Monday, November 17, 2008

Banking in the internet age

Banks will disappear soon - centuries of tradition to be replaced by Internet systems

People aged over 40 are often amazed by what is happening online. Sometimes they find it difficult to consider things the way those born in the 1970s do. The world is changing fast. For example, many business people - the younger ones - are avoiding banks altogether as a source of funding. Instead they are going to cooperative ventures such as Zopa, where you borrow money from other people, rather than banks.Bank accounts as we know them will become obsolete for millions of people within a matter of a few years (for many they already are obsolete).

Posted by jack c @ 11:44 AM (1268 views)
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20 thoughts on “Banking in the internet age

  • little professor says:

    As someone who has used internet banking all my adult life, I find the idea of branch-based banking rather antiquated and quaint. Why stand in a queue for hours when you can do pretty much everything you need from the comfort of your own home.

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  • last_days_of_disco says:

    I think the shock of collapsing systems is going to make branch based banking popular again.

    The Internet is not indestructible.

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  • I disabled my internet banking when I had the proceeds of my house sale in it.
    The police say its inherently insecure and vunerable to fraud and the banks will not
    now recompense you if inadvertenly give someone your codes.
    As for Zoppa replacing traditional banking, that’s ludicrous.
    Even downloaded music isn’t that great, try playing it on a hifi and compare it to a cd.

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  • Not so sure about the ‘brands’ claim, isn’t that the way many of these social networky things will go once it becomes expedient to advertise their services? I expect we’re stuck with ruddy things even if we are all going to a bank-free utopia (bring it on!).

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  • I agree last days, I won’t touch internet banking with a barge pole, any fraud on your internet bank account and the bank can just blame you for having lax security on you lap top.

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  • This article looks like it is about 10 years out of date. It belongs in the .com bubble era.

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  • I disagree with those knocking online banking.

    I have used online banking for nearly 8 years and have not been subjected to any fraud whatsoever. None. Not a penny has gone missing or stolen and I get better rates of interest. 24/7 access to my money, can set-up cancel Standing Orders and Direct Debits at will.

    It’s fantastic.

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  • last_days_of_disco says:

    I am not saying online banking doesn’t work. I wasn’t knocking it at all. What I was saying was that the globally interconnected world we have become accustomed to is more fragile than we think.

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  • Zopa…now there is a scam/crisis just waiting to happen. I wonder what the default rate is like?

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  • Zopa isn’t a replacement to ordinary banking – yet. It’s an example of how things are changing.

    The point of the article is that many Brands who operate in traditional ways have yet to really understand the immense power that the Internet has, and will have on their businesses. New business models are springing up all the time and a lot of traditional face-to-face businesses need to wake up and smell the coffee. As Graham Jones says in his article:

    “Dramatic change IS coming to your industry – faster than you can imagine.”

    You’re either on the train – or under it.

    Philip Calvert
    Sales and Online Communication Skills Speaker

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  • Here’s a Bank that’s utilising the internet to full effect by announcing 50,000 job losses on it’s website !

    Nov. 17 (Bloomberg) — Citigroup Inc., the fourth-biggest U.S. bank by market value, plans to eliminate 50,000 jobs, or about 14 percent of the workforce as of Sept. 30, and reduce expenses by 20 percent from their peak as the global economy contracts. Chief Executive Officer Vikram Pandit is scheduled to announce the plan to employees today. The reductions were disclosed in a presentation posted on New York-based Citigroup’s Web site. Banks and brokerages worldwide have shed almost 160,000 jobs since the subprime mortgage market collapsed last year, sparking a credit crisis.

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  • If it walks like a duck and quacks like a duck….

    Zopa is basically a bank (or a credit union / building society / mutual society). Surely it’s only a matter of time before it gets regulated like one. Just because it’s online doesn’t make it any different – ICEsave was an internet-only account, look what happened to it.

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  • What’s an Internet Psychologist? Someone who writes online piffle?

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  • Zopa…now there is a scam/crisis just waiting to happen. I wonder what the default rate is like?

    According to Zopa, from 03/2005 to 11/2008 out of 6,388 market loans there are 26 in collection and 9 defaulted.

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  • There is no chance that I would use internet banking, every transaction has to have my signature on it. My company does not accept cash or foreign Bnakers drafts either, far to dodgy all round. Banks will always be there, otherwise how can coins and cash from shopkeepers be banked? Life is about living and communicating and money exchange is part of that.

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  • Eyes_wide_open says:

    Personally, I think Internet Banking and Branch Banking will live side-by-side as they are doing now. I see no need for either to disappear as both have their uses.

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  • Eternal Sceptic says:

    If economies are unravelling big time, power shortages are round the corner, pray tell me what keeps the internet internetted?

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  • re: Internet banking security. IMHO, so long as you have a firewall (a router), all the microsoft updates, and an antivirus program (even a free one), and you aren’t likely to fall for a phishing attack (ie. IQ greater than 75) then internet banking is more secure than branch banking. I’ve known of several cases in the area where I grew up of people walking into branches and impersonating the account holder to withdraw money.

    There are no cases I’m aware of where 128bit SSL has been breached. And if you use internet banking you can check your account for discrepancies any time of day or night,

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  • How is Zopa different from investing in Mortgage Backed Securites? Except that the MBSs are at least secured on somthing. Or how is it different from Credit Card CDOs? Nobody wants to buy them these days.

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  • I have banked online since the BoS introduced HOBS (a prestel-type service via direct dial-up, which I accessed from my mac using a viewdata client) in 1989. Internet banking at first was worse, but has since improved enormously.

    Used properly internet banking is a no-brainer, an absolute plus and a benefit to a sane and balanced life.

    Those who don’t use it are generally superstitious luddites who don’t understand the nature of internet security or safeguards, or conspiracy theorists who think the world is out to get them. No shortage of either unfortunately.

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