The Internet’s popularity has risen greatly in the last few years and it’s popularity
has forced most industries to go online. The Internet’s millions of users have attracted
commercal banks. People are increasingly using the Internet for financial services in
addtion to using the Internet for research, education,
The last few years have seen an explosive proliferation of the Internet, with millions of users
around the world logging on for a growing number of purposes. People shop, research, take
classes and file their taxes on the ‘net, and, increasingly, are using online banking services to
manage their personal finances. Personal computers, telephonic banking and increasingly
sophisticated automated teller machines are becoming commonplace as consumers abandon
daily or weekly trips to their local bank branches in favor of more convenient electronic financial
service. Although consumers appreciate the speed and convenience of electronic banking, there
is growing concern over the security of Internet transmissions. H.R. 2937, for example, provides
for the recognition of digital authentication in place of signatures, a move that has supporters
praising the technological savvy of the banking industry, but leaves some critics deeply concerned
at the possibility of misuse by criminal hackers.
While ATMs are a more “secure” form of electronic banking, consumers are paying in other ways.
Fifty-four percent of the nation’s banks add surcharges for the convenience of using the ATMs of
their competitor’s banks, and many independent ATMs operated by non-depository institutions are
charging fees as well. Critics, led by Sen. Alfonse D’Amato, D-N.Y., are calling for a ban of these
surcharges, saying that banks are profiting by “gouging” customers with outrageous fees. Others
argue, however, that banks make little or no profit off the surcharges, and that independent ATM
operators — who place their ATMs in traditionally unprofitable yet highly convenient locations like
airports and grocery stores — need to charge nominal fees just to break even.
Electronic banking is here to stay, and is growing along with the Internet as a whole. This section
looks at the impact it will have on consumers and the banking industry, the conflicting opinions
about the merits of eliminating the paper trail, and the regulations and legislation proposed to
manage banking’s trip on the information superhighway.