Today, there are also many online-only banks, meaning they don’t have a physical branch or network, and everything is done electronically. These banks, however, offer primarily mobile access, via an app, and are usually cheaper. Some of these banks have been recognized as “real banks”, direct banks or neobanks, while others are just electronic money institutions offering remote banking services. Revolut is such an example.
On the other hand, most of the banks and financial institutions provide online banking, in addition to face-to-face services. Online banking allows you to access your bank account using your computer or other device with secure Internet access. You can view account information, such as balances and transactions, but also manage your account, set alerts, pay bills, etc. The service is free with most banks, but it’s not always included in the offer, so, sometimes, you would have to set up online banking first in order to use it.
For the purpose of this article, we’ll focus on online banking services, not online banks (although they differ only slightly).
Now, you have an account with a bank, and would like to use the Internet to manage your finances. But, is online banking the smartest way to go? What should you know before accessing your bank account via WWW?
Just like about anything, online banking has its pros and cons. We outlined the most important ones to consider below, so keep reading!
Online Banking Pros
1. Convenience
You can access, and manage your account from any location or device connected to the Internet, whenever you want. This means no physical displacement, no waiting in line, and no direct human contact (not all customer support agents are kind, right?). When you have to check your balance quickly, or pay that bill you totally forgot about, you can do it straight from the comfort of your home. You can check statements, and monitor your account You can check statements, and monitor your account at any time.
2. Speed and Efficiency
With online banking, you can complete transactions, and make changes to your account almost instantly. You can sign up for other offers, update your personal information, link cards, and more - by yourself, and in one sitting!
3. Clarity
Assuming your bank pays special attention to user experience, your online account dashboard will be easy to use, and you’ll be able to quickly navigate from one section to another, and get a clear overview of your account, and activities. Any news, notifications, and additional bank services and products will be presented clearly and visibly, and accessible with a couple of clicks.
4. Greater control
You can be in more control of your budget by paying your bills online. You can set up recurring payments on a weekly, monthly or custom basis, so you don’t need any reminder. You can pay bills in a few clicks and even set up recurring payments on a weekly, monthly, or custom basis. And, online banking will alert you to any account activity. Furthermore, you can even set up alerts to receive notifications whenever you make a payment, receive a deposit, or go low on your balance. If there’s a fishy activity, you will also be alerted, so you can always check on your activity, and make sure you’re safe, and up to date.
5. Eco-Friendliness
Online banking, energy consumption aside, is a rather eco-friendly way of banking. You can opt to go paperless, and receive your bank statements, and all other documents electronically. Not only will you reduce paper clutter in your home, but you will also do a bit of good for the environment. No more papers to sort, store, and waste.
There are, however, some downsides to using online banking services that make it less convenient, and even dangerous. Let’s discover why!
Online Banking Cons
1. Safety and Responsibility
Online safety is a major concern of people looking to protect their finances and identity in the digital world. While many banks use different advanced measures, such as Secure Socket Layer encryption (the small padlock in a browser search bar), multi-factor
multi-factor authentication, anti-virus software, automatic logout, and alike, to protect their customers, it does not necessarily mean you’re fully protected against cyber attacks. As a customer, you’re responsible for your online behavior. You need to take additional precautionary measures to ensure full protection. For example:
- Create a strong password that you won’t store anywhere or share with anyone.
- Avoid connecting to public Wi-Fi when accessing your online bank account.
- Learn about common financial scams, and how to avoid them.
2. Technology
Many people have at least fundamental computer skills, meaning they know how to open a browser, log in, etc. However, for older generations, using devices to access their bank accounts can be tricky, especially if a bank’s online platform is robust, and not quite user friendly. Sometimes, even tech-savvy people have issues when trying to navigate a website, find a certain feature or information. Smaller banks and financial institutions might not even have proper tech teams to maintain their websites, but hire web designers and developers externally on an as-needed basis. This can be frustrating, especially if you need to do something quickly, and there’s no documentation, tech expert or customer support agent to help you out, and guide you through.
3. Service Availability
Some services might not be available online. For example, most banks don’t offer the possibility to deposit checks, unless there’s an in-app option. Also, to get a loan, unless electronic signature is allowed, you would have to visit a branch to sign the paperwork and complete the process.
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All of the above considered, online banking offers are great for anyone looking for a bank account with lower fees, extra flexibility, and advanced tools. If you rarely go into a bank branch, an online banking solution might be an easy, time-and-money-saving way to manage your finances.