Financial technology is a field that is constantly evolving, with new trends appearing on a regular basis.
One of the hottest fintech trends right now is the digital bank. In December 2021, for example, a new Israeli digital bank raised $120 million from investors, with the business valued at more than $300 million.
A global pandemic in which people have been less able to access bricks and mortar banks certainly hasn’t hindered the growth of digital banking.
Read on to learn more about the rise of the digital bank.
What is a Digital Bank?
Digital banking refers to the digitization of all of the processes that were traditionally performed by a bricks and mortar bank.
Whilst many of these processes go on behind the scenes, for consumers, the most common interaction with digital banking is through online or mobile banking. Both of these allow you to access banking services online using your computer or smartphone. You can perform most of your usual banking transactions such as making payments or transferring money between accounts without ever needing to leave your home.
What Are the Benefits of Digital Banking?
Digital banking offers benefits both for the consumer and the banks themselves.
The most obvious benefit for consumers is the convenience of being able to perform banking transactions from anywhere in the world. That might be sitting in your home, or traveling to the other side of the planet. You can continue to use your bank account in a country that doesn’t even have any branches of your bank.
It also offers more security as you don’t need to carry large sums of money to or from a bank when making payments or withdrawals.
For banks, digital banking allows them to operate 24/7, 365 days a year, as well as reducing the need to pay expensive rent or purchase real estate for branches. There are also serious IT and infrastructure savings to be made.
Other Digital Finance Options
As well as digital banking options there are also other choices available that can allow you to access digital funds.
For example, businesses such as Byte Federal offer Bitcoin ATMs that allow you to buy or sell Bitcoin and other cryptocurrencies with cash or even with debit or credit cards. You can instantly turn some of the cryptocurrency in your digital wallet into cash through one of these machines. It’s a simple way to turn digital currency into physical cash.
Online payments systems such as PayPal and Venmo also allow you to perform some tasks that were traditionally performed by banks all from your phone or computer.
The Digital Bank Is the Future
Physical cash is already beginning to feel outdated.
As more and more of us make payments through apps, phones, or contactless cards, it feels like the era of the digital bank has already begun. The rise of the digital bank is only going to continue, so watch this space.
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