Worth the Risk: The Reasons for the Increase in Internet Banking

April 2008 saw the arrival of the Infosec Show in London, where top IT security companies came together to discuss the hot topics in the information security industry. One of the hottest of the hot topics discussed at the 2008 show was the increase in phishing (or Internet fraud) and related fraud attacks over the previous year. Mark Bowerman, spokesperson for card payment agency Apacs, said that the Internet provided an extra area for fraud scams and warned that if people weren’t careful, they could potentially become victims of credit card and other types of fraud and identity theft.

Bowerman also reflected, however, that despite warnings over the security risks inherent in Internet shopping and Internet banking in particular, the number of people banking online was increasing — proving that, for many people, the benefits of managing your finances through the Internet were clearly outweighing the risks.

This increases to the number of online bank customers has been noted in a number of surveys. One, carried out by Lloyds TSB discovered that over 50% of Britons had not seen their bank manager for more than ten years, while one third of respondents who had been to their banks within the last two years admitted that their financial circumstances had changed since. Another study showed that in January 2008, 11 million people logged into at least one online bank account in the UK, representing a third of the total UK online population.

As Bowerman suggested, then, there are substantial reasons why people are moving off the high street and along the virtual path to Internet banking. The first and most obvious benefit of Internet banking is the flexibility it allows. Night or day, public holiday or festive period, whether the high street bank is open or not, the Internet bank is guaranteed to be, allowing customers to bank when they want. It’s also convenient, it’s fast and it’s easy. Whether you just need to check your balance, transfer some funds, or have to set up or amend a standing order – it can be done from the comfort of your office or front room, so it’s no wonder people are queuing up (or not, as the case may be) at the virtual gateways of the Internet banks.

Without having to visit the branch itself, the only expense of Internet banking is the cost of being online, and with broadband more widely available than ever before, and it being active all the time, flat monthly fees are the norm for most now. As well as saving money on not having to find time to visit the bank, there are also online savings to be made. This is because Internet banks are cheaper to run than high street branches, the banks themselves save money, and can hand this money onto the customer, through better rates of interest or more attractive mortgage packages.

With such a long string of fantastic benefits waiting for those handling their finances online, there’s little wonder why the figures are increasing so dramatically.

This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.