How Exclusively Online Banks Impact the Banking Industry

Recently there has been a surge in the number of online banks that allow customers to interact exclusively with their online platform and take away the need for bank branches around the world. These banks usually provide better savings rates and fewer charges overall for their customers. These positive characteristics are driving more and more customers to leave traditional banks behind for their online counterparts. 

Online banks lack infrastructures and other overhead funds so they are able to provide customers with better rates and fees on all their accounts giving them higher APYs on savings. With traditional banks, a large amount of their money goes towards buying lands, building branch offices, and paying employees to meet personally with customers. Online banks run everything through programs that require fewer employees to maintain. 

Because their entire presence is online, online banks have a better interface for users than traditional banks. Their online services are a lot easier to use and require less customer service employees. One area where online banks lose is personal relationships. Since the entire banking experience is online, customers do not form relationships with specific bankers that allow for more discretion with loans later on. 

Online banks have their pros and cons, growing to become very competitive with traditional banks. Their innovative practices let them also beat out banks in APYs and interest rates every time. We will probably see a positive trend in the use of online banks over the next couple of decades. 

https://www.investopedia.com/articles/pf/11/benefits-and-drawbacks-of-internet-banks.asp