E-Banking: Fruitful or Dry

Meaning: Electronic banking is a fast, convenient and effective banking facility which is used to highlight a process through which an individual is allowed to make a transaction which could be personal or commercial using electronic network.

It is a single click facility provided by banks for the ease of settling payments and providing comfort to the customers. Facilities provided by the banks includes: checking the account statements, fund transfers, opening the new bank account, applying for various kind of loans (home loans, car loans, education loans, etc).

Initially, cheques were introduced as mode of transaction by Bengal Bank in year 1784, then after two centuries ATMs got introduced in year 1987 by HSBC bank in India. Internet banking was introduced by ICICI bank in year 1998.

Pros of E-Banking:

Easy to Use: From opening an account to filling required information and doing transactions, it is an easy process. User-friendly interface is there and guidelines booklet could be easily found to avoid any kind of inconvenience to the customers.

Better Rates: No unnecessary service fees charged from customers. Thus, allowing banks to charge better interest rates and low mortgage charges.

Convenience: It is more convenient to operate from home or workplace rather than going to branch, as there’ll be no issue of working hours and waiting in long queues. One can easily do transaction anytime and from anywhere as you get 24 hours service.

Added Security Aspect: One need not to worry about the theft of virtual wallet as payments can be made using debit or credit cards, you don’t have to carry cash while travelling.

Additional Service: E-banks provides some extra service which can’t be availed in traditional banking system such as investment analysis tool, loan calculators, forecasting tools and many other services as well. Customer can pay their utility bills through e-banking as well.

When we use something there are always two sides of it. As we’ve studied pros of E-Banking now let’s have a look at some cons it possesses:

Cons of E-Banking:

Internet and portal accessibility: Due to network issues in some areas, it is difficult for the users to arrange internet and access the online account. Moreover, in some cases people are not used to technology so they face problem in operating the online portal or even in accessing it.

Impulse Purchase of items: Sometimes unavoidable transaction can take place and later you realize that you could have avoided it. That transaction took place because you saw enough money in your account and you took impulsive decision. This happens with most of us.

Effect on Credit Score: The frequent use of online banking can limit you from being picked for credit score which can give fruitful results in future. As we know high credit score keeps us in the race of opting for loans and other financial benefits but this isn’t possible in the case of online banks.

Limited Services: Customer will not get the benefit of personal attention while taking financial advice. Moreover, some E-banks does not offer services of insurance and brokerage.

Security Issue: In this modern era, you can easily find hackers in any street. Despite the efforts of banking institutions to keep the information of clients safe, secure and away from the reach of hackers, the data still gets leaked and customers sensitive information gets public.

Technologies used:

A wide variety of services are provided to the customers in online banking just at a click of mouse and lot of technology is used in providing Electronic banking solutions.

Electronic Fund Transfer- This facility allows the user to make payments to account holders of other banks in an effective and efficient manner. Physical clearing is not required as transactions are settled electronically. Thus, reducing the time for realization of funds. Under this comes NEFT (National Electronic Fund Transfer), it is the faster mode of fund transfer as money gets transferred to the account of beneficiary on the same day.

Automate Teller Machines- These machines which we call ATMs are installed nowadays in almost every city and town. We can go there for cash withdrawals, balance enquiries etc. Despite of using ATM cards, debit cards can also be used for cash withdrawal purpose in ATMs.

Credit Card- It is the type of credit facility which is provided by the banks to the customers which allows customers to borrow funds within a fixed card limit. The credit card limit is fixed on several factors and your credit score is one of them. You can use this card to make any kind of payments like- food, medical expenses, travel expenses, clothes, etc.

Conclusion:

Banks are making efforts to popularize E-Banking. Young generation is no doubt availing all the facilities of E-Banking and also urging their parents to switch to this mode. E-Banking services should be customized on the basis of age, gender, vocation etc. so that needs and requisites of people can be rewarded accordingly.

No doubt Indian banks are making sincere efforts for the adoption of advanced technology but still there are many challenges which are suppose to be tackled. Technical defaults can be avoided to some extent by employing highly skilled staff, upgrading the technology or software is must. Seminars or workshops should be arranged by banking professionals so that the employers don’t panic and take this positively.

Technology has its shortcomings and E-Banking is no different. Weigh the above points and know if this is something you want to venture in. This article will help you in taking a wiser decision.