Online banking has made life much easier for bank account holders by providing them online with almost all the facilities that a bank usually provides offline. All the services like the transfer of cash, a deposit of money, or even the payment of bills can now be done through online platforms of banking institutions.
Each bank institution now provides online banking through a desktop version of online banking or through mobile applications.
It is very beneficial for customers as now they do not need to visit the bank for every small thing; most of the transactions can be done online by sitting at home or in the office. In this way, a lot of time can be saved by the customers.
Understanding Online Banking
Online banking requires basic facilities like an internet connection, a mobile or a desktop, and a bank account with an online banking or internet banking facility. In addition, debit or credit cards can also be used to make transactions on several platforms.
After that, the customers are given unique customer IDs to use on the online banking platforms of the respective banks. To make it more secure and personalized, the customers are asked to create a strong password so that only the authorized user can access the profile made by him on the online banking platform.
After completing the steps mentioned above, customers can use online banking services without difficulties.
There are several services that the online banking platforms of banking institutions provide. However, not every banking platform of every bank provides all the services. Some of the common services that most banks provide online include applying for a credit card, making bill payments or doing transactions.
Customers can also open a new bank account through these online banking platforms. Banks also provide services like change of address of the account holder and other basic details as nowadays most of the banks are providing the e-KYC facility. With e-KYC, banks verify information digitally.
Customers can also deposit cheques online. For depositing a cheque, customers need to upload photographs of the front and back of the cheque after entering the name, amount, and valid sign in the cheque.
Advantages of Online Banking
One of the major advantages of online banking is that it makes the transfer of money very convenient and easy for customers. Customers can send money through online banking platforms whenever they want and do not even need to visit the bank for such purposes.
Another advantage of online banking is that the transfer of money can be done instantly and efficiently. Customers can even open or close their accounts online. Also, customers can access transaction history or mini statements through online banking platforms and can also check their balance whenever they want.
Applying for a new ATM card, activating an ATM card, setting an ATM PIN, enabling or disabling specific transactions of an ATM card, and many more services can be managed online from the comfort of home.
Disadvantages of Online Banking
For a new user, using online banking platforms can sometimes be difficult or confusing as not all customers are familiar with new technologies and their functions. This also leads to failed transactions of money as sometimes they enter the wrong PIN or details of the receiver's account. Because of such difficulties, many customers prefer making transactions face-to-face or by going to the bank rather than using online banking platforms.
Another disadvantage of online banking is that most banks have fixed transaction limits for the day, which means that if the customer wants to debit or credit more money than the transaction limit, then he will not be able to do so because of the fixed transaction limit. In such a case, the customer can only make the transactions for the rest of the money by visiting the bank only.
The risk of fraud is increasing day by day with the improvement in technologies. Hackers target customers' bank accounts to steal the account holders' details and money online. Many cases of cyber fraud are being registered daily in the country, which is a serious concern for all financial institutions. Due to such risks, banks are making efforts to secure online banking in such a way that hackers cannot break its security.
To avoid such frauds, customers are advised to use their own mobile internet connection for online banking services and not to use public Wi-Fi for such purposes as it makes it easy for hackers to access their bank account online.
Customers need a good internet connection to do any online transaction or use any of the online banking services, as a poor internet connection can sometimes lead to transaction failure. When a transaction gets stuck, customers get worried about whether their money has been debited or not.
Services of Online Banks
A lot of new banks have entered the industry recently, which do not even have any physical branches. However, they offer all the basic services of the banks to their customers online. If the customers need to avail of any service from such banks, they are required to connect with such banks via email, phone calls, or online chat.
All these services can be accessed by customers through their mobile phones and even on their desktops; they only need an internet connection.
These online banks do not set up their own physical ATMs, but they tie up with some other banks which have already established ATMs, and the customers of these online banks can use the ATMs of other banks and can get cash from them. While other banks charge customers some fee for using their ATMs, the online bank with which the customer has an account reimburses the same amount of the fee charged.
Since these online banks do not set up their physical branches, they save a lot of money that would have been spent setting up physical banks. Online banks earn money by charging banking fees to customers, which is somewhat less compared to physical banks in most cases. That is the reason why customers are now shifting towards these online banks. With online banks, customers get access to all the services of banks without going anywhere, which helps them to save time and money.
The Bottom Line
Online banking is emerging rapidly all over the world, and soon many more online banks will enter the market, which will create competition in the market. This competition among online banks will benefit the customers as the cost of services will decrease over time.
Banks need to make online banking more secure because only in this way online banking can sustain itself in the market for a longer period.