More people are relying on the internet for their transactions with the accelerated shift to digitalization due to the COVID-19 pandemic--including banking.
While online banking has been a staple for millennials even before the pandemic, it was only recently that more people are showing interest in digital banking.
Think the two are the same? Some interchange the two, but note that there are purely digital banks available to Filipinos.
Here's what you should know about online banking and digital banking:
What is online banking?
Online banking is a platform (website or app) that allows you to do bank transactions online. This means you can transact on your smartphone, laptop, computer, or tablet. It removes the hassle of physically visiting a bank branch for your banking needs such as transferring funds or paying bills.
Many banks with physical stores offer online banking to their customers. It should be noted however that there are limitations to transactions that can be done with online banking. For instance, some banks do not allow customers to cash in checks online.
What is digital banking?
Digital banking on the other hand relies purely on electronic channels for all of its transactions. From opening an account to cashing in checks, everything can be done using your gadget.
As defined by the Bangko Sentral ng Pilipinas, "digital banks offer financial products and services that are processed end-to-end through a digital platform or electronic channel with minimal or no reliance on physical touchpoints."
Digital banks usually offer higher interest rates too since they do not have physical branches to maintain.
Which one is better?
It depends. Both online banking and digital banking have their pros and cons.
If you're one who likes to keep a paper trail of your finances, you might be fine with a brick-and-mortar bank that offers online banking.
But for those who are usually too busy to go to a bank to transact, digital banking might be ideal for you. On the other hand, if you're a person who has limited access to the internet or who usually relies on cash on hand, it might be difficult for you to rely solely on digital banking.
The bottomline is what's important is to consider your banking habits and needs in deciding how to handle financial transactions.