When was the last time you walked inside your financial institution’s brick-and-mortar branch?
In recent years, as technology has developed and as Internet has become more ubiquitous, online banking has become immensely popular with consumers all over the world. Whether you are in North America, Europe or Asia, online banking has essentially become the rule rather than the exception, and financial institutions have invested a lot in their online infrastructure.
Online banking has provided millions of consumers reasonable, convenient and time-saving banking solutions. Everything from helping you open a bank account or improving your personal finances, online banking has made managing your finances much easier than in the past.
Who knows? Perhaps online banking will vanquish the concept of actual banking branches within the next 30 or 40 years. The trend is already unfolding as many banks are announcing the closure of certain branches and the loss of employees. This means that your grandchildren, and other younger generations, will eventually ask the question: what’s a branch? It will certainly become a foreign concept to many people in the years to come.
Another area that consumers appreciate from online banking is the ability to automate your finances. This is imperative for a society that has a finite amount of time, and even energy. Bill payments, mutual fund purchases or money transfers are just some of the aspects that can be automated. Let’s face it: not all of us are enthusiastic about maintaining our finances.
Simply put: Internet banking has become popular. Let’s take an inside look into why.
The Advantages of Online Banking
Do you remember the pre-Internet age? Those times were tough when you think about today.
Years ago, when the Internet was still in its infancy period, customers had to actually visit their branch to pay a bill, transfer funds or even purchase shares of a stock. This was even more difficult when the hours of operation were extremely limited. Remember rushing from your office to get to your bank before they shut down for the day? If you’re over 30 then you do.
Fast forward to the present, online banking has afforded you with many advantages and convenience. Not only can you check and monitor your bank account remotely, online banking enables you to automate your finances, such as automatic deposits, paying bills, transferring funds and receiving records of your transactions.
Something else that is often ignored is the fact that online banking can help you save money. If you are someone who lives paycheck to paycheck and has very little funds in your checking account then you run the risk of facing overdraft fees. By utilizing online banking options, you can meticulously monitor your checking account and prevent paying those outrageous fees.
It can be rather difficult if we reverted to the past and didn’t have online banking.
But online banking has also led to the formation of virtual banks, a multi-billion-dollar industry.
The Rise of Virtual Banks
Virtual banks essentially represent what the future will be like in the next few decades.
A wide array of recent studies have found that more and more consumers, particularly customers from younger demographics, are opening a bank account at virtual banks. These are financial institutions that maintain strictly an online presence. In addition to the convenience, virtual banks provide customers with numerous advantages and benefits, many of which are greater than what the big banks can usually offer their clients at the present time.
One particular advantage is that virtual banks offer their clients higher interest rates on their savings accounts as well as lower interest rates on certain credit products. The reason why they can do this is because virtual banks have fewer expenses than a conventional bank.
The other area of importance is they have very little or zero fees attached to their bank accounts. Moreover, there are fewer restrictions on minimum balances. Both are boons for your personal finances, especially at a time when you are earning pittance on your savings and banking fees are surging every single year.
However, the one considerable drawback pertaining to virtual banks is the paucity of ATMs. Some virtual banks will have very little or no ATMs available at all. This means that if you wish to access your money then you will need to access an out-of-network ATM, a transaction that will cost you plenty of money in the end.
With that being said, the benefits still outweigh the drawbacks when it comes to a virtual bank.
Virtual banks are so massive that they are even getting recognized by the finance industry. Piraeus bank, for instance, was recently presented with multiple awards at the World Best Internet Bank awards. This is just another example of how virtual banks are disruptors.
A specific technological advancement has aided the growth of online banking and the rise of virtual banks, and that is mobile technology.
Mobile Technology is Helping the Customer Everywhere
A simple glance at the marketplace and you will notice that there is a mobile application for pretty much everything. Want to order a pizza? There’s an app for that. Want to watch a movie or TV show? There’s an app for that. Want to check the stock market? There’s an app for that.
Over the years, nearly every single bank has developed its own mobile app. These mobile apps enable customers to track and monitor their personal finances. The traditional financial institutions as well as virtual banks realize the power of apps and how easy they make online banking. The Emirates NBD bank in Dubai recently announced that it is offering mobile banking services through its own mobile app.
Suffice to say, without a mobile app then it would be increasingly difficult to do your banking.
And it isn’t just the banks creating mobile apps. There are many players entering the mobile app market for commerce. PayPal, Apple Pay and Credit Karma are just some of the smartphone apps that make online banking simpler. These ultimately complement your day-to-day transactions, improve upon your finances and enhance your general banking solutions.
If you think that mobile apps are only widely available in North America and Europe then you would be wrong. Apple Pay, for example, is available with CIM Bank, and PayPal is generally used all over the world for e-commerce, mobile payments and digital storefronts.
The mobile app market has also established money apps that can be automatically synchronized with your online banking information. This latest trend allows you to stick to your budget without any excuses by tracking your spending behaviors. If your bank is too small and does not offer you the syncing function then you can do it manually by entering your account information into the app, which can be a bit time-consuming. But it is still worth it in the end.
Mobile technology is enhancing the online banking experience, improving upon virtual banks and helping consumers properly navigate the banking market and their own personal finances.
Just remember one thing: you won’t need to rely only on your smartphone for mobile banking. The R&D departments at tech firms and the big banks are already developing apps whereby you can perform your banking duties with your smartwatch.
What else does the future have in store for doing your banking on the go?
Final Thoughts
Indeed, monitoring, managing and maintaining your personal finances has never been easier.
Thanks to online banking, we can automate our bill payments, investments, automatic deposits or withdrawals and even the ability to open a bank account. Due to the prevalence of virtual banks, we can avoid paying hefty fees, save and earn more money through the power of higher interest rates and take advantage of bank account opening promotions and offers.
Of course, these two elements are further enhanced by mobile technology. Everything from transferring funds to buying 1,200 shares of Facebook stock, mobile banking makes our finances simpler to handle and perhaps even more exciting to oversee.
Many people, especially older consumers, may be apprehensive about adopting this new technology. Since they often come across reports of identity theft, data breaches and security infiltrations, some may feel that they are putting their finances in jeopardy. However, banks have installed tremendous security apparatuses and encryption tools that prevent criminal activities. Also, most financial institutions exempt online banking users from liability in the event of fraudulent transactions so you don’t have to be too concerned about being on the hook.
Automating your personal finances allows your money to work for itself. Automating your banking solutions affords you more time and energy to concentrate on the more important things in life: your family, your free time and your passion for professional wrestling…or, er, chess.
If you have yet to take full advantage of online banking, Internet banks or mobile banking then the question must be put forth: what in the world are you waiting for? Get going!
This article alomst seems to promote a “Cashless Society”, and enforce the concept of the War on Cash.
I am surprised at it coming from the author, even though it does explain the luxury of online banking; it does nothing to give the People reason and rationale to fight against the War on Cash?