What if I told you that you never have to walk into a bank branch again? That all your bank transactions could be done via your cell phone regardless of where you are, and any questions could be answered with a text? Online banks are here.
As a pilot, you have to be comfortable with technology, but even so, those questions may have made you uneasy. The idea of our banking riding on an app is enough to send some of us into sheer panic. But if you’re used enough to technology that it seems odd not to have all your banking online, then maybe it’s time to see what online banks can do for you.
Why Online Banks?
Digital or online banks were created to appeal to the young, digital generation that wants to be able to do everything from their cell phone. Many online banks are free or very competitively priced, whereas their brick-and-mortar alternative is not.
The selling points of digital banking are very attractive. Because whether you’re a captain or first officer, whether you work for United, American, or Southwest, you travel. A lot. And I’m sure you’d like to be able to track your family’s expenses without having to breathe down anyone’s neck. With online banking, you can manage it all from your phone, one of the few items that are always with you, and save that precious time at home for more important things.
But I know what you’re thinking. In an age of hackers and identity theft and fraud and so much more, is it safe to bank entirely from your phone?
I’m glad you asked.
Let’s Discuss the Pros First.
Better security & app features
A lot of us feel some extra sense of security by being able to walk into a bank branch with a problem or talk to someone face to face to open up an account. But personal relationships aside, the reality is that identity fraud and theft were happening long before banks became digital. (And I’m not just talking about that movie where Leonardo DiCaprio impersonates an airline pilot and forges checks in the ‘60s.)
Because digital-only banks don’t have the overhead costs of a traditional bank, they spend all their money on improving technology for the app and staying ahead of the game. That translates to better security and better app features, such as tools to help you track your expenses. Think you and yours might be spending too much on unnecessary things? Get up-to-the-minute updates and monthly reports on your spending habits with these latest-and-greatest digital bank apps.
Enrollment is easier than ever
Chuck, a friend of mine, recently moved to the Midwest. Shortly after his move, we caught up and when I asked him if he had gotten all his banking set up, he started to complain about how difficult it was to open up an account. You see, Chuck is an airline pilot for Delta, he’s not home a lot, and he couldn’t believe how many papers he had to submit to the bank, visits to the branch he had to make, which conflicted with his trips, … all just to open an account. He was frustrated.
Some regular banks now offer digital enrollment to a point. But most are going to ask you to eventually come into the local branch and finalize the process.
With digital banks, you can enroll from start to finish online, and it’s faster than you’d think.
Manage your card instantly
Can’t find your card? Or did your card got stolen and you’re not sure where? That’s okay—go on the app and freeze it. If you find it later, go on the app and unfreeze it. Did your phone get stolen, too? That’s okay—you can log in to the app from multiple devices to secure your account. Even change the pin on your card through the app with just a few clicks.
Customer service is 24/7
The good news is that online banks are still run by people! 24/7 chat services are usually standard in an online bank app. So if you’re overnight in Tokyo and it’s some ungodly hour back home in LA, you’ll still be able to reach someone.
Secure emails, call centers, and chat functions are replacing the one-on-one experience of walking into a bank and chatting with the teller, but if you’re like me, that is music to your ears. Really, who likes waiting in line?
Users also report that they can do a lot more themselves whereas, with the traditional bank, they would’ve had to make a phone call, or perhaps wait in another line. The thing is, digital banks want to give you more independence and control, so you may not end up needing that customer service as much as you used to. Again, music to our ears.
Rates are competitive
The reduced infrastructure of a digital bank is translating into higher rates on interest-bearing accounts, significantly higher in many cases than the country’s largest banks. You get rewarded for the bank’s savings. Kind of a no-brainer, right?
But Wait, What’s the Catch?
Digital banks don’t have ATMs. What most do is rely on ATM networks, such as Cirrus or Allpoint.
How often do you go to the ATM in a month? For most of us, our card is our primary payment method. But if you’re one who prefers cash, then you may want to check this feature as some digital banks will put a limit on how many times per month you can withdraw from an ATM.
Not as many services
Traditional banks have become a one-stop-shop for so much, from insurance to mortgages to investment advice. Digital banks don’t offer everything that the traditional bank does, but the specifics will vary from bank to bank.
Do you ever deposit cash? That simple transaction may be a bit more difficult with a digital-only bank. It goes back to the network of ATMs that the bank is affiliated with. Ask about this feature if cash deposits are a frequent transaction for you or your family.
If I want to transfer money through my digital bank, it takes approximately 2-3 business days. That’s fine and all, but what if I need it sooner? A traditional bank can usually transfer money between accounts on the same day. Ask yourself how important that feature is to you.
Do you ever make international transactions? This may also be more difficult, if not impossible, depending on the bank.
So, Do I Go Digital?
Think about how you bank and what you need. As online banks grow, their range and efficiency of services will grow, too. You can’t deny the benefit of better rates for your savings account, up-to-minute access on your spending, savings, and nifty reports to keep you and your family in check, but perhaps you’re not quite ready to let go of the fuller range of services at your neighborhood bank.
The good news is you can do both. Try out one of the more popular online banks in the country and see how it compares. Try out those competitive rates. You don’t have to throw all your eggs in one basket.
Also, keep in mind that traditional brick-and-mortar banks are also becoming increasingly digital. My banking with my regular bank is all done online and I hardly ever go into their branches. But, on the same note, I do have some money in an online bank, too. So why not dip your feet in a couple of pools? As the technology improves and the options expand, you can take the full plunge if and when you’re ready.