Online Banking: Advantages and Disadvantages

With the growing popularity of the Internet, more and more industries are looking for ways to use this popular medium in an effort to keep up with the changing technology preferences of their customers. These days, you can do just about anything online, from grocery shopping to making a free phone call to a friend in Tokyo through your PC. The possibilities of the Internet seem endless and the banking industry has decided that it will not be left behind. While most people have at least heard of online banking, most of them probably haven’t tried it yet. Perhaps it’s because we feel more comfortable working with real people and real paper when it comes to money matters rather than transacting in the seemingly impersonal universe of the World Wide Web. Whatever the case may be, there are pros and cons to online banking. This article will outline these pros and cons so you can feel justified in your fears or see online banking as a safe way to manage your finances quickly and efficiently.

Let’s start with the advantages of online banking.

First, online banking is convenient. It allows you to make transactions, pay bills and check balances 24 hours a day, 7 days a week. The bank practically never closes because it is as accessible as your PC or laptop. No matter where you are in the country or the world, you can visit your bank online and handle money matters. You can even schedule to pay multiple payees ahead of time instead of keeping up with paper bills or trying to remember when to visit a payee’s website to make an online payment. Your bank will automatically send payments on your behalf in the amounts and on the dates you specify.

Second, online banking is fast, efficient, and effective. Through the Internet, transactions are generally made and executed at a faster rate than ATMs. Plus, online banking gives you the ability to manage multiple bank accounts (checking, savings, CDs, IRAs, etc.) from one place. Most banking sites are also compatible with programs such as Quicken and Microsoft Money, to enable more efficient asset management.

Just like with anything else, there are downsides to online banking.

The main problem for most people is that of trust. They may be wondering if their transaction was successful or if they clicked the right button. The best way to overcome this concern is to get used to printing the transaction receipt. Keep this receipt until your bank statement or online account view confirms that you have successfully executed the transaction.

Online banking sites can also take a while to start up and can be difficult to learn at first. Some banks require customers to provide some form of photo identification in addition to signing a form at one of their branches. Spouses may also need to sign a power of attorney if they both plan to access and manage their accounts together online. On top of all this, it can take a while to learn how to use your banking site. Most if not all banks will offer an online banking tutorial. Some even offer live customer support for online banking via chat, email, or phone.

Clearly, online banking has advantages and disadvantages. It makes life easier for some people and for them it’s frankly a better way to bank. For others, it can be a bit more complex and downright intimidating. In light of these two perceptions, more and more banks are offering online banking as a viable option for their customers.