Advantages and Disadvantages of Online Banking Services
With the advent of the Internet and Internet-related services, technological conveniences have made their way into our daily lives, so it comes as no surprise that the banking industry has developed into a major presence online as well. But just how safe is online banking? Will your money really be secure?
Nowadays you can do almost anything over the Internet, and the banking industry — also known as Internet banking — has decided not to be left behind. Yet while most of us have heard of online banking, a majority have probably not tried it, perhaps because we are more comfortable with real people, paper and money than with impersonal transactions on a screen. Whatever the reason, online banking has a number of advantages and disadvantages, outlined below so you can judge for yourself.
The Advantages of Online Banking
First and foremost, online banking is extremely convenient. It lets you pay bills and make transactions any time of the day or week — the bank never closes, because you access it from your laptop or computer, from any country in the world. The greatest advantage is that you no longer wait in the long, wearisome queues of a branch to request a transaction or statement.
Online banking is also fast and efficient. Conventional banking can take hours to process even a simple transaction such as clearing a check, but online transactions are executed far faster than at an ATM, and you can handle several different accounts from a single site. Opening an account has become simple and nearly paperless, closing one is just as flexible, and you can even apply for loans without visiting a branch. You can access account information at any hour without depending on office hours, monitor your account and transactions closely (which helps detect fraud), transfer funds nationally and internationally within minutes, and carry out stock trading and exchange bonds and other investments. You can also compare the policies and interest rates of different banks and choose the one that suits you, and most online banking sites are compatible with programs like Microsoft Money and Quicken for more effective asset management. For the banks themselves the system is cost-effective — it cuts administrative costs and paperwork and serves thousands of customers at once — which raises profit margins and allows more acceptable interest rates on savings and credit cards.
The Disadvantages of Online Banking
Like anything, online banking has disadvantages. The biggest is a lack of trust — many people wonder, after each transaction, whether they did the right thing; printing the transaction receipt, which confirms whether it went through, helps overcome this unease. It can be difficult for a beginner to learn, a site may be slow to start up, and some sites ask for photo identification, which can be inconvenient. Most sites, however, provide tutorials and even live customer support to solve problems.
The most serious disadvantage is security. While availing yourself of Internet banking, you must be careful to protect your computer and personal information — your password, user name and PIN — or you may fall victim to hackers who make unauthorized use of your account. Banks have introduced several security measures, but customers must also stay careful; overall, the number of banking-fraud cases remains considerably low.
Clearly, online banking has its share of advantages and disadvantages: for some it simplifies life, while for others it feels intimidating and complex. Some people prefer the personal touch of talking to a real person and will never be comfortable with Internet banking; but if unlimited access to your accounts and convenience are your highest priorities, nothing beats it. With the security of the FDIC standing behind them, it is clear that online banking is here to stay.
