In a world of constant change one of the newest to some in the financial world virtual banking. Many people think this has been available for quite some time through their local bank but it hasn’t. Virtual banking is banking done only online with no option of going into a branch. Virtual banking is a concept that hasn’t swept the world as many thought it would but it has changed the financial health of some people.
A virtual bank is a bank that is only online. Most virtual bank customers see an advertisement for their services and after investigating, they decide to fund a virtual bank account. They can only complete their transactions online and if there is a dispute, it is done online as well. Many people think online banking is the same as virtual banking but it’s not.
Online vs. Virtual Banking: The Reality
Online banking is not the same as virtual banking. The biggest and most obvious difference is lack of choice. When a customer decides to bank virtually, they have no local branch to visit if they are running errands. Online banking customers still have the option to go to their local branch for many things if they choose to and still have their online banking options. The other differences are just as shocking.
Traditional banking options for deposits vary. There are many banks that allow their customers to take pictures with a phone for deposits, deposits through ATMs, direct deposit or walking into a local branch and physically depositing the money.
Virtual banking systems don’t have that many options. There are no physical locations so all deposits have to be done online. While direct deposits and transfers are an option, it can take a 7-14 business days to become established. If there is a physical check that has to be deposited, virtual banking customers have to consult their banks to find the procedure for that.
Traditional banking customers have the option of going to an ATM to make a withdrawal. Many of these banks have their own ATMs their customers can use to avoid fees and limits. This is a huge convenience for those that need cash in their hand instead of using their debit card.
Customers of virtual banking systems don’t have it as convenient. Without physical locations, the number of ATMs can be scarce. Some virtual banks have partnered with other banks to accept their customer’s ATM cards for withdrawals and other transactions but not all banks have accepted those proposals. For the virtual banks that don’t have a partnership, there are very few ways to get large amounts of cash.
Safety and Legal
When most people have learned about virtual banking and their options, many wonder if these banks are actually safe to use and if they are legal.
Yes, most virtual banks are legally operating. For those that want to know more about a particular virtual bank, the FDIC website will be a great help. This website will tell customers what banks are fully insured and operating per FDIC regulations. Those standards are the same standards traditional banks work under.
While virtual banks seem strange, they are safe and work well for some. There are some people that operate completely online and having a virtual bank works well for them. Those that want to bank virtually should understand the differences and feel safe doing it.
Virtual banking is one of the newest trends that have given people more options to manage their finances in a way they are comfortable.