As technology advances, more services are available only online. While this can be convenient for some people, it does pose challenges for others. One of the most recent trends to come as a result of technological innovations are online-only banks, and they're proving to be controversial among many people.
Because these banks typically have no physical branch, using their services comes with a range of drawbacks. Many individuals are unwilling to sacrifice the advantages they get from working with a physical bank, and those considering digital money management should be aware of the potential disadvantages.
• Security concerns: While all banks implement the latest techniques to fight security breaches, many consumers are hesitant about the security of financial institutions that have only an online presence. Those who have concerns about digital security or are accustomed to the safety measures put in place by more traditional banks may have even greater apprehensions about this component of Internet-based banking.
• Accessibility issues: If a traditional bank's website goes down for a period of time, those who need to transfer funds or get account information can merely walk into a branch and complete any necessary transactions. However, if a bank with only an online presence has a glitch, its users may have no way to view their accounts. Accessibility can also be a concern for those who don't have constant Internet availability - if users are in an area that has no connection, they may be at loss for how to manage their accounts.
• No access to coin counter kiosks: Physical bank branches offer their customers the opportunity to use a free self-service coin counting machine. Online banks obviously can't offer this option, and this may deter many people who tend to save change and have it counted out and deposited into an account. As the recession left more individuals looking for additional ways to save, these options have become extremely popular with many people.
• Less personal service options: Many bank customers rely on the friendly, in-person service they get from tellers when they are confused about charges, want to make account changes or need to learn about alternative financial management options. An online-only bank cannot offer this type of service to account holders, which keeps many from relying solely upon Internet banks.
June 7, 2013