This week APACS, the UK payments association, marks the 10th anniversary of online banking in the UK (27 May 2007) - a significant milestone in the evolution of UK banking and payments.
Over the last ten years online banking has become increasingly popular and the number of people using the service has risen five fold in the last six years alone. In 2006 there were a record 18.1 million Britons banking online and for the first time the number of adults using internet banking exceeded those using telephone banking. Today, half of all internet users in the UK bank online.
Those with online accounts are also accessing them more frequently - with one in five users going online daily compared to just one in thirteen four years ago. 90 per cent of online banking users also shop online - with 84 per cent of those using their online bank account to make payments or transfers.
APACS data also shows the different patterns of use for both online and telephone banking: online banking is much more likely to be used to check balance and statement entries and to make payments; while telephone banking is most frequently used for making queries and is more popular than internet banking for arranging an overdraft. By 2016 it is expected that over two thirds of all adults will be using telephone and internet banking.
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. Looking ahead, we are expecting more people to start logging on for their banking, with many more using it for making payments rather than just checking balances: a shift that will no doubt be accelerated by the banking industry's new faster payments system which will speed up online payments after its launch later this year."
While the number of online banking users has grown, so too has the number of fraudsters targeting customers online. In 2006 online banking fraud amounted to £33.5 million of losses compared with £23.2 million ilion in 2005. In order to protect their customers, UK banks are constantly reviewing the security of their online environment, including back-end systems as well as front-end authentication.
Sandra Quinn continued: "The chances of becoming a victim of online banking 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.
"We urge online banking customers to make sure they remain wary of unsolicited emails claiming to be from their bank and to only use a fully protected PC with a firewall installed and regularly updated antivirus software."
To coincide with the 10th anniversary of online banking, APACS has launched a new guide to online and telephone banking explaining everything consumers need to know to set up the service, the facilities on offer and how to protect themselves against fraudsters.