The Impact of Online Banking Platforms

ver the past few decades, we've gradually transitioned from handling business activities in-person to online. From shopping to banking, nearly every activity that once required a trip to an office or store can now be handled over the internet. Handling tasks online saves time and increases convenience for everyone, including consumers and businesses.

Online banking platforms are one resource that everyone benefits from. No longer do you need to visit a bank branch to deposit checks or set up a transfer; instead, you can log into your account and take care of business in minutes. Here's what you need to know about the impact of online banking platforms and how to take advantage of them.

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Online banking platforms: a definition

An online banking platform refers to a website or mobile app that links to your bank account at a financial institution. Most banks offer online banking platforms where you establish a username and password to access your transactions and handle certain banking activities, like deposits, transfers, and payments. Some let you log in via biometric or two-factor authorization.

Online banking platforms streamline your banking needs and allow you to take action whenever you want without needing to visit a branch. Businesses with lots of financial activity benefit from online banking features, which vary across financial institutions.

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What to know about online banking

Online banking makes it easy to handle everyday financial activities. You simply log into your account via the bank's website or mobile app and conduct the necessary transaction, such as making an online payment or transfer. Nearly all banks offer online banking services, though the extent of the features available may differ from one financial institution to another.

Some banks operate entirely online, with no physical branches whatsoever. The online-only model reduces operating costs, and some banks pass the savings onto their customers in the form of lower fees, better rates, and extra features.

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The technology behind online banking

For a bank to offer online services, it requires a dedicated website or mobile app. Most banks offer both, so customers can access their account information using a PC, laptop, smartphone, tablet, or other mobile device connected to the internet.

Once the user logs in with their name, biometric details, or multifactor authentication, they'll see their current account balance. Most banks include transactional history so customers can scroll through recent deposits, transfers, and withdrawals. You might also download monthly statements and schedule future transfers or bill payments.

Some banks allow you to conduct more extensive online financial activities. For instance, the financial institution might provide online application services for loans, lines of credit, or depository accounts. Some grant you access to order checks, place a stop payment order, or change your address.

Business bank account holders may receive additional perks, like invoicing services, business loan access, and accounting software integrations.

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Online banking security: how to protect your account

If you choose to handle most of your banking activities online, you want to take steps to protect your account details. After all, you don't want to risk someone hacking into your account and stealing your personal information or hard-earned cash. Here are a few tips to reduce your risk.

1. Choose a strong password

While passwords like 'abc123' and '123456789' might be easy to remember, they're also simple to guess. Try to strengthen your password by combining numbers, letters, and symbols. Also, avoid using the same password for your bank account with other websites or apps.

2. Sign up for two-factor authorization

Two-factor authorization establishes a second barrier to accessing your bank account aside from your password. To log into your account, you'll enter your username and password. Then, the bank's system will text or email you a one-time code, which you must promptly enter. Two-factor authorization provides an additional security layer to frustrate would-be hackers.

3. Limit who can access your business bank account

If you're a solopreneur or freelancer, you're probably the only person with access to your business bank account. However, if you've hired an accounting team or external bookkeeper and provided them access to your banking details, ensure you monitor your account and limit their transactional authority to only what's necessary.

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The difference between traditional and online banking experiences

Traditional banking relies on the in-person experience. There are physical branches that customers can visit when they need banking assistance. While conventional banks may offer online account access and mobile apps, the features available may not be as extensive as what you can find with online banks. Traditional banks often charge fees for their services, which may be higher than online banks.

Online banks provide flexibility and convenience to customers. They may specialize in specific products, like checking or savings accounts, rather than offering a broad range of products. Many online banks charge lower fees than you'd find at a traditional bank. They can offer lower fees since they usually have fewer operating expenses, especially if they don't have any brick-and-mortar offices.

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The advantages of online banking

There are several benefits to online banking to be aware of.

Minimal fees

Many online banks (including Novo) charge no monthly fees for their services. Some don't require minimum balances and eliminate transfer charges and other everyday transactions. They can minimize their fees because they have fewer operating expenses than traditional banks.

Mobile check deposits

Some online banks allow you to deposit checks via online apps without visiting a local ATM. That allows you to deposit money wherever you are—in the office, at home, or on the road—as long as you have an internet connection.

ATM access

For those occasions when you need actual cash, you can withdraw money from a nearby ATM. Many online banks participate in networks providing free access to designated ATMs.

Special perks

Some online banks cater to specific customers and include lots of helpful features that suit their needs. For instance, Novo's business bank account includes data analytics to monitor your company's income and business expenses. You can also use Novo to invoice customers directly within the app.

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Using automation to pay bills or schedule transactions

Financial institutions that offer online banking services may allow you to automate recurring bills so you never miss a payment. For instance, you could schedule monthly vendor payments or other expenses to pay directly from your account.

You can also use online banking to schedule other transactions, such as payroll, tax payments, or transfers. Scheduling your financial transactions in advance helps avoid any last-minute rush to pay expenses, avoiding late fees or other penalties.

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Financial tool integrations

As a business owner, you probably use various software programs to manage your company's operations. Some financial institutions provide integration features for business customers, allowing you to connect your accounts with accounting software, e-commerce platforms, and POS systems. That makes it easier to manage your finances and facilitate customer sales.

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Online banking streamlines your business processes

Through online banking platforms, monitoring your business account transactions, making deposits and payments, and integrating your banking activity into your organization's software tools is possible. If you're in the market for a new business banking account, check out Novo. We offer business banking solutions with no monthly fees or minimum balance requirements. Plus, our platform integrates with prominent software tools like QuickBooks, Stripe, and Shopify, so you can unify your business processes without requiring much manual intervention!

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Novo is a fintech and not a bank. Novo acts as a service provider to Middlesex Federal Savings, F.A., and the deposit and banking products obtained through the Novo platform are provided by Middlesex Federal Savings, F.A.

Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.

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