Advertiser Disclosure
History of Online Banking: How Internet Banking Went Mainstream Learn how banking online has become standard practice. By Ruth Sarreal
(https://www.gobankingrates.com/author/ruths/) October 7, 2017 Share Tweet
It’s hard to imagine there was once a time when all banking was conducted at actual brick-and-mortar financial institutions. Even the
Get a New Checking Account
simple task of checking your account balance used to require a trip to
0.65 % APY
the bank. Today, you can check your account balance, send money,
Online Checking Account
transfer funds and more — right from your smartphone, computer or tablet.
Effectively manage your bills Watch your money grow
Although so many people take advantage of the digital banking tools
Open Account
offered online today, most people don’t know the full history of online banking. Learn how this innovative form of banking evolved and gained mainstream popularity — and also learn how you can save money with an online bank (https://www.gobankingrates.com/banking/online-banks-saving-money/).
The History of Banking via the Internet Banking has come a long way since the days of regular visits to tellers. Now a customer can take a picture of a check with his phone to deposit it into a savings or checking account (/checking-accounts/) and receive SMS banking alerts in the form of texts. The evolution of online banking started in the 1980s when the definition and the practice of internet banking were far different than what exists today. Join Today: 10 Best Online Banks (https://www.gobankingrates.com/banking/best-online-banks2017/)
What Is Online Banking? When the term “online banking (/banking/banks/online/)” initially gained popularity in the late 1980s, the phrase referred to the use of a terminal, keyboard and television or computer monitor to access one’s bank account using a landline telephone. Now the online banking definition, or net banking definition, includes any electronic payment system that allows customers of a financial institution to conduct financial transactions through the financial institution’s internet-enabled website or app. Here’s where it all began.
Jump-start Your Savings with a $10,000 Deposit
1.60
% $1 To Earn APY Online Savings Account APY No Minimum Deposit Open Account No Transaction Fees Member FDIC
1981: New York City Banks Test At-Home Banking The early version of what was considered online banking began in 1981. New York City was the first place in the U.S. to test out the innovative way of doing business by providing remote services as four of its major banks — Citibank (/banking/financial-institutions/citibank-national-association/), Chase Manhattan, Chemical Bank and Manufacturers Hanover — made home-banking access available to their customers.
1983: Bank of Scotland Institutes First UK Internet Banking Services The Bank of Scotland offered customers the first UK internet banking service called Homelink. People had to connect to the internet through their TVs and telephones to pay bills and transfer money. What is now known as online banking was formed during this time.
1994: Stanford Federal Credit Union Offers U.S. Internet Banking In October 1994, Stanford Federal Credit Union became the first financial institution in the U.S. to offer internet banking to all of its customers. A year later, Presidential Bank became the first bank in the country to offer customers access to their accounts online. The advantages of internet banking systems began to catch on as many other banks soon followed Presidential Bank’s lead. Open a New Savings Account
1996: NetBank Is Founded
1.60 % APY
The evolution of internet banking continued with the first truly
Online Savings Account
successful internet-only bank, NetBank — which was founded in 1996 and closed in 2007. The NetBank name and domain were acquired by BofI Federal Bank in 2012. Are You a Customer? How to Find and Use Your NetBank Login
No monthly fees No minimum balance
Open Account
(https://www.gobankingrates.com/banking/how-find-use-netbanklogin/)
1999: Bank of Internet USA Is Founded Bank of Internet USA was officially founded as part of the incorporation of BofI Holding Inc. on July 6, 1999, making it America’s oldest internet bank; it opened for business on July 4, 2000. The conveniences and perks of internet banking became obvious to many customers: higher interest rates online (https://www.gobankingrates.com/banking/online-banks-vs-traditional-banks-best-interestrates/) than with traditional banks, greater access to accounts, and online banking transfers, to name a few.
2000: 80% of U.S. Banks Offer Internet Banking As the evolution of online banking continued, it slowly gained popularity in e-commerce. When bigname banks began to offer online products and services, e-banking seemed to gain legitimacy for consumers. By 2000, online banking had become mainstream: An overwhelming 80 percent of banks in the U.S. were offering internet banking services. Related: 6 Banking Services That Will Be Obsolete in 10 Years (https://www.gobankingrates.com/banking/5-bank-services-obsolete-10-years/)
2001: Bank of America Has 3 Million Online Customers In 2001, Bank of America made history as the first financial institution to gain more than 3 million online banking customers, about 20 percent of its customer base at the time. More people were starting to realize the advantages of online banking.
2009: Ally Bank Is Launched In 2009, Ally (/banking/financial-institutions/ally-bank/) Bank joined the ranks of internet-only banks. “The Ally Bank brand was launched to provide customers with a straightforward, customer-centric approach to banking as consumer preferences continue to shift toward online banking,” said Diane Morais, CEO and president of Ally Bank.
2010: Online Banking Is Growing Faster Than the Internet In a 2010 survey on consumer billing and payment trends, Fiserv, a financial services technology company, found that online and mobile banking were growing at a faster pace than the internet. Online banking has continued to evolve as more innovations and conveniences have been offered. Bank of Internet USA has introduced a number of new and technologically advanced products and services since its inception, including mobile internet banking apps for the most popular mobile devices, mobile check deposit, Popmoney for money transfer via text or email and EMV-chip debit cards.
2017: Online Banking Is Standard Practice Online banking has become so widespread today that customers expect accounts to include free online banking, and many banks only operate on the internet, effectively decreasing overhead costs to offer more competitive rates and enjoy higher profit margins. “As an online bank, Ally doesn’t have branches, which allows it to offer customers great rates, 24/7 service, and innovative and competitive deposit products,” Morais said. Find Out: How to Open a Bank Account Online (https://www.gobankingrates.com/banking/openbank-account-online/)
Jump-start Your Savings with a $10,000 Deposit
1.60
% $1 To Earn APY Online Savings Account APY No Minimum Deposit Open Account No Transaction Fees Member FDIC
Online Banking Security: How Accounts Stay Safe Today, online banking is one of the most popular ways for people to manage their money. Banks ensure internet banking security for customers by using encryption technology — such as secure sockets layer –verifying internet banking account activity, incorporating account safety features, and constantly warning consumers of ways to avoid threats such as identity theft.
Consumer Responsibility for Secure Online Banking Online banking customers should take measures to practice safe internet banking. The FDIC advises consumers to take the following precautions: Research a bank prior to opening a paid or free online banking account. Be aware of fraudulent websites made to look identical to actual bank sites. Always make sure the bank is FDIC-insured. Keep personal online banking information secure. Know your rights.
The Future of Online Banking Despite the slow adoption rate in the early part of the history of internet banking, online banking has proven it’s here to stay. Online banking features and services (https://www.gobankingrates.com/banking/online-bank-services-glance/) have greatly evolved from the first days of internet banking history — from the need to use a landline to access account balances in the 1980s to having the ability to transfer funds, pay bills and deposit checks with just the click of a mouse or on a mobile device today. As technology continues to advance, banking online will likely become even easier and more ingrained in the average consumer’s lifestyle. Up Next: 7 New Banking Technologies You’ll See in the Next 5 Years (https://www.gobankingrates.com/banking/6-banking-technologies-youll-see-next-5-years/) Barri Segal (https://www.gobankingrates.com/author/barrisegal/) and Laura Woods (https://www.gobankingrates.com/author/lauraw/) contributed to the reporting for this article.
Open a New Bank Account $300 statement credit with Rewards a Checking $2,500 direct deposit in 60 Account days
Open Account
1.60
% $1 To Earn APY Online Savings Account APY No Minimum Deposit Open Account No Transaction Fees Member FDIC
1.30
% $25 To Open Online Savings Account APY Free mobile banking Open Account $25 min. deposit $0 money transfers
Checking Account Earn up to $600 with
qualifying activities. Member FDIC
Open Account
1.55
% $0 Min. Deposit High-Yield Savings Account No FeesAPY Open Account No Minimum Balance FDIC Insured Sponsors of
See Comments
Check Out the Next Article
How to Deposit Cash to an Online Bank Account (https://www.gobankingrates.com/banking/depositcash-online-bankLearn how to get cash into an account/) account with an online-only bank. (https://www.gobankingrates.com/banking/depositcash-online-bank-account/) (https://www.gobankingrates.com/banking/deposit-cash-online-bankaccount/)
(http://www.zergnet.com/i/2769890/38067/0/0/75256927/1) (http://www.zergnet.com/i/2195641/38067/0/0/75256927/2) (http://www.zergnet.com/i/2000256/38067/0/0/75256927/3) (http://www.zergnet.com/i/1861524/38067/0/0/7525692
This Is How Much Prince Harry Is Donald Trump’s True Net Worth 5 Things You Should Never Buy at 5 Places You Should Never to Use a Really Worth Revealed Walmart Debit or Credit Card (http://www.zergnet.com/i/2769890/38067/0/0/75256927/1) (http://www.zergnet.com/i/2195641/38067/0/0/75256927/2) (http://www.zergnet.com/i/2000256/38067/0/0/75256927/3) (http://www.zergnet.com/i/1861524/38067/0 Sponsored Links by Zergnet
Related Articles
(https://www.gobankingrates.com/banking/advantages(https://www.gobankingrates.com/banking/deposit(https://www.gobankingrates.com/banking/ally(https://www.gobankingrates.com/banking disadvantages-online-savingscash-online-bank-account/) bank-review-online-savingsbest-banks-millennials/) accounts/) account/) How to Deposit Cash to an Online Bank Account What Are the Best Banks for Millennials?
(https://www.gobankingrates.com/banking/deposit-cash(https://www.gobankingrates.com/banking Pros and Cons of Online Savings Accounts Ally Bank Online Savings Account Review: High online-bank-account/) banks-millennials/) (https://www.gobankingrates.com/banking/advantagesYields and Better Service By Cynthia Measom By Sabah Karimi disadvantages-online-savings-accounts/) (https://www.gobankingrates.com/banking/ally-bank(https://www.gobankingrates.com/author/cynthiameasom/) By John Csiszar (https://www.gobankingrates.com/author/s review-online-savings-account/) By Sabah Karimi
(https://www.gobankingrates.com/author/sabahkarimi/)
(https://www.gobankingrates.com/author/johncsiszar/)
> Banking (https://www.gobankingrates.com/banking/) > Banks (https://www.gobankingrates.com/banking/banks/) (https://www.gobankingrates.com/banking/banks/online/) > 7 Reasons Online Banking Makes Cents
>
Online
FEATURED IN:
(https://www.facebook.com/GoBankingRates) (/)
(http://www.pinterest.com/gobankingrates/)
(https://www.instagram.com/gobankingrates)
(https://twitter.com/GoBankingRates)
(https://www.linkedin.com/company/1098730)
About Us (https://www.gobankingrates.com/about/) Contact Us (mailto:
[email protected]) Press (/about/press-releases/) Our Team (https://www.gobankingrates.com/meet-the-team/) Calculators (https://www.gobankingrates.com/banking/calculator/) Sitemap (https://www.gobankingrates.com/sitemap/) Terms of Use (https://www.gobankingrates.com/privacy-policy/) Privacy Policy (https://www.gobankingrates.com/privacy-policy/) Advertiser Disclosure (https://www.gobankingrates.com/advertiser-disclosure/) Advertise (https://www.consumertrack.com/contact-us/) Email Opt Out (https://products.gobankingrates.com/unsubscribe/) Careers (https://www.consumertrack.com/join-our-team/) © 2018 GOBankingRates. All Right Reserved.
Newsletter Sign-up:
Enter Your Email
Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all financial or credit offers available.