The Rise Of Digital Banks (Maybe)!

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Technology is changing fast and altering the way that we live our lives.  It is changing how we travel, how we get our work done, how we learn and how we consume our media, but it also has a big effect on how we spend our money and personal finances in general. I’ve written before about technology’s effect on the way we spend money.  Cash was king until we could write a check. Debit cards replaced our checks, then credit cards allowed us access to fast and easy credit. Now we have PayPal and cash apps, Apple Pay and Google Pay. There is Square and Square Cash where you can send money via an email! Sure why not? LoopPay turns your smartphone into all your credit accounts and Venmo lets you send and receive money from anyone else that has downloaded the app. Technology is leading the changes and making it easier to spend our money, which is convenient, but…, it can be dangerous. It is super easy to spend our hard earned money impulsively. Who do we blame! Millennial’s of course! It’s always the Millennial’s fault!  As a Gen Xer, it is my turn to blame the younger generation for all of my problems in the most general and frankly ridiculous of terms and I am embracing it! What new technologically led change in personal finances will the phone worshiping Millennial’s cause? (Sarcasm.) Who knows, but I think the rise of all digital banking is on the way.
I found this quote from an article on digital banking at The Financial Brand.

“When it comes to money, Millennials told us they don’t want to feel like they’re being judged,” said Bill Wallace, CEO of Digital at Chase. “So, we designed Finn (a digital bank) to put them in charge, no matter where or how they’re spending.”

Holy smokes! Toughen up, Millennials! In my day we were judged on our appearance (must dress like exactly like everyone else), intelligence (have it but still fail a test and act stupid to be cool), who could ride with no handlebars on their bike the longest and many other inconsequential criteria decided arbitrarily by our peers and elders. Big digression, but my point is Millennials are no worse and no better than the generations that came before them. Nobody and I mean nobody wants to be judged! And when it comes to personal finances and money, people will always gravitate toward convenience and avoid judgement. All digital banking on your phone certainly provides that. Digital banks are mobile banks designed to be used on smart phones. Accounts and credit and all your banking needs met with your smart phone only. N26 is a European digital bank that is coming the United States and Chase is the first major American bank to offer mobile only or digital banking.
We already have mobile options for mortgages and other lending products. Digital banks look to take over all of a consumer’s banking needs. It will be interesting to see how much traction, mobile only banking makes this year. Would you use a mobile only banking option or do you prefer to stand in line at a bank? I can definitely see the appeal of all digital banking. As digital banking grows, it will affect how personal finances are managed but it won’t change the fundamentals of money management. Pay attention to your money and don’t spend more than you make. Would you try digital mobile only banking? Let me know in the comments!

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