Advantages And Disadvantages Of Online Banking

The Rise Of Online Banking And Credit
Part 1 The Impact Of Internet Loans
Part 2 Advantages And Disadvantages Of Online Banking
Part 3 What Do You Need To Open A Bank Account Online?
Part 4 How To Apply For A Payday Loan Online

Now that you can do all your shopping and banking transactions on the Internet it is a good time to look at whether this is a sensible move or not. There are both benefits and drawbacks to using the Internet for financial transactions but there is no doubt that it is here to stay so let’s look first at the advantages. In this article we examine:

  • Benefits of online banking transactions
  • Access to financial products online
  • The possibility of identity theft and fraud
  • Customer service quality and transaction delays

Secure websites for banking transactions

Banking websites are secure. Or, they are as secure as the technicians can make them. There have been some instances of hacking but the latest firewalls and modern cyber tracking makes banking websites the most secure in the world (after the government).

Overall, online banking operates much faster than traditional banking

Legitimate websites will show a security certificate and are often marked with a little padlock icon. If you click on the icon you can verify the details of the site. The website address should always show ‘https’, the ‘s’ shows that it is secure. Any site with just http in the address is not secure.

Simple and speedy 24 hour access

If your bank is closed you can use the bank’s website and this will be available 24 hours a day. So, if you work unsociable hours and cannot get to the bank you can make transactions online. This is equally important for less able bodied people who may find it difficult to access a traditional local bank. Additionally, whether you are away on business or on a vacation you can still keep track of your transactions and balance. Speed is also a feature of online banking. There is no need to spend many minutes queuing in line for the bank teller and if you have just received your paycheck you can access your money immediately.

Financial products online

Whether you want to apply for a personal loan, a credit card, a payday loan or to make some investments, online banking will make the process simple. There is a wealth of information about all the different products and you can check up on interest rates for both loans or savings accounts.

Online banking is secure but there are always exceptions and banks are not totally immune from cyber attacks.

The rise in online banking has also led to a larger variety of providers with many new lenders now offering loans only through websites. So, there is a greater choice for anyone who has been turned down by their bank. Some lenders are more flexible than others and as long as you are aware that you may pay a higher rate of interest you will have more choice when applying for a loan.

The possibility of identity theft and fraud

Online banking is secure but there are always exceptions and banks are not totally immune from cyber attacks. However, for most people the possibility of identity theft can be discounted as long as you take some basic precautions. Keep all PINs and account numbers safe and secure. Never reveal your passwords to anyone and keep a track of your balance. If something looks wrong it is important to contact the bank immediately.

A young woman is shown entering her online banking services on her phone at home

Some banks operating online do not have bricks and mortar building so you need to be sure that the business you use is legitimate. Do some serious research before trusting your details and money to any online operation. You can check that deposits are secure by confirming that the bank is FDIC insured.

Lower standards of customer service

If you are used to dealing with the same teller each time you visit the bank then online banking might be slightly disappointing. Most have a call center and in order to reach the correct person you may need to go through an irritating telephone menu. When you have an urgent inquiry this can be frustrating.Some banks are better than others and all will have a dedicated customer service section to deal with inquiries and complaints.

Possible delays with transactions

Although overall, online banking operates faster than traditional banking, there can still be delays with transactions as the system is still subject to normal banking business parameters. When paying bills or transferring funds it is useful to keep a print out of the transaction as proof that can be shown in case there is a delay.

There are both pros and cons to online transactions but, if used sensibly, you can take advantage of all the benefits and miss out on the drawbacks. After making use of online banking most people often wonder how they managed before. This is one of the modern wonders that the Internet has made possible.

The Rise Of Online Banking And Credit
Part 1 The Impact Of Internet Loans
Part 2 Advantages And Disadvantages Of Online Banking
Part 3 What Do You Need To Open A Bank Account Online?
Part 4 How To Apply For A Payday Loan Online

About the author

David Warren

David Warren is an expert on personal loans across the United States. His career in banking has helped make David the loans specialist that he is today. He shares his analysis and insight into the personal finance industry on onlinecreditusa.com