Digital banks are reinventing the entire banking experience, by introducing a feature that has, thus far, been fairly foreign to the world of banking: flexibility. While the traditional banking model is reliant on having physical branch locations, digital banks almost never have a brick-and-mortar location – all the magic happens online. That means you don’t have to choose your bank because it’s conveniently located at the corner of your street anymore. You can choose the bank that fits your needs based on your professional and financial profile. So instead of pushing a one-size-fits-all offering like traditional banks, digital banks have the freedom to offer tailored services and tools for a very specific set of customers, alongside the speed and convenience of an online experience.
Lower fees and higher perks
Because they don’t have to maintain thousands of physical locations, digital banks usually have much lower operating costs, and those savings get passed along to the customer in the form of lower (in our case, zero) account fees, better cash-back offerings and higher interest rates on savings accounts.
Faster and simpler processes
With a digital bank, you can open an account in minutes. (We timed it here at Lili, it takes about 3!) No need to walk into a branch, wait for a banker to hang up the phone, talk for 10 minutes, print, sign, leave, get a letter, sign, fax… (who still has a fax machine anyway?)
New approach – new vision
Banks born in the age of the internet, like any digital business, are pushing boundaries and disrupting the status-quo. Their operations flexibility allows them to adapt to different types of customers and focus on user experience, innovation, and design. Lili, for example, chose to create a banking experience tailored for the freelancer’s lifestyle. No minimum balance is important when you don’t have a fixed income coming every two weeks, and a tool to categorize your purchases is key when you need to separate your work and life expenses. And a no-fee ATM location finder is really a nice-to-have, when you’re constantly on the-go!
If it’s online, it’s always available…
Another benefit to banking digitally is that your bank is virtually always open and you typically have more communications options (email, instant messaging, chat, phone…), which means you can manage your money on your own time, and no one else’s. And for freelancers with an ever-changing schedule, this flexibility really comes in handy! You can take care of a lot of your banking transactions (depositing checks, making transfers, checking your balance) any day, any time. The actual exchange of funds usually occurs during standard business hours, but ordering a money transfer on Sunday, means you can focus on your clients on Monday!
…and it’s just as safe
There’s an old fear that your money isn’t as secure with an online bank as it would be behind the 300-pound solid steel door of a backroom vault. But nowadays, digital banks take the exact same security measures as traditional banks when it comes to keeping your data and your dollars secure. Some digital banks (including Lili) are also FDIC insured through a partner bank, meaning your money is insured by the government up to $250,000 if anything happens to it. Some old fears are just old.