foreign exchange rates enquiry, updating details, requesting replacement PIN, registering for SMS alert, and sending and receiving messages to and from the bank.

Apart from these common services, Standard Chartered’s online banking service helps customers to access statements up to a year old and track the status of issued cheques as well as access loan summaries and payments.

To use this service, Standard Chartered also has promotions and raffles for customers who use internet banking often, with prizes that include cars, mobile phones and holiday trips.

Risks involved in Internet banking

Despite the advantages, there are also concerns when it comes to the risk involved in using online banking with the fraud operations witnessed in the recent years.

Answering these concerns, Karim Beg says, “RBS follows all required regulations to ensure security in the UAE and has undertaken several measures to offer robust security with regards to online banking and we take this very seriously.

“These include the use of security token that dynamically generates a password every 60 seconds, use of the Virtual Keyboard, 128 bit SSL encryption, VeriSign Certification and the disabling of the user id after defined number of unsuccessful login attempts.”

All of these efforts are put in place to ensure that customer information is secure, he adds.

There are also risks related to the accounts being hacked and money transferred without one’s knowledge. And for the banks, the growth of the Internet has offered greater flexibility but it has also brought new risks that must be guarded against such as phishing attacks.

“At HSBC, we use industry standard security technology and practices, focusing on three key areas – privacy, technology and identification - to safeguard our customers’ accounts, from any unauthorized access,” explains Abdulfattah Sharaf.

HSBC believes in customer education and continuously notifies customers of any new trends or security methods that are made available to combat fraud.

“We consistently use all communications channels available to tell our customers that HSBC does not send email messages asking customers to update or verify their personal and security details.

“Being one of the largest banks in the world, HSBC Bank Middle East leverages the expertise of HSBC from across the world to combat fraud,” adds Abdulfattah.

The bank also participates in local and international Fraud Forums to gain knowledge in the latest fraud issues to be better prepared in case similar incidences happened with customers. HSBC has also a very close liaison with the local law enforcement for the same.

Eco friendly model

Banks are also moving towards this technological advancement for being eco-friendly.

Standard Chartered has pursued the online avenue of banking to cut down on paper waste, saving trees and contributing to protecting the environment.

The banks website hosts a padlock symbol on the bottom right hand corner of the browser - known as a ‘digital certificate’ confirming the authenticity of the site.

Meanwhile, HSBC is in the process of changing the way they think about the business and how they operate; paper reduction initiatives are a very tangible example of how they are creating a more sustainable business model benefiting all stakeholders.