Digital banking started to evolve in the 1990s with the creation of the internet. Here, traditional banks started to provide customers with online banking services. This proved a success, which led to more banks expanding their services online.
Today, banking providers don’t need to have a physical presence on the high street to offer all the banking services you need, this can all be done through your laptop or mobile phone.
In this blog post, we discuss the pros and cons of digital banking to help you decide what style of banking works best for you.
Pro: Digital Banking is Always Open for Business
When you sign up to digital banking you can conveniently manage all your finances online. This is perfect for people who work long hours or usually would have to travel a long distance to a bank branch.
According to research conducted by Statista, in 2019 73% of the UK population actively used online banking, with most people surveyed preferring to manage their money using their smartphone.
Using digital banking to manage your money, means that you don’t need to worry about waiting in long queues at a bank branch as you can access your account wherever and whenever you like – as long as you have an internet connection.
Con: Spending Money has Become a Little Too Easy
With the development in digital payment methods such as Google Pay, it only takes a matter of seconds to make a payment and for the money to be withdrawn from your balance. As you’re not dealing with physical money there is more of a temptation to overspend (sometimes without realising it).
Payments in and out of your account happen so easily and without you having to do anything, that it’s easy to forget about, this works fine for authorised payments such as direct debits and bank transfers but you still need to be aware of unauthorised transactions.
Although you do have the option to track and monitor your spending insights to see what you’re spending your money on. You can also connect certain budgeting and saving tools to your mobile banking app, which can help with money management and prevent you from going over budget.
Pro: Digital Banking for a Better Online Experience
A survey conducted by Bain and Company revealed that digital banking providers were far better than traditional banks in areas that “mattered most to customers” including, the quality of banking experience and the speed and simplicity of transactions.
On top of the convenience of digital banking, there are many features that tend to be better than what you would find in a high street bank including:
- Transaction speed – Online banking platforms generally, execute and process transactions at a quicker speed.
- Budgeting Tools – Many digital banking platforms offer or are compatible with budgeting tools to help you manage your money better.
- Text Alerts – you can receive notifications from your digital baking app if you’re about to go overdrawn or don’t have enough money available to pay an upcoming bill.
Con: No Personal Relationships
More traditional banks who have a branch on the high street tend to offer more personalised service, which can be an advantage if you need additional banking services – such as a mortgage or loan. Additionally, if you need to make changes to the terms of your account, a bank manager usually has some discretion if your personal circumstances do change.
Additionally, digital banking platforms may not be as accessible for some people and can be difficult to navigate and understand. Therefore, speaking to a person, face to face may be a valuable experience to get up and running with online banking.
However, if this really isn’t a problem for you and you’re happy to speak to a different customer service member each time and can easily navigate the technology, then a digital banking provider might work for you.
Pro: Keep your Money Secure with Several Layers of Security
Although not all internet connections are secure and you should never use public WiFi to access your online banking, digital banking providers have secure systems in place to protect your money and personal information.
Usually, online banking platforms have several security features to prevent fraudsters from accessing your money and as a minimum a two-step log in process, which can consist of:
- A username and password (which should never be shared with anyone and changed regularly),
- A captcha (a randomly generated word or image that you need to repeat or select to prove that you’re not a robot),
- A pin number to access your mobile banking app,
- A card reader security device which gives you a one-off code to enter online,
- A text messaging service that provides you with a one-time password,
- Your answer to a security question
Although, when it comes to depositing your money into your digital current account, it does involve putting a lot of trust in the place you deposit your money as you can’t pop into a physical bank branch and need to take it to a PayPoint location in a shop or post office.
Plus, there may be some fees involved when you deposit your money this way but it’s best to check with different banking providers about different fees and costs involved.
Choose a Banking Provider than Works for You
Traditional and online-only banking providers both have their advantages, however, it’s worth considering whether having access to a physical bank branch and a personal touch outweigh the convenience and innovation that digital banking provides.
Here are Suits Me®, we want to ensure that our digital service allows you to stay in control of your finances, all from the comfort of your own home. We’ve designed it so you don’t need to visit an ATM or find a branch to check your balance, view your most recent transactions or manage your direct debits.
However, if you need any help or support, we’ve made sure you can still give us a call and speak to our customer care team over the phone – rather than only through a messaging service.