Most big banks have already been in the move to create apps, online applications and other online features, building their digital presence.
But banks as we know, with physical branches, are slowly changing. Have you heard of digital banks and neobanks? They’re both operate solely online, but whilst they’re quite similar, there are a few distinctions. Want to know more about this space?
Our friends at Australian FinTech put together a quick FAQ outlining the main differences.
What is digital banking and what online-only banks are there in Australia?
Digital banks, or online-only banks are exactly what they suggest, banks that operate online through a computer or app on your phone. This means they don’t offer in-branch service like traditional banks do, so you can do your banking at any hour of the day.
They’re often either a division of a bigger bank or union, offering the added security of these bigger players.
Some of the main digital banks operating in Australia include:
- UBank. Owned by NAB
- ING. Owned by ING Bank
- RaboDirect. Owned by RaboBank
- ME Bank. Owned by industry super funds
- Easy Street. Owned by Community First Credit Union
Is a digital bank and neobank the same thing?
A digital bank and a neobank aren’t quite the same, even if they do sometimes appear that way. Whilst the terms are sometimes used interchangeably, digital banks are often the online-only arm of a bigger player in the banking sector, whilst neobanks are completely digital, existing independently to traditional banks.
What are neobanks?
Neobanks are just like normal banks – they’re a place to put your money, a place to borrow money from and a place to hesitantly hand over interest repayments to – the only catch is they’re 100% digital. They’re usually not associated with any traditional banks, and have no branches you can visit, existing solely online.
While this may raise concern about a lack of personal touch, neobanks plan to lead the pack in personalised banking by using artificial intelligence to keep track of your data and customise your app experience.
We love the idea of creating efficiencies with technology!
What do you think? Leave your comments below 🙂