Digital Banking: Advantages & Disadvantages
- Overview
Digital banking has garnered a lot of positive responses thanks to its ease of use, time-saving potential, convenience it brings, safety, cost-friendly approach, etc. Earlier we looked into broadly what digital banking is, the different types of payment that fall under it, the products & services in it, and what could be the driving factors for its growth in the future. If you’re yet to read about it, you can visit our blogs section on our website.
Today we will cover the last part of this topic i.e. advantages and disadvantages of digital banking. Let’s begin!
- Advantages of Digital Banking
1. 24*7 availability
This has to be one of the best advantages of digital banking. Unlike traditional banking which had fixed days and working hours, digital banking removes this hurdle by taking things online.
One can access their accounts, make payments, monitor transactions, and request other facilities at any time, any day. This has ensured a huge sigh of relief for the working people who had to take time out of their working hours to visit banks and stand in large queues.
2.Saves Time
The next obvious advantage of digital banking is it saves a lot of time. Say you’ve free time in the day. You still had to travel to the bank, stand in line, and await while the process was getting done. All this has been reduced completely in many cases. Now one can simply avail of these from the comfort of their home.
3.Makes Life Easy
Probably one of the most favored advantages of digital banking is-convenience. With help of it, customers no longer need to go through the hassles of leaving their homes or taking time out of the office to handle the operations of their accounts.
Plus, the added features of FAQs, customer support, and information that clears basic doubts all have become available for the users at their fingertips.
4.Restrictions
A good advantage from the country’s point of view. With more and more people opting for online payments the risk of fraud, fake currency circulation, and black money circulation has been restricted to quite some extent.
Apart from these, there are many other features like being able to automate payments, monitor assets & liabilities, and transfer funds across large distances within seconds, etc that come with digital banking.
- Disadvantages of Digital Banking
Nobody is perfect and it is quite true in this case as well. With the plethora of advantages, there are still a few disadvantages that need to be focused upon as the era of digital banking grows. Let’s have a look at it.
1.The Risks
Digital banking is a safe and secure option, but there are always ways for hackers to swoop in. This is why banks are always working on updating and reviewing their security processes. Despite all efforts, digital banking forums are prone to vulnerabilities and hacks such as phishing, pharming, identity theft, and keylogging.
Hence, one should always ensure to take additional steps from their end and help the banks by taking care of our part as well. Some ways to do that is i) Ensure the same passwords aren’t used everywhere. ii) Keep changing passwords. iii) Never reveal it to anyone. iv) Never share OTPs, etc.
2.Errors
One of the biggest drawbacks of digital banking is the server issues that are common to some extent. A server error could mean you can’t access your data, run the risk of paying twice (and if the credit doesn’t happen run to your bank), can also cause you to lose time.
3.Frauds
With the rise of digital banking, there has been a rise in fraud as well. People who aren’t that tech-savvy can fall prey to these scammers. Keep yourself updated with different kinds of scams and tricks they use to scam people.
4.Deposits
With the advent of the online world, there is a bit of a disadvantage to people who might get paid in cash. They can’t really deposit that money online. So, this could work as a small drawback, not being able to deposit money.
5.No Personal Connections
As the entire process gets shifted to virtuality, there will be a loss of connection that helped add a touch of personalization. The trust factor is also established when a customer interacts with the bank’s relationship manager.
These come into play mostly when loans, credit cards, etc come into the picture. People might not be able to trust the online world the same way.
All good things have to come to an end, and with this, we have ended our small series on Digital Banking. We hoped your understanding of this thing of the future has increased. If this built curiosity in you to explore the world of tech, digital banking, and more in-depth you may reach out to us.
At MITSC, we offer a plethora of courses that help you advance in your careers and life and keep you well informed at the same time.
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