By this point, no one can dismiss online banking as a fad. However, it is worth considering whether the trend towards online financial transactions is going to slow or reverse in the years to come. There will continue to be people who resist online banking in favor of offline transactions just as there are people who prefer to keep their money in mattresses instead of putting it in banks. Whether these people will exert serious influence on the movement towards online banking can be examined by looking at the needs of modern consumers, and the interests of the banks themselves.
The Move to Online Business
The global connectivity provided by the internet, combined with the fallout from the global financial crisis has encouraged a growing number of entrepreneurs to start their own businesses online. As an increasing number of people look to save themselves from unemployment or augment otherwise insufficient salaries by finding new ways to make money online, they will require new ways to send, receive, and invest their online funds.
The Rise of Mobile Banking
As handheld mobile devices become more sophisticated, users are experimenting with more sophisticated transactions. Moving beyond ringtone downloads, consumers can now shop online and purchase software upgrades and augmentations through app stores. In addition to this buying and selling, anyone with a web browser on their phone can access their bank’s online banking site to move and manage their money in more locations than ever before.
As banks consolidate and grow larger, they are looking for more ways to cut costs, and reducing the number of full-time employees on their payroll is an attractive option. Encouraging customers to do their banking online allows banks to close smaller branches in outlying locations and use economies of scale to develop customer assistance centers in locations where the labor market is more favorable.
Online banking is also more attractive to banks because a reduced physical footprint means reduced costs in other areas. In addition to saving the money that would normally be associated with operating and maintaining physical branches, no longer having to print and mail paper statements to customers would be a huge savings for banks. As an added bonus, banks have been able to take advantage of current pro-environment sentiment by marketing online banking as a “green” alternative.
By appealing to more mobile customers and more cost-conscious financial service providers alike, online banking continues to be an attractive option for everyone involved. However, when discussing the internet it is dangerous to assume that everything is going to be moved online; there will always be individuals, industries, and transactions that are grounded in the real world with no desire to change the way they do business.