A virtual bank account is one based solely online. Though most traditional banks offer an online banking package with their accounts, a virtual bank is only online and has no physical branches or need for person-to-person contact.
This enables you to manage your finances online, seeing everything instantly. It gives you an easy-to-understand interface with which to manage your accounts and funds. Over recent years digital banking has seen strong uptake by customers and this is just a further step in that digital world, one that brings clear, instant access to your finances.
Why Would You Want A Virtual Bank Account?
Virtual bank accounts have some clear advantages over traditional bank accounts. In general, they are very fast to set up. This is done online, so there is no need to visit a branch to open an account. There are no opening hours to comply with and no journeys need to be made to complete the process. Account verification is fast and contact-free.
• Security
For secure access to your banking and accounts, virtual banks are somewhat ahead of traditional banking in the implementation of advanced security features that work to keep your money safe. Most virtual banks use the latest electronic identification methods, often more than one. This can mean a combination of facial recognition, followed by a fingerprint scan - or a fingerprint scan and a pin number. Using a two-pronged approach to account security gives them an advantage in this area.
MoneyTransfers.com highlights the need for safety when choosing a virtual bank account. There is more to consider than just physical security for account access, we also need to consider the security of virtual banking in terms of protection by governing bodies.
Traditional Banks tend to belong to the Financial Services Compensation Scheme (FSCS) which will offer protection for your savings up to £85000. In addition, their regulation will be provided by the Financial Conduct Authority (FCA). This is not always the case with virtual banks. It is important to check what cover your money has if something were to go wrong.
• Easy Access and Instant Banking
To manage your money held within a virtual bank, you only need a smartphone. You can do all the things you would expect of a bank, including, setting up direct debits, making payments, transferring money domestically and abroad. You can also organise loans, manage cryptocurrencies, and direct debit cards all from your phone. This simplifies the processes and means trips to the local branch of your bank are no longer needed.
• International Transfers Tend To Be Cheaper
Virtual accounts have fewer overheads than traditional banking, this is apparent in their comparatively low charges for services such as international money transfers. The savings of using a virtual account for these transactions can be significant, the costs tending to be many times smaller than traditional banks. In some instances, there is no fee, even for international money transfers.
This benefit can make it very advantageous for those that transfer money abroad often to have a virtual account for the purpose.
• Easy To Understand Banking
As the virtual bank does not have a branch, or sales staff to sell its products, it relies on offering great value services that are transparently illustrated online to its account holders. This is very useful for customers wishing to understand a bank's products in an easy-to-understand format. From this you can quickly understand what's available and take the time to ensure that it is what you need.
• 24-Hour Banking From Anywhere
When you have virtual banking, one of the biggest advantages is the freedom from being tied to a traditional bank's opening hours. These tend to be office hours making a trip to the bank challenging for a lot of us. Knowing you need to make changes or manage services in a branch that is not open until Monday morning, at the exact time you are yourself due to arrive at your own workplace is tedious to say the least.
This convenience doesn't just apply when you are due at your own office, but is especially useful on holidays or whilst travelling. At home, or away, another advantage that virtual banks hold is they are likely to process your transactions faster, not being tied to waiting until Monday morning for a weekend transaction to be carried out can often make baking and using your money easier and more convenient.
• Cryptocurrency Friendly
With the cryptocurrency explosion we are experiencing, looking towards your traditional bank for support may not prove fruitful at this time. However many virtual banks are set up to provide support for cryptocurrency directly or with exchange services that are provided to the virtual bank by 3rd party companies.
This support for cryptocurrencies that virtual banks provide has materialised in a timescale that traditional banking cannot match. This is very indicative of the ethos on which virtual banks pride themselves. Crypto is the future and digital banks understand this.
What Are The Downsides Of Virtual Banking?
So far we have focused on the considerable advantages offered by virtual bank accounts. But like all things, there are always going to be disadvantages in certain situations, or for certain people. Virtual banks are set up like a supermarket, you can choose from what's on the shelf at the cost it's offered at. Traditional banks can be open to negotiations on the costs and availability of certain services. Loans, mortgages, and debt repayments are areas where traditional banks tend to have some wiggle room in their products and services.
If you prefer a more traditional face-to-face banking experience and are not comfortable with online transactions, you may find the traditional banks easier to work with compared to online banks.
Should I Get A Virtual Bank Account?
The demand for Virtual bank accounts has increased thematically in recent years; many choose to run a virtual bank account in addition to traditional banking. This gives you the ability to benefit from the advantages of both formats of banking.
If you’re looking to travel abroad anytime soon then a virtual bank account can mean easy access to your money while you’re abroad, rather than exchanging cash before you go; so that is certainly one positive reason to look into getting a virtual bank account.
