Navigating the Digital Frontier: Critical Issues in Online Financial Services - Essay Sample

Introduction

Most businesses and companies are currently operating online as consumers expect mobile devices and computers to have effortless experiences. The financial sector has always been at the core of this trend as technologies, and digital platforms begin to integrate themselves further into facets of our lives. The advent of online finance is among the most critical developments throughout the financial world. At any moment, customers can now access their bank account, move cash, expense tracking, save, communicate with their financial consultant and acquire crypto currency-all electronically. Online financial services also enhance effectiveness in reflecting on existing debts, the transmission of data and database. This paper has looked at the crucial issues that financial institutions should consider while offering online services.

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Security

Security is the main issue that financial institution should address while offering online services. Security threats related to online services may result from human errors, accidents or even unauthorized access to networks. It is more likely that an institution offering online services faces errors in their data, or credit card fraud. This may take place through phishing attacks, social engineering, ramson ware, DDos, malware as password cracking. The most popular security problem that financial institutions face is ransomware. It happens when an attacker gets unauthorized access to the personal and transaction details of clients. The intruder can penetrate an e-commerce site's database using fraudulent software programs to decrypt messages. Often, the purpose of an attacker when extracting data from consumers is for selling it on illegal markets and demand ransom amount of money.

The financial institution should ensure that they protect the framework of their IT before offering online services. This helps them in creating a security plan, based on a robust foundation. Through this, financial institutions should pay attention to every operating device and system by ensuring that they are well protected against security attacks and sophisticated cyber-attacks. Furthermore, they should take their audits seriously, since effective plans on data cannot be complete without them. As a result, the organizations can easily detect the existing loopholes in security strategy. Furthermore, they should implement multi-factor authentication. This involves taking additional process to protect the business accounts from their hackers. Through these processes, financial businesses would carry out their transactions without fear of theft.

Technical Problems

Technical problems are another issue that financial institutions should address when offering online services. Financial institutions rely so much on online platforms, and this signifies that they can generate extensive profit from the operation. However, if there are faults in transaction codes, they can also experience massive losses. Therefore, a single technical problem can cost the financial institution millions in losses. Loss of data and money has been troubling to the consumers and financial institutions. It may also create chaos for the customer who may not be able to make transactions or payment during the breakdown. Mobile banking service is now used by 54 per cent of customers all over the world. It is therefore critical that institutions have not only their web portals functioning properly, but also their online services. Therefore, financial institutions should offer priority to alleviating this concern by demonstrating how account funds would not be lost if there are technological difficulties. They should ensure they don’t experience technical problems by updating their software, teaching their staffs on preventing issues caused by human errors, working with IT support and cleaning their technology regularly.

Difficulty in Transaction

Some online services have difficulty in the transaction, causing a lot of inconveniences to the customers. Time used by these financial institutions in servicing customers should also be considered. Therefore, the financial institutions should ensure that their processes in online services are easy for all customers to use, and takes the shortest time possible.

Online Business laws

Financial institutions should ensure that they address all legal issues related to online services. For Instance, they should pay the necessary taxes required to transact online, and the amount for every transaction taking place. Furthermore, financial institutions should ensure that they abide by the law that protects sensible information for their customers. Besides, they should ensure that they comply with the laws that protect customer's exploitation. Therefore, the interest rates charged through online transactions should not be too high for the customers. They should be fair to both the financial organization and the customers.

Accessibility of the services

Lastly, financial institutions should address issues that cause to the ineffectiveness of the services to the customers. This should involve ensuring that the services are available to clients at all times. Through this, financial institutions should leverage live chats with the customers, seek their feedback, track the relevant key performance indicators, improve their response time on average and be more flexible. By addressing these issues, an effective customer relationship should be achieved, thus increasing their loyalty and overall profitability of such organizations.

In conclusion, online service offered by financial institutions has been the crucial development in the last few decades. Nevertheless, despite the many benefits associated with these services, there are several issues that financial institutions address. Security is leading in affecting the effectiveness of online services. Others are; technical problems, difficult in transactions online business laws and accessibility of the services.

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