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Ancient Greece provides evidence of banking with Greek temples and some private and civic entities, conducting financial transactions such as loans, deposits and currency exchange. Credit also existed whereby a moneylender in one Greek port would write a credit note for the client who could “cash” the note in another place. There are records of loans from the 18th century BC in Babylon that were made by temple priests to merchants. Effectively the world’s first ever banks were the religious temples which were the absolute centres of the respective communities.

Charging interest on loans and paying interest on deposits became more highly-developed and competitive in secular Ancient Rome – ’secular’ is important to note as the major religions of the day considered the charging of interest to be immoral. The expansion of trade and commerce, especially into Europe, facilitated the need for the increasing provision of financial services.

In Britain, the modern age of banking began in 1640 when King Charles I, needed cash to pay the English army that was being raised to fight against Scotland, seized the gold bullion that many merchants and nobles had placed in the Tower of London for safe-keeping. The 2nd Bishop’s War soon ended the British Parliament returned the bullion back to its owners.

Following the Bishops war in 1642, further warfare broke out with the Great Civil War between the King and Parliament. London was considered the stronghold of Parliament and was the safest city in the Kingdom. This meant led to mistrust of the government and people who did not wish to have their bullion seized by one side or the other placed their gold in the hands of goldsmiths in the city, who naturally had their own methods of safe-keeping.

In Britain Goldsmiths were considered the first private bankers. When depositors banked their gold they received ‘goldsmith’s notes’. These notes essentially were the first bank notes. People were willing to accept payment by these notes as they knew they backed 100% by a deposit of gold.

Current and future developments in banking are linked to the world-wide-web and a vast expansion of trade and commerce which have given rise to an emerging form of banking. Internet communities, functioning similarly to ancient communities, have been established to connect lenders and borrowers. Their aim is to cut out the banks. However looking at the size of lends in these communities and the lack of more complex lending ability or products we are confident that banks and banking staff will remain as important as ever far into the future.

Charging interest on loans and paying interest on deposits became more highly-developed and competitive in secular Ancient Rome – ’secular’ is important to note as the major religions of the day considered the charging of interest to be immoral. The expansion of trade and commerce, especially into Europe, facilitated the need for the increasing provision of financial services.

Current and future developments in banking are linked to the world-wide-web and a vast expansion of trade and commerce which have given rise to an emerging form of banking. Internet communities, functioning similarly to ancient communities, have been established to connect lenders and borrowers. Their aim is to cut out the banks. However looking at the size of lends in these communities and the lack of more complex lending ability or products we are confident that banks and banking staff will remain as important as ever far into the future.

In the present day banking scenario, the Online banking services have helped the banking customers in a significant manner. One can easily identify the unprecedented changes that have been taking place in the banking sector ever since the economic reforms were launched way back in 1991.

Two of the biggest segments of the Indian economy that have seen the best of these changes are the Online Banking services and fixed term deposit segments. Both these segments have been able to encourage the prospective customers to think beyond the previously framed rules and regulations.

In the world of Online Banking services and fixed term deposit, things have started changing like never-before. With the procedures and mediums of performing the banking services on the World Wide Web, things have changed and are much easier these days. Nowadays, a prospective loan applicant can fill an online form to request for a loan of any kind. Similarly, a banking customer can make an online request to view his account balance, request for a cheque book or statement, perform funds transfers and even issue a Demand draft or an e-cheque. These are just a few of the things one can perform by going online.

A customer can implement some useful things to ensure a hassle-free stint at the banking portals, such as:

Avoid banking at Cyber Cafés

Getting aware of phishing emails and scams

By remembering PIN and card together and by not keeping them in public view

Not keeping easy PINs, which can be easily cracked and avoid their sharing

By avoiding any passage of information related to accounts

By not replying to unknown emails

By immediately reporting a lost or stolen card and lodging a FIR with the police

However, there are certain things that need to be taken care off while using banking services on the Internet. The banking services must not be accessed, frequently, from a common PC or a laptop as that may lead to data leakage, leading to huge financial liabilities and losses. A person, desirous of using these services, must check the authenticity and encryption level of the website, on which he expects to perform banking tasks.

The advent of online services has helped the banking community to have a sigh of relief and get much-needed relief from the earlier times of banking, where standing in long-queues was a common practice.

A customer can easily opt for a fixed deposit by using the online banking services. He can also opt for a saving or current account while submitting his application on the Internet. However, he still needs to submit the necessary paperwork for that, besides fulfilling the eligibility criteria.

Many leading banks in the world of Indian banking sector such as State Bank of India, Kotak Bank, HDFC Bank, UTI, Standard Chartered and ABN AMRO etc. to name a few, have already started their online banking operations. Many other new names such as Barclays Bank have also entered in the Indian banking segment and have created a name for themselves in a short span of time. The greatest benefit of these services is that a customer gets banking solutions within a fraction of a second and moreover, the banking staff is relieved from some of its duties leading to more efficiency.

Thus, it can be easily concluded that the Online Banking services have largely stimulated the Indian economy and banking sector to a considerable extent. The banking customer of today is a lucky fellow, who just cannot believe his luck.

 

Security is one of the key requirements by financial customers today as they increasingly use the Internet to not only manage their financial transactions online but also to buy different financial products. Online finance community is the buzz word of the young Indians. With the increased per capita income and shortage of time, people are now preferring purchase through online mode. Swiping a credit card has become a common phenomenon. In such a scenario, banks and other financial institutions should invest in and promote the security of their online websites stand to differentiate themselves from their competitors and win more customers. The rapid growth in online phishing along with identity scams and increasing regulatory pressure has ensured that security is a critical concern among the online finance community in India.

Day by day banks are exploring a variety of online security threats. The key ones among them are phishing, keyboard logging and man-in-the-middle who have emerged as serious threats over the last 18 months. The interesting part of this security story is that these threats are something that the customer must protect themselves against and requires a lot of customer education and financial literacy. When a bank realises that there is a phishing attack; there is enough possibility that some of the customers would have already been affected by this . There are number solutions available to prevent each of the above mentioned threats and it is important that the banks implement them as soon as possible to make the online finance community more secured.

Apart from phishing, the other disruptive threats that affecting the Indian online finance community are spamming, virus infusion and Trojans. These threats have been there for a long time but cannot be ignored. The spectrum of affected areas by these threats range from identity theft of bank’s online customers to loss of transactional integrity for online deposits and withdrawals. There a number of attacks associated with Indian online finance community which require large investments and may not be justifiable with the customer base of some banks. As a matter of fact, there are many banks who are willing to compensate for the fraud losses but not picking up a solution to prevent the same.

The online finance community’s need for security policy must be continuously monitored and updated as a result of newer security threats. This constant updation is required because the bank has to continuously evaluate the risks, the cost of technology solutions and even the upgradation. Then it gets all the more challenging due to a variety of technological solutions available in the market, each addressing one or the other problem but none offering a one-stop solution. A number of online banking users are unaware regarding types of threats they face online and the precautions that they must take to counter them. Hence, financial literacy is a must for the Indian online finance community. The customer education becomes a key element to prevent the manifestation of a number of risks associated with these frauds.

The growth of online finance community also depends a great deal on the customer-targeted communication from the banks to alleviate the fears of all these above risks. The experienced eyes of an Internet-savvy can detect potential phishing attempts when compared with a customer comfortable with the traditional mode. The beginners or users who have started adopting online banking do not continue to use them if they are struck by a fraud or attempts of fraud. This is due to the fact that their confidence on such a channel is drastically reduced and fall back on the traditional modes of banking. Hence, to conclude, the regulatory bodies should enforce online security norms,and reward initiative and innovation from the banking and IT communities.