Nuances of online banking - the pluses and minuses

At an age when everything can be accessed right at the fingertips, banking has also undergone tremendous transformation. Over the last decade, banking has changed significantly transporting its activities to the cyberspace. Online banking has brought convenience to people’s fingertips. The age-old tradition of queuing up in front of bank counters has become a trend of the past with the advent of online banking. Whether it is to make deposits, withdrawals, bill payments or even shopping, all that is required is the click of a mouse.

Functions of online banking

Online banking offers people a host of services in banking. It brings to them information and other data related to their account and transactions in an instant and offers the facility to provide applications, requests or instructions to banks. More importantly, online banking aids people to transfer funds according to their needs.

Online banking offers the advantage of accessing account data from anywhere provided internet connection is available. Information regarding transaction details, status of transactions, balance enquiry, bill payment date, credit card balances etc. can be easily obtained through internet banking.

Online banking allows a person to transfer funds from his account to another person’s account in the same or a different bank via internet. Settling of utility bills such as telephone, gas or electricity bills has become increasingly simplified with online banking. A person can also transfer money with other points with which the bank has channels.

Online banking vs. traditional banking

The reason for the immense popularity of online banking can be attributed to the convenience it offers. Internet banking will provide more gains to the banks as well. Lesser physical effort, staff, infrastructure etc. can help banks save more money and help the institutions focus on customers more with the provision of better rates. A plethora of services are also made available by the banks online, such as financial forecasting and budgeting tools, financial planning capabilities, investment analysis tools, loan calculators etc. Mobility is an integral part of internet banking allowing people to bank on the go.

However, there are several aspects of banking that people could have boasted of in the past, but are not available with internet banking. The relationships that could be maintained between the banker and the customer is totally absent through online banking. Banking had imparted a personal touch prior to online banking. Complex transactions and complex service issues cannot be dealt through online banking. Bank signature guarantee and notarization can be done only by a direct visit to the bank. The biggest pitfall of online banking is perhaps the security concerns it puts forth. In spite of security encryptions, there are high chances of cyber attacks and identity thefts on internet, which people did not have to worry about before the advent of online banking. 

Online banking has revolutionised the way people bank. With increased reliance on technology, the trend is going to propagate with lesser emphasis on the traditional banking. The facilities offered by online banking would not even have occurred in the wildest dreams of people twenty years ago.  In spite of compromising the relationships that customers had with bankers in the past, it is not surprising that online banking is too hard to resist for the average busy Indian customer. 

Now with the advent of new age Financial Institutions like BankBazaar.com which is an online marketplace for personal loans,car loans etc it has become easier for customers to even apply for loans online.