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Online banking, also known as virtual, internet, or e-banking, is an electronic payment system that offers customers of a bank or other financial institution the ability to complete a variety of financial transactions through the bank's website. Because online banking is heavily dependent on Internet access and penetration, the first e-banking services were launched in New York in the early 1980s, dubbed "Home Banking". Today, account management via online banking is very popular. Statistics show that 81% of bank customers in the US have used online banking services at least once in the last 12 months. Most banks are able to offer all of the services traditionally offered in a local branch online, including checking account balances or lists of recent transactions, paying bills, or transferring funds to someone else.

Mobile banking
While e-banking has been around for some time, mobile banking is a relatively new service offered by financial institutions. Due to the growing popularity of smartphones, more and more banks are developing their own mobile banking applications. In 2015, 90% of US bank customers had used mobile banking to check their balance or recent transactions in the last 12 months.

Some banks are hard at work developing new tools in addition to the traditional bank account management services available through their smartphone apps. For example, some banks in the UK now allow you to withdraw money from an ATM using their mobile app instead of your credit or debit card. A significant proportion of bank customers are now deciding against mobile banking due to concerns about trust and security.

Advantages of online banking
Convenience is one of the great advantages of online banking. With it, you can do almost all banking transactions 24 hours a day, 7 days a week. As well as taking care of your day-to-day account management activities, you can communicate with your account manager or open new accounts including savings accounts and pension funds. Another great benefit is that you can do all of this while paying lower or no transaction fees, as the overhead and other costs for the bank are lower with fewer or no physical branches to maintain. Some banks have gone a step further and declared themselves branchless or internet-only institutions.

Disadvantages of online banking
While online banking is considered the most convenient way to manage your bank account, there may be times when a customer prefers to have a face-to-face consultation with a bank teller on more complex banking matters. Not having this option could be a major disadvantage if you are considering opening an account with a branchless bank. Another downside of online banking is its complete reliance on internet access. Although internet connections at home or at work are commonplace these days, there may be times when you don't have internet access. This problem becomes even clearer with mobile banking. For example, when you go on vacation, you can choose not to pay for mobile internet, so the only internet connection available could be public WiFi. In addition, it is advisable not to log into your online banking when using a public WiFi connection, as your smartphone or other device is more vulnerable to hacking when connected to an unsecured network.