A purely digital bank is a financial institution that operates solely through online and mobile platforms. These banks offer all the traditional banking services like checking and savings accounts, loans, and credit cards, but without any physical branches. This means that customers can access their accounts, make transactions, and manage their finances entirely online or through a mobile app.
The Advantages of a Purely Digital Bank
One of the biggest advantages of a purely digital bank is convenience. Customers can access their accounts and make transactions from anywhere, at any time. They don’t have to visit a physical branch during business hours or wait in long lines. This can save a lot of time and hassle, especially for busy individuals who don’t have the luxury of taking time off work to visit a bank branch.
Another advantage of purely digital banks is that they often offer lower fees and better interest rates than traditional banks. Since they don’t have to maintain physical branches, they can pass on the cost savings to their customers in the form of lower fees and higher interest rates. This can be particularly beneficial for people who are looking to save money on banking fees or earn more interest on their savings.
Additionally, purely digital banks often offer more innovative and user-friendly banking services than traditional banks. For example, they may have more advanced mobile apps that allow customers to easily manage their accounts, set up automatic bill payments, and track their spending. They may also offer more personalized financial advice and insights based on customers’ spending habits and financial goals.
How to Choose a Purely Digital Bank
If you’re considering switching to a purely digital bank, there are a few things you should keep in mind. First, make sure the bank is FDIC-insured. This means that your deposits are insured up to $250,000, just like they would be at a traditional bank. Second, look for a bank that offers the services you need, such as checking accounts, savings accounts, loans, and credit cards. Third, compare the bank’s fees and interest rates to those of other digital banks as well as traditional banks.
It’s also a good idea to read reviews from other customers to get a sense of the bank’s customer service and overall reputation. Finally, make sure the bank’s mobile app is user-friendly and has all the features you need to manage your finances.
The Future of Purely Digital Banks
Purely digital banks are becoming increasingly popular as more people embrace online and mobile banking. According to a report by Business Insider, the number of digital-only banks worldwide is expected to triple by 2024, reaching 277 million users. This growth is driven by factors such as the convenience and cost savings of digital banking, as well as the increasing prevalence of smartphones and other mobile devices.
As purely digital banks continue to grow in popularity, they may also face increased competition from traditional banks that are expanding their online and mobile offerings. However, many digital banks are also partnering with traditional banks to offer more services and reach more customers.
Conclusion
A purely digital bank can be a great option for anyone looking for convenience, lower fees, and more innovative banking services. When choosing a digital bank, make sure it’s FDIC-insured, offers the services you need, and has competitive fees and interest rates. As digital banking continues to grow, we can expect to see even more changes and innovations in the way we manage our money.