Mounting fatigue when queuing at the bank is something that is unlikely to have escaped any of us. Spending time waiting in line to perform some of life’s more mundane functions has long been considered something of a necessary evil – but is it? An increasing number of people are turning to alternative methods of conducting their banking affairs. The banks like to call it ‘multi-channel’ banking: To the rest of us this involves using our landline, mobile or Internet connection. Here, we take a look at the increasingly popular pastime of online banking and address some of those niggling security concerns associated with both Internet banking and online transactions in general.
All of the major banks in this country have launched very successful online operations in recent years, and all are unanimous in saying that online transactions form the platform for their future growth. As far as personal banking is concerned, many essential activities can now be carried out on the Web. Most of the banks offer the similar services in this respect.
Ulster bank’s ‘Anytime’ portal (www.ulsterbank.com) is a good example of the kind operation that the banks are running nowadays. Launched in 1999, it offers real-time balance and transaction reporting on all accounts (current, deposit and credit card). For those looking to get a little more ‘hands-on’ with their financial affairs, provision is made for statement lists, transaction searches and an export facility (by which financial information can be downloaded to external programs such as Microsoft Money). There are three payment modules for moving your money: The intra-account transfer (from your current to your deposit account, for example); Bill payment (to pre-defined beneficiaries, such as any of the main utility companies); and Third Party transactions (to somebody else’s account, possibly in a different institution). At the moment, transfers to third parties are limited to domestic accounts (ie, within the State), as are also limited in the value of transfer allowed.
Bank of Ireland’s Banking 365 (www.365online.ie) is the oldest kid on the block as far as online operations are concerned; the pilot scheme was launched in 1997. The service now receives roughly 130,000 unique log-ins per month. The site offers the standard day-to-day banking options, such as balance checks, transaction histories and credit transfers. Another useful aspect of the BOI portal is the ability to apply for a loan or a credit card online, obviating the need to actually visit the bank in person. If you fit the fixed criteria for what you’re looking for, you can get instant approval.
AIB offers a similar loan approval system at its site (www.aib.ie). Similarly, credit card limits can be increased with a few clicks of the mouse. Another useful service is the mobile top up facility: Pre-paid users can top up their credit using the funds in their AIB account. User numbers at the portal have grown by 30 per cent in the last year, and AIB are expanding their online and text services in a bid to continue to attract more customers.
As well as the standard online banking site, AIB offers a portal dedicated to personal finance (www.aib.ie/personal). Access to information here is open to the general public, not just AIB customers, and offers impartial advice on life’s larger financial decisions, such as buying a car and managing debt.
National Irish Bank (www.nib.ie) is a relative newcomer to the online field, but offers a site that has all the regular bells and whistles based on the same security structure as its parent company, the National Australia Bank. Like Ulster Bank’s ‘Anytime’ service, it offers an export facility by which information can be downloaded to your own personal finance software; useful for small businesses and those that like to keep a keen eye on their finances.
When Irish Permanent and the Trustee Savings Bank merged some time ago to form Permanent TSB, the biggest mortgage lender in the country suddenly found itself with a chain of banking outlets. It’s hardly surprising then that one of the most innovative features of the Permanent TSB site (www.permanenttsb.ie) is the provision for applying for a mortgage online. There’s no longer any need to head off to the local branch for an hour-long meeting with a mortgage advisor – an instant approval in principal can be given online. As well as the mortgage services, there’s the standard range of personal banking options, such as balance checking and money transfers.
Online and up
All of the banks that we spoke to are optimistic about the future growth of online banking: ‘User numbers on the business site grew by 80 per cent last year,’ said Neil Kelly, manager, E-banking Business at Ulster Bank. ‘We’d expect to see that trend continuing. We’ve changed the way we’re marketing it (e-banking) of late – we’re getting our frontline staff to point out the advantages in terms of cost and convenience to customers in the branches.’
Brian Howley, sales and marketing manager of Business Online for Bank of Ireland, is equally enthusiastic. ‘2000/2001 was a massive year for us, as it saw the launch of a new system, but since then growth has been constant. Our strategy is to move customers from paper to electronic transactions – it’s cheaper for both the customer and the bank. In some cases, processing a cheque can cost as much as EUR1.20, as opposed to a 24 cent electronic charge. It’s also offers far more in the way of convenience to the customer.’
So, is online banking replacing telephone banking as the convenient option as far as customers are concerned? Not yet, but it’s on it’s way, according to Katrina O’Connell, marketing manager for BOI’s Banking 365: ‘Telephone banking usage is still high, and people have to join the phone service before having the option of the Internet service, but more and more customers are heading directly online. We know that many customers would like to see more functionality with the online service, and we’re looking at ways to satisfy that need.’
The expansion of online services now seems to be top of agenda for the online banking. This is a distinct change in emphasis from recent years, when the buzzword was ‘security’. So, has the security issue faded into the background somewhat?
It seems to be the case. ‘Security issues are no longer a major concern for our customers,’ Brian Howley told PC Live!. ‘We use the highest form of encryption available on the market, with digital certificates. More importantly, we are a trusted party.’ Katrina O’Connell concurs: ‘Obviously, our customers are concerned about Internet security, but once they have tried our online services, their concerns are normally put to bed. They’re not afraid to make online transactions; a lot of our financial sales are made online now, such as credit cards and personal loans.’
Neil Kelly sees the prevalence of the Internet in everyday life as being largely responsible for the increased faith in online security that is being displayed by most consumers: ‘People are more comfortable with the Internet; security isn’t as much of an issue as it was two or three years ago. The current issues are functionality and portability. “Access” is now the key word.’
Inevitably access, ease of use and functionality will continue to increase in the coming months and years across the whole spectrum of electronic transactions. We’ll be using cash for less and less of our day to day commerce, and running an increasing amount of our finances from our laptops, handhelds and mobile phones. It might all sound very ‘Brave New World’ to some of you now, but be warned, it’s here right now, so you better get used to it.
What’s keeping your cash safe?
It’s hardly a secret that the Internet, as well as providing us with the greatest knowledge base known to man, has also attracted a rather large quantity of general malcontents and wrongdoers in its relatively short life. The retail banks are well aware of this and have taken their own steps to counter the threat. The first line of defence is the registration process itself. Once a customer contacts the bank to request access to the online service, they are normally sent a Personal Identification Number (PIN) in the post. This must be used in conjunction with a password or registration number to gain access to their accounts. Further security questions might be asked, such as the last four digits of their contact phone number or their date of birth. In this sense, online banking is as secure as owning an ATM card.
However, tales of hackers on the net, with the ability to intercept information and use it to their own ends, have long been doing the rounds. What protection do our online transactions have from these?
This is where the worlds of online banking and e-commerce merge. Any responsible e-store will use the latest security technology to ensure the privacy of your financial transactions, and this is something that all banks have to do.
So, what is considered as the latest security, and how does it work? Here are a couple of key technologies that are being deployed by responsible traders at their Web-stores, to ensure that your information doesn’t get into the wrong hands:
Secure Electronic Transaction (SET)
SET is a system for ensuring the security of financial transactions over the Internet. It is supported by Mastercard, Visa, Microsoft, Netscape and others. With SET, a user is given an electronic wallet (digital certificate). A transaction is conducted and verified using a combination of digital certificates and digital signatures between the purchaser, a merchant and the purchaser’s bank in a way that ensures privacy and confidentiality. SET makes use of Netscape’s Secure Sockets Layer (SSL), Microsoft’s Secure Transaction Technology (STT), and Terisa System’s Secure Hypertext Transfer Protocol (S-HTTP). SET uses some but not all aspects of a public key infrastructure (PKI).
Secure Sockets Layer (SSL)
SSL is a set of rules followed by computers connected to the Internet. They cover encryption (guarding against eavesdropping); data integrity (ensuring your information doesn’t get tampered with during transmission); and authentication (verifying that the party you are dealing with is genuine). Spotting whether SSL is active at the website you are visiting is a relatively simple affair. Firstly, you can check the URL displayed in the browser window. An ‘s’ added to the end of the usual http part of the address (i.e. https) indicates that SSL is in effect. In Netscape Communicator 4.0 and above, a closed padlock appears in the browser window when in secure mode. Similarly, a closed padlock will appear in Internet Explorer 4.0 and above.
If a website doesn’t appear to have this sort of security, don’t part with any of your details – or at least contact them for further security information.
All of the banks offering online services are pleased to report that there have been no adverse security issues to date – an indication of how effectively they have tackled the issue. E-commerce sites using proper security measures are equally confident regarding this once troublesome problem.
The main outstanding concern of online retailers is summed up by Colm Lyons, managing director of Realex – a Dublin-based company specialising in credit card transaction services for businesses: ‘The main issue for many businesses is that it’s difficult to verify that the person using the credit card is actually the owner of the card. All that’s set to change in the near future with the introduction of Visa and Mastercard’s new ventures “Verified by Visa” and “Mastercard Secure”, which will introduce a password system into the process.’
Transaction trend – The Mpark mobile commerce application
Ok, it may just be another device for squeezing cash out of the much-persecuted Dublin motorist, but Dublin Corporation’s Mpark system is a great example of the current trend of moving from paper to electronic transactions. For those of you that haven’t come across it before, the whole thing centres on that blue button that can be found on pay and display machines in the high-rate zones between Parnell Square and St Stephen’s Green, Dublin. The user simply has to call up a number on their mobile phone and follow the pre-recorded instructions. Inputs are made using the phone’s keypad, and once the desired value is selected, a pay-and-display ticket is printed off using the regular green button on the machine as normal. So, there’s no need to carry all that loose change around in your pocket for parking anymore.
16/02/04
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