Risks & Disadvantages Of Online Banking

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Online banking has changed our lives in ways we could never have imagined. Going to the bank in pre-online banking days was often a nightmare, especially if you were busy. You had to go queue and wait for your turn, which wasted a lot of time. When online banking came into the scene, we all gave a collective sigh of relief. We were happy not to have to go to the bank, and we could do our banking from the comfort of our homes or anywhere in the world, at any time. All we needed was a smart device. 

With all the accolades online banking gets up to date, most people forget about its disadvantages. 

1. Security And Identity Theft 

Mobile apps and online banking apps by design should be secure. Banks often implement security protocols, which are up to date. No system is completely airtight in terms of security. Hacking and identity theft may occur, threatening customers’ security. When using online and mobile banking, be careful of using unsecured networks such as public Wi-Fi hotspots in cafes and airports. 

Downloading a VPN will solve the issue of an unsecured network. A VPN creates a secure tunnel between your smart device and the internet. It masks your IP and hides your location, and most importantly, encrypts all your communication and secure your information. 

2. Limits Your Deposits 

Online banking normally has a daily or monthly deposit limitations. This makes it difficult for businesses to make large online deposits. When you reach your limit, you have to make a physical trip to the bank t deposit your cash. The scanning software can read not all check types. Handwritten business checks, which have a black line on their backside to make a carbon copy in an account register, might be rejected by the online deposit system, which means you have to deposit in the bank. 

3. Not Always As Fast 

It takes only a few minutes to deposit a check in the bank using the bank’s mobile app. However, you have to wait before you can access the money. Online banking provides convenience by sparing you the time you spend in commuting and queuing in a bank. But the advantage of being in the bank physically is that they review all deposits and funds released according to the bank’s policy, which might take up to 3 business days if you do it online. 

4. No Personal Banker Relationship 

You may be capable of handling all your banking needs yourself online, but when you have complicated issues, you do not have a personal banker to turn to. Online banking sites often have customer service departments, but we are all familiar with the irritation of being put on hold, and speaking to a total stranger who has no clue about our problem or account history. While online banking is convenient, you are also advised to go down to your branch and build a relationship with the local bank. 

5. Limited Range Of Services 

You can accomplish a lot with an online account, such as checking balances, paying bills and depositing cash. You can also make an application for a new account or apply for a mortgage. In most cases, you need to visit your bank branch for form signing and present proof of identity documents. Even though you can transfer cash into a debit card, you have to visit an ATM or a branch for cash. 

6. Overspending 

With the convenience of online banking, it presents the potential to overspend. You may end up paying overdraft fees if you’re not careful. 


Online banking is very convenient, especially when on the go, but you have to use it with caution. The possibility of hacking is very high. As with everything manmade, there are always advantages and disadvantages. Being aware of both is crucial in weighing whether to use online banking or not.

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