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Online Banks: Why Not Go Virtual?

cryptocurrency, money
tobrono on Deposit Photos

Want to hear about yet another thing you can do entirely from the palm of your hand? The magic of our cell phones and the internet never ceases to amaze me: They can also completely handle all of our finances. Online banks, also known as “direct banks,” are an innovation to the banking industry. Most people already do most of their banking on their bank’s mobile app anyways. Why not go fully virtual?

Are they different?

Online banks and the traditional brick-and-mortar banks aren’t that different from each other. They both allow you to have the same amount of functionality with your money, protected by the same encryption security services, and subjected to the same laws and regulations. The only difference comes with the consumer’s preferences.

Better rates and lower fees

With lower overhead, online banks make up for their lack of a physical building with better prices for their customers. They usually offer lower fees, better interest rates, and it is often quicker to get an account open. There is still adequate customer service available over the phone and online despite no tellers sitting in a building waiting to help.

Lack of human interaction

However, the face to face interaction is not something that online banks can replicate. There is no one sitting waiting for your deposit slip, they do not have any of their own ATMs, and you can’t even stop in to break your 20 into quarters for laundry. People crave human guidance, and it is not something many people can get past to go completely online. However, if you open up your mind a little bit, you’ll see that people are already moving past cash transactions.

Cards over cash

In a survey by Fortune, they found that 80% of people prefer to use cards over cash. And that there are only about 10% of people left who use cash for most of their transactions. If you can get over the occasional ATM service fee, then you can reap the benefits from an online bank. 

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