Of all the sectors in business, the financial industry has one of the more advanced technologies, making digital banking possible. Using a downloaded application, customers can bank anytime and anywhere. This means you no longer have to spend long waiting times for a transaction that’s supposed to take only a few minutes. With an app and internet connection, you can perform banking transactions even without setting foot inside the bank. This can’t be more convenient at the moment as the world is facing the COVID-19 pandemic.
However, despite the benefits of online banking, it still has its pitfalls. Because of the high amounts of money involved, the financial industry is a magnet for cybercriminals. As they’ve become more sophisticated, online attacks are likely launched every minute.
Ahead you’ll find the importance of transacting through digital banking and the reasons why you should always be wary when doing digital bank transactions.
The Basics Of Digital Banking
With the help of an IT support company like Mustard IT and similar firms, banks can offer automated and web-based processes to their consumers to access products and services. Users can access these products and services, along with their banking information, through desktop and mobile devices.
Digital banking covers both online banking and mobile banking activities. In the past, clients used online banking to perform specific transactions using computers to access a bank’s online portal. In recent years, technology has set its sights on mobile banking, where people who lead active lifestyles can perform transactions online.
The Pros Of Digital Banks
Because of its many benefits, many people seem to be transitioning to digital banking. Some of the advantages people enjoy when it comes to online banking include the following.
With just an internet connection and an online banking application, users can make transfers and digital payments using their mobile phones and other portable devices. Online banking also gives users access to their updated accounts or the ability to request a change of information, with a few clicks and without the need for a quick trip to the bank. For these reasons, banking becomes more efficient and users are more empowered to access their accounts when necessary.
Since the past decades, going green has become an essential mantra for both consumers and businesses. Along with this increased awareness are the calls for practices that use fewer resources.
Because digital banking promotes paperless transactions and doesn’t require customers to drive to these financial institutions, sustainable banks can reduce their carbon footprint significantly. Digital banks don’t need to maintain an office, skipping the need for electricity and other resources needed to run a working space. Instead of keeping a physical copy of transaction records, all banking history can be accessed online, helping these institutions save on physical space and resource use.
Online Bill Invoicing And Payments
If you run a service-oriented business, it can sometimes be challenging to fund your daily operations while waiting for your customers to pay for the services rendered. In some cases, delays are caused by internal issues, such as lost invoices or a customer’s unplanned emergency trip.
With automated billing and invoice processing, businesses can transact with their clients and even receive payments online. Those keeping personal accounts can likewise make use of automated bill payment facilities with just a few clicks.
Because online banking doesn’t require a user to be physically present in order to perform transactions, you can access it any time and wherever you may be. This means you don’t have to wait for a bank’s operating hours and working days to pay bills, transfer funds, and withdraw and deposit money.
The Cons of Digital Banks
Of course, if there are pros, there would also be cons. And some of the disadvantages of digital banking are enumerated below.
The rules that govern digital banks are the same as what covers traditional banks. These institutions may have the same, if not more, secure software encryption and other security measures in place.
Unfortunately, no system is perfect and invincible. In some cases, hackers can still get past these strict security measures and launch attacks like phishing, malware attacks, and other malicious activities.
Vulnerability To Technological Problems
For security purposes and to provide a more seamless transaction, banks need to update their systems often. This means there’d be a few hours or days where you can’t access your account online. Worse, if you have no internet connection or have power cuts or if servers break down, the application won’t be accessible to users at all.
Not all digital banks are the same. Some offer limited financial services as compared to traditional banks. More importantly, digital banks can’t offer special rates and discounts to their valued customers in the same manner as traditional banks do.
The banks people are used to often strive to form personal relationships to ensure customer loyalty. In some cases, they’d even offer special services to clients, such as low interest rates and financial advice for free. These services may not always be available with digital banking.
Online banks are more convenient for users who prefer to have unrestricted access to their accounts. Except for the absence of a physical office, digital banks are not too different from traditional banks in terms of the services offered and the security measures in place.
Perhaps the most worrying when it comes to digital banks is the security guarantee to its customers. Because hackers can and will attempt to have access to your information by all means, the least you could do is practice security consciousness by avoiding sharing your banking information with anybody.