Online vs Traditional: How Has the Digital Age Changed Banking?

The world of banking has changed greatly over the past couple of decades. Undoubtedly the evolution of the internet and its influence on our daily lives has had the biggest impact, with the digital age meaning many traditional services moved online.

This has made a lot of processes a lot quicker and more convenient, from checking your balance to taking out a yearlong loan. However, there are still some aspects of traditional banking that certain people prefer. Here’s how the digital age and evolution of online banking has changed the industry.

Fees and Interest Rates

One of the main benefits of online banking is that you can usually save on fees. This is mainly because the operating costs of running online banks or accounts are generally lower than traditional, bricks and mortar ones. Fees such as minimum balance, direct deposit, check, over-limit and debit card fees can be lower.

There has also been a rise in the number of digital or online only banks emerging, that also offer lower costs to operate. Many offer slightly higher interest rates alongside reduced fees, to make them competitive and attractive to new savers. They don’t always provide as many financial products or account options as traditional banks though.

Security Improvements and Concerns

A major concern for many people in the early days of online banking was security. The threat of cyber attacks, hacking and data breaches has put off plenty of people. Yet even if you use a traditional bank, all that information and data will still be stored somewhere and at risk of theft.

Plus, online banks use the same security measures as other banks and companies that require your personal details or financial information. Security has improved too, with encrypted websites, personalised password screening and, financial losses should be covered.

Customer Service

The main difference that the digital age has changed for banking has been for customer service. Nowadays most of this is done via email, online chatbots or phone, with a lack of face-to-face interaction. While it may be faster and more convenient in some cases, when it comes to your personal finances a lot of people would rather deal with someone in person.

For online-only banks this isn’t available but with traditional banks that offer online banking it’s still possible to visit branches and make an appointment. This makes discussing mortgages, loans, ISAs and account options a lot easier in some cases.

Mobile and Tablet Access

Technology has made it possible to now access online bank accounts through smartphones and tablets, adding to the speed and convenience. This can raise further security concerns should the device be lost or stolen, though all banks have processes in place to lock accounts. The other issue is that as technology advances, many banks change their online formats and designs, which can confuse and annoy the less tech-savvy customers.

Deposits

Making deposits has also changed, as it can be a hassle when there is no physical location to visit and add them to your account with online banking. Some banks allow you to mail in deposits, though this can be too risky for some. Others enable wire transfers or eDeposits, where a photo of a cheque is taken and uploaded with an app for the deposit to be paid. So, the choice is growing to deal with this potential issue in the digital age.

The Future of Banking

Technology continues to advance, as does the banking sector as it attempts to keep up. There have already been many changes seen with plenty more on the way. Thankfully, most of these have been to the benefit of customers, with online banking making a lot of processes quicker, more efficient and safer.

Disclosure: This is a collaborative post.

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