Expanded Lesson 5 min read
Sep 20, 2023
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Digital banking lets you securely manage your money on the go. You can access nearly all the same benefits and features on your mobile device or computer without visiting a brick-and-mortar branch. Digital banking apps also use security features such as two-factor authentication and facial recognition.
You have many options for where and how you manage your money. Thanks to digital banking, you no longer need to go to a physical bank or credit union to open an account, make a deposit, or transfer money between accounts. You can manage your money digitally using your smartphone, tablet, or computer and save time from commuting to your local financial institution. Convenient digital banking is widespread, and your current bank or credit union probably already offers this service.
What is digital banking, and how does it compare to visiting a branch in person? Explore the benefits of digital banking and use these tips to help keep your money safe.
Lesson Content
What is digital banking?
Digital banking means managing your money using an electronic or digital platform, such as a website or mobile banking app. You can access a financial institution’s products and services by logging into the app or website on a smartphone, tablet, or computer without visiting a local service center in person.
Both online banking and mobile banking fall under the umbrella of digital banking. Online banking refers to banking services provided over the internet, such as a website. While mobile banking means accessing these services on a mobile device like a tablet or smartphone. Downloading a digital banking app from your financial institute to your mobile device should be free.
To bank digitally, you must log in to your account via the app or website using a secure username and password. If you have an account but don’t have digital banking yet, you should be able to set it up online in just a few minutes or download your financial institution’s app from an official app store. If you don’t already have a checking or savings account, many financial institutions let you open a new account on their website. Or you can visit a local branch in person to get started. Then you’ll be ready to set up digital banking.
With digital banking, once you log in, you can check your account balance, transfer money between your accounts or to another financial institution, and deposit checks by uploading a photo of the front and back of the check. If you have a loan, you can check your remaining balance, track interest, and make payments in just a few easy clicks.
Nearly all financial institutions offer digital banking in addition to in-person banking. However, some banks exist entirely online, so you must manage all your accounts digitally via their app or website.
What are the benefits of digital banking?
Digital banking is revolutionizing the way people manage their finances. It is the fastest way to access your account. That way you can spend more time making informed financial decisions and less time driving to your financial institution to manage your account. You’ll also be in good company. It has been reported that almost 80% of Americans prefer to bank digitally.
Managing your money digitally instead of in person can unlock many benefits and banking features without visiting your local branch. This technology is designed to make life easier by offering:
Anywhere, anytime banking
Digital banking gives you the freedom to access financial products and services 24/7. With internet access or a mobile device, you can conveniently log in to your account and manage your money hassle-free. You don’t have to worry about visiting your local financial institution during their hours. Instead, you can bank nights, weekends, and even holidays. You can see your accounts in one location to get an overall view of your current finances. Some apps and websites also offer built-in budgeting and planning tools that help you keep track of important goals and trends. For example, they can track how much you spend vs. how much you earn every month to encourage you to save. And some even let you see your accounts across different financial institutions for a comprehensive view of your entire financial health.
Personal help when you need it most
If you have a question about your account or need help with your finances, you can often get the answer right away on your mobile device or computer. Most credit unions and banks offer digital help, such as instant chat and over-the-phone support. The chat feature is usually available 24/7, so you can quickly get the answers you need.
Strong security
Digital banking apps and websites are designed to be secure. Security is a priority within the financial industry and that includes following (and in some cases exceeding) current industry digital security standards. A typical security feature includes sending a notification of suspicious activity on your account. You can also take steps to support your security. For example, when you create a digital banking e-account, you will choose your password and username. Experts recommend creating a strong password by using a unique phrase or list of characters that you can easily remember. Also, choose multi-factor authentication for an additional layer of security if it’s offered, but not mandatory, at your financial institution. Some financials will also send you a notification via text or email with a secure code to verify your identity. Important: Do not share this code with anyone.
Additionally, some apps and websites also let you log in using facial recognition or your fingerprint.
Automated services to save time
Paying your bills and getting paid is much easier when you use electronic bill pay within digital banking. Bill pay lets you both receive and pay bills electronically. It can be used for one-time payments or recurring bills, like rent, loans, utilities, and credit card bills. Payments can also be automated by selecting which account you’d like the payment to be deducted from. That way, you don’t have to worry about forgetting or falling behind on your bills.
The same is true of direct deposits. You can have your paycheck, Social Security payment and other regular checks automatically deposited into your account as soon as they’re available. You won’t have to worry about losing checks or having someone trying to cash them.
Also, many digital banking apps and websites are compatible with digital payment apps like Venmo, PayPal, and Apple Pay.
Fraud protection on the go
Fraud prevention should always be top of mind. If someone steals your debit or credit card, you can quickly and easily log in to your account and freeze the card to prevent anyone from using it. Or if you misplace your card, you can freeze its use (just in case) and then unfreeze it once you find it. You can also sign up to receive notifications for every transaction.
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