Banking Finances

Digital Banking

We’ve all heard the terms of digital banking and online banking, but what do they mean and what is the difference between the two? Is there a difference?

The two terms do mean different things, but as more and more banking has become digital, the two terms are seen as synonymous by many. So let’s dig a little deeper.

What is digital banking?

Digital banking is anything that uses electronic devices to process transactions, as opposed to a manual process carried out by bank clerks. The earliest forms of digital banking were ATMs using a debit card to access your account, withdraw funds and check your balance. Some banks were offering these facilities in the early 60s.

With the development of the Internet, digital banking expanded, building networks that connected retailers, suppliers, and consumers, but it wasn’t until the 1990s when significant advances were made.

Skip forward to the next decade and from the year 2000 onwards broadband services began to replace the old dial-up systems. As data transfer speeds increased, online banking services began to develop rapidly. 

What is online banking

Online banking is one part of digital banking and refers to the applications and secure websites used by customers to access their accounts and perform banking transactions. Online banking has expanded rapidly over the last two decades, thanks to the improved Internet, and banks are promoting these services heavily. 

Along with making interaction with their bank much easier, online banking is also more efficient, allowing digital business banking platforms such as Penta to offer more competitive services than traditional banks. Without the need for physical bank branches, digital banks can reduce their overheads and focus on offering services to make online banking easier to use and more intuitive.

What is a digital bank?

What is the difference between a digital bank and a traditional bank? A digital bank is one that doesn’t have bank branches for customers to visit and make banking transactions. All your transactions are undertaken online, without the need to visit a branch with paperwork and documents. All the services you would normally need to visit a branch to complete are carried out online. 

Many traditional banks have online banking systems, but they also retain their branches. These are not digital banks. 

Opening a new account, arranging a loan or overdraft, and transferring funds to clients and suppliers can all be done online. Modern digital banks allow you to interact with your digital bank account through various methods, such as a mobile app and on your tablet. 

Take advantage of the digital revolution; opening an online account with Penta is quick and easy.

Advantages of digital banking

  • Banking everywhere. One of the biggest advantages of digital banking is the ability to check your account wherever you are. With a mobile phone app, as long as you have a signal or Internet connection, you can operate your account, arrange transfers and check transactions.
  • Real-time information. Transactions, such as paying a supplier are recorded instantly, so you always know what is in your account.
  • Security. Most digital bank transactions are carried out by the customer, and security checks are put in place to prevent fraudulent use. Many banks use a system of One-Time Passwords/Passcodes (OTP). Whenever a transaction is started by a customer, an OTP is sent to their mobile device and/or by email to authorize the transaction.
  • Link your accounting software. Keeping on top of your accounts can be a pain, but your Penta account can be linked directly to accounting software. 
  • Less chance of errors. It’s a fact of life, but human errors occur, even in the best manual systems. In digital banking, the chances of errors being made are greatly reduced.

FAQ

Does a digital bank have branches?

Not normally, most digital banks do not have branches. This is one of the fundamental differences between digital and traditional banks.

How do I deposit funds into a digital bank?

You would normally transfer funds into a digital bank electronically. Part of the digital banking concept is to make banking paperless.

Can I deposit cash into my online Penta banking platform?

The ability to deposit cash into a Penta banking platform is a feature that is coming very soon.

Does a digital bank account operate as a normal bank account?

Yes, digital bank accounts are exactly the same as traditional bricks and mortar bank accounts, except you interact with them online. This means that a digital bank account can be used in the same way as a non-digital account.

Is my digital banking account safe?

In addition to our highly secure website, your Penta Business Account also uses features 2-step authorization. Outgoing transactions must be confirmed using a code sent to your mobile. The security of your money is a Penta core value.

Is my money safe in a digital banking account?

Funds held in a Penta Business Account are protected by the same rules as a traditional bank. The European Deposit Guarantee Fund protects up to €100,000 in the event of the bank becoming insolvent. The Penta Business Account is, backed by solarisBank, a fully licensed digital banking service.