2018 Proved a Big Year for Digital Banks and Mobile Payments

Digital banking is, increasingly, a way to carry out banking operations without having to fit them into bankers’ hours. The 9-to-5 bank just doesn’t work for a lot of people, if it ever really did, and digital banking looks to substantially improve on the experience. 2018 is already being regarded by some—like Forbes, no less—as a big year for digital banking, and 2019 may prove even bigger.

Already, two major competitors have made their marks on the digital banking market in Europe: N26, who counts just over two million members to its credit, and Revolut, who counts over 3.3 million. The duo together account for just over half a billion dollars—$550 million, at last report—which makes them substantial operations by any standard.

What are digital banks doing to cause such substantial numbers to come about? Easily one of the great advantages is the ease of which users can open an account. Digital banks also offer excellent advances in speed. Not only are accounts faster to sign up for, but they’re more readily useful.

Debit cards received within days of signup allow for access to a host of ATMs and point of sale (POS) systems. Throw in an array of extra services—various insurances, cryptocurrency connections, investment services and more—and the end result is, literally, faster, cheaper, and better.

That makes for a difficult prospect for the physical bank to beat. About the only thing saving the physical bank is security, and that may not be a protection for the physical bank much longer. If things keep going as they’re going, physical banks may be completely dead in a few years once the last vestiges of the baby boomers who still prefer physical almost universally are lost due to sheer attrition. Safety will still be a big factor, but with mobile systems improving, it may not be such an edge for long.

Only time will tell the ultimate fate of the digital bank, but it’s increasingly clear that the physical bank has a lot of ground to make up. It’s got to prove it can be better than a tool that’s faster, better, and cheaper than itself, and that’s no mean feat. The digital bank may well end up the only game in town.