Advantages of Online Banking?


Elderly Aunt And UncleDec 06, 2011: We had set aside some time this weekend to pay a visit to our elderly Aunt Jane* and Uncle James*. They are a lovely couple and it's always a pleasure to spend time with them :).

Our Uncle James is a very serious person with a solid character rooted in good values and habits. On the other hand Aunt Jane is an extremely jovial, a happy go lucky motherly lady who always showers tonnes of love on us. As you might have already guessed, Aunt Jane is not very good with the nitty gritty details of various aspects of life like accounting, finances, debt and more. She is content with Uncle James handling the details of their finances, accounting and other needs. In short, they complement each other very well.

Check BookWhen we arrived at their residence for a nice homemade dinner this weekend, we caught Uncle James balancing his check book. He was doing it in an interesting way. Using a calculator he tallied all the figures that he had entered by hand. Then he put the calculator away and checked the sum by hand, figuring out the totals in his head. We were surprised. If it were us we'd have done it the other way round. Seeing our surprise he smiled amusingly saying that he trusted his math more than a calculator. So he always did the final check on his numbers by hand!

Online BankingDuring the course of our conversation we subtly suggested Uncle James about considering online banking for his needs. Like most people, Uncle James has heard a lot about online banking but has not tried it. He pays his bills by mail and deposits checks at a local branch of his bank. He uses the Internet to check his emails, or shop for small gifts at Ebay or Amazon, but when it comes to banking, he feels more comfortable working with an agent at his local bank.

Since he is a man set in his ways, he was skeptical about online banking. He brushed aside our suggestion saying that he did not trust the security of an online bank and was concerned about his money being stolen away by internet thieves. This is a valid concern among many elders in our country. So we thought we'd persist with Uncle James and give him a correct picture of online banking so that he can make an informed decision based on facts instead of rumors and baseless fears.

Round The Clock Banking

Open 24 hoursThe first thing that we had to convince Uncle James was the fact that online banking was not going to change his money habits. Rather it would give him access to his accounts 24X7 by using current computer based technologies via the Internet from the comfort of his home or wherever his location was. He could pay his bills, schedule (or reschedule) his mortgage payments, electronically transfer money from his bank account or receive money in it within seconds. Also, he could download his monthly statements with a click and save it on his computer thus saving paper (read trees) and reducing clutter at the same time.

Quick & Efficient Management of Finances

Quick & Efficient Management of FinancesWe logged into our Orange Savings account and showed him how online banking helped us to manage our finances more quickly and efficiently by doing away with the time-consuming, paper-based aspects of traditional banking. Next we explained to him, since online banking was done via the Internet using secure networks of a bank, thousands of customers could be handled at the same time. Hence, there was no need to visit a bank physically and wait in long lines to complete our transactions. Online banks generally execute and confirm transactions at or quicker than ATM processing speeds.

We shared with Uncle James that as kids, we had observed how at times our parents would have to take half a day off to apply for a new bank account or a loan. He acquiesced at having done the same thing, especially when he and Aunt Jane moved to a new city. Well, gone are those days. Now we can apply for a new account, or a loan, or a mortgage with a single mouse click from the comfort of our homes at our own convenient time. Our enthusiasm and eight years of secure online banking brought a smile across Uncle Jame's face. Sweet, isn't it?

High Yield Saving APYs, good CD Rates and FREE Checking Accounts

High Yield ReturnsNext we showed Uncle James some of the Money Market Rates available through online banks and credit unions. We shared that at present the banking industry was going through difficult times. He was well aware of it and was extremely unhappy with the savings APY available at his brick and mortar local bank.

Then we went on to explain that in today's increasingly competitive banking environment, online banking is considered as a powerful "value added" tool which helps banks to attract and keep new customers, especially the younger generations. In addition, online banking helps banks to eliminate costly paper handling and teller transactions, reduce the number of clerks and cashiers, and bring down expenses on bank stationery, paper slips and forms. As a result, online banks are able to pass a part of their savings to their customers by offering FREE checking accounts, high yield savings APYs, and better CD Rates. Consequently now a days, most large national banks, many regional banks and even smaller banks and credit unions offer some form of online banking.

Type of Online Banks

Types of Online BankingNow that we had engaged our Uncle's attention, we steered him towards different types of online banks currently available in the market. There were banks who had no online presence and were thus known as "brick-and-mortar" banks. Uncle James currently banked at one such institution.

The next category of online banks are sometimes referred to as "brick-to-click" banks since they offer online banking in addition to having physical branches. And the last type are completely online or "virtual" banks that have no physical branches or tellers whatsoever. Uncle James preferred the "brick-to-click" category since he could visit a branch to have things fixed if something went wrong. We agreed with his line of thought :).

Trusted Online Banks are Secure

Trusted & SecureLike Uncle James, for many people, the biggest hurdle to online banking is learning to trust it. After all the banking industry is built on their ability to win and retain their customers' trust. So one of the greatest challenges for the banking industry has been to design this new channel of service in such a way that its customers will readily learn to use and trust it. Since online banking is done through a bank's website, security is a major concern.

We showed Uncle James, how most of the large banks now offer fully secure and functional online banking for free. Over the years as more and more banks have succeeded online and are having an increased flow of customers who are using their online services, online banking has become as common as ATMs (Automated Teller Machines). Trusted national and local banks have websites that have been secured and are regularly monitored by special web based security companies and software. Moreover most good banks offer detailed FAQs about the security of their sites and how they monitor their customers' transactions round the clock to prevent identity theft and fraudulent transactions.

Online Banking offers a Convenient Basket of Tools and Services

Basket of ToolsNext, we shared with Uncle James about how we use Microsoft Money to keep track of our cash flow, expenses and manage our portfolio, all in one place. And the good news was that now several online banking sites offered sophisticated tools, including account aggregation, stock quotes, rate alerts and portfolio managing programs to help us manage all of our assets more effectively at one secure site. Many of these programs are also compatible with popular money managing programs such as Quicken and Microsoft Money. Some banks offer these basket of web tools totally free while others charge a small fee for their use.

Aunt Jane interrupted us at this point by announcing that a delicious dinner was ready. Since we were really hungry we wasted no time in heading towards the dining table with Uncle James in tow.

Debit Card TransactionsAfter dinner, we explained to Uncle James that if he used online banking he could keep a (real time) tab on their banking transactions conducted through their debit cards. In addition, the debit card could save him time during his shopping trips at the check out counter where he currently pays the bill using his check book. Not only that, he could also keep an eye on Aunt Jane's purchases at nearby malls by simply logging into his account rather than waiting for the paper bank statements to arrive in the mail at the end of the month.

His eyes immediately lit up and we knew he was sold! Looks like the idea of keeping a real time tab on his better half's shopping finally convinced him about the benefits of online banking. We wasted no time in getting him signed up for an Orange Savings account along with an Electric Checking account.

Bank BonusHe loved the referral bonus and gave us a mighty bear hug. Since he is a sincere person, he has already got the basics of online banking under his belt by studying ING Direct's tutorials in depth and exploring their website. Kudos to Uncle James for adopting new ways of handling his finances :). Hope that other elderly people with concerns akin to Uncle James can also adopt safe and secure online banking.

However we have one concern. We wonder if Aunt Jane would continue to shower us with her love since we made her life a little more difficult with Uncle James watching her debit card transactions from the web! What are your thoughts about the feasibility of safe use of online banking by our elderly citizens? We are looking forward towards your comments.

*Names have been changed to protect the privacy of our relatives.

Image Source(s): iStockPhoto

Related Posts


12 comments