Many banks have begun to offer customers the option of online banking, a practice that has benefits for both parties and whilst consumers view online banking as a quick way to pay bills and check their finances; online banking, at least to some degree, has become the norm for many simple bank transactions.

Online banking allows people access all of their account through a secure bank-created website. Depending on the services chosen, a customer may simply be able to view the day-to-day activity of every account they have with a bank. Another convenient service lets people transfer funds, either between accounts or from electronic transactions.

The biggest plus for banks to banking online is the price. Because Internet-only banks don’t have the expense of maintaining hundreds of local branches, their overall cost of doing business is lower than it is for their traditional counterparts. Which means they pass the savings on to their customers in two main ways: higher interest and lower fees.

Another big advantage is that you’ll have 24-hour access to your account, for free. Unlike your corner bank, online banking sites never close; they’re available 24 hours a day, seven days a week, and they’re only a mouse click away. Also if a money issue arises while you’re out of state or out of the country, you can log on instantly to your online bank and take care of business.

Accounts can also be automatically funded from a traditional bank account via electronic funds. Most direct banks offer unlimited transfers at no cost, including those destined for outside financial institutions. They will also accept direct deposits and withdrawals that you authorize, such as payroll deposits and automatic bill payments and any online banking sites offer sophisticated tools, including account aggregation, stock quotes, rate alerts and portfolio managing programs to help you manage all of your assets more effectively. Most are also compatible with money managing programs.

However f you’re new to online banking, it might take time to register for your bank’s online program. Or, it may be easier to physically fill out a form at your local branch and a traditional bank provides the opportunity to develop a personal relationship with that bank. Getting to know the people at your local branch can be an advantage when you need a loan or a special service that is not normally offered to the public. A bank manager usually has some discretion in changing the terms of your account if your personal circumstances change. They can help you solve problems such as reversing an undeserved fee or service charge.

The most important factor when choosing to manage your personal finances effectively is time. A greater time investment will almost always result in a greater financial return.

Therefore the sooner you start to manage your finances, the greater return and financial ease you will feel in the future. Many people fail to plan ahead, which results in struggling to juggle finances at a later point in life.

Money management should focus on four primary questions:

1.       What financial goals would you like to achieve?

2.       When can you expect to achieve them?

3.       What finances do you currently have?

4.       What level of risk would you make to achieve these targets?

Choosing somewhere to live is an essential in everybody’s lives, and therefore, buying a house will be the biggest financial purchase that people will make. The financial investment into a home will affect all your other finances.

Making big decisions on your lifestyle will affect your financial goals. If you consider a luxury holiday to be one of life’s essentials, you will have less money left over for savings and investments.

When do you want to retire? What expenses do you currently have? Deciding what your priorities are will help to determine what money you will have left.

It is worth assessing your current liabilities, as these expenditures and assets could be reduced or sold and free up money for the future.

Calculate how much spare money you have so that you can form an investment plan. Investments can vary dramatically. Some are high risk for higher reward or loss, and some are low risk for a steady growth on investment. It’s up to the individual to decide what level of risk you are prepared to make.

Once these considerations have been made and your plan is in places, it’s important to assess the decisions you’ve made and how they affect you on a day to day basis. You plan may be too restrictive, leaving you with not enough money to live on, or perhaps you could make greater short term sacrifices to benefit you in the long term.

A small amount of time spent on your current finances can be highly rewarding for your future.

The US economy saw its first growth in over a year, rising to an annual rate of 3.5% between July and September.

Experts believe that a major spending plan by the US government which featured a scrappage scheme to encourage the car sales market has been the main cause of the upturn.

Some economists believe that there could be more setbacks lurking ahead, despite the official statistics showing that the recession is over.

A spokesman at the White House announced that recent economic progression was “a welcome milestone” but it would take more time for a full recovery to be recognised.

The US economy had risen 0.9% in relation to the previous three months, whereas the UK economy remained in recession, unexpectedly dropping 0.4%.

Hugh Pym, the chief economics correspondent for the BBC, revealed that the growth rate of 3.5% was greater than the 3.3% predicted by most experts.

He continued:”The sheer scale of the stimulus in the US has made a big difference, it was much bigger in percentage terms than that in the UK.”

“That the US, the powerhouse of the world economy is growing once again, is good news for the global economy has a whole.”

The last time the US economy grew was in the second quarter of 2008, by an annual rate of 2,4%.

The National Bureau of Economic Research will reveal the full extent of the US economic climb from recession when it analyses all the factors.

Some factors were significantly responsible for helping US economy during the third quarter, according to the Commerce Department.

The spending on durable manufactured products rocketed up at an annual rate of 22.3% which was the highest quarterly figure since 2001 and was spearheaded by the ‘Cash for Clunkers’ scheme helping new car sales.

Consumer spending increased on housing products by 23.4%, the greatest quarterly surge in 23 years, and came as a result of an improving housing market.

The big increase is considered by many to be due to the government’s $8,000 tax credit provided to first-time house buyers.

Government spending increased by 7.9% as stimulus spending spread and exports saw their biggest rise since 1996, rising by 21.4%.

Brian Bethune, an economist for HIS Global Insight stated that “it’s good to have the economy growing again.”

“But we don’t think that rate of growth is sustainable because it is distorted by all the government stimulus.”

“The challenge here is to get organic growth – growth that isn’t helped by fiscal steroids.”

However, unemployment is at a rate of 9.8% and a sharp fall came in September in the car sales industry as a result of the popular car scrappage scheme coming to an end in August.

Dean Baker, co-director of the Centre of Economic Policy Research believes that “you can say that the recession is over, but it sure won’t feel like that.”

“There is a lot of downward momentum that isn’t going to go.”

Plans to split British bank Northen Rock in two which would allow for its partial sale has been granted by the European Union.

The divide would result in two separate banks forming and are already being described as the “good” and “bad” banks.

The “good” bank would offer new lending, retain some of the existing mortgages and hold its savers’ money.

The “bad” bank would be used to repay the existing government loans and hold the remaining loans.

 Decisions made by the EU to accept the move are seen by Northern Rock as “an important and positive step.”

Changes to the existing setup will be made towards the end of the year.

The EU revealed that the good portion of the bank would be expected to grow and then be sold to third party, with the bad bank allowing its assets to dissolve then becoming liquidated.

The good bank may be sold prior to the general election next year with potential buyers being speculated already, with Virgin and National Australia Bank, owner of Clydesdale and Yorkshire Bank, among the interested parties.

EU Competition Commissioner, Neelie Kroes, believes that the move would make the bank a good long-term option, revealing that “this decision demonstrates once again that the EU’s state aid rules provide an appropriate framework to allow state support for a sustainable restructuring of banks without giving individual banks an unfair competitive advantage.”

Whilst Jonathan Todd, European Commission spokesman, said caps would need to be applied for the duration that the good bank remains owned by the public.

Some of the caps include a balance sheet reduced to a quarter of its size prior to the crisis, not being the market leader for loan interest rates, a cap set to limit its lending to one-third of Northern Rock’s 2008 levels and also a cap on retail deposits to be slightly lower than the pre-crisis level.

An investigation was engaged by the EU into Northern Rock in April 2008, two months after its nationalisation.

The results from the investigation showed that the UK government was kept at a “necessary minimum”.

By 30 June, the bank had paid back approximately half the taxpayers’ £26.9bn loan and will gain a further £8bn from the government during the end of year restructuring.

The EU stated that the restructuring would reduce its market share to below half of its pre-crisis level and “correct the excessive expansion of Northern Rock pre-crisis.”

Northern Rock released a statement, saying “this approval is an essential requirement of the planned legal and capital restructure, which is central to the business plan for Northern Rock.”

“The restructure will strengthen the capital and liquidity position of Northern Rock significantly, and offers value for money to taxpayers” and it would be “business as usual” for its customers.

Online banking fraud in 2008 nearly doubled compared to previous years thanks to software that’s now available that enables fraudsters to track what you type.

The device is called keylogging, and enables fraudsters to gather passwords and credit card numbers.

Last year alone, online banking fraud reached a massive £52.5 million, compared to £22.6 million in 2007, and again, just £12.2 million in 2004, according to UK payment association – Apacs.

Losses due to fraud related to UK credit and debit cards also rose by 14%, reaching £609 million. However, most victims of card fraud aren’t liable and therefore get their money refunded.

Recent years has seen an increase in the number of people choosing to bank online, from the comfort of their own homes, as opposed to having to queue.

One Step Ahead

The problem of this is that fraudsters are usually one step ahead of consumers, and therefore, quickly adapt new technology. This has been seen clearly by the steady increase of internet banking fraud in the last few years.

The programmes that are used to target us by tracking our details usually find their way onto our computers via unsolicited emails.

A spokeswoman for Apac said: “The industry continues to remind customers to ensure that they have their computer’s firewall switched on and anti-virus software up to date.”

The introduction of card chip-and-pin numbers seemed to be doing the trick when it came to reducing card fraud, however, 2007 and 2008 has seen the number begin to rise once more.

Goods that are bought on the internet, over the phone, or via mail order are currently the number one target when it comes to card fraud. In these areas, pin numbers are not required, so it is hardly surprising that fraud in this area has risen by 13% to £328 million.

PIN Numbers Work

However, the most significant rise was 39%, which correlates to the number of people who take over other people’s accounts – ID theft.

Apac have admitted that, overall, card fraud losses have increased, but it says that if these losses are taken as a percentage of card turnover, these were actually falling.

It also pointed out that in the last 5 years, the most rapid acceleration in fraud was actually by fraudsters using cards overseas, especially in places where chip-and-pin is not in place. Apacs is therefore pressuring on many countries, including the US, to introduce chip-and-pin.

Anyone in the UK caught out by card/internet fraud is not liable according to the terms of the Banking Code as long as they have acted with ‘reasonable care’, and will subsequently be reimbursed.

However, the code also says that if the card is used before it is reported missing, or is someone knows a PIN, the victim has to pay the first £50 they lose.

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Some Abbey customers are angry over the companies online glitch since it updated its system over the weekend.

The glitch has lead to many customers being unable to transfer money between accounts online, even though their website says their customers can manage their accounts “when, where and how [they] want”.

Abbey have apologised to its customers and said that only a “small number” of customers have been affected. They have also promised to deal with customers individually and are dealing with call centre delays.

The glitch in the online system seems to have occurred over the weekend when Abbey changes its online banking system for small businesses to make it more similar to the system personal banking customers use.

Abbey did take care to try and notify its customers that they may face problems in the run-up to the change, by posting a notice on its website alerting customers to the change before they logged in.

However, many small businesses have complained that the new system has not been working for a few days now. Some saying that they are unable to transfer money between reserve and current accounts, though others say they are unable to manage their accounts at all.

Tim Bugler from Stirling has said: “The whole thing seems to b a monumental foul-up. They have replaced what was a fairly efficient system with a shaky one.”

He also claimed that he was not satisfied that the changes occurred “without warning” and that he was now unable to view the same number of previous transactions compared to the system before the changes.

As a customer with the bank for eight years he says that the old system worked well for him, and that the changes came at a bad time for small businesses that were already facing problems caused by the economic problems at the moment without having to worry about banking problems.

Mike Wines is an IT project manager for Sparrowhawk Solutions in Guilford has been facing problems paying bills as he is unable to transfer money.

He also added that he had tried calling Abbey 15 times since the changes took place but was unable to get through due to large numbers of other customers also trying to get through.

He said: “I want to be spending most of my time with my customers; banking should be something that happens in the background of my business.”

Abbey have moved some of its phone centre staff from personal banking, to business banking lines in order to try and clear the queues, and have issued a statement saying: “We are very sorry for the inconvenience that has been caused to our small business customers.

“As part of the upgrade, our active online customers have been requires to register again to gain access to their secure internet site.

“The majority have done so successfully – however for a small number of customers, for instance, those with linked accountants, if they have only re-registered for their main account, they are not able to see or transact on the other accounts.

“We are working on this and expect to resolve this with individual customers.”

Although online banking was introduced to make things easier and more convenient there is still a lot of controversy whether it actually solves or creates problems. One of the main issues was people’s security, being online there could potentially be numerous scams out there trying to gain sensitive information and used against you.

With this being said you can easily avoid the scams and receive the full benefit from online banking as it can truly make your life much easier if done with caution. Ensure that you look out for anything suspicious such as emails containing a link stating that you need to log into your account, these can often have software that obtains your log in details and sends them to the creator.

With online banking you be able to manage everything in your account in the comfort of your own home. This automatically cuts out any phone calls or trips to the closest bank therefore saving you time.

Once you have signed up for online banking you will be able view your latest transactions and monthly statements to keep a record of your finances. Many people are even helping the environment and opting out to receive a paper statement each month which cuts down the waste of paper.

You can send or make payments to other people or any credit cards so not only will it save time, it will ensure that you don’t miss any credit card payments resulting in additional bank charges. This isn’t just limited to the UK either, you can send money overseas with the click of a button.

If you have forgotten your PIN number for your cash or credit card you can request it to be sent out to you immediately to the address on file, be sure to update your details if they change as you would hate for your personal details to be sent out to an old address.

Not only will it allow you to manage your future finances online but you can check your existing direct debits and standing orders so that you are aware of what you have connected to your account. You will be able to view how much the amount is for, the last date is was taken out and the next date the payment is due to come out. If you see anything out of the ordinary then you can amend or cancel any of your direct debits to avoid paying for anything you’re not wanting to. If you use cheques often then you can also monitor those online, you can view, amend of cancel pending cheques linked to your account.

As you can see online banking offers a huge list of benefits that will make your life easier, as well as being able to manage your bank account you can apply for further products such as mortgages, loans, insurance and many more. This will also be made easier as they already have your details and credit history on file so you can often get an instant quote.

While we all know that the internet has made a real impact upon our every day lives, who would have thought that the traditional business markets and practices of yesteryear would have been so affected.  This transformation is reflected in the rise and rise of Google, which seems to be going from strength to strength.

Originally listed on the US stock market in 2004 at $84 a share, yesterday saw the price of Google shares break the $700 barrier for the first time, with many analysts expecting further gains – even against a falling stock market.  While the majority of Google’s income comes from advertising, their main business is in the search engine sector (a sector which they have dominated for some time).  The company is now valued in excess of $200 billion, making it the 5th largest corporation in the US!

One of the markets which has been hit by the onset of the internet is the financial industry.  As much as some people may dislike the power which online access holds, it is very unlikely that you will be able to succeed in the financial industry without some form of online presence.  The growth in comparison websites has also been very marked, with many people now more keen to see if they can shave a few pounds off their mortgage, or agree better loan terms elsewhere.  When you also consider the change in laws regarding termination payments, the consumer really has more control than ever before.

While the industry has never been more transparent, you still need to read the fine print, making sure that you understand what is on offer, how much it will cost you, and if it is really for you.  It is not difficult to check, and access to additional data / terms and conditions has never been better – online and on the ball, you need to go into every transaction with your eyes open!

For the first time ever, the number of internet based banking customers now tops the number who use telephone banking.  It has been reported that there are 17 million live internet banking customers, against “only” 16 million who use telephone banking. 

It seems that the biggest change has come from the over 55s group, who have slowly but surely taken to internet banking, as the group also show the largest increase in internet literacy of late.  It seems that a mixture of robot like telephone banking systems, and easier and easier access to the internet have pushed many towards online banking.  What does this mean for the banking industry?

While it is good news for the financial industry from a costs point of view, with internet costs very much lower than those for the telephone system, it does open the industry up a little more to online fraud.  Over the next few years we should see a mixture of greater online security, and a number of advertisements detailing how to spot these cons and how to ensure your user details and savings are safe.  This in itself may be a major battle for the financial industry!

This move towards online banking just serves to show how advanced the UK market has become, and cemented our position as on of the most internet literate countries in the world – a position which seems sure to get stronger and stronger. 

Will mobile banking ever be as successful as internet banking? Time will tell, but there will need to be a massive increase in the quality of mobile internet connectivity, and quicker data transfer speeds – which both seem some way off at the moment.