Why Digital Banks are Emerging Nowadays?

Compared to traditional banks, digital banks offer higher interest rates to entice more clients to entrust their money. Amidst today’s situations, various digital banks are opening to introduce the convenience of financial technology.

Traditional banks have consumers regard as reliable and secure places to save their hard-earned money. As a result, they’ve witnessed a steady increase in deposits. They don’t need to provide greater interest rates on deposit accounts to entice clients.

Digitally operated banks, on the other, do not need a physical branch to operate. They have a growing demand for their loan- or fee-based products which outpaced their ability to attract deposits. Thus, they set higher interest rates to entice more clients nowadays.

Are digital banks safe? Well, know your risk appetite. Compared to traditional banks, they only have customer service that can be reached through their web-based or bank apps to assist you with your banking concerns. What’s interesting is that they are open 24/7 to assist you. Moreover, the security of your money is also something to be aware of while dealing with digital banks. Not all digital banks are made equal, so it’s crucial for customers to know what they’re looking for and do their investigation — selecting an FDIC-insured digital bank product.

To entice clients nowadays, digital banks obtain no fees when transacting. As cited in the report of Forbes, convenience is the number one selling point of today’s digitized banks since they allow people to conduct cashless payments, especially with the ongoing pandemic.

Digitized banks are emerging because it is hassle-free when checking your balances, transaction history, and payments. They can also directly promote their new services and even communicate their advisory to you.