The popularity of online banking in the UK has been increasing drastically in recent years. It is estimated that 41.4 million regular users of the internet use online banking (UK payments Administration 2011, p. 12). Financial institutions have embraced online banking because it serves them a good opportunity to market different products. Despite the popularity of online banking in the UK, some customers have not embraced it because of various reservations.
As much as online banking has a wide range of advantages, there are various disadvantages that are supposed to be addressed by all stakeholders in UK. This includes financial institutions and individual customers for long term sustainability. In this case, there are various disadvantages that need to be looked at (Macesich 2000, p. 21). Setting up an account through online banking can take some time. This is based on the procedure and time that one takes before he/she can register an account with his bank.
Online banking has various learning difficulties. In this case, banking sites can be difficult to navigate through for a new customer (Kotler & Keller 2006, p. 18). As a matter of fact, a customer needs to be well acquitted with banking site software’s and they might be required to read tutorials. Site changes and upgrades can be costly to customers as time goes by. This is because every bank needs to upgrade its site to accommodate arising market needs.
It should be known that online banking lacks appealing customer service. This is because there is no personal contact with the banks staff. In this case, customers talk to employees on phone and there is no guarantee that you are talking to the right person. Internet accounts are complex because a customer needs to get an account with his/her service provider and this can be a hectic experience (Boland 2009, p. 18). There are a lot of security concerns on online banking.
Online baking sites are heavily encrypted with the current technology but hackers have always proved to be a menace. These hackers can access a customer’s account and this is dangerous. Switching bank accounts has proved to be cumbersome (Cronin 1997, p. 21). Customers can not spend on their online bank accounts as they wish and this is restrictive.
There are various technical breakdowns that can be witnessed on online banking. Despite high technological advancements, online sites can also go down. Therefore, if such a breakdown happens, a customer can end up being penniless and this is not good. Different customers don’t have trust in online banking and this is a worrying trend (Boland 2009, p. 28). UKs government should ensure that customers are well educated on such aspects by involving all stakeholders. In this case, a customer can carry out a transaction and wonder if he/she is doing the right thing.
For a customer to use online banking, he needs some basic computer familiarity and literacy. A customer can not use online banking if he/she doesn’t know how to navigate on the internet (Boland 2009, p. 32). Customers may not be able meet a banks representative if it is not operating a branch in their area.
Bodies like the UK Payments Administration have been coming up with measures to address all this disadvantages that might limit the uptake on online banking in the UK (UK payments Administration 2011, p. 18). Apart from this, there are other initiatives that need to be taken for sustainability. In this case, financial organizations and customers can come together to address such problems for sustainability. The first step is to enhance the idea of password security (Kotler & Keller 2006, p. 45). In this case, customers should be educated on various aspects that will enable them to handle their passwords well to avoid any leakages that might encourage hackers to access their bank accounts.
Banks should enhance their customer service departments to deal with various problems. For instance, representatives should be there to help customers in navigating through their sites. A bank like Barclays has come up with such measure to ensure that customers are satisfied (UK payments Administration 2011, p. 21). Customers should be educated on how to identify theft because some of them are ignorant (Boland 2009, p. 34). This is because some of these problems can be avoided through common sense. For instance, customers should not click on suspicious links and mails.
Financial institutions should carry out market research to know what customers want for easy online banking. This is because their online banking needs and interests are supposed to be taken care of. Banks need to implement the latest network security software for sustainability (Boland 2009, p. 46). Customers should enhance their internet connectivity and avoid any eavesdropping in relation to ongoing transactions. This enhances confidentiality and makes online banking safe for customers and the bank.
Customers have found it hard to have their problems solved online. This is because they need help from representatives. Customers should be taught how to manage their online bank accounts because some of them are ignorant and this is not good for all stakeholders (Macesich 2000, p. 39). Financial institutions are supposed to keep their customer details secure because there are instances where employees collude with fraudsters to steal (UK payments Administration 2011, p. 32). The bank of England should come up with good measures to ensure that this is dealt with.
Online security is supposed to be enhanced because there is a lot of malicious software and this might reduce the uptake of online banking. Financial institutions are supposed to enhance their complaints departments because this will enable them to get various suggestions on how such problems can be solved (Boland 2009, p. 29). Dispute resolution between banks and customers should be enhanced to ensure that all stakeholders are satisfied. This is because dissatisfied customers can end reversing the gains that have been made through badmouthing.
Boland, V., 2009. Modern dilemma for world’s oldest bank. New York: Dodd, Mead & Company.
Cronin, J., 1997. Banking and Finance on the Internet. New York: John Wiley and Sons.
Kotler, P. & Keller, K. L., 2006. Marketing Management (12th edition).New York: Prentice Hall.
Macesich, G., 2000. Central Banking: The Early Years: Other Early Banks. London: George Bell.
UK payments Administration., 2011. UK payment industry. Web.