Disadvantages Of Online Banking

The electronic banking has various advantages than the traditional banking system which is simple and convenient for the users. The advantages are-

(6) Transparency in Transactions- E-Banking has improved transparency in transactions. E-Banking allows customers to open accounts, pay bills, view account balances, complete loan applications, calculate interest, etc.

It also has some disadvantages which must be taken care of. The disadvantages of online banking include the following:

Convenience way of operating banking transactions: Online banking is a highly profitable channel for financial institutions. It provides customers convenience and elasticity and can be provided at a lower cost than traditional branch banking (Williamson, 2006). The convenience of online banking is helping people gain greater control of their finances and contributing to changing patterns in cash withdrawal and day to day money management. (Beer, 2006)

Internet banking refers to an online facility which provides an alternative channel for delivering banking or financial services and enables individuals to access their accounts anytime and anywhere through a bank’s web site (Z. Liao, Z., and M. T. Cheung, 2012). In other words, online banking named as E-banking, internet banking or virtual banking. Generally, the operation of online banking is connect to the core banking system designed by bank and then contrast to branch banking which refer to traditional way of bank customers accessed to banking services. Nowadays, internet banking is one of the most important businesses in electronic business around the world (Ariff et al, 2012). Most of the conventional banks have to operate and provide the online banking service to their customers as needs by

Internet banking has many benefits for consumers and these advantages also can explain why it is growing in popularity.

Disadvantages of online banking include the amount of time it takes to create and authorize your account. In most cases, you will be required to visit the local branch to sign verification papers and provide authentic identification. I must say I disagree with the article calling this a disadvantage. It is certainly not convenient, but I would not call it a disadvantage. The learning curve is listed as a disadvantage. Online banking sites can be very difficult to navigate, especially for new users.

We can do our banking at home through the internet. For example we can set up and cancel standing orders through our online banking account. Transfer funds to other people, not just on a computer but now on our smartphones too. This technology has replaced the need for us to visit our bank and deal with a teller.

As their name suggests, they only execute their operations online. Customers can only be in contact with their money over the internet since they do not have any physical branches. Because online-only banks require lower overhead costs, they have the capability to offer more free services and higher interest rates compared to a traditional bank. Online banking provides many customers the convenience of handling their business at any physical location as long as they have access to internet. This is possible because of the variety of services that online banks provide despite limiting interaction to only the internet. Some of their services include applying for loans online, transferring funds and paying bills online. While the convenience of being able to access banking through the internet is worthwhile, there are limits to it. For example, making large deposits to the bank is limited and can only be made through the mail, they don’t service cashier checks for transactions, and withdrawing money from the account is very inconvenient. Luckily, the role of the internet in financial transactions is becoming increasingly prominent so that spending money online is more accessible, but it is important to understand both the benefits as well as restraints of online banking. Nowadays, many large brick-and-mortar banks have caught on and provide some online services in attempts to

Banks that offer financial products and services through the Internet must be able to meet their customers’ expectations. Banks must also ensure they have the right product mix and capacity to deliver accurate, timely, and reliable services to develop a high level of confidence in the customers. Customers who do business over the Internet are likely to have little tolerance for errors or omissions from financial institutions that do not have sophisticated internal controls to manage their Internet banking business. Likewise, customers will expect continuous availability of the product and Web pages that are easy to navigate.

As commercial banks first came about, they were presented as brick mortar, comprised with safe deposit boxes, vaults, tellers and ATMs. Today, we live in a very fast paces world. Technological advances have allowed global economies to bank online at personal and professional leisure. As some commercial banks do not require a physical location, they save a lot of money in ancillary charges, such as rent, utilities and property taxes. At times they may offer higher interest rates on deposits, investments and charge lower fees as well.

Many people are starting to elect not to receive hard copy statements from any of the businesses they conduct business with. Many businesses offer discounts to those who opt in to receive their statements online. This saves the companies money and is more convenient for the customer. This can also pose a security risk for the customer. Banking online requires a username and a password and many times those are too easy to guess or steal from a phishing

Banking online is a recently developed convenience. How often do you forget to pay your bills? With online banking your bills are paid on time. You also have immediate access to your bank statements updated by the minute.

The use, acceptance, adoption and application of internet technology to businesses to boast their performances are not something new. Saffu et al., (2008), states that there has been a significant increase in the use and application of e-commerce in businesses in the past decade. E-commerce has benefits such as reduction in costs, increased business opportunities, reduced lead time and providing more personalized service to the customers (Turban et al., 2008). Internet banking or e-banking is one of the many tools of e-commerce adopted by the banking industry. Tools of information technology such as internet banking have significantly improved the quality of services offered by the banking

The last time that technology had a major impact in helping banks service their customers was with the introduction of the Internet banking. Internet Banking helped give the customer's anytime access to their banks. Customer's could check out their account details, get their bank statements, perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices. However the biggest limitation of Internet banking is the requirement of a PC with an Internet connection, not a big obstacle if we look at the US and the European countries, but definitely a big barrier if we consider most of the developing countries of Asia like China and