Digital-only banking is not a passing trend. It’s the way of the future. Keep reading to learn more about what’s in store.
What is Digital-Only Banking?
Digital-only banking offers banking services via apps and online. These automated services can be accessed on mobile devices and do not have any physical location.
Some features of digital-only banking include:
- 24/7 Support
- Saving pots
- Monthly spending reports
- Future spending projections
- Spending notifications
- Bill splitting
Security of Digital-Only Banking
Digital banking applies superior authentication methods that offer more security than a PIN. These methods include:
- Facial Recognition
- Fingerprint Scanning
- Voice Recognition
Online vs Digital-Only Banking
According to Deltec Bank, “Digital banking and online banking are not interchangeable terms. Digital-only banking could be considered a progression of online banking.”
Although online banking does allow certain tasks to be completed digitally, ATM machines and bank branches are still part of the service. But digital banking does not include any physical aspects.
Instead, the entire process is completed digitally with automation and artificial intelligence. Even setting up a new account can be done online.
What Brought About Digital-Only Banking?
Digital banking is the result of consumer demand. Customers want to quickly and easily make transactions and view their financial records. Although online banking started to meet this need, digital banking took it a step further.
Traditional banks offer online banking for tasks like paying bills or transferring funds to another account. Customers typically have usernames and passwords that grant them access to their account information. This information can be viewed on the bank’s website.
Online banking led to mobile banking. This development did not change much of what online banking does, but it did allow customers to use these services on their mobile devices.
The next advancement was digital-only banking. It is revolutionizing the way banking is done by eliminating the need for bank branches and ATM machines and making it possible to complete all banking tasks online.
Future of Digital-Only Banking
The speed at which digital-only banking has grown was tempered by US regulations. However, that may soon change as regulations are slackening. In fact, if the Evolution of the US Neobank Market Report is correct, digital banks may soon take over traditional banks.
Business Insider says that Chime, a digital bank based in San Francisco, is already gaining success with over 2 million customers. Chime’s customer acquisition rate exceeds Wells Fargo’s rate. The report also claims that digital banks have become prevalent in Europe during the past three years.
But digital banking’s growth doesn’t stop in Europe and the US. According to Financial Management, many Asia-Pacific consumers are interested in digitizing the banking system.
The article states, “73% of consumers across the Asia-Pacific region believe they ‘should be able to accomplish any financial task on a mobile device’”. This expectation will increase the use of digital banking in these regions.
It seems clear that digital-only banking is going to affect traditional banks and customers who use traditional services. As more and more consumers favor digital over face to face services, digital banking is likely to become mainstream.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.