Advantages and issues of concern with online banking

Paying bills and taking care of any other financial matters, such as monthly payments or money withdraws is now easier than ever. Although online banking is not very old, as it only became popular in 2000, the attractiveness of this banking method placed it on an ascending trend that doesn’t seem to slow down at all. In fact, millions of people are switching to online banking each year, as the services and products become more attractive, cheaper and more secure. The early history of online banking only offered customers little control over their accounts. Today however, a few clicks of the mouse will enable you to transfer money, pay bills and change direct debit. Moving money in and out of the account is easier than ever and standing orders can be created in a flash. Most financial analysts believe that online banking is the method that most of us will use in the near future. More and more banks are developing virtual offices for their customers and some are even creating virtual help desk personnel and clerks to greet their online visitors.

Advantages and issues of concern with online banking

Online banking offers several advantages over traditional banking. Better rates of interest, for example, are generally offered by most banks that are hoping to attract more clients to their online systems. Better interest rates on credit cards and savings account are common with online banking and the utopist 0% credit card rate was first offered through online banks. Existing accounts also receive better rates and today four of the five best-paying current accounts come from banks that operate primarily online. How come online banking is cheaper? Well, the main reason is that the overhead is reduced, since the institution is able to implement an automated system. Reduced need for renting space and hiring staff also helps transfer some of the costs of online banking to the clients, thus reducing interest rates and offering better deals. Of course, the biggest fear with online banking regards security problems. A few well mediated stories of hackers emptying online bank accounts have set their roots in our minds, and we can’t seem to be able to replace unfounded fears with hard facts. The 128-bit encryption system used in online banking encrypts al data, before any transfer is made, so that the contents of any file are perfectly secure. Fraud guarantee is common with most good online banks, so even if a hacker manages to breach your account, your money is insured.

Article correct at its author date: Feb 2006. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

If you would like to display this article on your web site please email us.