Telephone banking

Telephone banking is a service provided by a bank or other financial institution, that enables customers to perform a range of financial transactions over the telephone, without the need to visit a bank branch or automated teller machine. Telephone banking times are usually longer than branch opening times, and some financial institutions offer the service on a 24-hour basis. However, some banks impose restrictions on which accounts may be accessed through telephone banking and limits on the amount that can be transacted.

The types of financial transactions which a customer may transact through telephone banking include obtaining account balances and list of latest transactions, electronic bill payments, and funds transfers between a customer's or another's accounts. Telephone banking can not be used for cash or documents (such as cheques) for which customers must visit an ATM or bank branch.

From the bank's point of view, telephone banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions.

Telephone banking was first introduced in the 1980s, one of the first being Girobank in the UK which establishing a dedicated telephone banking service in 1984.[1] Telephone banking saw growth during the 1980s and early 1990s, and was heavily used by the first generation of direct banks. However the development online banking in the early 2000s started a long term decline in the use of telephone banking in favor of internet banking.[2]

Operation

To use a financial institution's telephone banking facility, a customer must first register with the institution for the service. They would be assigned a customer number and they may be given or set up their own password (under various names) for customer verification.

The customer would call a special phone number set up by the bank and are authenticate through a numeric or verbal password or through security questions asked by a live representative. The service can be provided using an automated system; using voice recognition capability, DTMF technology or by live customer service representatives.

See also

Bibliography

  1. ↑ "A history of banking: from coins to pings". The Telegraph. Jun 1, 2015.
  2. ↑ Clark, Teri B. The Complete Personal Finance Handbook: Step-by-step Instructions to Take Control of Your Financial Future. Ocala, FL: Atlantic Pub. Group, 2007. Print.
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