The Difference Between a Neobank and a Digital Bank

If you think hard enough, you are going to be able to consider a few things that you and all other individuals have in common. This could include a smile, biological parents and something that seems to be a bit of a rite of passage growing up, a bank account. Back in the day, opening such an account was fairly straightforward. You went to your local branch when you were old enough, told them you would like to open a bank up and there you go. Now things are a bit more difficult.

What contributes to this is that we no longer only have traditional banks to think about as an option when we open ours up. This includes not just traditional banks but also digital accounts and also neobanks. When you open a bank account, you need to consider these different options and think about which appeals to you most.

The difference in these banks is going to be discussed in more detail below so you can help make an informed decision about which you would like to use.

Traditional Banks

Traditional banks tend to be some of the biggest banks out there such as HSBC, Lloyds and Barclays. You can get information from them over the phone, online or by accessing a physical bank. They can often get quite crowded and don’t have the most streamlined processes, meaning you might find that you struggle to get an answer to questions right away and set up the likes of standing orders and direct debits is not as simple as it could be. Of course, if you don’t like change much and would rather stick to the banking process that you know and love, traditional banks are the way to go.

Digital Banking

Digital banks tend to be existing banks that have put a lot of time and effort into their online activities, making it a lot easier for people to access them remotely. They tend to be a lot more convenient and easy to use than traditional banks that haven’t put as much attention into their online presence. The services that are offered through traditional banks, such as payments, withdrawals, savings and transactions, can all be done pretty easily through a website.

The Benefits of Digital Banking:

There are a number of different benefits that come with using a digital bank, and these include but aren’t limited to:

Digital Banks Never Close

When it comes to having your questions answered and having access to banking services, worrying about opening and closing hours is a thing of the past. When you are banking online, you are able to get constant access to your money and constant access to the services that are offered by banks. If you are struggling to find extra hours in the day in order to visit a branch, then a digital branch is certainly the way to go.

They’re Incredibly Convenient

By offering customers frequent access to banking services, there is no getting away from the fact that digital banks are a lot more convenient. It means that no matter where in the world you are, you are still able to take advantage of the offers that come with digital banking because everything can be done on the go. As such, if you go on holiday and forget you had rent to pay or a client to send money to then it has never been easier to fix this.

More Payment Options

A digital bank provides customers with a lot more payment options as they are able to make a choice between using their mobile device, laptop or their standard payment card. It means that banking does not have to be a separate act anymore and instead, it is incredibly easy to fit it into everyday life. If you are already working on your laptop, then you can just open another tab to fix your online banking. The possibilities, well and truly, are endless.

Neobanks

These are one of the newest forms of banking as every single service that they offer is offered through an app. They’re very easy to use, especially for the more tech-savvy younger generation, and they are becoming more and more popular with each passing day. They allow people to create different pots so that money management is a lot more straightforward as well, something that many struggle with.

The Benefits of Neobanks

Like digital banking, neobanks come with a huge array of different benefits. These include some of the following:

More Flexibility and Speed Than Ever Before

You have a lot of flexibility when it comes to neobanking, as customers are given a lot of options right from the off when it comes to the number of services they can take advantage of. This differs from digital banking because where these are traditional banks with a digital presence, neobanks are only available online. This means they have usually come up with a range of features that other banks will not be able to offer.

There’s a Big Focus on Customer Service

Neobanks are disruptive to the banking industry, and one of the things they don’t have, which traditional and digital banks do, is direct communication with their customers. This can put a lot of people off using them; however, neobanks are aware of this and, as such, have a particularly strong focus on customer service. Neobanks do not have the luxury of years with the same client to ensure loyalty; they instead need to offer the best service right away, which all account holders, including small businesses, feel the benefit of.

Allow For Banking in the Modern World

The overall ease and speed that comes with using neobanks are enough to entice clients away from traditional banking. People these days are busier than ever thanks to work and travel and therefore, using an app for all of their banking needs is perfect.

Struggling to Choose a Bank?

If you are struggling to choose which kind of bank you would like to use, you should consider the above benefits that have been lined out and think about which appeals to you more. If you want to stay up to date on developments within the world of FinTech, then you should be sure to follow blogs such as YouYaa, which is regularly uploading updates about the industry. This should also assist when it comes to choosing a bank and knowing which kind will be best for you.