You’ve probably seen ads of digital banks and you’ve heard of people opening an account with these types of banks. Among the most common brands you would encounter online include Discover, Chime, Digital International Bank and Ally Bank. So the question is, are these digital banks safe?

Comparison with Traditional Banks

First, let’s differentiate digital banks from a brick-and-mortar bank? Traditional bank have lots of branches while a digital bank usually doesn’t have one. With traditional banks, you have to go to a physical branch in order to open an account but via a digital bank, you can access, open the account via a website or an app on your own smartphone, hence the term “digital”.

Registration is Done Online

Signing up for an account online is pretty much very basic. You just need to provide your personal details and when it comes to verification, you’ll only need to send a photo of a valid ID and in just a few minutes, you’re done.

Making a Deposit

So let’s say you now have an active account, the next question is how will you be able to make a deposit if there’s no physical branch? It’s all done online.

If the bank accepts checks, you can simply take a photo of the check complete with all the details on it such as your name, the code and the amount to be deposited. That brings a lot of convenience since you don’t need to go out, fall in line to a teller and have your check deposited and validated.

But what if you don’t use checks? The good news is that most online banks have partnered with other payment gateways, digital wallets and even traditional banks so you’ll most likely to have plenty of other options in order to transfer funds into your account. Most of them have alliances with various payment centers and some even with convenience stores.

Withdrawing Your Money

And what about withdrawals? It’s just pretty much the other way around. You will be able to take the money out from your account and have it transferred to any of their supported payment gateways or have physically withdrawn via any physical branch of their partners.

But What’s the Catch?

Digital banking also has its cons. If you are the type of person who is careless about remembering or keeping your password safe then your security is prone to be compromised. If let’s say your phone got stolen and you haven’t set a pin or lock for your device then it would be easy for them to gain unauthorized access to your account.

Another disadvantage of digital banking is the lack of in-person support. Some clients still prefer to have a face-to-face conversation with teller or bank staff rather than doing them all online. The good news though is that some digital banks are already providing online video support so this can make up for the human aspect that customers are looking for.

It’s All About Convenience!

Convenience is one of the greatest advantages of digital banking. There’s no need to physically bring your money with you because you can easily access it with a computer, laptop, tablet or smartphone that is connected to the internet. So what are you waiting for? Go experience the convenience of digital banking!

Amelia Sewell