Nowadays, the Digitalization of everything has made things easy to acquire with fewer efforts and costs as well. Time has changed and things become available at your doorstep; so does digital banking. Digital banks are functioning best in terms of providing facilities to their customers and even more than that. But, have you ever thought about what is digital banking exactly? Who is behind this concept of making things online, especially in the banking sector? Let’s figure out the info with our Financial Information Hub.
Here you will get all kinds of questions to get answered related to Digital Banking. Also, after you complete the understanding of digital banking, jump on to see various best banks working in the top area of the world: the USA, Canada, Australia, the EU, and other parts of the world.
What is digital banking?
Digital banks, in simple words, are different services related to banks available on the phone, on their applications, or might be available in Browsers. Generally, these banks have no physical branches available (if available; one or two) and these are often known as neobanks, virtual banks, mobile banks (being available on phones), etc.
Generally, because of no branch available, these neobanks do not provide card services; however, it lets users send via their wallets, or through other linked banks facility available on the application.
However, a few advanced or widely-popular banks might see issuing cards and other features like a physical bank; Cash App, for instance.
The services that are being taken through digital banks are comparatively more feasible than that of physical banks or traditional banks. Also, the expenses to acquire such big staff like in traditional banks are avoided in digital bank facilities. This means it seems cost-effective and comfort-oriented approach for both users and the service providers.
Who offers digital banking?
For sure, anyone would be happier to get their task completed without them going anywhere; but to be at home. The biggest advantage seems that it gives ease to the user to not wander anywhere to find facilities.
However, Online-only banks are actually the name of those who carried this trend of making banking online. Therefore, they seem more prudent and flexible enough to provide the services whether it’s quick transfer, taking loans, transferring money abroad, etc.
Online-only banks expel the old tradition of making a visit to nearby banks to get your work done. This is something parallel to modernization as well as for the ease of humankind.
Benefits of digital banks
For sure, anyone would be happier to get their task completed without them going anywhere; but to be at home. The biggest advantage seems that it gives ease to the user to not wander anywhere to find facilities.
The further paragraphs of this Financial Information Hub will unveil how beneficial digital banks are.
Ease of use
The use of the internet has made things easy to access with the least troublesome and higher scope of flourishing into the act of completing the work. Earlier, when the internet was not the medium, people used to stand in line for their banking work. However, this has massively changed after the emergence of digital banks.
It came with comfort; people can get their bank accounts easily opened, can transfer money without considering the distance, and also it is less paying charges; compared to the traditional banking system.
Along with it, when the pandemic hit, the real advantage of digital banking came in front when everything was locked up, however; the internet was helping to reach out to each one for their benefits.
Interest rates
In terms of interests, there are several traditional banks that offer comparatively fewer interests on the savings account. Due to this, there are many who feel like shifting towards Online-only banks which offer a decent interest of up to 3% (in a few mobile banks).
With the motto of expansion, digital banks are trying to lure users by giving them offers that are better than traditional banks. Ultimately, it’s good for the users’ point of view as they get more interest.
Money transfers
Similarly, money transfers around the nation and the world are something that is highly in charge and takes more time to complete the transaction. While choosing a digital platform for the same is quick and comparatively less chargeable.
Only a few clicks apart, your transactions will be sent safely and on the time as well. There are many such applications working to ease such acts and provide the utmost security at the same time. Cash App, PayPal, Google Pay, etc. are good examples of it.
Fees
We all are very much familiar with the introductory fees when we visit any nearby traditional banks to open a bank account. Almost all the banks ask for fees initially to get an account opened and will transfer the amount once your account is opened.
But, in online-only banks, you don’t require to pay anything extra to set up your account. It is free in most cases and also is quick and doable from your side too.
The majority of earnings for traditional banks come from the initial charges they make. However, it is not the case in virtual banks. They usually earn through the exchange of money method. The more money you will send by using its application, the more they’ll get from that.
Travel
Due to the ease of making your digital banking portable, digital banks or mobile banking is surging high in demand. It, unlike traditional banks, can be used either in Australia or in the USA (depending upon the application accessibility) with so much ease.
Although you contribute to the nation’s building economy with the use of credit cards at restaurants, shopping malls, ATMs, and others, the use of Online-only banks also helps with the same. The only difference seems to be that the functions are available on your mobile phone and you don’t necessarily need to use credit or debit cards for any payments.
Budgeting and analytics
Moreover, among various advantages, digital banking provides an additional feature that helps to analyze how much money is spent in which category. It is significant in today’s time to get your expense surveillance through it.
The mobile features on different digital banking platforms are designed in such a way that it helps organize everything into the category section.
With this, you can put limits on any one category to not spend more than the scheduled limits. This would help you find minimalism: a reflection of a better life.
Early paychecks
Apart from facilitating the transfer of funds quickly and easily; digital banking is a proven beneficiary for paychecks as well. On average the time taken by traditional banks to deposit paychecks is 4-5 days in America or other parts of the world. However, there are many virtual banks that work to get your checks deposited earlier or even 2 days earlier (in a few cases).
With this advancement, who will not want to try it at least once? You would too.
Sign up process
You must have admitted that opening a bank account is a chaotic task in traditional banks. There are so many factors that are responsible for extending the time period as well as making you exhausted during the process.
On contrary, opening accounts on a digital banking platform is much easier and could be done at your home. The process is done on the application itself and you need to provide your personal details; the rest will be done within a few minutes.
Community
Did you ever get a chance to be called a community account holder in a traditional bank? Well, most likely not. However, when you open your account on the virtual bank; you get a kind of feeling that you are a part of their community.
For an instance, when you send someone through Venmo, you get additional features like putting GIFs, sending messages, and others.
This way depicts that you are actually important to digital bankers. Therefore, they are concerned about you being their user.
Saving on autopilot
With the help of digital banks, your savings become a regular habit because of the automatic feature of the virtual banks’ app.
This helps you to save money even when you forget to do so. Additionally, because it works automatically, you don’t need to be bothered about saving anymore.
On the other hand, there’s no such facility in traditional banks to make savings automatically.
The setback of digital banks
As nothing is permanent and perfect; so does digital banks. There are so many advantages and good things related to virtual banks; however, the setbacks cannot be avoided in the smog of its positive sides.
Below are the disadvantages of digital banks:
No branches available
Although there are benefits of not being the branch of your bank, there are a few setbacks to it as well. We can get our work done easily with the help of the mobile application without visiting any branch. Also, there are several other benefits of not having a tour of your bank. But, the importance of bank branches cannot be taken for granted.
Let us see why it is so.
You must be aware of many banks and their services both online and offline or traditional banks. Also, you have noticed how at different stages, several kinds of issues emerge due to a lack of sufficient knowledge and maybe for other reasons. So, in that case, if your bank has any branch nearby to you, your issue would be tackled soon with the help of representatives in the branch.
Also, no doubt that there is customer support available for online banks; however, the personal touch is something that proves more effective than any other mode in terms of solving problems.
So, there must be several advantages of not having branches, but the importance of branches cannot be put aside.
Customer Support
The customer support section is created the resolving users’ concerns during the usage of banking facilities. Almost all companies, whether it’s financial or any other that is dealing with customers, keep support staff to tackle every issue that a user comes across.
This could be well-maintained by traditional banks as there is a direct interaction of users and bankers which leads to proper understanding and resolution of the trouble.
But, when it comes to digital banks, they don’t have much bigger staff to tackle the issues of thousands of users. Therefore, it becomes pathetic sometimes to tackle all the concerns of a variety of users.
The End!
Digital banks are growing in demand as per their easy-to-access nature. Also, there are several benefits like time-saving, less cost requirements, and also safe for financial acts. With all these benefits, more and more people are going towards the change from traditional to Online-only banks or virtual banks.