Online vs traditional banking
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Online banking offers conveniences for both customers and banks. It allows customers to bank anywhere at any time and reduces costs for banks by eliminating physical branches. While online banking replaces in-person interactions with security measures like passwords and encryption, the level of security is comparable to traditional banking. As mobile devices and technology continue to advance, online banking will become even more integrated into daily life through mobile payments and money transfers between connected devices.
Online vs traditional banking
- 1. Online vs. Traditional Banking The differences between them 30 years ago, banking was an up-close and personal affair. To get cash, make a deposit, or check your balance, you had to visit your bank’s local branch, wait in line for a teller, and show your ID at the window to make any transactions. In the mid 1980’s, just as computers were starting to make their way into homes, banks started experimenting with ways to bring the branch to customers, over phone and data lines. These days, there are more online banks than there are brick-and-mortar ones. The convenience of online banking for customers and the cost-savings for banks is so great, online banking is here to stay. Here’s a little bit on what online and traditional banking have in common and what sets them apart. Why online? The move towards virtual or online banking offers benefits to both the bank and the customer. For banks, it means a huge reduction in the expense of doing business. Fewer branches mean less overhead for their business, all around: very little or, in the case of online-only banks, no real estate costs, reductions in the number of staff required, and less risk of robberies and losses. For customers, it’s all about convenience. You can do almost anything online that you can do at a traditional bank branch. Until recently, the exception has been deposits of physical checks. But now, some banks allow customers to take high-resolution photographs of checks they need to deposit with their smart phones and email the images for a nearly-instant deposit process. There’s another big benefit to online banking: it’s greener. Fewer branches require fewer natural resources like electricity, fuel for moving money and paperwork, etc. Plus, customer service and record keeping has been centralized by many banks, further cutting the amount of resources required to do business. And, finally, customers don’t need to be mailed paper statements every month because everything can be safely and securely transmitted online and by email. That means saving millions of trees per year and a big reduction in carbon emissions by the postal service. Security The biggest concern for banks and their customers has always been the security of money and information. While the move online is a dramatic change to the nature of banking, the security measures involved for both online and traditional banking has remarkable similarities. The bank vault has been replaced by high-security servers and the encryption of data to prevent virtual break-ins and thefts. Security cameras have been replaced by Secure Socket Layer connections between bank and customer computers, keeping a watchful eye on transactions and preventing eavesdropping. And presenting ID at the teller window has been replaced with “cookies,” passwords, and PINs that identify your computer and Security Certificates that identify a bank’s. 1
- 2. For more information on how Kiboo keeps your information as safe and secure as any traditional bank, have a look at this article. The future of online banking As technology improves and as mobile devices become more and more powerful, the concept of being “online” will fade and eventually disappear. Your phone, tablet, desktop, and laptop will all be fully functional banking tools, connecting you whenever you like and wherever you are to your money. Already, you can receive alerts by SMS on your phone. But soon, you’ll be able to use your phone like a debit card, purchasing items by scanning barcodes, paying bills without having to visit your computer, and transferring funds among your friends and family just by bumping devices. Kiboo already uses the latest technologies and platforms not only to protect you online, but to help you get the most out of your money. But we’re not done yet: we’re actively testing out new ways to make banking even better online. And, when a new tool meets our criteria for safety, security, ease-of-use, and overall helpfulness, you can bet it’ll make its debut on Kiboo. 2