In a survey conducted this year, researchers found out that four out of five households with Internet access now use online banking. This new way to keep track of your finances has become somewhat of a norm in our society, but the few who do not take advantage of this option have made accusations about banking online.
To help weed out some of these accusations, here are ten myths about online banking.
Myth 1: Your Money Is Not Safe If You Bank Online
A very common myth about online banking is that your money is not secure. However, the reputable companies who provide online banking are committed to protecting their customers’ account information in every way. User names and passwords are used for verification purposes, and most sites will log the user off automatically after the account is inactive for a certain length of time.
Data encryption and firewalls are also used to keep the customers’ information safe. A study by the Center for a New American Security showed that banks are always looking for new technology to prevent fraud and alert them to fraudulent activities.
A Better Business Bureau (BBB) and Federal Trade Commission (FTC) study found that online banking users discovered fraudulent charges on their own 68.2% of the time. As explained by a Jevalin report, this is because online banking users are four times more likely to actively monitor their banking activities over non-online banking users. This is why the series of regulations called “Reg E” were established by the Federal Reserve.
These regulations limit consumer liability in the instance of fraud. If a consumer detects fraud within two days, they are only responsible for the first $50 of fraudulent charges, and they become more financially responsible the longer it takes them to detect the problem.
Myth 2: You Lose Customer Service With Online Banking
The second myth is that customer service is not available with online banking. Banks actually want their customers to use online banking because it is more cost effective and easier for them to conduct business. This is why most banks encourage online banking by providing special online support services, some of which are even better than the bank’s regular customer service support.
Myth 3: Online Banking Is Expensive
Some consumers my think that online banking terms and conditions are subject to changes not used with non-online banking. This is quite simply not true. Online banking actually saves the average consumer $1,100 in paper checks and postage, according to the BBB and FTC study. Also, the time and money spent traveling to a bank branch is eliminated.
Myth 4: Online Banking Is Time-Consuming
Another common concern is that online banking is time-consuming. At first, it may be difficult for a new customer to get to know their way around the bank’s online system, but after a few visits to the site, they can complete common tasks much more quickly. According to the same BBB and FTC study mentioned above, online banking has the potential save the average customer up to 60 hours in their lifetime.
Myth 5: Online Banking is Complicated
Potential customers may worry that the process of banking online is confusing, but most find that the confusion is only temporary. As mentioned before, after a few visits to the site, the customer becomes more familiar with the system, and they are able to complete tasks much easier. Banks design their websites with the customer in mind, and they make sure to provide a site that can be easily navigated. If a customer is confused, customer support services are easy to find.
Myth 6: You Cannot Trust Online Banking
Due to many of the myths listed above, many consumers don’t trust online banking. They believe that making a mistake will cause them to loose money. As I have said, banks want customers to use their online services. Therefore, the companies have devoted themselves to solving problems with customer service.
Myth 7: Banking Offline Is More Convenient
Banks have made online banking much more convenient than offline banking. One of the best parts of online banking is that the banks’ websites are available all day, every day. A customer could check their balances, see images of cleared checks, and pay bills, even in the middle of the night. Banks have also started to use mobile applications to help customers do their banking wherever they have cell phone service.
Some banks have even developed an application that allows the customer to deposit checks from their cell phones.
Myth 8: Virtual Banks are Unstable
Another myth that may concern customers is the possibility of their virtual bank being shut down and their money going with them. The truth is that any customer of any Federal Deposit Insurance Coverage (FDIC) insured bank is covered for up to $250,000. Every customer gets this same protection if their virtual bank or their physical bank closes, as long as it is insured by the FDIC.
Myth 9: Transactions Made Online Take Too Long
Some consumers believe that online transactions will take longer than if they made the same transaction in a physical bank. Every bank has a different system, but according to Bankrate.com, “Online bank sites generally execute and confirm transactions at or quicker than ATM processing speeds.”
Myth 10: Virtual Banks Do Not Give Physical Checks
Most customers still want the ability to write physical checks, but think that they won’t be able to do so with online banking. While this statement used to be true, ING Direct, the world’s largest bank, recently started providing customers with checks due to customer demand. It is possible that many other online banks will follow in their footsteps.
Beth Montgomery is a writer on various consumer finance topics including credit cards for people with fair credit. Beth welcomes your comments at her email beth.montgomery87-AT-gmail.com