Banking Basics

Importance of an Online Banking System

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In modern day life, people are involved with more complicated lifestyles than in the past and time has become the limiting factor for them to involve in more and more activities. Therefore, it is very difficult to adjust the time or make a schedule to attend all activities as they wish without disturbing another.

Thus, there is a high chance of misplacing information and it can be easy to forget the due payments of bills and fulfill business transaction on time. These errors would burden you with a heavy cost as you are subjected to pay the penalty charges and late fees.

Online banking is a method that helps consumers to manage the time and complete their payments on time and avoid unnecessary expenses involved with traveling to a bank in person. It makes the customers feel more comfortable to check their financial statues in the virtual world than in physical confines of a bank. 

What is online banking?

Online banking is a practice of making bank transaction and paying bills via the internet. It allows people to check their balances in the accounts, pay utility bills and even withdraw or transfer their money from one account to another.

What is the importance of online banking?

*In traditional banking, people access their bank account when they receive their bank statement once a month or else while they make a trip to the bank officer for a particular matter. Things were not happening real time and people had to wait for a period to know their account statues.  But, with the online banking facility, customers are able to access their account information whenever they need.

Therefore, it is very convenient for the customer and also reduces the risk of unnecessary overdraft as the customer can always keep an eye on his bank account balance.  

*In some circumstances, customers may need to transfer their funds from one account to another, especially in a situation one account bears an overdraft or if there is lack of funds in a loan account. Then, the customers are able to transfer the money through the online system so that he can minimize unnecessary interest and penalty charges on late payment.

*People may need to get information about the banking facilities and want to apply for a loans or credit cards. If the bank provide online banking facility, it is very convenient for the customers to access the bank and complete the transaction without making a special trip to the bank.

*Customers could use the online banking system to transfer their money in savings accounts to a debit card account even if the bank is closed, so that he could withdraw that money from automated teller machines using the debit card.

*On line banking system can be used by a customer to access their bank accounts anywhere in the world and to make payment for the bills as well as to do the transactions while being out of the country.

*Generally, on line banking system enables the customer to handle several bank accounts such as checking, saving, CDs, IRAs…etc from one site. Therefore, this system provides a more effective management opportunity for the customer’s bank accounts.

*Customer does not have to carry the money he withdraws because it is possible to withdraw money via internet to the customers’ debit card without going to the bank. Therefore, the online banking system would mitigate the risk of customer’s money being robbed.   

* Online service save the customer’s time as they could avoid the method of filling slips for any simple transaction and the waiting time in a line at banks especially in rush hours. Since, the online banking available 24 hours a day, customers don’t have to worry of the opening and closing hours of the banks and could have access to their bank accounts whenever convenient.

* Usually, the online banking services are offered free to customers by many banks.

* In practice, the online system enable the banks to mitigate their expenses incurred on the banks for postage and even for the stationary

More about this author: Menaka Ratnayake

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