Online banking is as much a part of life today as shopping on the Internet, downloading music or exchanging information by e-mail. But who would ever have thought that online banking as we know it today is already some 25 years old? In Germany, it started in 1983 with the pioneering medium of Bildschirmtext (BTX, videotext). Christian Schwarz-Schilling, federal minister of post and communication at the time, fired the official starting signal on September 1, 1983 at the IFA consumer electronics trade fair in Berlin. Since then, Postbank – which was there from the start as a pioneer – has shaped the development of online banking. Even now, it sets benchmarks – particularly in matters of security.

Television screen brings the bank to your living room
What is now the stuff of sci-fi cartoon strips was at one time a revolutionary technology for the retail banking customer: For the first time ever, data were transmitted via phone line at a speed of 1,200 bits per second and appeared on the home TV screen. At that time, there were three areas that enjoyed particular popularity among “BTX subscribers” - news, mail-order and travel booking options and naturally the home banking service of Postbank.
 
It enabled customers to issue transfer orders, check account balances and handle standing orders. For the circumstances of the time, this was a revolution – up to then, it was necessary to fill out a transfer slip or go to a bank branch in person.

To protect customers from unauthorized third parties, retail and savings banks came up with the PIN/TAN procedure, which still – in a highly advanced form – represents the foundation of flexible and secure online banking in Germany. The customer gains access to his account with his account number and personal identification number (online PIN). Taking the place of the required paper slip with signature is an online order that must always be submitted with a transaction number (TAN) good for only one transaction.

Still, due to the cost, the complicated technology and the limited display, the public approached the BTX technology very warily. For example, over the course of eleven years, the number of customers that used the BTX service of Postbank rose to a mere 300,000. However, Postbank had always been – and continued to be – sold on online banking and systematically expanded the system.

The Internet triggers a breakthrough
With the rapid spread of the Internet and PCs during the 1990s, online banking also saw a breakthrough. Those banks that, like Postbank, had already been familiarizing their customers for years with home banking could now move full speed ahead on the Internet. Access data and procedures were the same, but in addition, the data had to be securely encrypted. In 1998, Postbank was the first bank in Germany to use the high-security 128-bit encryption standard for browsers, making it unnecessary for customers to install any additional software. Previous years' experience had taught Postbank that only the simplest and most secure technology would be understood and accepted by customers. At that point, the number of online customers soared: Only six months later, Postbank welcomed its 500,000th online customer. Since then, this number has grown to roughly 3.7 million. As an independent bank, Postbank is still a market leader in German online banking. Today, roughly 35% of all Germans manage their current account online, according to the Statistical Office of the European Communities, eurostat. That puts Germany at seventh place in the EU.
 With 2.9 million visitors a month, the www.postbank.de website is Germany’s most frequently visited finance page (unique users, source: Nielsen Online, July 2008).

The range of online banking services today offers far more than account balance inquiries and transfers. Since the launch of Postbank’s online brokerage at the start of the new millennium, customers have been able to buy or sell shares, bonds and investment funds or subscribe to new issues. SMS alerts when salary payments are received or when chosen thresholds are reached in safe custody accounts complete the service offerings.

Postbank has also systematically developed its online products over the years. They always feature a cost-effective online condition and bear the additional name of “direkt”. Recently, the Postbank direkt private customer loan was recognized by the German Institute for Service Quality as the best online installment loan (July 2008).

Security is top priority
The key to success, along with user-friendliness, was secure online access. With the rapid growth of the Internet, the first cyber-criminals, on the lookout for confidential access data, appeared on the scene in 2004.  Everyone was using the latest English coinage "phishing" (fishing for passwords), and banks had to deal with the latest loophole for fraud.

Postbank reacted immediately to this threat from the Internet, put together a comprehensive security package and launched its first countermeasures. The free mTAN, the launch of customer-specific order limits and digitally signed Postbank e-mail got phishing e-mail under control.  Also contributing were the informational campaign, which included newsletters and a guided tour of online banking security on the home page, and a free hotline.

Postbank is taking aim at the latest threats from Trojan horses as well. TÜV Rheinland confirms that the mobile TAN is secure - it reaches the customer via SMS through a separate channel, and expires after a short time. What’s more, it is only valid for the transfer requested. Because the recipient’s account number and the amount are repeated in the SMS, the customer can identify any manipulation immediately and cancel the process.

In the future as well, the bank and its customers will need to join forces against fraud. This includes safeguarding one’s own PC with virus scanners, firewalls and operating system updates. Mail from unknown senders should not be opened, and only software from trustworthy sources should be downloaded and installed.

“Life without online banking is inconceivable”
Today in Germany, online banking is so popular that no one wants to be without it. Customers today even check their bank balances when they're on the go using their BlackBerry or other PDA. In 2007, with iBanking, Postbank was the first bank in Germany to make it possible to use the iPhone for banking.

Now Yahoo! and Intel are planning to put Web services on TV as well. Technological development in online banking thus comes full circle, ending just where it started with home banking in 1983.

Whether SMS messages on account movements, status reports on product requests or appointments for personal advice. The original, rather transaction-oriented online banking system is becoming more and more of a cockpit for easy management of one’s whole banking relationship – making an ever more important contribution to customer retention. “A customer-bank relationship without online banking is inconceivable today,” says Dr. Michael Meyer, Managing Director of Product Marketing at Postbank. “As many as 65% of our regular customers are using online banking. That demonstrates how important this communication channel is for the everyday customer. It is part of our multichannel strategy, which gives the customer free choice between the Internet, the branch location, and mobile sales.”

Special anniversary offer
As part of the anniversary of online banking, Postbank is adding a “little something” to your current account:  From September 1-5, anyone who opens online a new Postbank current account will get an additional EUR 50 toward their starting balance.  Added to this will be a 5% interest rate on the associated overnight deposit account for six months and a lifelong, interest-free line of credit in the amount of EUR 500.