Now days pay slips, paper bills, checks often seems to be disappearing. Now bank customers can manage and to great extent control their transactions and accounts using the internet. All these are possible through internet banking systems where secured websites are used by their customers to make financial transactions. Online banking uses the computer technology to give their customers the option of bypassing the time-consuming, paper-based aspects of traditional banking in order to manage their finances more quickly and efficiently

     Initially started with a fee now this feature is free by most of the banks, in fact new age customers choose to open their accounts only in those banks which have this feature. On the other hand most banks are turning to internet banking because it not only provides cut their paper work, work load but also help them go global. It is important for the banks because your business need to be either everywhere or no where. Historically the major financial institutions have used powerful computer networks and IBM computers to automate millions of daily transactions; now day’s customer’s receipt is the only paper record at the point of sale. With PCs and laptops becoming cheaper and the internet networks available everywhere banks are utilizing these potentials to their economic advantages by adapting those same internal electronic processes to home use. With the help of Internet Banking banks need fewer buildings as their locations because most of these features are available to their customer’s right inside their home. Also these are available twenty four hours a day and 365 days a year.

     The online banking provides several functions and Electronic bill presentment and payment ( EBPP) is most popular and crucial. Customers can also perform Funds transfer between their own checking and savings accounts, or to another customer's account in some cases.  Several banks also allow Investment purchase or sale. Several banks allow you to buy stocks or mutual funds using special account called “demat”. Customers can also apply for a new Loan and make transactions, such as repayments.  There are certain futures which are non-transactional in nature but essential for example online statements, check links, chat etc.  Financial Institution Administration features allowing the financial institution to manage the online experience of their end users. Features like Hosting Administration allow the hosting company to administer the solution across financial institutions. One can also perform several other functions like issue stop payment requests, track recent account activities, order traveler, regular or cashier’s check etc.  Top American banks like Citibank, Bank of America, HSBC and regional Banks like US Bank, Commerce Bank etc. all of them are utilizing online banking. The online traders like E-Trade, Ameritrade etc. all of them allow online banking. There are several banks which are member of Federal Deposit insurance Corporation (FDIC) , this allows that  customers’ money is  as safe as if they  were doing business at a brick-and-mortar financial institution.

     There are very few disadvantages like if the bank is trying to become internet based then there will be initial cost for automating it and it will take time. There will also be some learning curve as it will totally be a new culture for the employees as well as customers and changing habits are always difficult. There will be some employees who would fear of job loss and would like to look for jobs else where due to fear; so there will be some turn over initially. Also there are a few services like cash which has to be done at the banking locations still. Most important of all there are some security scares; if a customer looses his credit cards if someone misuse it then it would take months to get the transactions corrected and there could bad spots in credit history for a long time. There will be quite a few customers who would not like to change the habits at all because they do not trust the internet. That will require two separate processes to do business for small number of customers who do not want to use internet banking at all. There are customers who would like to talk to the customers face to face rather than doing their transactions virtually.