Digital-only banks are using innovative technology and software to win customers in competition with traditional high street banks.
So, how do mobile-only banks work, and why are they can be better?
Read on to find out more.
What are the mobile banks?
Mobile banks, such as Revolut, Monzo, Monese, and others, are digital banks where every transaction happens via an app on your mobile device (simplified). These banks do not have high street branches.
Customers are issued with a bank card and can use it as usual or gain access to their cash via the ATM network. However, all their banking happens via the app. Most digital banks also support Apple Pay and Google Pay for their cards.
What features do mobile banks offer?
The various mobile banks offer different features mirroring the functions of traditional banks.
You also have other beneficial functions that you don’t often get with a traditional bank, including real-time spending notifications, changing card limits, monthly expenditure reports, budgeting assistance, and the option to freeze and unfreeze cards.
For all their advantages, mobile banks currently have some limitations in various banking services and often do not offer loans, overdrafts, and investment tools. From another point of view, it makes them more simple and straightforward for customers.
Whatever way you decide to do your banking, the safety of your money is of paramount importance. All top digital banks are licensed by financial regulators such as FCA or PRA in the UK.
What costs are involved with digital banks?
Usually, digital banks have 2-3 account types, and their costs may vary from £0 to £20 per month.
How to open an account with a mobile-only bank
Opening a bank account with a mobile-only bank is straightforward and refreshingly quick. You don’t need to spend hours visiting a bank branch and queuing to speak to an account manager. Sometimes you don’t need to provide proof of address, making mobile banks perfect for overseas students studying in the UK and seasonal workers from overseas who require a UK bank account.
Signing up for a mobile-only account is easy:
- Download the app
- Verify your identity by providing a photo ID, together with a video or picture of yourself holding the ID
- Once you’ve signed up, you should receive your contactless debit card within a few days
Digital banks that are operating in the UK
Atom Bank claims to be one of the first banks created exclusively for mobile.
Monese is notable that you don’t need to have a permanent UK address to open an account.
Monzo is a well-established mobile bank that offers current accounts, bill payments, and direct debits. Monzo also provides additional features, including a monthly spending report and instant notifications that allow customers to monitor and manage their spending.
N26 launched its current account in the UK in 2018. However, the bank has over 1.5 million customers across Europe. It is protected by the German deposit protection scheme, rather than the FSCS.
Currently, the UK app is still in beta, which means that many of the features you might be expecting are presently absent. For example, you can’t set up direct debits or pay in your salary into an N26 mobile account. Unlike some other digital banks, you can access N26 via a computer, rather than exclusively using a smartphone.
Revolut was originally aimed at the travelers’ market because of its ability to be used in 120 currencies and hold up to 26 currencies.
Revolut doesn’t offer a full range of account services, and you can’t set up direct debits or standing orders. However, the account does meet the needs of frequent travelers and those who work in different currencies.
Starling Bank has built its own IT systems from scratch and can offer its customers digital functionality and seamless integration with other mobile banking and financial apps.
Starling offers a full current account, including overdraft and interest features, and the ability to create standing orders and direct debits. The bank also provides a Euro account that is aimed at customers who work in both currencies, and it guarantees a genuine exchange rate.
Many people will find switching to a mobile bank beneficial, especially since all banking is made via smartphone, and costs are usually less.
Also, the multiple additional features offered by application-based banks are beginning to revolutionize how users manage their money. Why not sign up for an account today and experience the efficiency and comfort of mobile-only banks!