Online Banking Pros and Cons

The Philippines has always been one of the top countries with the heaviest internet users. But despite this point of fact, not a few remain reluctant with making online transactions and participating in the cashless economy by setting up a savings account and avail of its highly convenient online services.

But their worries are not unfounded. While online banking is extremely helpful, it has its fair share of disadvantages that suffice to cast doubt among Filipinos who have seen alarming news of people being scammed online, to cite one example.

If you find yourself caught in the middle of wanting to enjoy the convenience of internet banking but anxious about its legitimate security issues, this article is for you. In this blog, allow Lumina Homes to give you a quick rundown of the pros and cons of having an online bank account, and whether said advantages outweigh the risks.

The 5 Pros of Online Banking

Online banking makes it easier for you to make payments, transfer money, and check for account balances and transaction history. Below, take a look at the key benefits and advantages of setting up an online bank account.

1. Convenience

Banking online is the height of convenience. No need to head to the nearest bank branch, which may even be closed during holidays, which is also probably the time that you need cash the most. Having an online bank to access anytime, anywhere is something you'd want to take advantage of over the hassle of long queues, closed banks, and more.

2. Speed

Say goodbye to ridiculously long lines at the ATM machine and instead make bank transfers and balance inquiries without setting for outside your bed, and only within seconds. Your online bank will also allow you to check transaction histories you have done recently. If you're at the mall and want to eat at a restaurant but don't have cash, many fast-food chains offer cashless payments to save you the embarrassment of failing to bring cash with you.

3. Economy

If you withdraw cash from an ATM machine that is not really your local bank, it will charge fees per transaction. With online banking, many online banks offer fewer to no ATM fees, maintenance fees, overdraft fees, and other extra charges to pay for.

4. Environment

With paperless transactions, it's the more eco-friendly choice to make payments. No need for paper documents detailing your banking transactions in the past. You can conveniently check these online. You can also have digital copies of your bank statements, invoices, and other bills to minimize paper clutter in your desk or cabinet.

5. Sufficient Security

While many still doubt the security of an online banking system, digital banking has enough security measures to deter identity theft and other security breach attempts. This includes setting up a password that only you know, as well as immediately notifying you of any transaction recorded via email or your phone number. This way, you will know whether there have been bank transfers that transpired unbeknownst to you, which you can immediately report by contacting your online banking provider.

The 4 Cons of Online Banking

Despite the convenience, speed, economy, eco-friendliness, and sufficient security of digital banking, there remain a number of issues that discourage many Pinoys from going digital. There are three main disadvantages associated with digital banking:

1. Internet Requirement

It is public knowledge that internet connectivity in the country is still inferior compared to other countries. And while the internet is more accessible now than ever before, not everyone has access to it, or it's not always readily available. This restricts the common Filipino from enjoying the perks of having a great online experience when it comes to making paperless transactions.

2. Limited Availability

While it's undeniable that cashless payments make digital shopping such a convenience, some physical stores and boutiques don't have this payment method yet. That's when you would still need to head to a nearby ATM machine and withdraw cash from your traditional bank account to make payments at these physical establishments.

3. Intimidating to the non-tech savvy

According to the latest data by Bangko Sentral ng Pilipinas, 44 percent of Filipinos still don't have bank or savings accounts. There are key factors that enable these statistics, including lack of financial literacy, inaccessibility, lack of trust in online and traditional financial institutions, and lack of funds to maintain bank account ownership, among others.

With online banking, one factor is some Filipinos' disinclination to anything digital or hi-tech. While the use of online banking is fairly easy, it could still be difficult for the non-tech savvy. Some people, especially the older population, also tend to be more vulnerable to online scams due to this very lack of internet familiarity. In addition, some people are rejecting digital technologies as they still prefer depositing and withdrawing money the old-fashioned way.

4. Online Scams

Finally, online scams are rampant. It could target not just the most vulnerable groups but even people who have been knowledgeably surfing the internet for years. This is the key demotivating factor that keeps Filipinos from joining the digital wave of online banking services and is making do with what traditional banks can adequately serve them in helping to manage their finances.

But these security threats could be avoided. This involves never disclosing any of your personal and banking information to anyone and anything that dubiously asks for them. Furthermore, it's to only make payments at legitimate and trustworthy websites. With responsible and smart online banking, you can free yourself from the risks, and only enjoy its many conveniences.

Even with searching for an affordable house and lot for sale this 2023, banks help to fund your dream property purchase. Banks offer a higher loanable amount and lower interest rates, making it a viable option for many property buyers. Once you sealed the home deal, you can also make loan payments online through legitimate websites or through your online bank account.

Lumina Homes, Vista Land's housing segment, is a prime provider of affordable house and lot and is trusted by many Filipino families who achieved their house and lot in the Philippines through the real estate company. Become the next Lumina homeowner this year by making an online home reservation with us!