Benefits and Risks of Digital Banking

By Harry Mariano, Digital Relations Consultant

Many brick-and-mortar banks are shutting down in place of digital banking, but how safe is this change to the way we manage our money? For older adults, it can feel uncomfortable to manage money via an app or a computer, and they may prefer to speak to a professional face-to-face rather than an AI chat helper.

In this article, we explore the benefits and risks of digital banking and share important tips on keeping your money safe online. 

Easy Access

Online banking has made it possible for people to withdraw, deposit, transfer, and send money 24/7 as long as they have an internet connection. For many, this may feel disconcerting. If you can access your bank account so easily, who else can? Luckily, online banks have numerous security features that are constantly being upgraded and adapted to minimize the risks of fraud and cybercrime.

Always set up a two-factor authentication system with your online bank so they can verify it is you whenever you make a transaction. Cybercriminals commonly send fraudulent texts or emails asking you to click a link to verify your information, so never click these links or enter sensitive information. Always use your bank’s official website or app to manage your account on a private Wi-Fi server – never use a public Wi-Fi server (such as at a library) to access your bank, as that can potentially expose your information.


Though buying things online at any time of the day or night can be wonderful, it also makes overspending easier. Fortunately, many online banking apps have built-in budgeting features that can help you prevent unnecessary spending and will notify you when your account is running low.

You can also benefit from better rates and lower fees with online banking, as the costs of running a brick-and-mortar bank are negated. With the benefits of quick and simple transactions, it’s worth considering online banking if you are looking for higher interest rates on savings or want the simplicity of banking from home.

Lack of In-person Communication

For some older people trying online banking, adjusting to the lack of in-person communication that was once the norm at a bank can be difficult. Online banks offer help services where you can talk to a customer service assistant, but for some, you must first negotiate with an automated AI chat system.

There is a level of trust required to deposit your money into an app rather than to a real-life person, but if you choose a reputable online bank, there are a few things you can do to ensure it is safe. Always check for a small lock symbol on the left side of the search bar to ensure the connection is secure, and choose a strong password with a hard-to-guess combination of numbers, symbols, and letters.

A Step Toward the Future

Although it can be challenging to keep up with the rapidly evolving technology in this day and age, there are plenty of benefits to online banking. If you are careful about which online bank you choose, verify their reputation and longevity before opening an account, and keep your account secure with the latest security features provided by the bank, it’s worth considering stepping into the world of online banking.  

Note:  Island Senior Resources is not a financial advisor, and we do not advocate you change or don’t change to online banking. Our goal is to highlight what you need to consider before making any changes. It can be helpful to consult a professional financial advisor as well.