With the increased use of Internet, a variety of avenues and facilities have been opened for the masses. It gives us access to facilities like shopping, booking tickets, making payments etc. The biggest advantage of using internet is that one does not need to go out anywhere, he can do all his chores from his comfortable home environment. Not only, does it help us in these leisurely activities, but Internet has also become a mode for banking. Internet banking has appeared as a boon, in this fast moving world, where we do not have much time even for our family or friends.
Online Banking is a facility that allows customers of banks or other financial institutions to operate or gain access to their financial accounts or information online.
To perform Online banking a customer needs to obtain an online username & password. This confidential information is provided by the bank itself to its customers. It is then verified & authenticated by both the parties. Now a days this data is compulsorily provided by the financial institutions to its customers. It is upto the customer to decide whether he wants to access or use it or not. This username & password is unique ie. it is not similar to the customer’s bank account number, otherwise it could be easily traceable. The customer can change his password, upon first logging in. To access online banking, the customer should visit the financial institution’s website, and enter the online banking facility using the customer user name and password.
Advantages of Online Banking
1. Fast and Efficient – Unlike the traditional banking, online banking is much more faster, easier & convenient. The whole process is very user- friendly. The customer is guided as to what he has to do next. If he by chance gets stuck, he can call the 24 hours customer service to get assistance. Hence it is more efficient.
2. Hassle Free – the major advantage of using online banking is that there is no need to stand in the long queues in banks for petty needs. One can comfortably stay at home & view his financial information on his own computer screen.
3. Plethora of services – online banking gives access to view account balances & recent transactions, download bank statements & ordering cheque books online. One can easily save this information in electronic form for further reference & thus reduce unnecessary paper keeping.
4. Banking transactions – Bank customers are also authorized to conduct various banking transactions like transfer funds between the customer’s linked accounts, third party payments including bill payments, opening fixed deposit accounts, Investment purchase or sale, Loan applications and transactions.
5. 24*7 – Unlike to the previous times, when one used to adjust his daily routine according to the bank timings, Online banking is available all the seven days in a week for 24 hours. Hence anyone can gain access to his account at his own convenience.
Disadvantages of Online Banking
It goes without saying, that the online banking system is a very relaxing & a stress free way to operate one’s bank account. Previously people used to stand in long queues waiting for their turn to get their work done. Whereas, now a days they can very easily operate their transactions sitting at their home itself. But with all these benefits, come along one of the biggest disadvantage associated with online transactions ie cyber crime.
1. Security- there is an increased risk for identity theft or fraud where one’s personal data is accessible online. Even though online banking sites are heavily encrypted, it is hard to avoid hackers who may access the customer’s bank accounts. To avoid such accidents, online systems have encouraged using virtual keyboards to key in confidential information.
2. Transition from old system to Internet Banking – Some people especially the older generation may find online banking a more difficult process because they are not used to it. Since they are not much computer educated, they would avoid using Internet banking services because they find it difficult to understand how it works. Hence, they first need to be properly educated & groomed to make the systems more familiar to them.
3. Site changes and upgrades – All the banks need to periodically upgrade their online programs, wherein new features are added or existing fields are modified. This would require the customer to be more careful and aware because he may need to re-enter some account related information in unfamiliar places.
4. No personal assistance – In the real banking system, whenever a person is faced with some problem or query, he can go to some bank employee get assistance. However, in the case of Internet banking, the customer is faced with the problem of making endless calls to the customer service department, where he is put on hold or has been passed around from one person to another.
5. No room for mistakes - a wrong click can cause losses, which can be monetarily challenging.
6. Dependence on Internet – if the network is down in one’s area, then using online banking can be quite challenging. This may pose a problem, if the person has to do an important transaction.
7. Internet account – One needs to open an account with an Internet Service Provider (ISP) which may be another hectic process.
Although, there are some disadvantages associated with online banking, its advantage seems to outweigh them. Online banking has made the whole banking system more efficient & effective. Today’s customer is much more smarter & far more educated to learn more & more and adapt to the new systems.