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There are numerous pros and cons associated with telephone banking, including ease of use and potential security threats presented through access to personal information. Banking over a telephone system can often be more convenient than banking in person, since some functions can be accessed even when a bank is closed. This type of banking also allows various issues to be more easily resolved for multiple customers at once, since some information and procedures are automated and do not require human interaction. There are some potential disadvantages with telephone banking, however, including difficulties that may be present in accessing an automated telephone system and security risks that can be created by providing bank access without human interaction.
Telephone banking refers to the use of a system to allow customers of a bank to process various banking procedures over the telephone. Such services can include anything from applying for loans and altering the terms of an existing account to ordering new checks and monitoring the balance in an account. The ease of access for such services is one of the major advantages that telephone banking can provide for customers. Telephone services can be provided 24 hours a day, unlike most services provided at bank locations which are typically closed in the evenings, on weekends, and on many holidays.
Since telephone banking can utilize an automated system, multiple customers can also be helped simultaneously. Simple questions regarding bank locations, branch hours, and even account balances can all be handled by such systems. This allows those operators or associates who are available to help fewer customers and focus on providing more thorough customer service, without taking time to answer simple questions that do not require human assistance.
Telephone banking is not without its potential negative aspects, however, and many of these problems depend on the type of system developed by a bank. Automated phone systems are somewhat notorious for difficulty in use, especially older systems that may not recognize voices or other forms of input. Newer telephone banking systems have improved upon many of these flaws, but the menus utilized by such systems may still be difficult to effectively navigate.
There are also some potential security risks that arise through the use and development of telephone banking systems. Since customers are not actually present and face-to-face with a bank teller or manager, it may be easier for identify theft to occur and produce misrepresentation of customer needs over the telephone. This can be controlled through various security protocols incorporated into a phone banking system, but even these measures can be insufficient in some instances.
How common is telephone banking anymore? Hasn't it largely been replaced by online banking? It seems that most problems associated with telephone banking have been addressed by moving to Internet banking. It is easier for customers to get to where they want to go by navigating around an Internet site and most security problems have been resolved -- customers have to confirm their identity when logging in on an "unfamiliar" computer and 128 bit encryption is pretty darned solid.
Some people still prefer banking over a phone, but it would appear the days of that service are numbered.