1.7.6.G1
Online Banking
Take Charge of your Finances
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 1
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Online Banking
• In the year 2006, 63 million Americans
reported that they used online banking
• 43% of internet users in the United States
bank online
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 2
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.6.G1
Online Banking
• Online banking – also known as internet banking,
allows consumers to complete transactions with
wireless technology. Wireless technology includes:
– Personal Computers (PCs)
– Personal Digital Assistants (PDAs)
– Cellular phones
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.6.G1
Online Banking
• Consumers can access account information and
statements
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.6.G1
Online Banking
• Consumers can transfer funds
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.6.G1
Online Banking
• Consumers can manage bills and apply for credit
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.6.G1
Online Banking
1.7.6.G1
Advantages
Disadvantages
• Decreased cost of paper and
postage
• Storing all statements online
instead of keeping a paper
copy
• Convenience
• Paying bills online
• Ability to access account
anytime
• No waiting for a monthly
statement
• Not as personal
• Not able to access without
technology
• Decrease in safety features
• Increase in risk for fraud
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Online Bill Payment
• Online bill payment – allows consumers to send
money from one account to a vendor
– Usually occurs automatically
– Consumers need to check with the vendors regarding
their policy of when the payment will be processed
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.6.G1
Online Bill Payment
1.7.6.G1
• Examples of companies that use online bill payment include:
–
–
–
–
–
–
–
Retailer banks
Credit card companies
Insurance companies
Energy and utility companies
Health care
Transportation companies
Education expenses
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Online Bill Payment
1.7.6.G1
Occurs in two ways
Consumer works directly
with the depository
institution to pay the
company that is owed
Consumer works directly
with the company in
which the money is owed
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 10
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Online Bill Payment
1.7.6.G1
• Important financial aspects include:
– Checking with the vendor or company to understand their
policy of when transactions are complete
– Confirming there are enough funds in the account to
cover the expense of the bill
– Confirming bill will be paid, money will be taken out of
the account, and the transaction will be completed
– Their financial information is secure and it is safe to make
online transactions
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 11
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Determine Security
1.7.6.G1
• The Uniform Resource Locator (URL) ends in “s”
which stands for secure
• A closed lock to the right of the URL or in the
bottom right hand corner of the web browser to
indicate a secure site
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 12
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Insecure Practices
• Email accounts are not secure
– Do not send important information such as:
• Social security numbers
• Bank account numbers
• PIN numbers
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 13
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.6.G1
Consumer Protection
1.7.6.G1
• The Federal Reserve Bank of Chicago suggests the following:
– Passwords are a combination of letters and numbers
– Avoid using passwords that would be easy for someone to guess such
as birth dates, phone numbers, names, sequential numbers, etc.
– Change passwords once a month
– Keep all receipts and compare them to bank statements monthly
– Log out of depository institution Web sites immediately after you
finish working
– Contact the depository institution directly with any questions or
concerns
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 14
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Recurring Payment
1.7.6.G1
• Recurring payment – bills are set to be paid on the
due date or a previous date set by the consumer
– Payment will happen automatically electronically
• Advantages of recurring payment include:
– Save money on postage
– Saves time for the consumer
– Bills are paid on time
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Regulation E
1.7.6.G1
• Regulation E – covers all electronic fund transfers
including transfers occurring through an electronic
terminal, computer, telephone, or magnetic tape
– The transfer must be conducted with the purpose of
authorizing a depository institution to debit or credit a
consumer's account
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 16
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Consumer Protection
1.7.6.G1
• Privacy Policy outlines how a consumer’s
information will be used and protected
• Opting out of a financial policy allows a consumer
to request a depository institution to share only a
limited amount of personal information
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 17
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Conclusion
1.7.6.G1
• Review
– Define online banking
– Review what transactions can be completed through
online banking
– Discuss advantages and disadvantages of online banking
– Discuss online bill payment
– What are secure and insecure online banking practices?
• Any questions?
© Family Economics & Financial Education –March 2008 – Financial Institutions – Online Banking – Slide 18
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona