Digital First

Technology has revolutionized nearly every aspect of human lives and banking is certainly no exception. Traditional brick-and-mortar banks are, at times, seen struggling to keep up with the demands of an increasingly digital-savvy clientele. This has led to the emergence of a new type of financial institution: the digital-first bank.

You may be wondering what is digital banking and how is it different from digital-first banking. Digital banking is typically a convenience that regular brick-and-mortar banks and credit unions provide customers who want to access their services online. Digital-first banking, on the other hand, encompasses institutions that are exclusively online with no physical presence. 

Choosing a digital-first bank means selecting a bank that has lower overhead, potentially allowing for more competitive interest rates and a more flexible product offering, all while being subject to the same protections and regulations as traditional banks.

Key takeaways

Digital-first bank definition: A digital-first bank or financial institution doesn't have physical branches. It may be a sub-brand or offshoot of a more established institution.

How it works: Digital-first banks operate entirely online and offer customers access to banking services through a mobile app, website, or other digital platforms.

The benefits: Digital banks may offer convenience and lower fees than traditional banks with physical branches.

What’s on this page

Here’s what you need to know about digital-first banking:

  1. What is digital banking?

  2. What are the advantages of digital banks?

  3. How to get access to the top digital-first banks

Read on to learn more about the ins and outs of this rapidly-growing sector and understand why more consumers are increasingly turning to digital-first banks.

What is digital banking?

Digital banking is a modern banking business model that operates primarily through digital channels. It offers seamless financial services to customers through mobile apps, websites, and online banking platforms. In contrast to traditional banks that serve customers through physical branches, digital-first banks allow customers to manage their accounts and conduct transactions using their personal electronic devices.

What are the advantages of digital banks?

Digital-first banks are fairly new, so you may be wondering why you should choose them over traditional banks. Here are the most significant benefits of digital-first banks to help you to understand if they are the right solution for you.

  • Deposit insurance coverage: Digital-first banks can be insured by the Federal Deposit Insurance Corporation (as all digital-first banks on Raisin are). This means that depositors funds are accounts including high-yield savings accounts, money market deposit accounts, and certificates of deposit are covered in case of potential bank failure up to $250,000 per individual, per institution.

  • Competitive rates: Digital banks have lower overhead costs than traditional banks. A recent study by the Boston Consulting Group found that companies with a strong digital customer experience generate 5% more revenue than their competitors. This enables them to offer customers lower fees and better interest rates on savings and deposit accounts.

  • Environmentally friendly: Since digital banks don’t depend on paper-based processes, they may reduce the negative environmental impact of your banking activities. 

  • Unparalleled convenience: The biggest pro of digital-first banking is that you can make transactions from anywhere, at any time, and via any device. You no longer need to visit physical branches to manage your finances, which saves you time and effort.

  • Same regulations as traditional banks: Just because a bank has no physical branches doesn’t mean it isn’t subject to the same rules and regulations that govern traditional banks. You can rest assured that these online-only institutions are required to follow the same guidelines as those with brick-and-mortar locations.

Digital-first bank spotlight: mph.bank

mph.bank is a digital bank that focuses on delivering value directly to its customers. Rather than devote precious resources to splashy marketing or sports stadium naming rights, mph.bank instead focuses on offering highly competitive interest rates to customers.

Make the most of digital-first banks on Raisin

Digital-first banks often offer more competitive products and services that most traditional bank. Raisin takes the guesswork out of choosing the right digital-first bank. Our unique platform hosts only federally insured digital-first banks, so you can trust your savings to be safe.

Browse Raisin today to explore our wide range of savings products from digital-first banks and beyond.

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