One of the fastest growing trends in banking is that an increasing number of bank customers are using online services to meet their banking needs. The Internet provides a medium for bank customers to easily check account balances, pay bills, transfer funds between accounts, and handle other transactions that used to require a trip to the bank. According to a recent survey, nearly 70 million Americans use the Internet for at least some banking transactions and that number is growing every year.

There are some obvious advantages that online banking offers consumers, but there are also some drawbacks that continue to keep some people from banking online. Here are some of the pros and cons of online banking.

Pros of Online Banking

- Convenience: In a world where people are constantly looking for ways to save trips and become more efficient, the Internet provides the ultimate in banking convenience. Banking transactions are no longer limited to banker’s hours and customers can now carry out complex transactions from their home, office, or even their mobile phone. Customers no longer have to worry about buying stamps to pay their bills or getting checks sent in the mail four to five days before a payment is due. Not every banking service is available online but the services are constantly evolving and improving.

- Attractive Rates: There are some online banks that are only found online. These banks don’t have the overhead costs of brick-and-mortar buildings and real estate and as a result they’re able to offer better savings rates and more attractive loan rates to their customers.

- Control: Online banking customers like the idea of controlling when transactions happen. Being able to go online and see recent expenditures, deposits, and pay bills knowing that the funds will be received in time and not be lost in the mail is an attractive feature that online banking customers enjoy.

Cons of Online Banking

- Security: Although Internet security has improved by leaps and bounds over the last few years, many customers are still concerned about the possibility of fraud or identity theft when it comes to online banking. To open a bank account, most of a person’s most confidential personal information is required and an online security breach could easily send that information into the wrong hands. Banks spend millions of dollars to fortify themselves against the attacks of hackers, but it’s impossible to guarantee the security of personal information.

- Poor Customer Service: Some people like the idea of a bank teller or loan officer being face to face with them offering service with a smile. It’s impossible to replace a personal relationship through Internet banking and issues that need to be resolved often result in toll-free calls to call centers in other countries–not exactly the highest level of customer service.

- Too Easy: With the ability to set up direct deposits and automatic bill payments, many banking transactions occur without people having to lift a finger. This is easy and convenient, but it also makes it tempting to get lazy with how closely you monitor your banking activities. Forgetting about an automatic deposit that is scheduled to occur regularly can result in costly mistakes. Sometimes it’s good to have to write a check and balance a checkbook.

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