Telephone banking is a service provided by a

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

or other

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...

, that enables

customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for ...

s to perform over the

telephone A telephone is a telecommunications device that permits two or more users to conduct a conversation when they are too far apart to be easily heard directly. A telephone converts sound, typically and most efficiently the human voice, into e ...

a range of

financial transaction A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A ...

s which do not involve cash or Financial instruments (such as

cheques A cheque, or check (American English; see spelling differences) is a document that orders a bank (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The pers ...

), without the need to visit a

bank branch A branch, banking center or financial center is a retail location where a bank, credit union, or other financial institution (including a brokerage firm) offers a wide array of face-to-face and automated services to its customers. History and ...

or ATM.

History

Telephone banking became commercially available in the 1980s, first introduced by

Girobank National Girobank was a British public sector financial institution run by the General Post Office that opened for business in October 1968. It started life as ''National Giro'' then ''National Girobank'' and finally ''Girobank plc'' be ...

in the United Kingdom, which established a dedicated telephone banking service in 1984. Telephone banking saw growth during the 1980s and early 1990s, and was heavily used by the first generation of

direct bank A direct bank (sometimes called a branch-less bank or virtual bank) is a bank that offers its services only via the Internet, email, and other electronic means, often including telephone, online chat, and mobile check deposit. A direct bank has no ...

s. However, the development

online banking Online banking, also known as internet banking, web banking or home banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial inst ...

in the early 2000s started a long term decline in the use of telephone banking in favor of

internet banking Online banking, also known as internet banking, web banking or home banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial inst ...

. The advent of

mobile banking Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses ...

further eroded the use of telephone banking in the 2010s.

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 (which is not the same as the account number) and they may be given or set up their own

password A password, sometimes called a passcode (for example in Apple devices), is secret data, typically a string of characters, usually used to confirm a user's identity. Traditionally, passwords were expected to be memorized, but the large number of ...

(under various names) for customer verification. Customers would call the special phone number set up by the bank and would

authenticate Authentication (from ''authentikos'', "real, genuine", from αὐθέντης ''authentes'', "author") is the act of proving an assertion, such as the identity of a computer system user. In contrast with identification, the act of indicatin ...

their identity through the customer number and a numeric or verbal password or security questions asked by a live representative. The service can be provided using an automated system, using voice recognition capability,

DTMF Dual-tone multi-frequency signaling (DTMF) is a telecommunication signaling system using the voice-frequency band over telephone lines between telephone equipment and other communications devices and switching centers. DTMF was first developed ...

technology or by live

customer service Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...

representatives. In

India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...

, a variation of telephone banking utilizing

missed call A missed call is a telephone call that is deliberately terminated by the caller before being answered by its intended recipient, in order to communicate a pre-agreed message. It is a form of one-bit messaging. Missed calls are common in emerg ...

numbers, assigned to specific tasks (such as checking balances or performing money transfers), is offered by major banks.

References

{{reflist Banking

Banking A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

Banking technology British inventions

History

Operation

See also

References