Disadvantages of Online Banking

Online banking is the process in which a financial institute allows its customers to access their accounts through a secured portal in the internet and make way to perform certain transactions by themselves without the need to be present at the bank physically. Many recognized banks worldwide have made use of this potentially lucrative environment to set up their secured web portals and thus have attracted a different set of customers whom would have opted otherwise if not have been for this technology.

While online banking has proved to be a convenient and an efficient mode of doing banking transactions, it has shown its vulnerabilities in many instances as well. Therefore, when someone embarks itself to be an online customer there are few things that they need to be aware. Thus, the decision to enroll to an online banking portal should be an informed decision knowing the disadvantages as well as the advantages of this technology.

Let us now see what these disadvantages of online banking.

For many, doing transactions online is not safe at all. Although these transactions are done through encrypted web portals, lack of knowledge regarding the potential security benefits of the system makes it a technology to be mistrust. At times, lack of computer knowledge makes it impossible for a person to enroll into these online banking systems and therefore the necessity to develop the knowhow is considered a disadvantage in online banking. The relative easiness to perform online transactions would also make way for another disadvantage which is the relative ease in which a monetary loss can take place due to inappropriate ‘clicks’. In a traditional banking transaction performed at the bank itself, there will be enough support at hand when the customers require sorting out any queries. But, in the online system, support would take time and it may require the customer to fill out forms and give many calls to the customer support in order to sort out a simple query in relation to an online transaction. When a person depends on online banking, in case of technological mishap or disruption to internet, there can be lot of distress and inconvenience particularly when a person gets used to doing last minute transactions through the online mode.

Although there are visible disadvantages, the advantages of online banking clearly outweigh the disadvantages and therefore its rapid expansion is never hindered significantly. Lastly, with the improvement of technology, these disadvantages will also be minimized to a great extent and therefore should not be a barrier in the future.