Basically, there are two types of online banks.
- Numerous brick and mortar banks are now offering their services via the Internet. This still leaves customers the alternative to visit the buildings to do their proceedings in person. Or, they can take advantage of the online banking services.
- A virtual bank is the other type of online banking. They simply do not have a location that you can visit in person, so you just can’t go there to, for instance, make a deposit.
These banks charge very little for internet banking simply because, without buildings to maintain and tons of employees to pay, their expenses are considerable lower.
Photo Credit: Anosmia
In Europe, the brick and mortar banks nowadays encourage you as much as possible to start banking online. It’s the cheapest solution – for them!
Which has not always been the case.
Just after World War II, when millions of people over here were recovering from devastation, banks started to grow a network of local branches. Customers were encouraged to visit their local offices and put their money into a savings account. The adage back then was -and still is today-: money in your account first before spending it.
After growing a fine mazed network of local branches, banks discovered that staff expenses were up too much. -Remember, European banks aim for maximum profit increase each and every year. And they often succeed in surpassing last years profit growth. The bonuses they pay to their top level management probably has something to do with that.-
So, to cut expenses they gave all their customers cheques and a small identification pass with a signature that you had to show every time you made a payment.
But after a while, even that became too expensive. To make a long story short, after issuing PIN passes with a Personal Identification Number inside enabling you to pay to whoever was able to read those passes, banks now encourage you to go online and do your banking right there. That leaves many of their long time -and most loyal- customers in the dark as they feel they’re to old to adapt to Internet banking. But… who cares? We’re talking money here!
Online banking allows you to make a variety of transactions.
You can pay bills directly from your checking account, saving you the cost of a stamp plus walking to the post office and it also leaves you more tolerance in how rapidly you want to pay the bill because of the shorter transaction time.
Funds can be transferred from checking to savings accounts, vice versa. You’ll be able to complete loan applications and you can even use online banking for investments.
Other advantages of online banking are that you can view your transactions whenever you want, do some online banking regardless from where you are, provided you have Internet access and download the data to your bookkeeping software.
It goes without saying that you have to be very careful and follow all security issues while banking online.
But by main point is: do YOU do online banking?
How does this work in the US, UK, Australia, Asia, just to mention a few spots?
Do you think online banking is a safe and convenient way to handle your money? Is it promoted by the banks in your region and supported by their customers?
Let me know about your experiences.
I’m curious to learn from you about this.
Post your comments below.
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