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One might say that the internet has enriched our lives. Some others say it just makes life more complicated. That too much information accessible, and we become more vulnerable. This can be true when it comes to financing or the banking sector on the internet. The way we bank has undoubtedly given us more time to do other things rather than staying in lines at the bank, applying for loans, and waiting to see if approved for credit cards. The results, in some cases, might amaze you, and some you might not be so shocking depending on how you use the internet from day today.
As banking is an essential part of our lives, and we are always striving to make our lives less complicated to enjoy the things that we love to do. As the evolution of the internet changes every day, we must keep up with the latest trend when it comes to the power of money. Evolution of Internet Banking Internet and banking go hand and hand in our everyday lives. There is a large number of changes the banking industry has taken. From being a small institution that you may be able to reach a small portion of the business community to become a global phenomenon.
That being able to reach a potential customer that you would of not able to reach before. Before I go into details, here is a bit of history online banking. As the commercialization of the internet evolved in the early 1990s, traditional brick-and-mortar banks began to investigate ways of delivering online services. Though limited at first, the success of these early efforts led many banks to expand their internet presence through improved websites that featured the ability to open new accounts, download forms, and process loan applications.
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Soon enough, however, internet-only banks arose, offering online banking and other financial services without a network of branch offices. The first fully-functional direct bank insured by the FDIC was the Security First Network Bank, which began operations on October 18, 1995. With lower costs due to the lack of overhead, Security First, and the competitors that followed, it was able to offer higher interest rates on deposit accounts and reduced service fees.
As the choice in virtual banks grew, so did customers’ enthusiasm for banking online. More than 60% of account holders do at least some of their banking on the internet, according to the latest (2017-18) report on banking behavior from the FDIC. (Beer, 2017) The following are seven changes in the banking industry through the internet will change.
- Paper checks will potentially no longer be used. – In many countries, people do not even know what checks are. As many countries believe that is causing more identity theft.
- Changes in the way people pay. As the use of Venmo and Paypal has been becoming more popular.
- Disruption and changes in the banking industry. Fewer intermediaries and faster transactions.
- New regulations to be more in tune with the 21 st century
- Redefine the banking experience. They are having consumers become the center of the banking world.
- Use of Bitcoin. Becoming more of a cashless society.
- More consumer-friendly. Being more competitive and giving consumers what they want.
As in every new opportunity, there are pros and cons. Online banking is no exception. (Beer, 2017) Some of them are:
Pros
- More Information Technology positions. As companies will have more of a risk of potential hacks
- Banks will be able to offer you better rates. As overheads costs will be less, therefore, banks can give you better prices.
- Better customer experience. More banks compete for your business. They will want to give you more bang for your buck.
Cons
- Less available ATMs that the online bank offers. As more online banking becomes a reality, it will harder to receive cash with no fees.
- No personal relationships. As you might be able to do an online chat, you most likely will not be getting the same person.
- Less flexibility with transaction fees. You will not have that personal relationship as you would have if you go into a bank.
As more people use the internet for their online banking, there will be more changes to come.
