“The time for waiting in long queues in front is long gone. Moreover, online banking can do all of it for one without a problem.”
Significance of online banking
In today’s world of globalization, most are aware of the methods of online banking. During this pandemic situation, most people had to involuntarily use online banking. But even after this, some are not aware of the ways of online banking. Moreover, most people want to save their time by making things work faster, so why not banks? Banks being handled online allows everyone to save their time. This method is also environmentally friendly with less paperwork. This method is also more customer-friendly as it offers better service as compared to traditional banks. It also doesn’t have geographical barriers so anyone can manage their account, anytime, anywhere without any problem. Hence, online banking is the future of banking.
So what is online banking?
Online banking is a way that banks and other financial firms allow their customers to view or use their banking services or statements over the internet. One can easily access his/her bank account with any online banking services. There isn’t a need to visit a bank in case of making a payment where a person doesn’t have access to their credit or debit card or cash. But the first one needs to make an online account. Some account holders don’t have access to online banking. Also, if one would like to use online banking services one needs to register for the facility while making the account. One can even get this facility already after their account is already made. This facility allows one to check their account statement, make payments, buy insurance etc.
In most cases, people can open checking, savings and other types of bank accounts depending on their needs. One can open a bank account with the hassle of physically signing any document by using electronic signature capabilities. A person also has an option to link their bank account with an online account. The entire process of making a bank account online takes less than 10 minutes. At a minimum, one needs things like:
- One needs a stable internet connection
- And device with the capability of using a web browser: phone, tablet, iPad or laptop.
- The bank account number for the verification process
- Personal documents to verify one’s identity.
The same things apply to an online-only bank account except for the bank account number. Registration usually involves bank account details and email ID and one also needs to set the password to ensure no one else can access their account.
Pros of using online banking
There are many benefits of using online banking instead of regular banking
Instead of writing cheques and going to the back for the withdrawal of money, one can directly send the money to the payee electronically. Just a few touches on the screen and the payment would be done.
Applying for loans
Getting a loan is a paperwork intensive job but one can fasten the process by applying for these loans online. Filing the paperwork online deals with the credit check process faster, allowing credit unions to respond to your demand more quickly. Some online financial loan providers provide funds the same day one applies for a loan. This happens if the candidate’s approval comes on the same date. One can also benefit from better approval chances in online banking. Another thing about online loans that one doesn’t need to pledge collateral. So if one fails to repay the loan only their credit scores might drop. Apart from this, they might not face any serious problems.
If someone pays one a check it’s easy to deposit the check just by sitting at home by using online banking. One just needs to click a photo of the check through the mobile app of the bank and submit it for payment. The bank will process and deposit the money in the person’s account.
Viewing current and past transactions
Online banking makes checking one’s credit unions and banks also make it easy to check one’s current available bank balance. They also enable you to check previous transactions and review previous monthly statements online.
Another benefit is most online banks give messages or emails if they notice any fraudulent activity in one’s account. The same happens when one’s account balance goes below a certain amount. One also receives a notification when the deposited money is transferred into the account or when a check clears. Machines do all the work in such a case so this will happen faster than the physical bank activities. Which makes this great for staying informed and more importantly to quickly stop criminal actions.
Certain things one should be informed about in online banking
There are certain key takeaways with online banking. Those go as follows
Better interest rates
One thing with banking is that one would generally want higher interest rates with saving accounts. While the opposite in the case of loans a person would like a loan with an allowed interest rate. Online-only banks tend to offer higher interest rates on deposit accounts. They can achieve this because there is no overhead of chartered accountants handling one’s bank and that can pass the savings along to you. Online banks also tend to offer loans at lower interest rates. It’s always smart to look around and compare online loan rates with traditional bank rates but in most cases, online bank interest rates will be lower.
Usually, online banks offer to pay lower fees as compared to traditional banks because of brick and mortar institutions. In certain cases, they don’t charge a fee at all for certain services or if one is not able to maintain a minimum bank balance.
Security issues related to online banking
There are many security issues related to online banking. Some of them are
Phishing attacks involve that somebody tricks a bank account holder into clicking on a certain link. These links are usually software that collects vital information from one’s computer. This hence leads to online frauds and problems.
It is not always easy to hack into a person’s computer or device. So the alternative hackers might try is to use one’s social security number and get other vital information that might get them access to one’s bank account. Identity theft can occur in several ways. Using this technique for traditional banks is also possible. This can occur in a number by using a social security number.
This might be the most difficult thing for a hacker to do. pharming occurs when hackers can hack the bank’s URL. So that when one tries to get to the bank’s website they get redirected to a different site that resembles the bank website. A normal person might not be able to tell the difference but it can occur. In such cases be sure to check the website name properly before entering any information.
Why can online banking security issues be overlooked?
Banking websites hit by attacks every day so they keep updating their system from time to time. This effectively deals with such problems. In case that one does face bank fraud, the bank policies cover the person if they report the fraud immediately. The bank will reimburse the money in such a case according to the bank rate. This doesn’t apply to institutional depositors. So if one’s bank account is under their business name reimbursement wouldn’t take place. This doesn’t mean that one shouldn’t trust the process of online banking. One should always be cautious while banking online. A person should also install a good firewall system. It’s also necessary to ensure that their software is up to date with the latest security systems.
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