Business & Finance

Have Online Banks Replaced Traditional Banks?

As technology has advanced over the years, the way that we use our money has changed a lot. In the past, we would have paid for things in cash or with a cheque that would be cashed when we make our weekly trip to the bank. Now, we pay for items with our mobile phones, and we don’t visit a physical bank if we don’t need to.

Of course, there are still traditional banks that people use – but just how common are these in 2019? In this article, we are going to look at the concept of online banks and how traditional banks are adapting. Keep reading if you would like to find out more.

What Is An Online Bank?

An online bank is exactly what it sounds like – it is a bank that is entirely online. Online banks offer customer services that you would expect from a bank such as a savings account and a general checking account. However, the services provided can differ, depending on the online bank that you choose.

A simple search online will provide you with a long list of the best online banks available, but with so many on offer, it can be hard to choose the right one. This is why you should compare some online banks in order to figure out what is best for you in terms of what it offers and the general interest rates, which tend to be higher than traditional banks.

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What About Traditional Banks?

With the growth in popularity of online banks, it is safe to say that traditional banks are starting to become less popular. While you might have been able to visit many different bank branches on your local main street, now you will find that many have in fact closed down. People no longer need to visit the bank, and this has had a massive impact on the industry and some of the bigger banking companies that have been around for decades.

Of course, traditional banks have adapted with the times in an attempt to keep functioning and being a place where people put their trust in. Many of the biggest traditional banks have been offering online banking alternatives for many years – with some inventing this idea and now having to deal with online-only banks taking their customers. The great thing about traditional banks offering online banking is that customers can still benefit from online banking and what it offers, but they don’t need to switch their bank account, and this is much less hassle. For this reason, many people have stuck with their original bank, as long as it has an online banking option that they can use. Some traditional banks even offer apps now for ease of banking, and this has helped them to hold their position in the industry.

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Why Use Online Banks?

If you are currently able to access online banking with your traditional bank account, then you might be wondering – why would I want to switch to an online bank? The answer to this is simple – you can get more for your money.

One of the great things about online banks is that they don’t have any physical bank branches. This means that they don’t need to pay for these branches and so they can offer better deals for their customers at a lower cost to them. This often means that these online banks offer higher interest rates than you would expect and lower fees in general. This is a massive draw for many customers who want to regain control of their money and save more in the current economic climate.

You should also know that online banks are safe to use, as long as you use one that you have researched well. Online banks use secure systems, and everything is password protected and encrypted to ensure that your details don’t get passed on. If you were to use your traditional bank’s online banking app, you would find that it works in a similar way; just make sure you use a complex, unique password so you know that your details are definitely more secure.

Before you make any commitment to an online bank, you should make sure that it is a legitimate place to put your money. You can read reviews online and make sure that they are insured by the FDIC as this is very important. As long as this is the case and you get some good reviews overall, you should be safe enough to put your money in their hands.

A further benefit of using an online bank is that they are very easy to use. There is no queuing to talk to the teller; there is no need even to leave your home. You can bank on the go, and everything is created on easy to use platforms. Some banks also offer mobile apps, which is ideal in 2019 when everything is headed towards mobile.

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Final Verdict

As you can see, online banks have become extremely popular over the years. While they might not have replaced traditional banks entirely due to a level of trust with these institutions and the fact that they are offering online services – they are definitely on their way. Make sure to consider signing up to an online bank as you’ll get to benefit from lower fees, higher rates, and you’ll find that everything is much easier to use in general.

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