Internet (online) banking was the first banking technology to use the Internet. The Internet banking technology preceded m-banking. Before the commercialization of the Internet in 1991, large corporations spent huge amounts of money to use the Electronic Data Interchange (EDI) technology conceived in the 1960’s to exchange and transfer data over secure private networks. Only a few large businesses used the EDI technology because of its complexity and its high cost. After the commercialization of the internet in 1991, all types of e-commerce activities developed rapidly because of the World Wide Web’s low cost and easy connectivity including Internet banking. In October 1994, the Stanford Federal Credit Union developed and introduced the first Internet banking service in the United States. Considered a high-risk resource, the Internet banking project presented initially some unique challenges to financial institutions because by nature the Internet was not considered a secure environment. In May of 1995, Wells Fargo Bank became the first bank to make Internet banking accessible to its registered customers through a secure Web server.
Internet banking revolutionized the banking industry because it helped banks operate effectively by reaching far more customers at lower cost. According to the UK Census Bureau (2010), Internet banking adoption increased over the years, from 4% of UK households in 1995, 7% in 1998, 19% in 2001, 34% in 2004, to 53% in 2007. The UK Federal Reserve Board of Governors (2012) report revealed that in 2011, 68% of UK consumers engaged in Internet banking activities. Internet banking is firmly established and used by the majority of consumers, and m-banking has emerged as a new financial distribution channel.
Most users of Internet banking are also potential users of m-banking, so they are familiar with both technologies. Thus, that familiarity can play a crucial role in m-banking adoption. Compared to the Internet, m-banking service penetration rate is still relatively low at the current stage, and still, most consumers have not used the new technology yet. The mobile technologies creation is linked to the Apple Corporation’s technological creation of the iPhone and the rapid growth of Android phones based on Google’s operating system. M-banking as the usage of a Smartphone to access banking networks via the Wireless Application Protocol (WAP).
Corporate m-banking allows companies to control their finances anytime remotely using a Smartphone. Corporate m-banking is critical for companies to maintain a competitive advantage because it allows designated personnel to perform key banking operations in a timely manner remotely. M-banking was initially introduced in the early 2000’s through Short Messaging Service (SMS) and Wireless Access Protocol (WAP) or General Packet Radio Service (GPRS) enabled wireless mobile device web browsing. The SMS application was one of the first applications of mobile phone allowing banking.