All high street banks offer online facilities (hence the phrase ‘clicks and mortar services’) whilst. other banks only exist online.

The types of services offered by these two kinds of financial institution are essentially the same. but online-only banks, such as those listed in our Online Banking section (www.uknetguide.co.uk/Finance/Banks_and_Banking/Online_Banking.html) offer more competitive rates. However, they can’t, of course, provide the face-to-face customer service of their high street rivals

Advantages

Flexibility is the first and most obvious advantage of online banking. Your account can be quickly accessed at any time of day or night, 365 days a year, doing away with the inconveniences of restrictive banking hours, public holidays and queuing. Plus, the only expense is the cost of the time spent online charged by an Internet service provider. (banks sometimes offer free web access as a reward for opening online accounts). But these points are hardly enough to attract people who are loyal to their current banks. So, various other incentives are used as lures. Despite the fluctuating nature of interest rates, many excellent deals superior to those offered by traditional banks are available on Internet-only savings accounts, online credit cards, personal loans and mortgage deals. This is because Internet banks are cheaper to run than high street operations, so savings can be passed on to customers. As with old-style banking, balances and statements can be viewed, funds transferred between accounts, bills paid, standing orders arranged and so on. Debit and credit cards and chequebooks usually come as standard, while arrangements are made to provide customers with use of other banking providers’ ATMs.

Getting started

First visit the website of the bank with which you are interested in opening an account. All high street banks have their own sites and you can find links to these in our High Street Banks category (www.uknetguide.co.uk/Finance/Banks_and_Banking/High_Street_Banks.html) or for online only services, browse our Online Banking category mentioned above.

Acceptance is, of course, not automatic, and the process is not totally paperless. At some point you will have to sign an application form and post it to the bank, because the law doesn’t yet recognise electronic signatures. If you do not already have an account with the establishment, you will also be required to identify yourself in some way before being allowed to activate your account. Once this has process has been successfully concluded, transactions can be carried out at any time simply by returning to the bank’s website and logging-on using a secure password.

Security

There are a number of steps that can be taken before using Internet banking services to protect yourself from the risk of being a victim of fraud. The most up-to-date versions of Internet browsers are strongly recommended because they are equipped with the most advanced security systems. Updates of Netscape Navigator, Microsoft Internet Explorer and the like are available to registered users free of charge from the provider’s’ websites. Most data sent over the Internet can be intercepted and read by anyone because it is unencrypted. To avoid this happening, protect the secrecy of information you transfer by encrypting it using Secure Sockets Layer (SSL) technology - the industry-standard method for protecting web communications. The technology means that data sent or received is encoded in a way that makes it almost impossible to read by anyone for whom it is not intended. Unscrupulous interceptors will see only a garbled and meaningless stream of data.

Safety tips

• Keep your ID, password and PIN number in your head only.
• Never write them down.
• Never tell them to anyone else.
• Never send them via e-mail. E-mails can be easily intercepted.
• Never use an obvious password – such as ‘password’ or something someone could easily guess.
• Always close your Internet browser once you have completed your banking, so your account details can’t be accessed by someone using the same PC.