Digital banks such as Starling and Wise are becoming more popular every day, as for many people it is ideal to be able to manage your banking through your fingertips whenever and wherever, rather than visiting a branch.
But what exactly is digital banking, and how does it all work? In this article, we will take a look at this, as well as the possible benefits it could have for your business.
What Is Digital Banking?
Digital banking is banking done completely through a digital platform, meaning it is entirely paperless and accessible pretty much anywhere if you are connected to Wi-Fi or data. Digital banking has changed the way we bank in today’s times. Many people would agree that it is faster, easier and more convenient than traditional banking.
Digital banking apps boast so many useful features, such as real-time updates on your transactions, and the simplicity of transferring money to other people and other accounts with just a few clicks. Statistics show that in 2019, around 73% of UK adults were online banking users. It is safe to say that the percentage would’ve continued to rise in the years after that, largely due to the Coronavirus pandemic.
How Does Digital Banking Work?
Digital banking is done through an app or a website. You can do things that could traditionally only be done in-branch, such as paying in a cheque. Applying for an account with a digital bank is also done online, allowing you to get your digital banking started in a matter of minutes. Digital banking can be a great idea for the self-employed, as 24/7 app-based banking can be handy especially if a traditional banking branch’s opening hours or the location of the branch is difficult to work around.
Are Digital Banks Safe?
Yes – they are safe. Digital banks operate under the same regulations as high street banks. There are security systems in place that ensure fraudsters can’t get access to your account. That being said though, it is still important to never share your banking information with anyone.
In terms of app security, banking apps use quite a few methods of protection such as biometrics (fingerprint and facial recognition) and PIN numbers/passwords.
24/7 support and real-time updates of your bank transactions mean it is easy to notice a fraudulent transaction and contact your bank straight away to get help with this. Some banking apps also have a function that allows you to lock your card instantly if yours has been stolen or got lost.
Regardless of all of the safety regulations and banking security that is already in place, it is still important to be vigilant. Most people already do, but ensure to protect your device itself with a PIN number or password so any potential thief wouldn’t even be able to get past your lock screen.
Traditional Banking vs Digital Banking
Still can’t decide whether online banking is right for your business? Keep in mind these significant advantages:
It is so simple and fast to apply for an account. Customer support is available via messages, telephone or email if you get confused or come across any issues. It is worth noting that Starling Bank in particular offers 24/7 support from their UK team by telephone or in-app messaging.
You can manage your business’s finance whenever and wherever allowing you to stay on top of business performance.
Many digital banks don’t make you pay any monthly fees, nor charge you extra to use your cards abroad.
Digital banking can be integrated into other platforms such as Xero, making accounting and bookkeeping easier. This also offers the opportunity to merge different financial tasks into one easier process.
Digital banking is cost-effective.
Digital banking is environmentally friendly as it is cutting back carbon emissions and is paperless.
These benefits are undeniable, especially in such a fast-paced and technology-driven world.
To conclude…
Thank you for reading this article! We hope it has been useful to you. It could be worth just trying an online bank to help you decide whether it is the right decision for your business. Best of luck!
Why not try some of our other articles for self-employed business owners?