The Benefits of Online Financial Technology

Introduction

Online financial technology, also known as fintech, has revolutionized the way we manage our finances. From mobile banking apps to online investment platforms, digital tools have made it easier than ever to take control of our financial lives. In this article, we will explore the various ways in which online financial technology can benefit individuals.

Convenience

One of the primary benefits of online financial technology is the convenience it offers. With mobile banking apps and online platforms, individuals can perform banking transactions and access banking services remotely, without the need to visit a physical branch. This means that you can bank wherever and whenever you want, saving you time and effort. Whether you need to check your account balance, transfer funds, or pay bills, all of these tasks can be done with just a few taps on your smartphone.

In addition, online financial technology allows you to go cashless. Electronic transactions are more secure and sanitary compared to cash transactions. Furthermore, you can easily track your transactions electronically, allowing for better financial management. As we move towards a cashless society, digital banking tools provide a more efficient and convenient way to handle your finances.

Features

Online banking platforms offer a wide range of features that are designed to enhance your banking experience. Many banking apps provide personalized financial advice, savings tools, and calculators to help you make informed financial decisions. Virtual assistants are also becoming more common, providing a human touch even in digital channels.

In addition to the basic banking tasks like checking account balances and transferring funds, mobile banking apps often include advanced features such as mobile check deposit. This allows you to deposit checks remotely using your smartphone. Peer-to-peer payments are also becoming popular, allowing you to send money to friends and family in minutes. Other features like locating nearby ATMs, cardless ATM withdrawals, and budgeting tools can help you manage your finances more effectively.

Security

Security is a top priority for financial institutions, and online banking platforms have implemented various measures to ensure the safety of your financial information. Encryption, firewalls, and multifactor authentication are used to protect customer data and prevent unauthorized access. Many banking apps also offer biometric authentication, such as fingerprint or facial recognition, for added security.

Contrary to common misconceptions, online banking can be more secure than traditional banking methods. Digital payments and e-wallets often offer more security than physical cards, reducing the risk of fraud. Additionally, banks insured by the Federal Deposit Insurance Corporation (FDIC) guarantee the safety of your deposits up to $250,000 per depositor, per bank. Similar protection is provided by the National Credit Union Administration for credit unions.

Control

Online financial technology gives you greater control over your finances. With mobile banking apps and online platforms, you can self-serve and perform banking tasks at any time, without restrictions. Whether you want to deposit a check, transfer money between accounts, or activate a new card, you have the flexibility to do so whenever it’s convenient for you.

Furthermore, online banking provides real-time access to managing and moving money. The advancements in technology have made it easier than ever to send and receive money electronically. With just a few clicks, you can complete transactions that would have taken much longer using traditional banking methods. This level of control allows you to manage your finances more efficiently and make better financial decisions.

Benefits Beyond Banking

Online financial technology offers benefits beyond basic banking services. It can be a powerful tool for creating financial, social, and economic change. For example, online banking platforms can be used to teach financial literacy and provide access to banking services in underserved communities.

Additionally, online banking has allowed the emergence of niche banking options tailored to specific communities and needs. Black-owned banks and platforms like OneUnited Bank have extended their reach to Black communities across the U.S. by offering online banking services. Similarly, Daylight is a digital banking platform that caters to the LGBT+ community, addressing the unique financial challenges they face. These online banking options provide a sense of community and empathy while offering essential financial services.

Is Online Banking Safe?

Online banking platforms have implemented various security measures to protect your financial information. However, it’s essential to remain vigilant and take necessary precautions to ensure the safety of your personal and financial data. This includes creating strong passwords, keeping your devices updated with the latest security patches, and avoiding public Wi-Fi networks or unsecured devices when accessing your accounts.

While there are risks associated with online banking, the overall security measures in place make it a safe option for managing your finances. In fact, digital payments and e-wallets can offer more security than physical cards. Additionally, the guarantee provided by the FDIC and the National Credit Union Administration protects your deposits in the event of a bank failure.

Online Banking Fees

Online banks typically have lower fees compared to traditional banks due to their lower overhead costs. However, there are still some common fees associated with online banking. These may include monthly maintenance fees, overdraft fees, ATM fees for using out-of-network ATMs, wire transfer fees, stop payment fees, and foreign transaction fees. It’s important to review the fee schedule of your chosen online bank to understand the potential costs involved.

The Best Online Banks for Digital Banking

When choosing an online bank for your digital banking needs, it’s important to consider factors such as the mobile app’s user experience, the availability of features, and the level of customer service provided. Forbes Advisor has identified several online banks that offer excellent digital banking experiences. These include Ally Bank, Axos Bank, Chime, Discover Bank, SoFi Money, Varo Bank, and Wealthfront Cash Account. Each of these banks has highly rated mobile apps and intuitive online platforms that provide a range of features to enhance your banking experience.

Conclusion

Online financial technology has transformed the way we manage our finances, offering convenience, advanced features, enhanced security, and greater control over our financial lives. From mobile banking apps to online investment platforms, digital tools have made it easier than ever to stay connected to our money and make informed financial decisions. Additionally, online banking has the potential to create financial and social change by providing access to underserved communities and addressing the unique needs of different groups. With the right precautions in place, online banking can be a safe and efficient way to manage your finances.