Posted on: 24-03-2018 in Finance
How can digital banking in 2018 work for you better? You’ve probably already got a digital current account at the least. But what else is on offer – perhaps with a rival provider? It’s time to find out.
Here at Holborn we welcome advances and innovation in financial products and technologies, particularly when it increases consumer choice and control. We give digital banking the thumbs up – and so do 1 in 3 Brits.
According to research by the British Bankers Association, almost 20 million people used a banking app in 2016, with 30 app transactions being made every second. So with digital banking on the up, we’ve compiled a list of everything you need to know about app-based and digital banking.
This is pretty much as it sounds: you manage your account through an app on your smartphone or tablet. In an age where we rely more and more on apps to schedule our appointments, keep track of our fitness, or do the weekly shop, managing our accounts online is becoming an essential part of modern banking.
At the forefront of this new technology, digital banks are emerging as realistic alternatives to high street banks for their range of services and consumer choice.
With features such as fee-free spending abroad, spending-trackers, and the option to freeze a debit card with immediate effect, digital banks are particularly popular amongst the younger generation who are used to using apps to carry out daily activities.
(Er … what’s an App? An “App” is what they used to call a computer program. Software, in other words.)
Monzo has emerged as one of the heavyweights in the digital banking arena. This fully-licensed bank has attracted in excess of 500,000 customers since its launch in 2015 and is covered by the Financial Services Compensation Scheme, which means that your deposits are protected up to £85,000 per customer, if the bank were to go bust.
As well as a current account, which includes all the normal features, you also get some additional tools:
Revolut offers a similar banking service to Monzo, but without the additional safety feature of your deposits being protected by the FSCS as it is does not yet have a full banking licence. Like Monzo, it offers a current account with some additional features, particularly appealing to customers who travel and those who are security minded:
Starling is amongst the major competitors in this emerging sector. Like the others, it offers a current account but with full banking license and therefore FSCS protection. Unlike the others, Starling offers a small amount of interest on balances and is compatible with the CASS, so you can transfer direct debits and standing orders with ease.
Starling’s appeal is that it combines many of the best features of Monzo and Revolut in one application:
Just this week Monzo announced an integration with personal finance app Yolt, owned by Dutch bank ING. This kind of integration has been on the increase since the launch of open banking earlier this year, which is opening up all kinds of personal finance opportunities.
There are also reports this week that banking giant RBS is planning to establish a separate digital bank to meet customer demand in this area, following on the heels of Virgin Money who spent £38 million on developing a digital banking platform.