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Great technological advancements of the 21st century have made way for the rise of digital banks. People no longer have to rush to a traditional, brick-and-mortar bank at the end of their workday, as they can handle their transactions from the comfort of their own homes. But can digital banks truly replace physical establishments in every sense of the word?
Digital Banks Vs. Traditional Banks: What’s The Difference?
Apart from the obvious difference; the one related to the physical aspect. These two types of banks come with quite a few differences. Some, like the number of services offered, are smaller; others will have a bigger impact on your final decision.
Services Offered
Good news for everyone interested in digital banks, they offer pretty much the same services as regular banks.
From completing transactions to applying for loans, online banks will get the job done just as well as traditional banks. But there’s a slight catch, you can’t get professional guidance for every transaction from an advisor online, while you get to ask as many questions as you want once you walk into a physical bank.
Individuals who opt for digital banks have to understand they will be compromising on the in-person element of traditional banks. They also might have to figure out any complicated banking needs on their own, which can be time-consuming.
Places Used
Digital banks can be used in many of the same places as physical banks, as they are completely legit. For starters, they are the optimal solution for people who prefer contactless payments when in restaurants, public transport, or shopping malls.
They are also ideal for those who frequently send payments to friends and family, as they will save themselves from a weekly trip to their local branch. Digital banks are also an incredible tool for online casino lovers, as they’ve made a true revolution in the online gambling landscape. In fact, financial app deposits and withdrawals are the preferred method for many who frequently engage in online casino games.
Keep in mind that this is only one of the many methods of payment you have when playing on online sites, which have slowly been taking over land-based casinos. If you are not entirely familiar with the payment methods available in online casinos, you may be able to learn more from Techopedia and figure out whether you want to pursue this activity in your free time.
ATMs Available
By 2023, the number of digital banks in the world reached 235. However, none of them has a developed network of ATMs that can compare to traditional banks.
Digital banks have a much smaller network of ATMs, so you might have to venture out on a mission to find the closest one to you. That is, if you can even find one, since many of these banks are yet to include ATMs in their offer.
Contrarily, most UK banks have a well-dispersed network of ATMs, making it easy to withdraw or deposit cash at all times.
Fees Associated
All banking transactions and services come at a cost, with the fees ranging from bank to bank and from payment method to payment method. However, one thing that works in the favour of digital banks is the fact that the fees are generally low – sometimes, there aren’t even any.
The reason for this can be found in the overhead costs of traditional banks, which have more expenses related to their offices and employees. This isn’t a cost digital banks have to account for, which allows them to provide more competitive interest rates for savings accounts or investment products. Some digital banks even give more alluring rewards for credit cards, drawing in a great number of people.
Maybe that’s why digital banks are estimated to grow at a CAGR of over 3% between 2024 and 2032.
Convenience
At the end of the day, nothing beats the convenience of digital banks. Since they operate entirely online, they are available 24/7 via internet-connected devices. This can also save a person a great deal of time, as they can finish a transaction during their lunch break or while commuting to work.
This is in stark contrast with traditional banks that require an in-person trip to the nearest venue. Physical banks also have limited working hours, which many times overlap with your own work hours. Therefore, a trip to an establishment like this can be a logistical nightmare.
Security Implications
Due to their digital nature, online banks can come with some security risks. Even though cybersecurity is a top priority, which is why all banks apply the latest technology to protect their clients, people have to do their part of the job and take the necessary measures of precaution.
Traditional banks also employ all the necessary safety measures to protect their apps and websites from vulnerabilities, but they may also have physical security guards at their bank branches.
TechRound does not recommend or endorse any investment, financial, gambling or trading advice, practices or operators. All articles are purely informational—
