Pros and Cons of Internet Banking

Internet Banking Information

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With the introduction of cashless transactions and technological advancements, the banking sector is one sector that has undergone a plethora of significant changes. The most important among them has been mobile banking and internet banking.

Mobile banking, while it requires a user to have a ready handset available at all times and under all circumstances, internet banking doesn’t have quite the same pre requisite. To facilitate internet banking, it is important that the user sets up an online account to help in locating and using helpful and important features and staying secure while at the same time banking online in the comfort of one’s own roof.

Internet Banking

Benefits of Internet Banking

  1. Convenience- The concept of internet banking is extremely user friendly. Banking services are made available, round the clock on all days of the year. Real-time account balances and information are available at the touch of a few buttons. This makes banking faster, easier, more efficient and even more effective because consumers are able to always stay on top of their account balances. Updating and maintaining a direct account is also easier.
  1. Mobility- Online banking now includes mobile capabilities. New applications are continually being created to expand and improve this capability on smartphones and other mobile devices.
  1. Better Rates- Due to the disappearance of infrastructure and overhead costs, it allows banks to pay a higher interest rate to its customers on savings and charge lower mortgage and loan rates. Some accounts can be opened with no minimum deposits and carry no minimum balance or service fee.

Tips for mobile banking

Drawbacks or Cons of Internet Banking

Bank Relationship- A traditional bank provides the opportunity to develop a personal relationship with that bank. Getting to know the people at your local branch can be an advantage when you need a loan or a special service that is not normally offered to the public. A bank manager usually has some discretion in changing the terms of your account if your personal circumstances change. Your banker will also get to know you and your unique needs. If you have a business account, this personal relationship may help if you need capital to expand.

Security- Even though banks that facilitate internet banking possess sophisticated encryption software, there always exists the skepticism that no system is perfect. There is always the persistent risk of hacking, software malfunctioning and other unauthorized activity. Identity theft is a significant concern, but some online banks take this risk more seriously than others. Before opening an online account, thoroughly investigate the bank’s security policies and protections to ensure they meet your expectations.

Transaction problems- Sometimes a face-to-face meeting is required to complete complex transactions and address complicated problems. A traditional bank can host meetings and call in experts to solve a specific issue. In addition, international transactions may be more difficult (or impossible) with some direct banks.

If you regularly deposit cash, a traditional bank with a drive-through window may be more practical and efficient. Another potential drawback is that most direct banks do not have their own ATM machines. Unless an internet bank has a network alliance with another bank, you will be charged for your ATM use.

With these pros and cons in mind, one must wisely exploit the beneficial traits of internet banking.

“Note: If you have an account in Punjab National Bank you can find an IFSC Code of PNB from for online transactions”.

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