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Pros and Cons of Online Banking

Pros and Cons of Online Banking

Is online banking a good thing or a bad thing? Online banking is now a part of almost all the banks in the developed world, and even banks in developing countries, and in tax haven countries, are getting online. They are reacting to market demand, and since demand is so high, it is fair to say that online banking is currently a good thing and that it is probably here to stay unless there is a large security breach that shatters people’s confidence in online banking. Here are the pros and cons of online banking.

Pro – It Is A Convenient Way To Check Your Balance

Being able to hop online and see your balance is very convenient and is certainly better than having to wait for an email statement or paper statement. It is also better than having to go to an ATM or bank teller to get your balance.

Con – Starting Your Account Takes Longer

If you were to walk into a branch and set up your account, then you may get a lot more done in a short space of time. You can often sign the forms right there and take in your ID so that it may be processed more quickly. With online banking you have to wait whilst your ID and other information is checked.

Pro – Mobile Balance Checking Is Possible

With online banking, you are often able to integrate mobile technology. This m be done via an app, or simply by mobile Internet, and as a result you are able to check your bank balance on your phone whilst you are shopping in stores or prior to making online purchases.

Con – Signing Up Online Is More Difficult

There are numerous ways in which applying for and opening your account online is more difficult. For example, you may have to dig out online statements and send them over, or may have to scan your ID so you can send it over. There are often far more steps involved when signing up online and opening your account online.

Pro – There Is A High Degree of Ubiquity

If you have a problem with your account or your money, and even if you abroad, you are able to hop online and deal with it yourself in some cases. This is possible because there are some banks, companies and financial institutions that give you online tools to deal with your own problems. The fact the account is accessible via the Internet means your current location doesn’t have a negative effect (in some cases), and you are subsequently able to access your account and fix things as you wish.

Con – Support Is Harder To Get

If you sign up in a branch, then you can ask questions in the moment and have the process explained to you. If you apply online, then you may have to call their customer service department to get answers, plus they may ask you questions on the website that you do not know the answer to, which means you have to contact their support team or check their FAQ section.

Pro – Transaction Speeds Tend To Be Faster

When things happen as a result of your actions online, you are not the one that actually “Actions” the transaction, but you are the one that sends the instruction. This is faster than if you use telephone banking or a branch teller because it means somebody else has to send the instructions, and this may result in a time lag. It may even be quicker than using automated deposits.

Con – You May Have To Allow Cookies

If you are smart, then you have your cookie settings on their highest, which means websites cannot add cookies to your computer without you giving them permission manually. If you are signing up for an online account, you may fill in a portion of the online form before it becomes clear you need to allow cookies to continue your application.

Pro – It May Be The Most Efficient Option Available To You

If there is a transaction you wish to action, then there is a chance that online banking is the most efficient way to get it done. For example, if you want to sell some shares, there are some accounts where you are able to send the instruction online. This is usually faster than getting in touch with the broker via the banking system, is often faster than using telephone banking and is definitely faster than giving the instructions to a bank teller. The same is true for simple transactions such as moving money from your current/checking account to your savings account.

Con – Technical Problems May Make Applying Harder

There are times when your browser will not allow certain things to load, or may make the content appear incorrectly. It is especially annoying when the website has a button that you cannot press for some reason. It is also annoying when you leave the page for a while and when you come back it will not reactivate and recognize your clicks. It means you have to refresh, which may mean entering your details again.

Pro – Paying Bills Has Become Easier Than Ever

There are plenty of ways you can pay your bills, but a direct payment via online banking is now very easy. Many banks have set up their own systems that allow people to set up payments on the Internet. It eliminates the need to visit the people you wish to pay your bill to, and eliminates the need to give them your payment details over the phone.

Con – A Technical Problem May Delete Your Form Entries

If you use Wi-Fi, then there is a chance your Internet will go off at any moment. This is not so bad when it happens now and again when you are browsing, but if you have just filled out a large portion of their application and you press the “next” button–only to have a white screen appear, it becomes very frustrating. The technical problems that make you press refresh or back and then delete your form entries are very annoying.

Pro – Paying Bills Is More Efficient

This is true sometimes. For example, if you set up direct-debits/standing orders, then the process is automated and so is more efficient than paying your bills online. However, there are numerous payment methods that are less efficient than online banking.

Con – Applying Online May Be Less Secure

If you apply in a branch, then the process is as secure as the bank itself, but if you apply online, there is chance spy ware will pick up your application and steal your private questions, answers, and passwords. There may be records kept on your computer that give away the information you place into your application due to malware on your system.

Pros – You Can Set Up Direct-Debits/Standing Orders On Your Own

Setting up direct-debits/standing orders used to be difficult and time consuming. You would have to do things such as fill out forms and post them to your bank. Nowadays, you may send the same information over the Internet if you have a signing program that allows you to e-sign things. You can call your bank and have them set up your direct-debits/standing orders, and there are some banks that give you to tools set them up yourself. They sometimes have to undergo fraud checks, but some banks and/or online accounts will allow you to set up your own direct-debits/standing orders very easily.

Con -What If The Application Website Has A Security Hole?

There are plenty of times when websites have had security breaches that have resulted in lots of people suffering. Cloud systems have failed and exposed the details and personal files of many people. There is also the example of HeartBleed where hundreds of known and popular websites had been hacked for years without people knowing because of the HeartBleed bug. There is always a chance your new bank has a similar bug that we do not know about yet.

Pro – View Your Statements And Data In One Place

A good online bank will clump your information together on their website. This means you may be able to check the status of your pension or your loan, or you may be able to check your bank balance, your statements, your pending transactions and your standing orders. All of this information is available to you by simply going online and signing into your accounts.

Con – There Is A Learning Curve Involved

If you are used to dealing with your online bank account, then you may be mystified as to how other people cannot look at your user interface and instantly pick it up, but the truth is that online banking systems tend to be reasonably complicated. They are unlike other websites where things are kept simple to encourage conversions. An online bank will often offer a wide series of tools and information-getting functions that are packaged together in an efficient but easy-to-understand bundle, but even the simplest interfaces are not self-explanatory and are rarely “genuinely” intuitive.

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. 'He spent several years reading as many financial advice books and blogs as he could.And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created to help others do likewise!

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