Online banking has evolved to become the norm when doing business. In 2009, CNET reported the online segment of the banking industry is booming, and since then, its use has steadily grown.
Bank counter service is considered by many to be an antiquated method to conduct financial transactions. Those embracing technology frequently point to the advantages associated with online banking.
There are a couple of types of online banking; traditional brick-and-mortar banks that offer online banking and Internet-only banks that operate solely online with no physical branches. Many of the benefits associated with online banking are offered by both types of banks, however, some are generated from Internet-only entities.
Additionally, banks often try to route customers to their websites as it is a cost-savings measure for them, and as a result, some of these monetary benefits are passed on to the consumer. Other benefits bank customers receive from online banking are purely of convenience.
Here are a few of the top beneficial reasons of online banking:
• Convenience
Electronic processing is quick, easy and accessible. Traditionally, consumers had to do their business between “banking hours” which were generally 9 a.m. to 3 p.m., and if customers were lucky, their banks offered one extended hours time frame during a weeknight, or a few hours on a Saturday morning.
With online banking, customers do not have to wait or take time away from their jobs to visit the bank. Doing transactions through a bank’s website gives 24/7 access, and it also allows for faster processing since there is not a limited window of time for employees to sort through deposits and withdrawals; many of these can be calculated immediately.
The advent of direct deposit helps facilitate money clearing faster, giving individuals almost immediate access to their funds, and transferring money from one account to another is a simple computer transaction, further heightening the convenience factor.
• Better interest rates
According to Investopedia.com, due to the lowered overhead costs associated with online banking, some Internet-only banks offer better interest rates on savings and certificate of deposit (CD) accounts. Additionally, its noted lower rates may be charged for mortgages and other loans. There may also be other perks that banks offer the customers who agree to go completely online.
• Mobile banking
Increasingly, the banking industry, like many other commercial businesses, are building towards mobile-friendly processing. Smartphones are being increasingly used and many banks are offering on-the-go banking. The mobile industry, in general, is booming, and forecasts show this area will continue to grow over the next several years, and chances are banks will possibly offer additional perks to entice consumers to go mobile, not unlike its been doing with ‘regular’ computing.
• Other services
Investopedia notes, “Direct banks typically have more robust websites that offer a comprehensive set of features that may not be found on the websites of traditional banks.” Such tools are ones that can help consumers with financial planning, budgeting, loan calculators and investment analysis tools.
Online banking is found by many to be an advantageous service. However, there are also some disadvantages associated with online banking that consumers should be aware of; in the modern day there are still many people who prefer to know their bankers and meet face-to-face.