Online Banking has become pretty popular in the 21st century today due to the massive adoption of technology.  Today anyone can do almost everything online which was practically impossible some decades ago.

In this article, I'll be covering everything you need to know about online banking, the advantages and disadvantages of online banking, and how to operate an online bank just like a traditional bank with ease. If you're here to learn more about online banking, then read this article to the end as I'll be talking about the things you might not know about this type of banking.


What is Online banking?

Online Banking is a 21st-century banking system, the online bank allows users to perform several financial transactions using the internet. A lot of people recognize this form of banking as internet bank or web banking.

With the way the technology is going, most online banks are now rendering services you can access in the traditional bank. These banks have some local branches that assist the banks in rendering services such as deposits, transfers, and other forms of online banking service that can be accessed through their various channels such as desktop versions and mobile apps.

The online bank can be accessed remotely. As a user or customer using such banks, you don't need to visit any physical branch just like how you do with traditional banks. Most of the activities you want to perform can be done online. All you need to do and enjoy the services being rendered by these banks is just have a device that is connected to the internet. Upon registration, setting up passwords, and uploading all documents, you can start using some of these banks almost instantly.

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What Is Online Banking and How Does It Work? ( Online Banking Explained)



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Understanding Online Banking (Online Banking Explained)

The online bank mostly has a central office where they perform different things such as attending to customers through their customer service channel. besides that, every activity and service of the bank is done online. Customers are not required to visit the bank if they face any challenges such as failed transactions, fraud reports, card service, and many more. 

All they need to do is to contact the bank through its customer service channel, and the bank will take care of all of it. You can do all of this right from your place of comfort and convenient time, wherever e.g place of work, at home, school, etc.

As I have mentioned before, to enjoy the service of these types of banks, you will need a device to access these platforms. You'll need a device like pc, smartphone, tablet, then you can open an account and operate it from anywhere around the world.`

Once your account is approved and validated based on the documents you submitted to the bank, you can log in in using your login credential and access the bank services.

The banking platform operating this form of banking varies, this is why you see some of them performing services like online payment and bill payment. But some other banks run services like withdrawals, overdraft, bill payment, asset management, investment, loans and others. This service all depends on the bank, this is why you need to carefully choose an online back in order to ensure that they offer services that interest you. My own favourite bank offers the service of withdrawals, overdraft, bill payment, asset management, investment, and loans, and performs other functions like ordering checks, putting stop payments on checks, or reporting a change of address.

Today, impossible things like check deposit online that was not possible some centuries ago is now possible today through the use of a mobile app and an internet connection. All that a customer needs do is enter the amount before taking a photo of the front and back of the check to complete the deposit.

Despite all of these possibilities, there is certain limitations to what an online banking platform can do. Online banking does not support or allow the purchase of traveller's checks, bank drafts, certain wire transfers, or the completion of certain credit applications like mortgages. These transactions still need to take place face-to-face with a bank representative.

What Is The Advantages and Disadvantages Of Online Banking?

In as much as online banking is the future of banking in the world, the bank has its own advantages and disadvantages. Continue reading as I talk about some major advantages and disadvantages of online banking.

Advantages Of Online Banking

Online Bank Easy and Self Explanatory.

As a customer, you can actually log in and monitor your account regularly and closely. This will help you in knowing the activities going on, at least you'll rest assured that you can monitor the activities of the bank.

Online Banking is efficient and fast

As a user of online banking, you can transfer funds to different account easily with just few click on your smartphone, tablet or pc. Most time, this transactiob occurs in a minute or less depending on the bank and its current network state.

Like in the case of two different accounts in one financial institution, the transaction happens most of the time in seconds, and users are allowed to easily open or close an account at their own will.

Online Banking is more convenient. 

Convenience is one of the reasons why people are going for online banking platforms due to the fact that the bank allows them to perform different things such as bill payments and even transferring money between accounts.

Disadvantages Of Online Banking

Online Banking Can Be Deficult To Those That Are Not technologically Inclined

Older people find it difficult to use online banking due to the way technology is changing everyday. This is why people in their 70s and above preffer to use the traditional banks.

Online Banks Do Not Give Access To Withdrawal Of Large Cash.

The reason why this is a major disadvantage is because the online bank make use of local branches to help when customers request for withdrawal. Most of this branches do not offer withdrawal of huge cash.

Online Bank Do Not Work Well Without Internet. 

Some or most of the online or internet banks solely depend on the internet to operate well. Users must be connected to the net to enjoy the services.

Conclusion

I have explained everything you need to know about online banking in the article above. I hope you were able to get a better understanding of the term.

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For any question or inquiry, you can drop it in the comment section. I'll try to respond as fast as I can.