7 Best Digital Banks | Why UK Customers are Moving to Digital Banking?

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Digital Banking

Some well-known digital banks include Revolut, Fidor, Simple, N26, and Monzo, which enable consumers to open an account on their phone in minutes and do whatever and wherever they desire.

However, digitalization is not limited to online banks. Banks that already have created intrinsic digital bank rotational have optimized revenues and enhanced profitability by up to 70% throughout the last decade.

Nearly 250,000 U.K. customers changed their account balances through the Account Balance Switch Service in the third minute of last year, with nearly 95,000 doing so just in October, the country’s busiest month for bank statement switching in nearly two years.

What is digital banking?

Most people are eager to know what is digital banking. A virtual bank is a financial institution that mainly provides and offers its customers services that have been previously inaccessible at a bank branch.

The transition to online banking, in which lending services are provided over the internet, includes digital banking as part of a larger context. Different levels of digitization of banking services have contributed to the gradual, ongoing transition from traditional to online payments.

Why UK customers are moving to digital banks?

As discussed above UK people are going towards digital banking more and more. Let’s enlighten this fact of shifting and know more about it:

  • According to a survey, Starling Bank and Monzo Bank had the best customer service, scoring 85% and 83%, including both. Scottish Power, an accomplished financial institution (FI), had the lowest service quality ratings at the moment (56%).
  • Only 13% of respondents to the survey claimed they never use a cellphone for banking, and 5% indicated that they only use mobile banking occasionally. Nearly half of customers still favor using their financial institutions’ websites to conduct their banking.

Pros of digital banking

Digitalization is a subset of the larger context for the shift to online banking, in which commercial bank services are provided via the internet. The goal of digital banking is to simplify life for account holders. Among its advantages and disadvantages are:

  • The ease of banking from either the comfort of your own home
  • Accessibility of digital banking services around-the-clock
  • Paperless arranges the setting up of fully automated utility bill payments.
  • Gives remote areas access to banking services
  • Digital money transfers lower the risk of fake currency
  • Enhances customer safety and confidentiality
  • Allows for the immediate reporting and blocking of lost credit cards

Cons of digital banking

Like everything else in life, digital banking has some drawbacks as well:

  • No option for cashless deposits
  • No provision is made for deposit accounts. To deposit funds, go to the bank branch or automated teller machine closest to you.
  • Internet Requirement: In the apparent lack of a steady online connection, your ability to access.
  • Online fraud: If you don’t follow the security guidelines provided by the bank, like creating secure passwords, not communicating passwords, or failing to log out of your online banking consideration, you become a victim of online fraud.
Digital Banking
Digital Banking

7 best UK digital banks in the UK

  1. #1. Monese

Pros

  • With Mastercard’s rate of exchange and a 0.5% money fee, it could be used everywhere in the world.
  • Security features that are cutting-edge.
  • It is simple to deposit funds into your corporate account.

Cons

  • Customer support is not available 24 hours a day and only during office hours; there is no actual emergency once you’re in a jam.
  • Not ideal for freelance writers and sole proprietors, who are advised to use the personal version.

With Monese’s outstanding exchange rates and low transaction fees, users can transfer and transfer cash worldwide to a wide range of investments. The bank also has a fairly simple and straightforward mark process and is designed for a simple user interface but instead navigation, allowing you to keep track of your money via its secure app.

  • #2. Mettle

Pros

  • NatWest provides a secure and comfortable banking experience.
  • Accounting integrations tailored to your needs.
  • It’s completely free to use!

Cons

  • Not covered by the FSCS.
  • Mettle Account Highlights

Mettle is unquestionably the best value for money among internet business bank accounts. Mettle offers sole proprietors a sleek and simple banking system that can also be used as a financial reporting system to record the competitiveness and productivity of their business.

  • #3. Revolut

Pros

  • Excellent integrations.
  • Flexible pricing possibilities for both creatives and businesses are available, as is a free version.
  • It has its own paycheck features that are simple to use.

Cons

  • Not covered by the FSCS.
  • All ATM withdrawal effects in the United Kingdom are subject to a 2% fee.
  • You can’t make very many free installments with a free account.

All of Revolut’s e-commerce bank accounts allow you to hold as well as exchange 28 currencies, receive sleek black corporation cards, and have access to 24/7 customer support from anywhere in the world.

  • #4. Tide

Pros

  • One of the most effective and dependable mobile banking for smaller companies.
  • Sorts and tracks each of your purchases, as well as allow you to set it up pots.
  • Communicate your account to online accounting programs such as Xero and QuickBooks.

Cons

  • Cash cannot be transferred internationally.
  • Dedicated assistance must be paid for separately.
  • There is no FSCS protection.

Tide offers among the most popular internet company bank accounts and is believed through over 200,000 businesses in the UK. Tide is a very dependable banking solution created by a group of self-employed people who wanted to create a more simplified compassionate banking system with new businesses.

  • #5. Coconut

Pros

  • A bank account and an auditor in one app.
  • All of your financial affairs are in one place, simple to use even for non-technical freelancers.
  • The setup is simple…

Cons

  • Cash withdrawals incur a fee.
  • Not the bank payment product.
  • A 2% currency exchange fee is applied, along with a £1 overdraft fee.

The app allows you to connect all of your bank deposits and lines of credit to Coconut for a complete picture of your financial affairs, or you could just sign up for a free business current consideration with Coconut.

  • #6. Starling Experts

Pros

  • The setup is quick.
  • Customer service is available 24/7.
  • The FSCS protects you.
  • Can easily transfer your prevailing bank details.

Cons

  • Starling does not accept applications from sole proprietors.
  • Payments made internationally are restricted.
  • Tide and Monzo have more extensive web banking features.

Starling’s customer support is probably the best among internet business savings accounts. Accounts include 24/7 support via chat session, email, and mobile, with support services included in the free packages it provides and providing rapid answers to any of someone’s queries.

  • #7. Monzo

Pros

  • The application is sleek and simple to use.
  • Customer service is available 24/7.
  • The FSCS protects you.

Cons

  • Cash deposit fees
  • The financial services platform can only be accessed via its app; no software system is included.
  • It can be challenging for sole proprietors to obtain an account.

Monzo provides a comprehensive online business banking service for small and medium enterprises, and it makes the process extremely simple with its well-designed and appealing app.

Tips to secure your digital bank account

  • Back-Up Your Data Frequently

I understand how inconvenient it is to keep changing your passwords. You’re likely thinking that having to integrate a series of numbers, italics, and symbols into your password is bad enough, but now you have to modify this all the time.

  • Don’t ever, use any public Wi-Fi.

There are numerous drawbacks to using public Wi-Fi. It is also typically slow, but it also does not just provide a secure connection to the internet. A scammer can have everything when they connect to public Wi-Fi, which includes your net banking login.

  • Ignore all the unsafe emails

Phishing emails are those that request personal details from you. These emails attempt to dupe you into disclosing your personal banking details.

  • Distinctions from traditional banks

There is no discernible difference in offerings among both digital banks and traditional banks. Savings, deposit accounts, withdrawal of funds, transactions, investment opportunities, and loans are all services provided by both.

What are the differences between digital banking and normal banking?

  • The distinction is in its form. Traditional banks have a physiological presence in the form of corporate headquarters and branches, whereas financial institutions can only operate with something like a head office and rarely require the addition of a branch office.
  • Furthermore, other distinctions are frequently discovered and noticeable from the benefits provided. Lower administration costs, lower or even no agent fees, and rising interest rates are some examples. Of course, subject to the bank’s relevant terms & conditions.
  • Because of a bank is indeed a bank, the term “digital financial institution” doesn’t really change it institutionalized. A bank is financial that offers public savings, distribution, and lending services. According to POJK 12/POJK.03/2021, digital banking can be available in two ways.

FAQ

  • What is a digital banking app, and is it safe?

Ans- Digital bank is similar to a normal bank but everything is going to be digital here. Yes, it is absolutely safe if you are taking all the precautions and using them carefully.

  • Should I switch from a traditional bank to a digital-only bank?

Ans- Yes, switching from a traditional to a digital bank is a good idea. You will get flexible transfer charges as well as better pricing.

  • What is the safest online bank UK?

Ans- There are lots of safest online banks but starling bank is the most famous there.

  • Are digital banking and online banking the same?

Ans- No online banking can be an option for traditional banks. But digital banking is available for digital banks only.

Conclusion

Thus according to Accenture studies published in September, digital-only banking systems in the UK will triple their client base from around 13 million within the next year.

It discovered that five million individuals opened accounts with one of the contenders during the first 6 months of 2019.

According to the company, sales volume and deposits are increasing, with the average buyer depositing £350, up from £70 a year ago.