Technology in Fintech and the history of online banking
Online banking services have never been so effective. From arranging overdrafts with a few clicks to servicing all financial transactions of super apps, digital financial services have taken a big leap forward over the last forty years. We trace the history of online financial services, which began with the birth of the Internet.
1980
Computer-controlled banking
The first home banking service was offered to consumers in December 1980 by United American Bank, a community bank headquartered in Knoxville, Tennessee. United American partnered with Radio Shack to produce a secure modem for its TRS-80 computer so that bank customers can access their account information securely
1981
Deployment of New York City
New York City was the second place to test the delivery of remote services. Four of the top banks – namely Citibank, Chase Manhattan, Chemical Bank and Manufacturers Hanover – made home bank access available to their customers as an additional test pilot program, with a view to seeing if the initiative would take off.
1983
Britain is catching up
The Bank of Scotland became the first bank in the UK to adopt the innovative technology needed for remote functions. Their customers were provided with an online banking service called Homelink. People had to connect to the internet through their TVs and phones to pay bills and transfer money. The connection was slow and unreliable – but the disruptive potential of this new “telebanking” service was immediately recognized.
1994
Credit Union takes online banking mainstream
Copy: In 1994, the Stanford Federal Credit Union was the first financial institution in North America to provide all of its customers with Internet banking. In 1995, Presidential Bank was the first bank in the country to provide customers with access to their online accounts. The world banking giants looked interested in and noted the success of the project.
2006-2010
Exponential use of online banking
According to reports, 80% of all US banks in 2006 provided online banking services – and the trend has not shown any signs of slowing down. In 2009, Ally Bank was founded – the world’s very first fully digital bank.
A study from Fiserve in 2010 showed that both online and mobile banking grew at a faster pace than even the internet.
2022
A landscape in constant change
Recent reports say that 80% of bank customers globally are regular users of mobile banking technology. But today, the very structure of the financial industry is changing as a result of DeFi and blockchain technology. Technology is advancing so fast that by 2026, many experts believe that many Western countries will officially be cashless.
