Finance Banking

How Banking Direct Works

Virtual Banks Revisited

There are many types of banks and banking direct systems. The most common banks around are the commercial banks which are serving both individual and businesses. These banks have different branches all locally or internationally. But among other types of banks there is what is considered as virtual banks. These virtual banks are without any branches where customers can go to and withdraw their funds. Withdrawals are done thru ATMs.

Direct Banking Introduced

Direct banks are also how these virtual banks are known. These branches offer their services and products thru telephone banking, ATMs, mail banking direct, mobile banking, and online banking. These virtual banks started in the early 1990s when the internet became more accessible to the people. At first, banks offered these options with limited services. But later on, some banks were realized and maximized the use of the internet by having ‘internet-only’ banks. This is known as the virtual banks.

Commercial Banks Stepping Up

But these banks are not losing their popularity because most large commercial banks are now offering online services to their customers too. So people are now just sticking to the commercial banks since they can still make transactions online and with their banks’ branches. This is how banking direct has evolved.

Advantages and disadvantages of Banking Direct

Like any other things in life, there are advantages and disadvantages that revolve around banking direct. This type of banking has attracted a lot of customers to enjoy banking with commercial banks offering these services online.
The advantages of having banking direct or online banking direct includes convenience, availability, speedy transactions, efficiency, and effectiveness. It is now getting convenient to do banking transactions with the use of internet banking. People can have access to their accounts 24 hours a day. They process banking transactions any time. The transactions are also fast and on time. Wire transfers or balance transfers are now real-time and the transactions can now be done in seconds. Clients won’t have to go to their bank’s branches and fall in line waiting for their turn just to withdraw or deposit money.


But we must also mention the disadvantages of banking direct to be fair. One disadvantage you will experience in banking direct is the trouble of going to your bank’s branch before you can even register online. The need to do is because of security purposes. Then since you will be working with technology, there are some people who are not familiar or as savvy with the internet. So getting to know how things work with banking direct might take a few tries and errors here and there.


Probably the most significant disadvantage banking direct has to clear of is the trust issues. Customers are aware of the possibilities of issues and errors that might cost them their funds. There have been some incidents wherein people lost their funds because some people were able to steal their passwords to their online accounts.


Banks are slowly able to eliminate the disadvantages of banking direct and people are now slowly getting to trust their banks efforts to make their banking experience more enjoyable and easier.

By Greggy Rick Go, published at 01/26/2012
   Rating: 4/5 (10 votes)
How Banking Direct Works. 4 of 5 based on 10 votes.

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