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The global pandemic may have brought the significance of digital banking platforms to the surface, but mobile and online banking aren’t new.
“The pandemic has merely accelerated a phenomenon that was already taking place,” says Kevin Cohee, owner, chairman and CEO of OneUnited Bank, the nation’s largest Black-owned bank, headquartered in Boston.
Traditional banking methods—by branch, phone or ATM—haven’t been especially appealing during the past year. Banks limited their branch hours or closed branches, customer service call lines backed up and ATMs required you to venture out in public during a global pandemic. It’s no surprise that many banking customers have taken advantage of digital banking options over the past year.
Roughly three in four Americans (76%) have used their primary bank’s mobile app within the last year for everyday banking tasks like depositing checks or viewing account balances, according to the Ipsos-Forbes Advisor U.S. Weekly Consumer Confidence Survey.
“Covid-19 accelerated some consumers’ use of digital banking, including those who were less digitally savvy, but even those users found that the tools weren’t as intimidating as they may have originally thought,” says Matthew Williamson, global vice president, financial services, for digital consultancy Mobiquity.
When we talk about digital banking, we’re generally referring to banking on a mobile app via smartphone or banking online via computer.
The benefits of digital banking in 2021
Whether you’re already all in on digital banking or have yet to download the mobile app from your bank or credit union, here are some of the best reasons to bank digitally in 2021.
The ability to bank wherever and however you want is one of the main benefits of mobile and online banking solutions, says Williamson.
Our smartphones and computers are typically readily available, allowing 24/7 account access to take care of any number of banking tasks quickly.
Mobile banking apps, for instance, allow you to deposit checks from the comfort of anywhere. At the same time, you can check your balance, transfer funds and set up a notification to alert you if you overdraft your account—all without the need to visit a branch. It’s a real time-saver.
Digital banking also offers longer-tail conveniences, such as the ability to go cashless.
Paying with cash isn’t as convenient as an electronic transaction, points out Cohee. Electronic transactions are more secure (you aren’t carrying cash), they’re better from a cleanliness standpoint (you aren’t touching cash) and you can track what happens with your transaction electronically, he notes.
“A cashless society with digital transactions is much more efficient and it allows for much better management of your financial resources,” says Cohee.
Many banks’ mobile and online experiences are rich with features.
“Banks might offer personalized financial advice, savings tools, big purchase calculators or even virtual assistants who can help them decide what splurges they can truly afford, all within the convenience of an app,” says Williamson.
The most valuable features are typically those that can help you accomplish basic daily banking transactions, according to the Ipsos-Forbes Advisor findings.
Mobile check deposit, for instance, has been the most valuable feature to those using their primary bank’s mobile app over the past year. The ability to view statements and account balances, transfer funds and pay bills were also near the top of the list.
Features like peer-to-peer payments rank lower in terms of value. Still, the ability to send money within minutes to anyone in the nation through your mobile banking app can be handy, and many banks now offer this feature. Locating nearby ATMs, cardless ATM withdrawal and budgeting and tracking tools are perks your mobile app may offer as well.
Don’t shop for a bank based on the availability of digital banking features alone, though.
“Consumers should seek out banks that prioritize offering a human touch even in their digital channels, striking the right balance between the human element and digital automation,” says Williamson.
“Security is a No. 1 priority for financial institutions,” says Cohee. And that extends to mobile and online banking.
Threats, of course, exist everywhere, including inside the bank branch. Fortunately, many banks make it easy to take extra security precautions. For example, your bank may allow you to add multi-factor authentication to your mobile app and online bank account.
Many mobile banking apps now allow you to use biometric authentication to log in. Axos Bank’s app, for instance, provides three different biometric login options—fingerprint, voiceprint and facial recognition. Your bank may also scan for certain risks automatically. Ally Bank asks for additional verification if it spots a login from an unknown device.
Overall, you may be more secure than you think using digital banking.
“It’s been reported that digital payments and e-wallets actually offer more security in some cases than a physical card, giving some users even more reason to use digital banking tools,” says Williamson.
Plus, your money is guaranteed at banks insured by the Federal Deposit Insurance Corporation (FDIC). FDIC-insured accounts are covered up to $250,000 per depositor, per bank, for each account ownership category, in the event of a bank failure. Federal credit unions and the majority of state-chartered credit unions provide the same levels of protection via the National Credit Union Administration (NCUA).
Cohee says that a lot of the risk is often in the hands of the financial institutions, not in the hands of consumers.
Having control over your finances with the ability to self-serve is another significant benefit of digital banking, as is real-time access to manage and move money as you see fit, says Williamson.
It’s true. Unlike banking in person, mobile banking apps and websites generally have no restrictions on when you perform banking tasks, like depositing a check or moving money from one account to another.
And it’s getting easier to navigate daily transactions. “The world of technology is offering the opportunity to be able to receive money and to spend money in ways that are much easier than they were in past times,” says Cohee.
Banks are continuing to advance the features offered on their digital banking platforms. Automated savings tools and push notification alerts for things like low balances or overdrafts are commonplace. In some cases, you can even activate a new debit or credit card from your app.
5. Benefits beyond banking
Digital banking offers a host of important benefits for consumers that can make their lives easier and make them better stewards of their money, notes Cohee. But on a much larger scale, he says we can use this newfound connectivity that we have in our society to create financial, social and economic change.
“This online banking product allows for a broader base of communication that can be used for things like teaching financial literacy,” says Cohee.
OneUnited Bank, for example, has launched its OneTransaction campaign, designed to help close the racial wealth gap and create generational wealth for the Black community. The centerpiece of the campaign is a free financial conference, to be held virtually on Juneteenth (June 19, 2021), which will feature Black leaders from across the financial spectrum.
Digital banking also is becoming a way to find communities and options tailored to your needs as a banking customer.
Daylight (formerly Be Money), for example, is a new digital banking platform that provides “Banking for LGBT+ people, by LGBT+ people.” Daylight’s offerings focus on community and empathy, while addressing issues that complicate the financial lives of LGBT+ people. The Daylight card is a mobile-first account that features the individual’s chosen name, no matter what their official ID may state.
The best online banks for digital banking
The banks offering the best digital banking experiences have well-rated mobile apps and websites with robust features. These mobile and online platforms can help you accomplish daily banking tasks, better control your finances and, in some cases, connect you to a community of like-minded individuals.
These seven online banks rank among the Best Online Banks For Digital Banking 2021, according to Forbes Advisor research:
Mobile and online banking can help you take control of your financial life, providing tools and features that you may not have access to through traditional banking methods. But digital banking can also offer benefits beyond banking, connecting you to a community and banking opportunities specific to your wants and needs.
Remember, digital banking isn’t an all-or-nothing situation. You can bank digitally part-time to take advantage of its benefits and still visit a branch, ATM or bank by phone. What’s most important is to find a solution that works best for your habits and needs as a banking customer.
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