Telephone banking allows account holders to perform a variety of basic transactions, such as checking balances or transferring funds between accounts, through the use of a touch-tone phone. When the customer enters different numbers after certain prompts, the service sends signals to a computer system that retrieves information from the bank's records and relays it over the phone.
A telephone banking system utilizes the same back-end mechanisms of an online banking system, in that it takes user inputs and electronically checks bank records to retrieve details about account balances or transaction history. The main difference is that it uses the unique signals from a touch-tone phone to initiate the requests rather than a visual interface. When a customer calls the bank's telephone banking number, which may also be the same as its main customer support number, she may select various menu options for different aspects of the service.
Whenever the customer presses a button, according to the prompts from the automated system, it sends a unique tone which the banking program recognizes. Based on the tone and the system's programming, it is able to move to different menu options or access bank records to retrieve account information. Many telephone banking systems may also support voice recognition, wherein the customer speaks a command or request that the system interprets to complete the necessary actions.