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30 years of Internet banking

 article about 30 years of Internet banking

It was only back in March this year we were celebrating 25 years of the World Wide Web and the ingenuity of Sir Tim Berners-Lee. So how can internet banking possibly be 30 years old?

A TV and a telephone


Well, the internet bank of the 1980s looked very different to the glossy, feature-rich banking app you have on your mobile phone today. Back in 1983, Nottingham Building Society developed a way of connecting a TV set with a telephone so its customers could pay bills and send transfers at home. And while you construct that mental image: remember, in those days we were watching a cathode-ray-tube 1980s' box, not a modern flat-screen, and most of us got our clunky rotary dial telephones from the BT shop.

It was a revolutionary step for an industry in which the bank managers were still holding all the cards - well, most of them; some of us might have had credit cards, but the UK's first debit card wasn't introduced until 1987. By Barclays, just in case you're interested.

Electronic Payments


The banks had been using electronic payments since Dennis Gladwell created BACS as far back as 1968, but consumers hadn't got a sniff of the action until Nottingham Building Society's pioneering service in 1983. Coincidentally, that same year BACS launched its BACSTEL service, which used the telephone rather than magnetic tape, and which opened up its money transfer process. Even so, BACSTEL was not a consumer service: businesses could benefit from electronic payments but it would be a while before we consumers would be widely using them.

An internet age


A giant step forward was made in 1989 when a 34-year-old physics graduate working as a software engineer at CERN wrote a paper describing "a universal linked information system". Tim Berners-Lee went on to write HyperText Transfer Protocol (HTTP), HyperText Markup Language (HTML), and the first ever web browser, WorldWideWeb in 1990. Eventually, in 1993 Cern opened up the technology to be freely used by us all.

Then things began to take off...
1994: The first-ever banking website was launched by Stanford Credit Union in the USA.
1994: HTTPS was created by Netscape Navigations.
1997: The Nationwide Building Society launched the UK's first internet banking website. Savvy customers could now access account information using 1997's browser-of-choice Netscape Navigator and their top-of-the-range 56K modem.
1998: E-commerce company PayPal was launched, more widely enabling payments and money transfers to be made by the internet.
2003: ArtistShare, an early crowdfunding site, was launched.
2005: Zopa, the first peer-to-peer lending service was launched.
2007: Apple launches the first generation iPhone, beginning a revolution in consumer technology.
2007: Barclays introduced the UK's first contactless payment card. Although perhaps that wasn't so ground-breaking when you consider they'd been successfully being used since 1997 by Mobil in the USA.
2009: Bitcoin, the peer-to-peer payment system was launched. If you want to know what's happening in the world of cryptocurrencies today, make sure you check some cryptowatch websites. You might also want to check out some of the best bitcoin cryptocurrency bot and see if there's any money in it for you.
2013: An ONS survey said 50% of the UK population are using internet banking.
2014: Contactless payment cards are slowly gaining wider acceptance. In April this year UK spending on them exceeded 100m in a month for the first time (source: BBC News). Over 42 million of such cards are now in circulation in the UK, and one in three consumers has one in their wallet.

What next?


The smart money is on wearables. Banks like Banco Sabadell in Spain and PrivatBank in the Ukraine have already developed Google Glass banking apps. It won't be too far into the future before we're checking our statements and transferring money with our watches.

Why does it matter?


For the consumer, it is all about choice. But joining up all these new technologies into a seamless customer experience does present challenges for the banks, as Ahmad Khidhir, a Senior Consultant from banking software experts Misys, explains: "To allow customers to engage via different channels throughout the sales process requires banks to break out from a silo-based channel approach and allow for interoperability between channels ." Enabling us to bank using the SMART TV or the SMART telephone then? Perhaps we haven't moved that far in those 30 years after all?


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