Advantages and disadvantages of e-banking


The development in the financial sector allows exploring various online services by the traditional banks. The banking sector is working to enhance customer service by providing them online banking services. It is also known as virtual banking that allows the customers to conduct online services by using the internet. The customers are able to perform financial and non-financial services with the chief medium of internet. There is continues innovation in the field of financial sector such as virtual banks with no branches, innovative online services that allows to manage your individual account in effective manner (Ismail, 2017). Virtual banking has changed banking system completely which has developed convenient banking system.


In this busy and hectic schedule it is difficult for an individual to make time to visit bank for checking their account balance, interest rates, successful transfer of money, and any other update. Banking system has developed virtual banking system for customer convenience where an individual can access their banking system anytime and anyplace. There are many scenarios when there is banking holiday due to which your money can’t be transferred. Online banking system has provides an ease by providing 24 hours and 365 days services. It resolves issues faced by the customers during traditional banking system. An individual don’t need to stand in queue for any money deport and transfer.

2.Transfer service
The virtual banking system provides convenience to transfer money 24 hours in 365 days. You don’t need to stick to perform any transaction within working hours as you can do as per your convenience in 24 hours.

3.Monitoring service
The customers can access their updated passbook anytime for monitor their transactions to manage their financial plans.

4.Online bills payment
You don’t need to stand in queue for paying bills as it has feature to pay any kind of bill including electricity, water supply, telephone, and other bills.

5.Quality service
Internet banking has improved the quality of services by providing them convenience to perform their transactions anytime during the day. The consumers are able to apply for loan, insurance, and any other services without visiting the banks physically which shows that the quality of e-banking is fast and effective.

6.High liquidity
You can transfer money and utilize anytime which is the greatest advantage to access internet banking. You don’t need to visit banks for transferring money which can be done from anywhere without visiting to the banks physically.

7.Low cost banking service
Internet banking reduce enable to reduce operational costs with better quality of services. It provides convenience with high customer service at lower rate.  The Bank charges minimal amount for operations which reflect that the e-banking services are reasonable and efficient.

8.High interest rates
Internet banking provides low interest rate on mortgage loans than banks. The operational cost is also low which helps to saving amount that is beneficial for the customers. There are various other facilities such as no minimum balance account which helps to maintain account with zero balance. It increases total disposable income of the consumers without even worry about maintaining minimum balance (Lecic-Cvetkovic, 2016).

E-banking has various advantages which improves the banking system but there are disadvantages of using internet banking.  These are as follows:

1.Security issues
Internet banking is completely insecure as there are many problems related to the website and data can be hacked by the hackers. It can leads to financial loss to the users. The financial information can also be stolen that can also create financial loss.

2.Lack of direct contact between customer and banking officer

Online banking requires effective customer service for handling issues faced by the user. But lack of customer support creates disappointment among the customers.  There are some online payments which may not be reflected in the system due to technical issues. It also creates insecurity among the customers. Thus the lack of support from customer service executive is a barrier in online banking.

3.Transaction problem

During online banking there are various issues faced by the user such as transferred payment is not reflected, payment failed, and other issues due to technical support.

4.Long procedure to access e-banking

In some countries, government banks are providing internet banking by filling the internet banking form then after approval you can access security password to log in. An individual need to download the App of specific banking then all credentials needs to be filled for login successfully (Sharma, 2016).

5.Training and development
The banks need to conduct training and development program for employees for providing quality online services which enhance the customer experience. It requires huge investment to train them for providing effective services. Protection Status
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