It is safe to say that the banking industry has grown irreversibly over the past few years. Digital banking options have increased dramatically. Customers are also increasingly attracted to this new way of managing their money. Extensive activities have taken place, especially in the world of digital banking and fintech. With the advent of new competing banks, existing banks are expanding their technology. Customers are also flocking to face-to-face banking.
Today, digital banks are following in the footsteps of traditional banks over decades, surpassing traditional banks. However, the term “Digital Banking” is one of those concepts that does not seem to be well defined in today’s financial world and a proper understanding of this concept has not been formed among stakeholders. In this article, you can find out the right definition of a Digital Bank. Also, readers will know how to choose such banks and what are the best digital banks in the current time.
What is a Digital Bank?
Digital banking is often confused with mobile banking and online banking. In most cases, online banking and digital banking are synonymous, but online banking is defined more narrowly. Online banking mainly focuses on remote deposits, money transfers, bill payments, and online account management. But digital banking involves the digitization of all programs and activities performed by banks and financial institutions and their customers, and the architecture and process of the bank change completely.
Digital banking as a business model affects the strategy, organizational structure, and organizational culture of the bank. Online banking, on the other hand, focuses solely on digitizing key aspects of banking.
Digital banking is the use of technology to ensure integrity from the beginning to the end of the processing of transactions or banking operations. The operation started at the request of the customer, including maximum optimization. Digital banking means the automatic provision of new and traditional products and banking services to customers through electronic and interactive channels. The main benefits of Digital Banks:
- For the customer: Availability, utility, and cost-effectiveness.
- For the bank: Reduces operating costs, provides error-free and improved services.
How Do You Choose an Online Bank?
When choosing a digital bank, first of all, three main factors must be considered. These include “Security”, “Costs” and “Practicality”.
Security: Every digital bank you choose must have high security. This includes login processes such as authentication, as well as the permissions that allow them to operate.
Costs: One of the great advantages of choosing a digital bank over a traditional bank is that their fees can often be lower. Because they have higher operating costs and overhead.
Practicality: Does your digital bank fit your needs? Does it include an international cash card, credit/debit card, has an easy-to-use app, and features you need such as business or personal access? Does your digital bank offer mortgage opportunities or savings features? Make sure you choose a digital bank that fits your needs.
Other features are essential too. Digital banks should have characteristics such as being Customer-centric, Immediate realization, Extensible considering the power of open banking, Always being up to date on technology. Also, if digital banks provide you with exchange rates, rating calculators, quick and easy-to-use phone apps, banking services such as loans, and so on, your life can be more comfortable compared to past times.
Best Online Banks for Digital Banking
Creating a list of the best digital banks is a difficult task. All the new and competing banks that are there, have unique offers and attract different customers from different countries. They are not easy to categorize based on customer numbers, revenue figures, and accessibility. Here, we have compiled a list of the top 8 best digital banks that we believe bring something special to the market. This can be due to their size, unique features, or reputation in the market.
- DECTA
- Soldo
- IbanDirect
- Wise (Perfect option for Travelers)
- Payoneer
- Square
- Mercuryo
- Crypterium
Is a Digital Bank Safe for My Money?
Two main characteristics can help you to understand whether a digital bank is safe or not. First, having a license from any country, such as the UK, counts as guaranteeing that your money is safe. Also, the second point is about insurance. As soon as the digital bank is under the insurance of the Federal Deposit Insurance Corporation, the user’s money is safe. Such insurance and tools allow users to search a bank with its digital address or name.
Also Read: How Banks Integrate the Use of QR Codes?
Conclusion
Currently, many digital banks operate and offer services to users around the world. The future of banking and financial activities move in this way. Surely, having more information about the definition and features of such a bank can be helpful for users, especially to choose the right digital bank. As said before, digital banks can improve your company’s financial activities, provide you with less interest and reasonable monthly payments. In this article, we tried to give short and useful information about digital banks and introduce you to the best digital banks that are available.