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Online vs. Traditional Banking

The differences between them

30 years ago, banking was an up-close and personal affair. To get cash, make

a deposit, or check your balance, you had to visit your bank’s local branch, wait

in line for a teller, and show your ID at the window to make any transactions. In

the mid 1980’s, just as computers were starting to make their way into homes,

banks started experimenting with ways to bring the branch to customers, over

phone and data lines.

These days, there are more online banks than there are brick-and-mortar ones.

The convenience of online banking for customers and the cost-savings for

banks is so great, online banking is here to stay. Here’s a little bit on what

online and traditional banking have in common and what sets them apart.

Why online?

The move towards virtual or online banking offers benefits to both the bank and the customer. For banks, it means a

huge reduction in the expense of doing business. Fewer branches mean less overhead for their business, all around:

very little or, in the case of online-only banks, no real estate costs, reductions in the number of staff required, and less

risk of robberies and losses.

For customers, it’s all about convenience. You can do almost anything online that you can do at a traditional bank

branch. Until recently, the exception has been deposits of physical checks. But now, some banks allow customers to

take high-resolution photographs of checks they need to deposit with their smart phones and email the images for a

nearly-instant deposit process.

There’s another big benefit to online banking: it’s greener. Fewer branches require fewer natural resources like

electricity, fuel for moving money and paperwork, etc. Plus, customer service and record keeping has been centralized

by many banks, further cutting the amount of resources required to do business. And, finally, customers don’t need to

be mailed paper statements every month because everything can be safely and securely transmitted online and by

email. That means saving millions of trees per year and a big reduction in carbon emissions by the postal service.

Security

The biggest concern for banks and their customers has always been the security of money and information. While the

move online is a dramatic change to the nature of banking, the security measures involved for both online and

traditional banking has remarkable similarities.

The bank vault has been replaced by high-security servers and the encryption of data to prevent virtual break-ins and

thefts. Security cameras have been replaced by Secure Socket Layer connections between bank and customer

computers, keeping a watchful eye on transactions and preventing eavesdropping. And presenting ID at the teller

window has been replaced with “cookies,” passwords, and PINs that identify your computer and Security Certificates

that identify a bank’s.

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For more information on how Kiboo keeps your information as safe and secure as any traditional bank, have a look at

this article.

The future of online banking

As technology improves and as mobile devices become more and more powerful, the concept of being “online” will

fade and eventually disappear. Your phone, tablet, desktop, and laptop will all be fully functional banking tools,

connecting you whenever you like and wherever you are to your money. Already, you can receive alerts by SMS on

your phone. But soon, you’ll be able to use your phone like a debit card, purchasing items by scanning barcodes,

paying bills without having to visit your computer, and transferring funds among your friends and family just by

bumping devices.

Kiboo already uses the latest technologies and platforms not only to protect you online, but to help you get the most

out of your money. But we’re not done yet: we’re actively testing out new ways to make banking even better online.

And, when a new tool meets our criteria for safety, security, ease-of-use, and overall helpfulness, you can bet it’ll

make its debut on Kiboo.