What is an Internet Bank?

Online banking is also called online banking, online banking or electronic banking. It is a virtual counter set up by banks on the Internet. Banks use network technology to provide customers with account opening, account cancellation, inquiry, reconciliation, intra-bank transfers, and inter-bank transfers through the Internet. , Credit, online securities, investment and wealth management, and other traditional services, enabling customers to safely and conveniently manage current and time deposits, checks, credit cards, and personal investments without leaving the home. ^[1]

On October 18, 1995, SecurityFirst Network Bank (SFNB), the world's first financial organization named online banking, opened its "virtual door." By the end of 1997, there were 103 financial websites that could be traded in the United States, including banks and depository institutions. By the end of 1998, it had jumped to 1,300. With its high deposit interest and real-time, convenient, fast, low-cost, and feature-rich 24-hour service, online banking will be favored by more and more customers, and its number will also grow rapidly, becoming a very important one for the future banking industry. component.

In February 1996, Bank of China set up a homepage on the Internet and first published information on the Internet. At present, financial institutions such as Industrial and Commercial Bank, Agricultural Bank, Construction Bank, CITIC Industrial Bank, China Minsheng Bank, China Merchants Bank, Pacific Insurance Company, China Life Insurance Company have established websites on the Internet. ^[3]

The characteristic of online banking is that as long as the customer has an account number and password, he can enter the online banking to process transactions through the Internet all over the world. Compared with traditional banking, the advantages of online banking are reflected in the following points:

(1) Greatly reduce the bank's operating costs and effectively improve the bank's profitability. Establish Internet Banking II business, mainly using public network resources. There is no need to set up physical branches or business outlets, which reduces staff praise and improves the efficiency of the bank's back-office system.

(2) No time and space restrictions are conducive to expanding the customer base. Online banking has broken the geographical and time restrictions of traditional banking, and has 3A characteristics, that is, it can provide customers with financial services at any time (Anytime), Anywhere (Anywhere), and in any way (Anyhow), which is conducive to attracting And retain high-quality customers, and can actively expand the customer base, open up new sources of profit.

(3) It is conducive to service innovation and provides customers with various types of personalized services. The sales of financial products such as insurance, securities, and funds through bank branches are often greatly restricted, mainly because it is difficult for general branches to provide customers with detailed and low-cost information consulting services. Using the Internet and bank payment system, it is easy to meet the needs of customers for consulting, purchasing and trading a variety of financial products. In addition to handling banking business, customers can also conveniently buy and sell stocks and bonds online. Online banking can provide customers with more suitable Personalized financial services. ^[4]

From a technical perspective, online transactions require at least four functions, namely the merchant system, e-wallet system, payment gateway, and security authentication. The latter three are necessary conditions for online payment and technical requirements for online banking operation:

1.Electronic wallet system

E-wallet is a payment tool commonly used in e-commerce shopping (especially small shopping) activities. Wallet users usually have accounts in the bank. When using an electronic wallet, first install the corresponding application software, and then use the electronic wallet service system to enter the electronic money in your account. When a payment is received, the user simply clicks the item on the computer. The system has a function management module for electronic money and electronic wallet, which is called electronic money wallet manager. Users can use it to change passwords or confidentiality methods, etc., and use it to view accounts, lists and other data of electronic money receipts and payments in their bank accounts. An electronic transaction recorder is also provided in the system, and customers can learn about their shopping records by querying the recorder.

2.Payment gateway

The payment gateway is the interface between the bank's financial system and the Internet. It is a group of servers that connect the bank's internal network with the Internet. Its main role is to complete the communication, protocol conversion, and data encryption and decryption between the two to protect the bank's internal network security. Without the payment gateway, the electronic payment function of online banking will not be realized.

With the continuous growth of the online market, the processing of online transactions will become an essential function of every payment system. Today's merchants are often inefficient in terms of data transmission. With payment gateways, this problem can be effectively solved. It enables banks or dealers to continue to deal with the rapid development of the online market and the continuous increase in online transaction volume. Keep it as efficient as it should be.

3. Safety certification

The Certification Authority (CA) is an e-commerce certification authority established to resolve the identities and credit standing of all parties involved in transactions in e-commerce activities, maintain the security of transaction activities, and fundamentally ensure the smooth conduct of e-commerce transaction activities: The trust of all parties in online transactions, improving the safety of online shopping and online transactions, controlling transaction risks, and promoting the development of e-commerce are all essential. ^[4]

(1) Classified according to the presence or absence of entities.

According to the existence of physical outlets, we can divide online banking into two categories:

The first type is a special-shaped electronic bank that is completely dependent on the Internet. It is also called a "virtual bank". The so-called virtual bank refers to an online bank without an actual physical counter as a support. This kind of online bank generally has only one office address and no branches Institutions also have no business outlets. They use high-tech services such as the Internet to establish close relationships with customers and provide comprehensive financial services.

The other is to use the Internet to carry out traditional banking transactions on the basis of existing traditional banks. That is, traditional banks use the Internet as a new service means to provide customers with online services. In fact, traditional banking services are on the Internet. extend. This is the main form of online banking, and it is also the online banking development model adopted by most commercial banks. ^[4]

Online banking plays a very important role in e-commerce. Whether it is a traditional transaction or an emerging e-commerce, the payment of funds is an important part of completing the transaction. The difference is that e-commerce emphasizes the electronicization of the payment process and payment methods. Whether the electronic and network of payment methods can be effectively realized is the key to the success or failure of online transactions, which is directly related to the development prospects of e-commerce. The electronic money created by online banking and the unique online payment function provide strong support for the realization of electronic payment in e-commerce. As the ultimate performer of electronic payment and settlement, online banking plays a role of connecting buyers and sellers. The electronic payment service provided by online banking is the most critical element and the highest level in e-commerce.

Generally speaking, the business types of online banking mainly include basic business, online investment, online shopping, personal finance, corporate banking and other financial services.

1. Basic online banking business

The basic online banking services provided by commercial banks include online inquiry of account balances, transaction records, downloading data, transfers and online payments.

2. Online investment

Due to the developed financial service market, there are many types of financial products that can be invested. Foreign online banking services include stocks, options, mutual fund investment, and CDs trading.

3. Online shopping

The online shopping assistance service set up by the commercial bank's online banking greatly facilitates customers' online shopping and provides customers with high-quality financial services or related information services on the same service variety. The competitive advantages of commercial banks in the traditional competition are strengthened.

4. Personal financial assistant

Personal financial assistant is a key service category developed by foreign online banking. Major banks have transferred their wealth management assistants in the traditional banking business to the Internet to provide customers with various financial management solutions, provide advice and advice, or provide financial service technical assistance through the network, thereby greatly expanding the scope of services of commercial banks. And reduce related service costs.

5.Corporate Banking

Corporate banking services are one of the most important parts of online banking services. Its service types are more diverse and more complex than those of individual customers, and they require more relevant technologies. Therefore, the ability to provide online banking services to enterprises is one of the symbols of the strength of commercial banks. Generally, small and medium-sized online banking or pure online Banks can only provide part of this service, or not even provide it at all.

6.Other financial services

In addition to banking services, the online banking of large commercial banks provides customers with a variety of financial service products, such as insurance, mortgages, and mortgages, in conjunction with other financial service websites, in order to expand the scope of online banking services. ^[4]

In order to ensure security, online banks generally introduce authoritative third-party authentication mechanisms and use third-party certification centers' certificates to complete online transactions in order to reliably solve online information transmission security and credit issues. At present, the third-party certification bodies of domestic online banking are usually

1) Avoid using search engines

Obtain online banking website addresses from regular banking outlets and keep in mind that you should avoid using third-party channels such as search engines when logging into online banking. Because some fake online banking URLs are likely to be hidden in the search results, once you click to enter, it is likely to fall into the trap unknowingly. The best way is to register the correct Internet Banking URL in your browser's favorites, and future visits are entered by clicking the link in the favorites to ensure that the wrong URL will not be accessed.

2) Set mixed password and dual password

The password setting of online banking should avoid related to personal data. It is recommended to use a mixed number and letter password to increase the difficulty of password cracking and keep it in a safe place. The transaction password should be the same as the credit card password.

3) Check transaction records regularly

Regularly check the business records of transfers and payments handled by online banking, or customize account change notifications via SMS to keep track of account changes at any time.

4) Safekeeping of digital certificates

Avoid using online banking on public computers to prevent confidential information such as digital certificates from falling into the wrong hands.

5) Be wary of email links

Online banking generally does not send "system maintenance, upgrade" prompts via email. In case of major events, the system will suspend service and the bank will announce customers in advance. So when you get a similar email, beware of fraud. Once the information is found stolen, you should immediately change the relevant transaction password or report the loss of your bank card.