Online and Digital Banking Differences, Advantages, and Disadvantages, Explained

Due to the inaccessibility of physical banks in various parts of the Philippines, it's understandable that many Filipinos still do not have accounts at these institutions. Thankfully, some financial services remain available to them, including the ability to apply for a loan without a bank account. 

One cannot disregard the truth, however, there are still many instances in life in which having a bank account is necessary. Good thing, there are now more convenient banking options that are powered by the internet.

In this article, we will explore two of them that are now available in the Philippines.

 

Online Banking

Online banking, also known as electronic banking, involves financial transactions conducted through a bank's website or mobile application. Registering for an online account with your bank will allow you to use its online banking service. This lets you perform fund transfers and bill payments at any time and from any location without having to visit the physical branch.

 

Unionbank is one of the first financial institutions to offer Online Banking in the Philippines.

To provide customers with a high level of flexibility and security, online banking relies on web-based services, high-level process automation, and APIs. Obtaining bank statements, withdrawing cash, transferring funds, managing your checking or savings account, opening deposit accounts, paying bills, managing loans, managing cheques, and monitoring transaction records can be done on this platform.

 

Digital Banking

Traditional commercial banks in the Philippines offer online banking channels while maintaining their physical branches around the country. Clients must visit any of their branches to open accounts, cash and deposit checks, and other large-amount transactions. Cash withdrawals can also be made through ATMs or over the counter.

Freshly launched Maya is an example of a Digital Bank in the Philippines.

 

Banks that provide all-digital banking services, on the other hand, operate solely through the internet, which customers access via a mobile app. All technologies used are fully automated including customer service. Typically, digital banks do not charge transaction fees, initial deposits, or balance maintenance. Furthermore, their savings accounts pay higher interest rates than traditional banks. However, fully digital banks do not have functions such as opening a joint or checking accounts using a digital banking service. To deposit or withdraw money, you must go to another bank or one of the digital bank's partner locations.

 

Online and Digital Banking Advantages

Convenience and Accessibility

Except during system maintenance or upgrade, online and digital banking services are available whenever you want and wherever you are unlike physical bank branches. Online banking channels allow automatic bills payment of government services. When you enable this service, you will be able to schedule payments for utilities, credit card bills, insurance premiums, and other items and there you will not worry about missing payment deadlines.

Mr. Sean Martin D. Plantado, Head of Customer Service for Digido.ph, notes that you should get your bills paid on time to prevent late fees. Paying your bills online will certainly give you peace of mind. This is a huge advantage of online banking that saves you time.

Mobile Banking

Customers can use mobile banking to conduct the same bank transactions that they can with online banking with the use of a mobile phone.

 

Fast and Efficient Service

Transactions can be completed in five to ten minutes over the internet which saves you a significant amount of time. 

 

Accounts Are Manageable

Keeping track of your bank accounts becomes simple. Customers can access their transaction history through online banking channels at any time. This gives you the time to detect any suspicious activities that you can immediately report.

 

Paperless Statements

Paper statements are no longer necessary with online banking. Instead, you can view your statements electronically. It's also environmentally friendly. While you still have access to all of your transaction records, receiving electronic statements helps with paper conservation and zero-waste efforts.

 

Online and Digital Banking Disadvantages

Cybersecurity Threats

Despite website security technologies being employed, banking online channels are still vulnerable to fraudulent activities resulting in unauthorized transactions. Consumers must be better educated on how to protect their bank accounts from internet security threats.

 

Internet Issues

For a smooth and trouble-free online banking transaction, a stable internet connection is required. Because of the Philippines' notoriously slow internet speeds, online banking services are occasionally unavailable, particularly when customers require them the most. Regular system maintenance activities, which can take longer than expected, contribute to downtime and dissatisfied customers.

 

Learning

First-time and non-tech savvy users find it difficult to learn how to use online banking channels which leads them to prefer face-to-face transactions even if it takes a longer time.

Online and Digital Banking in the Philippines

  

Digital, online, and mobile banking services in the Philippines have inventive and useful features. 

UnionBank is one of the first digital banks in the country that uses EON. It won the Global Finance Magazine’s Best Bank World in 2017. 

BPI Online and BPI Mobile has new features such as QR code and e-wallet loading. 

BDO Digital Banking features fund transfer to one’s own account, another person’s account, and non-BDO accounts. It also includes reloading BDO cash cards and locking or unlocking your ATM card.

LandBank, the government’s largest formal lender in the provinces, offers services such as biometric login, viewing foreign exchange rates and unit investment trust fund, and using an ATM branch locator.

Security Bank is known for Human Switch Kit and Online Account Application that makes account opening fast and convenient.

Other online banking platforms in the Philippines are Metrobank Mobile Banking, OCTO by CIMB Bank, GCash Save Money (GSave), MayBank ISave, Diskartech by RCBC, Komo by EastWest Overseas Filipino Bank or OFBank, Tonik, and RBank Digital.

 

All-digital banking services are a new trend in the Philippine banking industry. Due to today’s pandemic that makes cashless and contactless payments much needed, these types of banking systems became more in demand.