Online Banking with Offshore Banks
Online banking has been the great equalizer in the race for customer service with domestic based banking institutions. In some ways, the domestic banks brought it on themselves. In their push to lower the transaction costs of deal with customers deposits, check clearing, withdrawals, etc, they first pushed the automatic teller machine.
ATM Cards, and the Automatic Teller Machine
The atm was embraced by clients because of the 24 hr availability and the "convenience" factor. It meant not having to wait in line, and not have to rush to the bank before closing on friday or be stuck with no money on the weekend.
At the same time, people were able to maintain relationships with banks that didn't have a physical presence in their hometown--or even state--by using mail (for statements) and of course the ubiquitous automatic teller machine and atm card.
Telephone Banking
Probably the next "giant leap forward" in automating banking services was telephone banking. Banking and at times brokerage services and bill paying was moved to the telephone. Automated systems were setup to handle routine customer service issues like balance inquiries, checking on a check clearing, and at times more complicated transactions like authorizing the payment of a bill.
Telephone banking was the next step in removing the banking client or customer from the physical bricks and mortar bank. People were becoming more comfortable with having bank accounts at banks where they rarely or never actually visited any of the banks branches. I myself had a bank account with Navy Federal Credit Union while stationed overseas and never missed a beat. Direct deposit and auto-pay of my more critical bills meant everything was handled via phone, or more likely back then snail mail.
Although telephone banking was a giant leap forward, it didn't last long because it was a precusor to what we routinely enjoy today, which is internet based world wide wide online banking 24/7 365 days a year.
Internet Banking
The Internet as a medium does a few things very well. In the early days, those things generally centered around accessing, organizing and presenting large amounts of data -- OR dynamic data -- data that changed quickly and timely information was important.
This is what made online banking one of few killer commercial applications for the Internet. Again, in the name of customer service and reducing costs, banks moved all manner of customer service functions to the internet.
Before long, deposit checking, incoming and outgoing wires, auto bill pay, ach transactions, credit card clearing, transaction reviewing, statements, applications for new accounts/account opening documents, loan payments, loan applications, approvals, and general communications with customers were being handled online. In the wake of all this automation we even got some banks who operate mostly, or even wholly online
The Online Bank
Some online banks popped up amidst the push to move everything online and onto the internet and also driven by customers' acceptance that they didn't need a physical location in which to visit.
Etrade, an online brokerage company, moved heavily into online banking, including loan and mortgage originations in the first part of the 21st century.
In addition, many online banks either whole or in part, came into operation and being. People were getting more comfortable with banking happening in a town they would never visit and it increased competition for all players, while opening some doors for some others.
Online Offshore Banks
Offshore banks were one of the beneficiaries of this giant push towards automation. One of the drawbacks of opening an offshore bank account has always been the feeling of being separated from your money.
While the physical separation is, of course, what brings the benefits of having an offshore bank, it was a stumbling block for some.
Technology has shrunk the world of finance and made it easier for some to adapt to having their funds in a bank in a foreign jurisdiction or tax haven offshore.
With the advent of atms, offshore credit cards, and offshore atm cards working off the same networks as the domestic banks.
Telephone banking once again made it easier to manage funds and carry out "day to day" banking tasks via a telephone and often automated to accept directions via a touch tone menu.
Then with the explosion of popularity of the internet, world wide web, internet banking, and comfort level with carrying out financial transactions online, the true online offshore bank was born.
Online offshore banking in some ways brings together the best of both worlds. You are close to your money, while those you wish to keep you financial affairs private from, are "worlds away".
Of course, it should be noted that all this technology also makes it easier for snooping governments or organizations to track your financial affairs, so care should still be taken if financial privacy or bank secrecy are concerns of yours to choose your online offshore banking partners wisely.
Until next time!
