Commercialization of the internet began way back in the 1990’s and has come a long with since. With technology evolving at every step in every sector, the banking industry is also not far behind. Realizing the advantages and benefits of integrating technology into this sector a lot of banks, over the years, who operate on the traditional brick and mortar structure,started to shift to delivering online services mainly to compensate on their operational costs. Seeing the success of these banks many other financial institutions started to turn to online banking services that and started to revamp their website. This feature was not only profitable for the banks but also the customers. Ability to open new accounts, download forms online, accessible terms and conditions and rate of interest are some of the benefits that be garnered. Gradually there was the advent of internet only banks that worked without branch offices. They saved on the overhead costs and labor and turned it into their favor by offering higher interest rates and lesser loan costs. This is thus attracting customers and the banks are doing nothing to sacrifice their earnings. In 1995, the first operational direct bank was established in Atlanta and the banking industry has not looked back since.
Fast forward today, the electronic banking technology has created new ways of creating and handling daily banking affairs, most importantly through the online banking channel. Two main factors, namely, ease of use and usefulness has been considered as one of the main reasons for the wide acceptance of online banking in the recent days. The web and internet based distribution aremaking it easier for banks to enter new geographic markets without having to incur the costs of purchasing and acquiring existing banks or creating branches for further growth potential.
The acceptance of online banking has thus been rapid in most of the countries around the world. According to banking data analytics, 81% of the people carry out their banking activities online. Have you everwondered why? Let’s look at some of the advantages that customers are gaining by choosing online banking.
Ease of Use
As mentioned above one of the biggest reasons for the widespread acceptance of online banking is the ease of use and convenience. Direct banks are open anywhere and all the time because of internet connection. If due to some reason that connection is not available they are given telephone service around the clock. . So if one has to make any kind of payment of transfer or any other activity all they need is an internet connection. Real time account balances, maintaining more than one account, updating information all becomes easier.
Banking analysis data has shown that banks are able to reduce the overhead and labor costs to a great extent since they do not need to buy out any new property. This in turn helps customers to get a better, lower rate since the banks can now afford them. Alongwith this, there are provisions like no minimum deposit account opening advantages, high yield checking accounts, lesser service fees, etc.
There are a lot of other better services that can be found with direct banks that are absent in traditional brick and mortar structures or websites of traditional banks. These include features like loan calculators, equity trading platforms, online tax forms, financial planning tables, functional budgeting tools, investment analysis tools, forecasting tools, etc. alongwith this they also provide tax preparation services and online bill paying.
With the advent of information technology, the mobile banking segment of the online banking service has also increased substantially over the past few years. Since a large part of the urban population has a smartphone and an internet connection these days, it is becoming easier to access information and make payments, etc much more easily.
As mentioned above, according to banking data analytics customers prefer online banking because of the ease with which they can handle banking transactions a. transfers are a very important component of banking that individuals carry out a lot. Online transfers are easier and do not incur any cost most if the times. Direct deposits and payroll deposits are also allowed.
One of the most obvious points is the convenience with which one can use online banking. Online accounts are easy to set up and require almost the same information as traditional banks. This saves time and at the same time if the form requires any updating, that can also be carried out automatically. Online banking also environment friendly since it requires no paper.
Thus the above pointers show why online banking has increased over the years to a great extent. As recent banking data analysis shows that customers are now more open and acceptable to such services.