What is Cyberbanking?

What is virtual bank?

Virtual banking, also known as cyberbanking, e-banking, home banking or online banking, includes provision of, and access to, various banking activities conducted virtually (from the road, external businesses or homes) rather than at a physical bank. Virtual banking allows customers to secure loans, pay utility bills, make deposits and check their accounts from remote locations.Types of Virtual BankingAccording to Robert E. Grosse in the book “The Future of Global Financial Service,” there are two basic models of virtual banking systems. The first is the electronic replacement of existing bank services by the internet or telephone; the second involves offering new services that were previously not offered in virtual form. Some types of virtual banks have no physical infrastructure at all and exist only over cyberspace.AdvantagesVirtual banking systems have numerous advantages over traditional brick-and-mortar banks. Customers have access to instantaneous service provision and lower transaction and account maintenance costs without having to physically visit a bank. Virtual banks are safe and install high-end firewall and data encryption software that ensure the integrity of customer data. Users are assigned individual PINs (personal identification numbers) that allow them to access their online accounts. Most online banks log off customers automatically after a few minutes of inactivity.DisadvantagesVirtual banking systems have some disadvantages for both the banks and customers. Initial setup costs for starting a virtual banking system can be high. New users may initially find banking sites difficult to navigate and use. Most virtual banking systems cannot be accessed without the Internet, and users may be required to invest in high-speed broadband for quicker, reliable access. Technological hitches can cause virtual banks to go down--an inconvenience.While virtual banks give customers numerous advantages in terms of bill payments and account information, at the end of the day, customers still need to visit ATMs to withdraw cash.