About the Benefits of Online Banking

 Online banking offers a number of benefits for users of both personal and business accounts. The ability to access information quickly, download it into accounting software and conduct business online with only a few mouse clicks are the biggest advantages to this still evolving system.

Benefits

1. Online banking permits businesses to avoid the hassles of brick and mortar banking. Online systems allow users to transfer money from one account to another quickly and easily rather than going through the hassle of check writing. Online banking also gives the option of downloading information into an accounting program to cut the time needed for bookkeeping activities. The entries also include places where money was spent, making tracking easier.

Significance

2. Bookkeeping once was a skill requiring the use of grid paper and many hours poring over entries. A missed entry could take significant time to locate and could cause problems with reconciling the accounting books with the actual account balances. Online banking takes out much of this guesswork as entries are online within a few hours of a transition. The listings include vital information and running account balances to make checking the account against personal records easier.

Misconceptions

3. Some people believe they are susceptible to others accessing their information by banking online. While that possibility always exists, banks use encrypted information and complex security measures to cut down on the likelihood that information will be compromised. Online banking is not fool-proof, however, and still requires keeping an eye on spending. Some tracking systems are faster than others, and knowing how yours works can avoid overdrafts and refused charges.

The Facts

4. Online banking exists as a tool to help with personal and business accounting. Each financial institution can impose its own limits, such as how often money can be transferred or the amount account holders can transfer at once. Many institutions now have added features, such as free online bill pay, to entice potential customers.

Evolution

5. Online banking started out as home banking, a service that permitted people to use videotex, which is a device that looks similar to a laptop but had limited capabilities. Videotex did not gain popularity, and banks looked for new ways to entice customers. Phone banking, where users could enter their information through an automated system, became popular in the 1990s before the wide usage of the Internet made accessing account information online a viable option.