|This article does not cite any references or sources. (March 2009)|
Telephone banking is a service provided by a bank or other financial institution, that enables customers to perform financial transactions over the telephone, without the need to visit a bank branch or automated teller machine. Telephone banking times can be longer than branch opening times, and some financial institutions offer the service on a 24-hour basis. From the bank's point of view, telephone banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions.
To use a financial institution's telephone banking facility, a customer must first register with the institution for the service, and set up some password (under various names) for customer verification.
To access telephone banking, the customer would call the special phone number set up by the financial institution. The service can be provided using an automated system, using speech recognition and DTMF technology or by live customer service representatives.
The types of financial transactions which a customer may transact through telephone banking include obtaining account balances and list of latest transactions, electronic bill payments, and funds transfers between a customer's or another's accounts. Cash withdrawals and deposits requires the customer to visit an automated teller machine or bank branch.
Some financial institutions have restrictions on which accounts may be access via telephone banking.
The customer would call the special phone number set up by the financial institution, and enter on the keypad the customer number and password. Some financial institutions have set up additional security steps for access, but there is no consistency to the approach adopted. Most telephone banking services use an automated phone answering system with phone keypad response or voice recognition capability. To ensure security, the customer must first authenticate through a numeric or verbal password or through security questions asked by a live representative.