What are the advantages and disadvantages of digital banking?
In an age where almost everything can be done digitally, it’s hardly surprising that more and more people are choosing to manage their finances online too, such as personal accounts and business current accounts. The convenience, speed and flexibility afforded by many digital banking options mean that we no longer have to pay a visit to a high street bank to perform basic tasks such as balance checks, or transfers.
So, wherever we are, at whatever time we want, it’s easy to log into a website or mobile app and have complete access and control over our finances. Here, we take a closer look at the advantages of digital banking and explore what drawbacks it could have too, starting with the advantages:
Although almost all high-street banks now offer an online banking facility, there are a growing number of new ‘challenger’ banks which operate solely in the digital world. This gives you a far greater choice when it comes to choosing a banking system which works for you.
Online-only banks don’t have the high costs associated with maintaining local branches. This means that they can offer better interest rates and lower fees than their traditional counterparts. They are also likely to be at the forefront of new digital technologies since this is their provenance and core area of expertise. These may well prove to be key considerations in deciding which digital business bank account will work for your business.
However, if you prefer a mix of both digital and traditional banking, then the hybrid options now available from most high-street establishments may suit you best.
Perhaps the most obvious and most popular benefit to digital banking is the convenience it gives you to manage your finances at a time and place to suit you. Provided that you have an internet connection and a mobile device or computer, you can usually access digital banking 24 hours a day, seven days a week.
Whether you wish to check your balance, pay a supplier bill or transfer money, digital banking gives you complete freedom without the limitation of standard office hours.
Ability to schedule bill payments
Thanks to digital banking, it is now possible to simplify your bill payments by setting them up to be paid automatically on a day of your choosing. With options to set up recurring monthly payments which you can amend at the touch of a button, you’ll never have to worry about late payments again.
This level of automation can be invaluable for those with busy lifestyles and businesses. It allows your banking to take care of itself while you focus on other essential things.
Disadvantages of digital banking
Although there are many advantages to digital banking, and we are all being drawn inexorably towards a digital future, it’s equally important to be aware of the potential drawbacks too, such as the following:
Stories of identity theft or stolen funds are common these days, and it appears there is always some new scam in circulation where fraudsters may try to trick you out of money or hack into online accounts. The misuse of personal information is quite-rightly a concern, and both businesses and individuals share a duty of responsibility to protect personal and financial information.
Security is a high priority for the digital banking world, with apps and websites often protected by many layers of security designed to keep hackers out. Encryption and measures such as two-factor authentication (2FA) all help to keep your personal information and business finances secure.
While passwords may one day be a thing of the past, it is essential that you use a unique and strong password that is not shared or easily guessed.
Of course, another downside to digital banking is what to do when the system doesn’t work. We all know the frustrations of logging on to see an error message or to be advised that the website is currently down and we should try again later. We soon become used to being able to access anything we want, whenever we want to, so when this isn’t possible, it feels hugely inconvenient.
Thankfully, improvements in technology mean that such issues are increasingly rare, and even if a website does go down, it’s usually still possible to gain access to your banking account via the mobile app.
Whether you’re always amongst the first to move with the latest tech, or you’re a little conservative, there is no hiding from the fact that the digital age is here to stay. With its many benefits, untold convenience and flexibility, managing your personal and business finances online are set to be the future.