A history of online banking

Looking through the histories of various things that we all take for granted in this modern 21st century world can be extremely fascinating, and it is also a great way of seeing how far we have come as a collective. At Winzum we’re huge fans of gaining knowledge and spreading it too (aside from our online competition addiction of course…)

One thing that pretty much everybody couldn’t live without these days is banking, and we explored the history of it right here [a history of banking]; from the Ancient Greeks, all the way through to the 21st century. But here’s the thing: banking has evolved by a crazy amount over the last few decades, something that is all down to the emergence of online banking.

It can be difficult to imagine not being able to transfer money at the drop of a hat for example, however in reality this has only been a widely available thing for the last decade or so. It got us thinking about the history of online banking, something we are more than happy to share with you!

The early stages of online banking in 1981

Amazingly, the early stages of online banking were being set all the way back in 1981, at a time when the commercial Internet was still in its infancy. It all started, like many things, in New York City, where major banks such as Citibank and Chase Manhattan experimented with home banking.

This was more of a novelty than anything else, however it still resulted in the seeds being sown for more sophisticated versions of online banking.

1983 and the crucial work of the Bank of Scotland towards online banking

Just a couple years later the Bank of Scotland became the first online banking provider in the UK with a service called Homelink. Customers were able to access their accounts through an Internet connection made via TVs or telephones, where bills could be paid, or money transferred.

Most online banking experts agree that this was the true start of the modern online banking craze.

1994 and the US online banking boom

Sure, online banking was slowly becoming a thing before the 90s, however it was still very much in its infancy. This all began to change after 1994 though, as Stanford Federal Credit Union became the first bank in the US to offer online banking for every single one of their customers.

Other banks like Presidential Bank soon followed, and online banking finally started to become the commercial force we now know today.

Appearance of PayPal at the turn of the century

PayPal technically isn’t a bank, however it has a whole load of parallels with online banking, and it also proved to be a vital component in the continued rise of online banking too.

PayPal appeared in 1998, with the ethos to provide fast, simple and efficient digital payments for their customers. Oh, how they succeeded! Within a few years PayPal were processing billions of dollars worth of payments, and had also boosted the general public’s trust of online banking.

Online banking in the 21st century: The new norm

By the mid-2000s the vast majority of banks across the world were offering online banking, with it quickly becoming the new normal for millions of people. In fact, 2010 online banking was growing at a rate faster than the Internet itself, which is a perfect example of how popular it is.

By 2020 we now have banks such as Monzo who operate solely on the Internet, and the online banking trend just continues to surge!