E-banking is catching on
As criticism grows on banks for the fees charged on a number of teller transactions, electronic banking (better known as e-banking) figures as a persuasive answer for cost-free, or at least low-cost, banking. Fees charged by banks on e-transactions are significantly lower than those charged at teller counters or automatic teller machines (ATMs), and are at any rate the cheaper way to do banking for both private individuals and businesses. Electronic transactions minimize the cost to the bank, ultimately also benefiting the customer. A long list of services can be processed electronically: money transfers to own or third-party accounts, payment of bills, payments to the tax office and financial transactions are only some of the normal operations that can be carried out on the Internet by bank customers, whether individuals or companies. Beyond traditional banking, the range of e-banking services is being constantly expanded to include payment of insurance premiums, hotel bills, travel expenses, subscriptions to publications and car rental expenses. Behind such new e-banking services lies a contract between the business and the credit institution, agreeing for payments to be made via the Internet for a small fee, which, depending on the business, is either borne by the business itself or in some cases by the customer. Internet banking growth should go geometrically in parallel with the growth of the Internet itself, gradually dragging along the expansion of offered services. Data from Greek banks shows that the share of Internet banking currently accounts for 15 percent of all bank transactions. The rate of Internet banking growth is estimated to be around 25 percent on an annual basis. According to the same estimates, the value of current Internet banking is over -10 billion annually, while the number of active users (i.e. those who used e-banking at least once in the past month) stands approximately at 400,000. The advantage of e-banking is not just in the direct, easy, safe and simple money-transfer and payment transactions. Low-cost transactions are among the primary advantages of e-banking at a time when the shrinking of interest rate spreads is pushing banks to look for new sources of income. Greek banks have an extra reason to encourage their customers to use e-banking, to the extent that their efforts to cut costs involves reducing the number of branch employees and trim the costs involved in the transportation and handing of normal cash. Security Besides, the fact that e-banking users are «sophisticated» customers, the method works like a safety valve preventing to a large extent the risk of arbitrary and abusive practices on the part of banks. Officials from banks’ Internet banking departments believe that e-banking customers are the most informed and demanding, but at the same time also the most loyal. Gradually, as the market matures, the evaluation criteria of the best electronic bank are expected to increase and become stricter, beyond security and costs, to include the range of services offered.
