There have been no major developments to talk about in the world of online banking in the past week, so I am going to take a step back and discuss the history of online banking. The term "online" banking first became popular in the late '80s and referred to the use of a computer to access the banking system using a phone line.
Many major banks started offering a "home" banking service which was essentially a pilot version of the internet programs we have now. There were actually similar issues related to "home" banking then there are to "online" banking in terms of concerns over privacy. Thus, the banks took extra precautions to prevent any sort of identity theft. For one, they required four verification steps to access their accounts. Users have to input their household code, personal identification code, personal "handle" and household "handle." While the bank has records of three of the codes, they don't have the PIC so employees of the bank or people hacking into the bank's records would not be able to gain access to the account.
"Home" banking served many of the same purposes that "online" banking does today. Customers were able to set up electronic payments with their bank so that they could pay certain accounts through the online system. "Home" banking allowed electronic money transfers and other basic banking tools.
Ultimately, as the internet revolution began home banking shifted to online banking. In fact, the first bank to offer free online services was none other than our own Stanford Federal Credit Union in 1994. The SFCU was also one of the revolutionaries in online bill pay, introducing the feature in 1997. Is there anything Stanford hasn't been instrumental in accomplishing?!?
Sources: http://www.atariarchives.org/deli/home_banking.php
