Digital Banks

Digital banks are a result of the increased movement from traditional banking methods to online banking that has occurred over the previous two decades. More and more commonly every day, banking services are provided over the internet. Digital banks take this trend to the logical conclusion, by operating entirely digitally. While for many people, the shift to online banking remains ongoing, digital banks are an attempt to get ahead of the curve and do business exclusively via the internet.  The beginning of the transition from traditional banking to online banking took place in the nineteen sixties, with the advent of ATMs and credit cards. As the internet became more and more widespread, online banking services became more and more popular as well, and today they are the norm. More than half of all customers in the United States today use their smart phones in order to do their online banking, and that number gets higher every day. Because of this, it seems logical to many people to stop using traditional banks such as Wells Fargo or Chase entirely, and use banks that only exist on the internet. The first of these digital banks is called Simple, and was started ten years ago in 2009 as a result of its founders’ frustration with the flaws of online banking systems. They offer free accounts and do not bill their customers with a number of charges for the services rendered. Today there are dozens of digital banks just like Simple, that exist solely …