Online banking in Germany is fairly easy and painless (some trouble with particular software products notwithstanding, of course). Online banking access falls into two categories: Dialogue-oriented (i.e. you enter everything yourself and retrieve statements etc. yourself) like on a web site or software-oriented where you set up a piece of software like Quicken or any of the own-brand software packages a bank offers and let the software do most of the work.
When you apply for online banking, you’ll probably be asked to choose any of two security methods common in Germany:
This is mostly used in a dialogue situation like WWW banking and means that you are given two codes: A PIN (personal identification number, normally 5 digits) which allows you to log into your account, check the balance and statements but does not allow you to generate any payment instructions. For any instructions you need a TAN (transaction number, normally 6 digits) which you will normally receive in blocks of 50 to 100. The reason for this mass of TANs is that each one is only valid for a single transaction and can not be re-used. So keep the sheet with your TANs safe and cross out those you have already used. As you come to the bottom of your TAN sheet, your bank will normally send a new sheet so you don’t run out of transaction numbers.
Originally a carry-over from BTX banking, PIN/TAN banking is still the dominant security system in web banking. (BTX or Bildschrimtext was an online service offered by the then state-run postal service, similar to Videotex in the UK or Minitel in France. Started in the 1980s it was run via a TV set or special units without own processing power and so the one-time codes of the TAN were invented to overcome the hardware limitations)
HBCI (or Home Banking Computer Interface) is a standard devised by the German banks in the late 1990s, when predominantly PCs were used for online banking and since those Personal Comuputers had the processing power to do encryption and decryption on data transmissions, HBCI offers encrypted and authenticated online banking between customers and banks. HBCI is software-driven so you set up your instructions off-line in your software package (like enter 3 bank transfers and click a box to receive your latest statement) and when the software goes online, usually via the Internet, it will execute the whole batch of transmission in one go.
HBCI uses public key encryption and depending on the system used by the bank you can either save you private keys on a floppy disk or get a smart card (card readers are often bundled by banks with their online banking software) for the same purpose.
When you start out with online banking, it will probably be easier to start out with PIN/TAN-based WWW banking, until you feel confident enough to tackle the task of setting up a software package to aid you.