What is Online Private Banking?

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  • Written By: Osmand Vitez
  • Edited By: C. Wilborn
  • Last Modified Date: 31 August 2019
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Online private banking is a method for individuals to conduct wealth management services over the Internet. Banks, credit unions, and other financial services companies will often provide a website for users to access their information. From this portal, individuals engage in services such as savings, investing, tax planning, and inheritance management, among others. Not all financial institutions will offer the same services, and accounts will also depend on the services selected by the user. Some financial institutions may charge fees for online private banking or the services associated with these accounts.

High-income individuals or those with a high net wealth are often the target clients for online private banking. Financial institutions may offer these individuals a private banker or associate in additional to other banking services. This allows the individual to worry less about managing his money and accounts, as the private banker will act on the individual's behalf. Smaller financial institutions are often unable to provide those with online private banking a personal consort for accounts.

Wealthy individuals may also use private banking as a way to hide income or wealth. The oft discussed Swiss bank account is commonly mentioned as a way to protect personal wealth. In Switzerland and countries with similar laws, releasing the ownership of bank accounts or wealth management accounts is forbidden. This allows high-wealth individuals the opportunity to engage in online private banking to avoid taxes and other government fees.


Private banking services may also link to wealth management accounts; for example, a standard checking or savings account may also link to a 401(k) or similar investment account. Online private banking allows users to access all accounts for their review. This allows individuals and businesses to conduct reconciliations without the monthly statement. Users can locate errors more quickly and move money among the accounts. Online banking may also allow users to receive emails for events that occur in their bank accounts, keeping them abreast of all situations.

The ultimate goal of online private banking allows individuals to engage in alternate investments offered through a financial institution. For example, institutions may offer derivatives, stock, insurance policies, or other investments. Wealthy individuals can earn more money by transferring a portion of capital into high interest accounts. Monthly online reports can allow individuals to review performance and make changes quickly to accounts. This results in the ability to mitigate losses and diversify investments at their financial institution.


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