Source: Fortune Live Media.

In today's highly technical world, it's hard to imagine there was once a time when all banking was conducted at an actual brick-and-mortar financial institution. Even simple account transfers required a trip into the bank.

While today's online banking is filled with amazing innovations, it hasn't always been this easy -- in fact, it took a long time to get this far.

The History of Online Banking
It might be surprising to learn that online banking has actually been around since the early 1980s. However, when the term "online banking" initially gained popularity in the late 1980s, it had a very different meaning than it does today. Originally, the phrase referred to the use of a terminal, keyboard and television or computer monitor to access one's bank account using a landline telephone.

In 1981, New York City became the first place in America to test out this innovative way of doing business, as four of its major banks -- Citibank, Chase Manhattan, Chemical and Manufacturers Hanover -- made this home banking access available to their customers. At the time, customers didn't really take to the initiative, so it failed to gain momentum until the next wave of innovation in the mid-1990s.

In October, 1994, Stanford Federal Credit Union became the first financial institution in the U.S. to offer Internet banking to all of its customers. Around a year later, on October 6, 1995, Presidential Bank became the first bank in the country to offer customers access to their accounts online. Many other banks soon followed its lead.

Customers were hesitant to use online banking at first for a number of reasons. Many didn't trust its security features, were unsure of how to use it and didn't care to invest the significant amount of time start up required. After easing into e-commerce, the idea slowly began to catch on. By the year 2000, an overwhelming 80 percent of banks in the U.S. offered online banking services. In 2001, Bank of America made history as the first financial institution to gain more than 3 million online banking customers, about 20 percent of its customer base.

Online banking has become so widespread today that many banks only operate on the Internet -- effectively decreasing overhead costs to offer more competitive rates and enjoy higher profit margins.

"The Ally Bank brand was launched to provide customers with a straightforward, customer-centric approach to banking as consumer preferences continue to shift toward online banking," said Diane Morais, Ally Bank deposits and line of business integration executive. "As an online bank, Ally doesn't have branches, which allows it to offer customers great rates, 24/7 service, and innovative and competitive deposit products."

How Customers Should Protect Their Accounts Online Today
Today, online banking is one of the most popular ways for people to manage their money. Banks ensure this practice is safe for customers by using encryption technology, such as Secure Socket Layer (SSL), verifying account activity, incorporating account safety features and constantly warning consumers of ways to avoid threats.

For example, Bank of America boasts that its online banking service "incorporates industry-leading safety features that give you greater security and peace of mind as you manage your money." However customers are also warned to take "common-sense steps to help protect [themselves]."

The FDIC has also taken measures to ensure this highly convenient practice is also a safe one.

Online banking customers are urged to:

  • Research a bank prior to opening an account online.
  • Be aware of fraudulent websites made to look identical to actual bank sites.
  • Always make sure the bank is FDIC insured.
  • Keep personal banking information secure.
  • Know their rights.

A Majority of Depositors Make Use of Online Banking
A 2012 survey conducted by the Federal Reserve Bank revealed that 68 percent of people had used mobile banking during the last 12 months -- with just 33 percent saying they had used telephone banking.

The Federal Reserve Bank dug deeper to learn more about the online banking demographic, finding the following information about respondents who used online banking:

  • 30 percent were between the ages of 30 to 44, while 20 percent were age 60 and older.
  • 73 percent were non-Hispanic whites, 12 percent where Hispanic and 8 percent were non-Hispanic blacks.
  • An equal number of men and women use online banking.
  • Income is irrelevant, with the exception of people earning less than $25,000 per year -- who are less likely to use online banking -- and those earning more than $100,000 per year -- who are more likely to use it.
  • 39 percent of online banking users have a bachelor's degree or higher -- relative to 30 percent of people with a bank account -- meaning online banking usage increases with the level of education attained.

Online banking has proven itself as here to stay. It took decades for Americans to finally accept this innovative form of banking, but it is difficult to imagine life without it today. Features have greatly evolved from the need to use a land line to access account balances, to having the ability to transfer funds and pay bills with just the click of a mouse.

This article originally appeared on Go Banking Rates.