The internet generation demands everything faster and quicker. Nobody wants to waste time in queues, be it a movie theatre or banks. Every banking organization has incorporated online banking or e-banking systems to rid the hassles. You can transact from anywhere or anytime if you are connected to the internet. E-banking or digital/electronic banking system revolutionizes how people would like to transact money at the ease of their finger scroll. But remember, there are many risks associated with online transactions. These Advantages and Disadvantages of e-banking highlight the pros and cons of e banking systems from different viewpoints.
The evolving technology has led society to enjoy more benefits of Modernization. E banking advantages are among such facilities that you can enjoy while binge-watching. NEFT, RTGS, and IMPS are some of the features of internet banking that lets you transact to any place in the world. Let’s look at the benefits of online banking.
Gone are the days when you have to visit your bank and talk to the managers to transfer money. You can easily send as much money as you want through online banking systems now.
Modern-day electronic banking gives you relief from the tiring long bank queues. Any transaction can be made from your mobile or laptop without actually withdrawing cash and handing it to the payee.
When it comes to online banking, money can be utilized to pay bills, order things online and transfer funds at any time with your ease. Even if you want to send money at night, you can do so, which was impossible in the traditional banking system where you had to wait for the bank to open the next day.
Whether it's a last-minute or an emergency fund transfer, the money reaches the recipient instantly through IMPS services. Whereas some transfer methods or international transactions may take up to 3 days for the money to reach your bank, for national transactions, up to a certain limit can be transferred instantly for most of the banks.Time is money, and there's a lot of it in the saving when you transact instantly. Saving time is one of the significant benefits of e banking as you can tend to other important things.
If you don’t have access to your desktop or laptop, you can still transfer cash to anyone within a few taps. Most banking organizations have their own official mobile banking apps which allow smooth transaction 24/7. So the next time you see your loved ones in urgent need of money, scroll through your apps menu and log in to let them you do care.
Carrying too much cash is risky, and risks escalate further when someone knows you have it at your home or in your bag. Electronic banking systems let your money stay safe from burglars and robbers as the only person who knows how to log in to your account is only you.
Banks usually high-end encryption algorithms and security protocols in the websites and mobile apps. These web services ask you to put login credentials multiple times to ensure everything is safe and sound.
While most of you would agree with the facilities and convenient transaction method of e banking there are still some disadvantages and limitations associated with it. Let us discuss some of them.
According to a 2019 Federal Reserve Payments Study, credit card payments totaled $44.7 billion in the US alone. On the other hand, another study revealed that 14.4 million consumers fell victim to identity fraud in 2018.
Since the negatives come along, online frauds are on the rise in money and card fraud. The latest Credit Card scam, “Card Not Present”, is currently booming in the US. So before you use e-banking, make sure of its negative outcomes.
The only thing e-banking use is a device with an internet connection, and if you are not good at operating the device, it is merely a toy generation thing for you. Also, the first thing to access is a smartphone or desktop with a good internet connection to access the e banking facilities. Lack of knowledge of technicalities can be one of the biggest advantages of e banking at times for people who are used to the traditional banking system.
For those who a habit of losing keys and passwords, it can be a problem if you lose or forget your passwords. Although resetting passwords is not a big issue, since it is recommended to change passwords every 3-6 months, people with a very good memory may sometimes face issues facing many passwords and keeping them updated.
As the stats suggest, only 52% of the people in India, 42 % in China, 25% in Greece use e banking or know using banking features. So the banks and other institutions may face problems training people new to this technology. Also, they have to train people working in banks first before they can train other people, which incurs training and recruitment costs.
Transaction failure and money deduction are common issues faced while using e-banking. If you have a slow internet connection or the bank server is facing connectivity issues, then it is possible that your transaction may not complete, and money gets deducted.
It can be an extra headache to call and contact the bank to issue refunds. Also, cashless transactions are not used at all places, and in any case, you need to visit a bank or ATM to fulfil your cash needs. You need an internet connection to be able to log in to your bank account. Having no internet connection can be one of the rare disadvantages of e banking.
Conclusion on Advantages and Disadvantages of e banking
Even with few limitations of e banking, the system has a lot of scope in few countries already using complete cashless banking. The use of banks is limited to account opening, check transactions, locker facilities etc. So the world is on the path of utilizing this technology to the full extent until cash and paper money becomes a thing of the past. Also, the introduction of Cryptocurrency and other paperless transactions will help achieve the target of a cashless world.
Electronic banking (e-banking) offers efficient, convenient, and secure ways of accessing financial services. It allows customers to manage their accounts and initiate transactions like opening new accounts, transferring funds between accounts, making deposits, applying for loans or credit cards online. Electronic banking can be done through Point of Sale (POS), ATMs, mobile phones, smart cards, and the internet.
The concern of security is one of the major drawbacks of electronic banking. With keyloggers, phishing emails, trojans, and other online dangers on the rise, it's only natural that individuals be concerned about their personal information, money, and electronic banking transactions' security.
The future of banking will be determined by significant technological improvements, which will revolutionize the industry. 'Digital' is the future of banking. The COVID-19 epidemic has prompted a major shift in consumer behavior due to our changing world.
The report aims to stimulate thinking about how the banking sector might be more intelligent and improved, positively impacting customers, their connection with money, and their financial well-being.
Although online banking is only concerned with basic activities, digital banking goes more in-depth and necessitates a complete re-engineering of a bank's internal infrastructure.