Online Versus Traditional Banking

Almost every person alive today has a bank account of some sort. Everyone needs a place to store their money, and the traditional method of burying it in the backyard is no longer a realistic option. So we have turned to the banks for safeguarding and keeping our money. Now there is a new option that opposes the traditional method of banking. This is, of course, online banking. Online banking is different from regular banking in that it is done entirely from a computer. Theoretically, you could go most of your life without ever seeing the money that passes through your bank account. Let's compare online banking to traditional banking and see which one dominates the other.

Both online banking and traditional banking have their pros and cons. An obvious advantage of online banking is the comfort. You can make all of your deposits and transactions from the comfort of your own home. With online banking, it also becomes much easier to shop online and pay your bills online because the transfer of money is so quick and easy. A definite disadvantage is security. Online accounts that hold your money can be broken into by experienced hackers. PayPal, the current leading online bank in the world, constantly updates it's security to protect it's clients against hackers but they continue to find ways around their protection.

The traditional way of banking also has it's advantages and disadvantages. When you actually hand money to a teller and watch them store it, you feel reassured that your money is in good hands. Banks do have better security than their online counterparts. However, they are more vulnerable to being stolen the traditional way as well. You can't hold a gun to a computer and demand money of it. Well, you can, but you probably would not get any good results. Traditional banking also requires that you extract the money from your account before you spend it, whereas an online bank would not.

So what it comes down to, then, is a contest between comfort and convenience and safety and security. Many people prefer online banking because of it's quick and easy system of spending and receiving money. I, myself use online banking for this reason. Other people, like my father, prefer to use the traditional banks for their security (which may not even be as effective. I have never lost money through my PayPal account but I have through other banks such as First Commonwealth). Do we sacrifice comfort for the sake of security or do we give up some protection for our own comfort and freedom?

No sources were used in this article.