Internet banking is steadily on the rise. No longer is conducting financial transactions strictly done at the bank’s counter, online banking has rapidly become the norm for a large percentage of people. Many people are attracted to Internet banking because of the convenience, speed and customization afforded by having the ability to do electronic banking.
However, with every positive generally comes a negative, and Internet banking is no exception, as there are some disadvantages associated with doing paperless banking. Here are a few of those drawbacks associated with Internet banking:
• Personal relationship with bank
One of the primary benefits connected to traditional brick and mortar banking is the fact you get to know your bankers and they are familiarized with you. While the Internet is increasingly used in doing business, nothing truly replaces a handshake and good old fashioned face-to-face interaction.
Investopedia points out getting to know bank personnel on an individual basis has its advantages, especially when “you need a loan or a special service that is not normally offered to the public. A bank manager usually has some discretion in changing the terms of your account if your personal circumstances change. They can help you solve problems such as reversing an undeserved fee or service charge.”
This likely wouldn’t be the case if you conducted your business with a bank, that for the most part, would see you as an anonymous face because there is not much personalization involved.
If you are going to do Internet banking, you may increase your risk of your account being hacked. This is not to say doing face-to-face only banking is guaranteed safety, but it does eliminate some of the risks that may occur.
While banks take strong measures to secure accounts, and individuals can/should take security in their own hands, technology is not 100 percent infallible. Hacks and data breaches are a reality of living in today’s modern tech-centric world and one of the trade-offs society accepts in exchange for benefits received. On the positive, due to the 24/7 nature of account access, wrongful account activity can often be identified quickly.
• Service reduction
Online banks may not offer the wide ranges of services a physical bank might. Services such as insurance, notaries, brokerages and personalized service to give advice or a periodic analysis of accounts might not be provided from Internet based banks, at least not without a fee. Brick-and-mortar banks often offer ‘extras’ to their loyal customers whom they see on a routine basis.
The convenience factor makes it easier to overspend. If you want to make a large purchase, you can simply transfer money. Relying on the bank’s counter to make a transaction gives you time to think carefully about the large withdrawal you might be considering.
• Dealing with checks/cash
People that still deal in paper checks and cash will find online banking to be a chore since there is no customer service counter to visit. Additionally many online banks do not have designated ATM machines and this may incur additional charges if you need to make a withdrawal.
While Internet banking has its drawbacks, the reality is this method of banking is here to stay. The good news is by becoming aware and familiarized with any potential hazards or negative effects, you can alleviate those issues and have organized management of your accounts.