Tenth anniversary of online banking in UK

This weekend will mark the tenth anniversary of online banking in the UK with more than a third of us now regularly logging on to handle their finances.

This weekend will mark the tenth anniversary of online banking in the UK with more than a third of us now regularly logging on to handle their finances.

May 27, 1997 marked the birth of the service with Nationwide Building Society beating the banks and launching the country’s first online banking service.

A decade on from its inception, more than 18 million people in the UK now get balance updates or make payments over the internet.

The advent of broadband and the relative ease of banking online as opposed to having to queue in a High Street branch has seen rapid growth in the sector.

Since the turn of the century, online banking numbers have increase five fold.

Today, half of all internet users in the UK manage their finances online, according to statistics from the UK payments association APACS.

By 2016 it is expected that more than two-third of adults will be using telephone and internet banking.

Figures from Nationwide show that 66% of online bankers log on at least once a week, with 9% of men and 6% of women stating that they check their internet account every day.

Sandra Quinn, director of communications at APACS, said: “Online banking has totally changed the way we manage our accounts, enabling us to keep a much closer eye on our finances outside of traditional banking hours.

“The ease and convenience of online banking has meant it has become second nature to many of us.”

Of those that have signed up to the new way of sorting out their finances, 53% said they bank online because they believe it to be convenient.

Half said internet banking is easy to use, with a quarter citing speed as the main reason they have switched from branch to internet.

But with the rise in numbers going online to manage their finances, there has inevitably been an increase in the number of fraudsters targeting internet bankers.

In 2006, online banking fraud cost the industry £33.5 million in losses, compared withGBP23.2 million in the year before.

There has also been a worrying rise in phishing incidents, in which fraudsters set up a fake version of a genuine bank website and then send out thousands or even millions of spam emails driving consumers to the site.

In a bid to combat online fraud, High Street banks are planning to force online customers wanting to transfer money from their account to a third party to use home “chip and pin” machines.

Thousands of devices will be sent out to online bank customers in the UK over the coming months.

But despite the rise in online fraud, experts believe the chances of being hit are relatively low.

Mrs Quinn said: “The chances of becoming a victim of online fraud are very low and banks are committed to keeping it this way.

“Because the banks’ own systems have proven difficult to attack, criminals have turned their attention to getting information directly from online banking customers themselves.

“Typically this happens through a phishing scam or because the customer is using an inadequately protected PC that has enabled a fraudster to access their account.”

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