The Disadvantages of Traditional Banking

The Disadvantages of Traditional Banking
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Traditional banking, where customers visit brick-and-mortar branches to conduct business, has its uses. But unlike online and mobile banking, physical bank branches are only available for limited hours and can become crowded, making it time-consuming to conduct even basic transactions.

Online and mobile banking provide easy access and flexibility. And while some people might think that traditional banks are safer than online banking, the fact is that even traditional banks store your data in large data centers that can be vulnerable to hackers.


  • Traditional banking lags behind online services in terms of accessibility, flexibility, affordability and – at times – security.

Less Flexibility and Availability

To do business at a traditional bank branch, you first have to get there, which means driving, walking or taking public transportation. You also might have to take time off from work or give up part of your lunch break to get to the bank during banking hours. Some banks are reducing the number of branches they have since online banking is becoming more popular. This means that your nearest branch might move if it hasn’t already, making it necessary for you to travel even further to do your banking in person.

Simply put, accessibility – or the lack thereof – is one significant disadvantage of traditional banking when compared to online services. Limited service hours, combined with the aforementioned geographical constraints, could prove to be a headache for some individuals. And, once at a branch, you often have to wait in line to see a teller or even to use an ATM, taking more time out of your day.

Exploring Rates and Terms

It is considered normal for traditional brick-and-mortar banks to charge higher fees than their online counterparts in an effort to cover the various expenditures required for them to stay "in business." This should be expected, given the fact that online bank services don't have the overhead of maintaining physical branches and are often willing to offer more incentives to compensate for the lack of a physical presence.

Assessing Possible Security Issues

Although it may seem excessive to fret about, bank robbery is a persistent security issue that all bank patrons and employees should be aware of. In fact, there were 3,733 commercial U.S. bank robberies in 2016 alone. With that in mind, security threats remain a hazard and "disadvantage" of traditional bank locations.

Cyber crime is, of course a serious issue that can affect online banking. That being said, the extensive security protocols now protecting online banking systems has dramatically reduced this threat.

Exploring Services

The services offered by traditional banks are, by all standards of measure, comprehensive and thorough. Individuals using online banking would be hard pressed to identify services their online bank provides that a physical bank branch could not. In fact, some services, such as printing temporary checks or requesting a new debit card, can be accomplished faster at a traditional bank than using online services.

However, the point remains that all services provided by traditional banks end when operating hours cease. This differs greatly from online banking, where basic services such as balance checking, statement reviews and various other requests can be made throughout the day and night.