Advantages of online banking
Convenience is one of the major advantages of online banking. It allows you to perform almost any banking transaction at any time, 24 hours a day, 7 days a week. Not only can you handle your day-to-day account management activities, you can also communicate with your account manager or open new accounts including savings accounts and pension funds. Another major advantage is that you can do all of this while paying smaller or no transaction fees, due to the reduced overhead and other costs for the bank if there are fewer or no physical branches to be maintained. Some banks have gone one step further and declared themselves to be branchless or internet-only institutions.
Disadvantages of online banking
While online banking is seen as the most convenient way of managing your bank account, sometimes a customer may prefer to receive consultation about more complex banking issues via a face-to-face conversation with a bank employee. Not having this option might be a major con if you are considering opening an account with a branchless bank. Another disadvantage of using online banking is its complete dependence on internet access. Although nowadays internet connections at home or in the workplace are commonplace, there can be situations where you have no internet access. This problem is even more significant when it comes to mobile banking. For example, if you go on holiday, you may choose not to pay for mobile internet and so the only internet connection available to you could be public Wi-Fi. Furthermore, it is advisable not to log in to your online banking when using a public Wi-Fi connection, as your smartphone or other device is more vulnerable to hacking when connected to an unsecured network.
This leads us to another disadvantage of online and mobile banking. Security issues are seen as the biggest drawback of online banking. Although financial institutions work intensely to prevent any data loss, as it may jeopardise their whole business, bank account information is considered to be one of the main targets for hackers and various computer viruses. Meanwhile, 48% of bank clients in the US choose not to use mobile banking for security reasons.
