A New Era of Banking

Online banking has come a long way since major banks in New York launched their first online banking efforts through a videotext system. Online banking has become an integral part of our society; virtually everyone who has a bank card or credit card and has access to the internet uses their bank’s online system in some fashion. Completely understanding the benefits and risks of online banking is imperative, so that a user can take full advantage of all services offered through e-banking, while also protecting his or her financial accounts.

The benefits of online banking generally speaking, outweigh the disadvantages. Online banking is an environmentally friendly way to bank. One may ask how this could be. Every time you use a check, receive a statement in the mail or even take a receipt once you have taken money from an ATM, you are negatively affecting the environment. On an individual level this wouldn’t be so bad, however billions use their bank for these services every day, which unnecessarily wastes paper. Online banking counters this by allowing individuals to access their financial instructions digitally, ultimately cutting out the need for paper. Today, one can opt for paperless billing, send and receive money to and from various accounts, access digital statements, receive direct deposit from their job and even receive e-mailed receipts from a physical ATM. An interesting feature of direct deposit is the money enters an account more quickly than if an employee were to receive a paper check; and who doesn’t want to receive their money faster? Many companies, including banks give consumers financial incentives or disincentives to use this type of billing. For instance, Con-ed charges its customer’s a service fee of five dollars for not using online banking. Another advantage of online banking is individual bankers have access to their banks around the clock from anywhere. Banks generally have limited hours, and sometimes it is just too inconvenient to physically go to the bank, say there is bad weather outside, you are on vacation in the middle of nowhere, you are at a job or you are the only parent home and it is your child’s bed time. Using your bank’s website can make what would be a grueling task, into an effortless one. Lastly, it allows for easier money management. Since one can access their bank account at any time, it is easier than ever to get a good gage on where one stands financially. Most banks even a have an expense analysis tool that tracks where the majority of one’s spending goes. These advantages have led society to a new age in banking, all because of the advancements in internet technology.

The drawbacks, although miniscule, are important for one to take a look at mostly for protection reasons. Although most major bank sites are secure, it is important to make sure you are on the actual site of your bank rather than a fraudulent spin off site (which can look realistic if a user is not paying attention to detail). It is imperative that you change your password frequently and ensure it is at a high level of difficulty so hackers cannot find a loophole and access your account. A friend of mine had an unfortunate situation where a hacker got a hold of her account and applied for a loan from an online loan agency called Western Sky. She received a letter in the mail that stated she had been denied because of her credit score. Upon looking up Western Sky on the internet it read, “Fast Unsecured Loans.” Luckily, the loan did not go through, but finding the hacker who attempted this has been next to impossible and to this day she does not know where she her information is floating. Therefore it is so important to have your bank information solely on your bank’s secured website and nowhere else. Some smaller disadvantages of online banking are that customer service can be of low quality. While making major decisions such as taking out a loan or refinancing your home it is probably best to see a banker in person. Lastly, while in some cases transactions are faster, in other cases they can take the same amount of time or longer than if you were to physically stop by your bank. For instance, many people use the virtual wallet, PayPal; while PayPal is a great service it can take up to five days for to transfer the money from a PayPal account to your actual bank account.

Overall online banking is just one of the many industries that have been able to move forward and allow its customer’s more efficient and effective services.  Knowing the risks of online banking can save you from disaster, and understanding the benefits can make an online banking experience even better.