Online banking is becoming a necessity. Nowadays, many Americans don’t sign up for banks that don’t offer online banking. So it’s an essential service and no longer optional.
There are many benefits that online banking can offer that can’t be found in traditional banks. Unfortunately, traditional banks are struggling to keep up with these benefits, and it seems that in most cases, many of these banks are falling behind.
Nowadays, online banks are gaining a lot more clients than traditional banks. It’s also carrying the banking industry’s future alongside it. This article will explore the future of banking under online banking and whether such claims are valid.
The Pros and Cons of Online Banking
Advantages
Convenient
Online banking seems to be the modern way to do banking. It’s convenient, and you can practically do it almost anywhere. Moreover, it’s a lot easier to open a new bank account. All you need is an e-mail address and the minimum deposit indicated by the online bank. In addition, you can easily link your bank account to their online website for traditional banks.
It’s also far more convenient to do bank transfers and other transactions in online banks. Most of the time, all you need to do is to choose your transaction, input the amount, and you’re done! The convenience of online banking is one of the prime reasons Americans prefer to bank online.
Cheaper Fees and Higher Interest Rates
Many people don’t know this, but online-only banks offer cheaper fees and higher interest rates than brick-and-mortar banks. This is because online-only banks don’t have to pay for rent and other utility and admin bills. Additionally, online-only banks only require a handful of employees to function.
Reducing bills and the smaller number of employees can give online banks cheaper fees. However, they can also risk offering higher interest rates. This makes online banks the best choice if you want to make your investments.
Cryptocurrency
We all know the growing attention in cryptocurrency, and we all know that traditional banks aren’t very welcoming towards cryptocurrency. It’s not their fault. Cryptocurrency isn’t regulated yet, and there’s a lot of risk in accepting it. However, online banks are willing to take that risk.
Not all online banks offer cryptocurrency-related transactions, but most do. It’s right in their neighborhood, so it makes sense that they have it. If you’re into cryptocurrency, then it’s in your best interest to start an account in an online bank.
Disadvantages
Security
Security is the leading disadvantage of online banks over brick-and-mortar banks. The number of data breaches is increasing every year. It’s rising alongside identity theft and selling personal information on the internet. Online banks are susceptible to these hacks and are vulnerable to all forms of malware.
This is why there is an increasing amount of investment into keeping online banks secure. Many are creating a secure portal that is impossible to breach. Many others are looking into blockchain technology to make transactions a lot more anonymous. However, it’s still quite unclear when these implementations can be made.
Requires Technical Know-How
Another disadvantage for online banks is the need for technical know-how. Those that aren’t very tech-savvy can have a hard time online banking. Furthermore, they are likely to make mistakes in their transactions which can be a headache.
Online banks are trying to solve this problem by making their interface simpler. They use icons and images alongside simple words to help those who aren’t tech-savvy navigate their apps. Moreover, online banks also offer online seminars to those interested in signing up for their bank but don’t know how to do so.
But these solutions won’t solve the problem of older investors. They tend to be stubborn with the old ways and would like to choose something that they are familiar with and have a more personal touch.
The Lack of Personal Touch
Online banks are devoid of the soul that brick-and-mortar banks have. When you enter your local bank, you’ll see employees and clients bustling around and interacting with each other. To some extent, this affects the way people bank.
We are inherently social creatures. The personal touch that a real person can give you when you do your bank transactions can make you feel a lot better, and in some instances, a lot safer. This lack of personal touch is an inherent problem that online banks can’t fix. But its effects are quite minimal when compared to the other disadvantages above.
Online banks still have their own sets of problems when it comes to banking. But the convenience, cheaper fees, and better interest rates they offer can offset those problems. Moreover, the increasing amount of investments into security can also make online banking a lot more attractive to those who are paranoid about their personal information.
