We can see when debits clear, retrieve our balances instantaneously, and pay our loans while standing in line for a cup of coffee. Online banking has made banking easier and convenient, but have apps and 24/7 banking given us a false sense of security? We wanted to evaluate the pros and cons of online banking to help us become better consumers and safe spenders.
Pros of Online Banking
Anyone who uses online banking knows it comes with a few impressive benefits that simply our lives.
Convenience is one of the most popular attractions to online banking. At any point, you can pull up the app or website and track your account balance, withdrawals and deposits, and apply for other products.
2. Catch overdraft quicker
Overdraft happens, and now users can catch it quicker before accounts go deeper into debt. Many banks allow customers to make cash deposit the same day an overdraft is noticed to avoid overdraft fees.
3. Rates are better
Online banking means low overhead, and as a result, banks can charge lower fees. Consumers can also search online for the best rates without visiting various locations and making a mountain of phone calls.
4. Identify suspicious activity
Because of its mobility and instantaneous service, online bankers can identify suspicious activity quicker and take the steps to minimize the damage. Consumers can make a phone call directly from the site and speak with a representative to alert the bank to the suspicious activity and stop it in its tracks.
5. Set-up alerts
From the site or phone app, customers can set up alerts about all banking activity to help them manage their finances better and prevent fraud.
Cons of Online Banking
Online banking is not without its frustrations and drawbacks. A few cons of online banking include:
1. Website and app maintenance
If the site is down or the app isn’t working properly, you can’t complete your banking activity until the bank restores service.
2. App security
Not all banks have the same security policies, and sometimes security threats are not addressed or realized until AFTER an event occurs. This is the same with the banking apps you trust every day. Banking apps are especially vulnerable when opened on unsecured networks, when customers use ineffective passwords, and when a device is stolen or inoperable.
3. Phishing and malware
Online banking usually means online correspondence from the bank. This creates the potential for phishing emails and malware. If an online banker receives an email that looks like it came from the bank, and he/she opens it, a thief can trick the user into forfeiting financial information.
4. ATMs are costly
Many bankers decide to work with banks that have low rates but are not in the area. This is problematic if an issue arises, a consumer needs to make a deposit or withdrawal, or paperwork needs to go to the bank. If users use an ATM not owned by his/her bank, fees are charged by both the bank and the ATM owner.
5. Lose face-to-face contact
The personal relationship between the banker and the bank disappears. Instead, calls are typically handled by a different person each time, shuffling through an automated system becomes daunting, and banking problems take longer to resolve.
Online banking is now a part of our banking habits, but consumers must use caution when selecting the bank, the app, and when visiting the site. When you open a new account, make sure you choose a bank that is both local and virtual.