What is Digital-Only Banking and What Does it Mean For Businesses?

The types of changes we’re seeing in financial technology daily are crucial for businesses to pay attention to. New trends in FinTech will influence the changes that occur in businesses of all sizes, especially when it comes to the customer experience. One of the bigger transformations we’ve seen recently is the shift to digital-only banking. Now, let’s be clear that digital-only banking is not limited to sending that E-Transfer to your friends and family.  

The concept of digital banking refers to the use of digital technologies, such as the internet and mobile apps, to access and manage financial services and products. On the other hand, digital-only banking (also known as online banking or internet banking) refers to a type of banking that is solely conducted through digital channels and does not have a location for you to visit.

What’s in it for consumers? 

Customers of a digital-only bank can perform all of their banking activities online or through a mobile app, including checking account balances, paying bills, transferring money, and managing their finances. Banks that are digital-only often offer competitive interest rates and lower fees compared to traditional banks, since they do not have the overhead costs associated with maintaining physical branches.

Some examples of digital-only banks include Ally Bank, Chime, and Capital One 360. These banks offer a range of products and services, including checking and savings accounts, credit cards, and investment options, all of which can be accessed and managed online or through a mobile app.

Risks

We have to keep in mind that while digital-only banking has become increasingly popular in recent years, it is not without its drawbacks. Many customers may prefer the convenience of visiting a branch for in-person service or to deposit physical checks, for example. Additionally, digital-only banks may not offer the same level of customer service or support as traditional banks, and there may be risks associated with conducting these transactions online.

How can they be resolved?

Despite these drawbacks, the shift towards digital-only banking is likely to continue, as more and more consumers become comfortable with using digital technologies to manage their finances. Businesses that can adapt to this trend and offer digital services will be setting themselves up for success long term. But why is that?

Trends

Companies embracing the hottest trends are certain to gain attention from consumers in today's market. In addition to digital-only banking, some of the biggest trends in FinTech include artificial intelligence and machine learning which improve financial services and products, along with the growth of mobile payments and the previous rise of cryptocurrency.

Artificial intelligence and machine learning are consistently being used to analyze financial data and make predictions about market trends, as well as automate tasks such as fraud detection and risk assessment. 

What’s interesting is that mobile payments, which allow consumers to make payments using their smartphones, are becoming more popular as a convenient and secure alternative to traditional methods of payment. Additionally, cryptocurrency, which is an asset that uses cryptography (solving codes) for secure transactions, is another area that gained a significant following in recent years. While cryptocurrency may have lost its glowing reputation, mobile payments are still important to watch for, even with the crypto dip.

The Takeaway

The FinTech industry is constantly evolving and businesses need to be aware of these changes to stay competitive. Digital-only banking, which allows consumers to access and manage their financial services and products through digital channels, is one of the major trends in FinTech. While it offers competitive interest rates and lower fees compared to traditional banks, it may not provide the same level of customer service or support and there may be risks associated with conducting financial transactions online. 

However, the shift towards digital-only banking is likely to continue as more consumers become comfortable with using digital technologies to manage their finances. Businesses need to stay up-to-date on these trends and adapt to them to succeed in the future.

Written By Ben Brown

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ISU Corp is an award-winning software development company, with over 17 years of experience in multiple industries, providing cost-effective custom software development, technology management, and IT outsourcing.

Our unique owners’ mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.

Why NFT’s May Come Back to Branding in the Fintech Industry

In today’s world, a digital record is key to materializing statements, ideas, and especially status. If you didn’t track your run on your apple watch, did you really go? If you didn't take pictures of your vacation, were you really there? If someone has a hundred thousand followers without a blue check mark, are they really that famous? There is a pattern here, digital tracking is becoming more important to us when determining legitimacy for just about anything. As we’ve let it enter our personal lives, we see it influence investment decisions. 

You’ve likely heard about “NFTs” and people making absurd amounts of profit from them. If you’ve dug further into the topic, you may have seen pictures of cartoon monkeys and thought “how is that expensive '' or “it’s on my screen now, why would I have to buy it”. Rightfully so; if you’re going to understand what NFTs are, you first have to know why the concept is valuable. 

NFT stands for a non-fungible token, the “non-fungible” part means one of a kind and cannot be stolen or copied. An NFT can only be bought using cryptocurrency, when the transaction happens the following information is recorded: sender, time, asset, and owner. That information is then stored in another familiar term called “blockchain”, essentially a virtual list of all that information for every cryptocurrency transaction. 

With everything in the world today being virtually transitioned like school, banking, and even work, why does it seem crazy that the selling of art has joined the trend? Think about how much physical paintings go for. What purpose do they serve other than aesthetics? Additionally, they can be replaced or replicated which makes them fungible, they can even be destroyed. NFTs are the innovation aiming to change that market and bring it to its inevitable virtual home. 

Though the boom of NFT has slowed down significantly, this doesn’t mean the technology will not return and play a significant role in the future of the fintech industry. With that being said here are some reasons why NFTs can be important to you or your business in the future: 

Smart Contracts

With the sale of an NFT comes a “smart contract” which is an agreement between the buyer and seller of the artwork. This contract can have just about anything in it and it has concurrent agreements between the two parties. For example, famous entrepreneur Gary Vaynerchuk (who is a big promoter of NFTs) uses the example of NFTs being used for ticket sales. Essentially, because these tokens are one of a kind, they give the holder status. This status can then be used to validate access. The instantaneous NFT transaction and verification system are thanks to the blockchain which has data readily available. 

Exposure From Creation

You don’t have to be a professional artist to create an NFT. The process of creation is not as complex as one may think. Brands can make tokens that would represent buyers being a part of an exclusive community. It’s not outlandish to think that there could be communities built around brands that utilize this technology. Additionally, this would enhance the connection between sellers and holders which would continue growing the community. For there to be an incentive for consumers to spend their money with your brand, you need to offer something unique. 

Uniqueness

If you’re a start-up following the same layout as everyone else, seeking out business will be difficult since people tend to go with who and what they know. On the other hand, if you come to the table with something people haven’t seen before (for example: making your token accessible to a limited number of holders) you can stand out. An NFT collection is a great way to do that. Well-known brands are looking for ways to utilize this technology and you’ll likely see the results soon. 

You want to generate a sense of FOMO (fear of missing out) in the public when describing what your collection offers. Otherwise, the value of the tokens you create will not rise at all. Anyone can make an NFT— the real value is being able to promote it, and that starts with demonstrating what is special about your offer. This creates the buzz around your brand which will earn consumers' attention as well as investors. 

What’s Next? 

What things do you value? What makes your interests unique? Do you think your career will look the same forever? It’s wise to evaluate the conditions of your industry and reflect on them at a personal level. If you’re a decision-maker, plan for the inevitable. If you’re lower in the chain of command, don’t be afraid to voice your findings or opinions. The virtual shift is nothing to turn away from, in fact, it should be a primary focus for any and every industry professional. 

We work with successful companies to increase their net profits using exceptional custom software solutions, contact us here to see how we can help your business grow!

The Backbone of Cryptocurrency: What Will Your Financial Future Look Like?

Cryptocurrency requires well-structured software to survive, otherwise, it would not exist. With the trajectory in usage over the years, you’ll want to consider the significance of this technology.

In recent years, we have heard about the rise of cryptocurrency in the world, from the radical spike of Bitcoin in 2017 to just this year when Elon Musk drove up the price after announcing that Tesla would accept Bitcoin as payment. It’s a big concept in today’s innovative world. This leads the public to wonder if cryptocurrency will replace traditional payment. While countries have their laws around its usage, it is still prevalent in today’s economy. Let’s discuss why this shift is taking place:

Blockchain: 

The reason digital currencies are so attractive to their users is because of the decentralized software they are made of called a Blockchain. A Blockchain’s purpose is to document and track all digital transactions to prevent fraud. In addition, the software decreases transaction costs and opens up the reach in which users can conduct trade. The ease of doing so is nearly effortless and very fast.

What Should Be Improved in Blockchain:

Blockchain technology is still in development and has had some security breaches in the past that have caused real issues in the cryptocurrency market. According to a 2021 CNBC report, hackers stole about $600 million in cryptocurrency and then proceeded to return it. Something like this must require the security capacity to protect users from losing their assets. While it was clear the theft had been planned by professionals, it was an eye-opener for the industry. However, in a Forbes article, the chief scientist at blockchain analytics company Tom Robinson, said that the fact the hacker was returning the assets "demonstrates that even if you can steal crypto-assets, laundering them and cashing out is extremely difficult due to the transparency of the blockchain”.

Future Of The Assets: 

With people all over the world investing in cryptocurrencies, and more than 15,000 businesses accepting it as payment its growth is unforeseeable. It will depend on building credibility and creating a safe environment for trade. The public must become familiar with the market and develop an understanding of the shift as this will have a key role in the economy.

Conclusion

Innovation in technology and production is unpredictable, in regards to cryptocurrency, one thing for certain is it is not to be ignored. The profit potential in this market would not only benefit one’s personal portfolio but also open up a business's growth potential. So with all this considered, are you looking to change what’s in your wallet?

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