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Benefits of Online Banking

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The state of online banking and online transactions looks bleaker every day. Back when the only way your data was stolen was when a “hacker” intercepted it, I was confident that 128-bit encryption was going to protect us forever. Now, with data being stolen at the destination, or when it’s being backed up, or when it’s being processed by a third party – we need some serious thought to the actual benefits of online banking.

  1. Statements – Seriously, finding a statement online is usually about a million times faster and easier than looking for it in your files, if you even keep nice and orderly files.
  2. Billpay – A double-edged sword, Online Billpaying can automate the paying of your bills, if you remember to set it up. And if you don’t do it automatically, you sometimes might forget to do it month to month. However, if you do utilize it, paying bills at the last minute could earn you a few extra bucks (both in interest and in stamps) a year for doing little more than typing a few words and clicking a few buttons.
  3. Direct Deposit of Paychecks – What’s easier: having your paycheck automatically deposited in your bank account, or, receiving a check in the mail, signing it, driving it to the bank and depositing it? How about what gets dollars into your account, and earning interest, faster? Everyone should have direct deposit.
  4. Transfers – Doing this online, with no waiting, is so much faster than driving to the ATM or branch (or calling and navigating a frustrating voice menu system). You save on gas and your valuable time.
  5. “Real Time” Balances – You can check your balance and know where you stand anytime you want with nearly real-time data.

Even with all the data being lost, the benefits of online banking are obvious and might outweigh the risk of a bank losing your data. Personally, I always conduct as much business as possible online because the recent stories you’ve heard could happen to strictly off-line banks. Loss of data during a backup? Loss of data due to theft from the inside? It’s all possible even if your bank doesn’t have a website. What do you think?

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7 Responses to “Benefits of Online Banking”

  1. Rob Lewis says:

    I think you’re right – I personally still feel the benefits do outweigh the risk of data-loss, although I’m yet to be affected by anything like this – I might change my mind if I was subject to fraud and lost a fair amount of money.

    A lot of people are scared of banking online because of these sorts of stories – yet they’ll happily pick up the phone and bank that way, or send off letters containing sensitive data that might never arrive at the destination – these methods of banking have been open to fraud for years. I guess it is less labour intensive to hack a computer system though, with the possible “rewards” also being greater.

  2. Cap says:

    online banking is still the better way to go too.

    its not for all, I understand people still prefer to deposit money via the teller window, thats fine.

    there’s no reason not to utilize online banking service if you have access to it though.

    at the very least, you can check your balances quicker.

  3. Cap says:

    woops accidentally pressed say it.

    anyways, i also think everyone should use online billpay when its available. the money you save in time and stamps (and interest) adds up eventually.

    you’ll have more problems with internal banking issues than outside sources tampering with your bank. it’s just not smart.

    one reason I think lots of people still dont utilize online banking.. might be because they dont have broadband access. if it takes you awhile to dial-up, login, and connect.. the benefits of saving time might not be as evident..

    some of my aunts and uncles dont utilize it too.. simply because they dont trust it.. and thats mainly because they dont understand how it works.

    if you’re computer savvy or comfortable enough, you’ll use it without issues.

  4. BlogDog says:

    I bank at Wachovia which had a “breach of security” not to long ago from the inside. I use online becuase of the simplicity and the extra .000721% intrest I get for holding a couple of days longer. I don’t think it matters … if a crook wants your info … they are getting it … you just have to be prudent and hope that someone takes repsonsibility if it is their fault …

  5. nickel says:

    To be fair, direct deposit has nothing to do with online banking. You can do this with any bank account. The main bummer of my bank’s online bill pay service (which is free) is that you can’t have it automatically pay the entire balance on your credit cards… If you set it to automatically pay the amount due, it pays the minimum. You have to log in to pay the full balance due. What a pain in the butt.

    fivecentnickel.com

  6. jim says:

    Yeah, direct deposit is a bit of a stretch but it is still an electronic transaction.

  7. Matt says:

    The truth is, data in transit (which is the only thing that “128-bit encryption” people always crow about) was never in any serious danger. Intercepting in-transit data is _hard_, even for skilled computer criminals. On the other hand, breaking into a merchant’s web site and rifling through their database of stored credit card numbers (which are not now and never have been protected by that SSL encryption, often aren’t encrypted at all, and whose security the customer has no way to know about) is a much easier thing to do. It requires a bit more savvy than going through their dumpsters (also a common tactic), but orders of magnitude less knowledge and work and risk than breaking into core routers and diverting traffic (which is what you’d have to do in order to view credit card info while it’s in transit)…and for a much bigger payoff too.

    Unless you’re willing to live a cash-only life, true security of your financial data is an illusion. The solution is not to panic or despair, but to keep a close eye on one’s banking and credit card accounts (and credit record). Online banking makes it easier to do that on a continuing basis. (And even if you’re really careless about selecting passwords, it’s still a lot easier to steal a printed statement out of your mailbox than to break into your e-banking account.)


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