Everyday banking habits have rapidly changed in the world, especially during the last years. While many people still use traditional banks, more and more start to use digital banking tools to expand their opportunities. It all depends on your needs and preferences, however, there are a few good reasons why online banking makes so much noise in Europe and US.
It all started in the 90’s
Early online banking products started to come about in the ’80s and ’90s. The first internet bank was registered in 1999 in USA. In the years since, online banking has rapidly evolved to become a quick and convenient solution to handle your money.
While some of the biggest world banks have been around for decades, online banks can build all their systems from scratch, being more cost – effective. Digital banks are able to arm themselves with the best tech solutions and optimize their services in a very efficient way. If you can submit forms via an app, rather than fill out reams of paperwork, why wouldn’t you?
According to the 2019 statistics, online banking is booming in many European countries. 95% of the Norwegian population access digital banking sites, making Norway the country with the strongest internet banking penetration. Icelanad, Denmark, Finland and Netherlands follow with no less impressive statistics. The numbers suggest that Europe’s confidence in online banking solutions has increased, making it worse to the physical cash, which is experiencing a significant decrease in some of the countries.
Taking a closer look to the US, 2019 survey by Finder stated that about 30% of Americans already use digital banking or at least plan to make a switch. Looking into 2020, Digital Banking Ecosystem Report says that the number of US consumers considering switching banks in the next 12 months increased by 86% from a year before. These figures imply that people demand changes and it happens really fast. While the majority still use traditional banks only, these figures imply that more and more consumers demand changes and start to look for digital alternatives. Why?
Reasons to use online banking
Firstly, online banking gives a chance to do just about everything you need in everyday banking. Online funds are instant and usually free for internal accounts. Moving money to/from external account usually takes from one to three business days. Mobile apps for banking are user friendly, easy, and safe to use. When it comes to withdrawal, most online banks issue debit cards and some of them don’t charge any ATM fees.
One of the most important reason why online banks are booming is that they typically offer better interest rate than traditional banks. For comparison, online savings account might offer interest rate of 5.3% while some of the traditional banks pay as little as 0.01%. Besides that, most online accounts don’t have minimum balance or activity requirement which helps to avoid monthly service fees regularly charged by traditional banks.
Get ready to switch today
If you’ve been debating making the switch, think about how often you really need to go to a bank branch for help. For people who don’t go to a bank regularly, online-only banking may be a great decision.
While they are mostly self-service, the convenience of managing your money from home or a mobile app makes it the future of banking.