Technology development is changing how the world works. It has affected crudely traditional institutions like banks and forced them to change their services and products. Customers now have online banking from brick-and-mortar banks, and other institutions have gone further to provide virtual bank accounts with no physical premises.
Virtual bank accounts might have been around for some time, but the concept is new to the ears of most customers. However, in a thriving online world, you, too, could benefit from having a virtual bank account. Here’s what they have to offer.
What’s a Virtual Bank Account?
Virtual bank accounts, or online bank accounts, are entirely operated through a mobile or desktop interface. They function more or less the same as traditional banks but offer additional benefits like speed, security and multi-currency abilities.
Virtual bank accounts are not tied to a physical location like a branch or office. They operate electronically. The accounts are relatively easy to operate and open and give users the comfort of having complete control of their accounts in the palm of their hands.
How Virtual Bank Accounts Operate
Virtual bank accounts might be a more recent idea, but they borrow heavily from traditional accounts in how they operate, so the idea isn’t entirely foreign.
Create an account
Customers will begin by opening their virtual bank account using their preferred service. Because the account is not linked to any physical location, you don’t have to worry about doing a walk-in. You can complete an online application, provide the required documentation and get your account approved and opened.
Once the account is active, you can make a deposit. For your first deposit, you would have to transfer money to the bank electronically or send a check via mail. The service provider might also request that you fax a copy of their identification. However, these requirements vary depending on the company you choose.
You can receive funds in your virtual bank account by having your employer deposit your paycheck directly into the account. Online businesses and merchants can receive money from buyers and customers to the account.
You can also transfer funds from another bank or PayPal account into your virtual account. Some accounts also allow you to carry out a transaction by using a smartphone to take a picture of the deposit. However, not all providers offer this feature.
Paying funds out
Virtual account offer debit cards like traditional banks. The customer can also order checks. You can use either of these provisions to buy products the same way you would with a traditional bank. The account also provides the option of paying bills online.
Although virtual banks do not have their own ATMs, you can access cash by withdrawing money using an ATM owned by another bank. However, the bank that owns the ATM might charge you ATM withdrawal fees.
Benefits of Virtual Bank Accounts
Virtual bank accounts are growing rapidly because of their unique service offering and the benefits they offer. Studies have shown that customers are more satisfied when they use digital-only banking. To understand why virtual accounts are becoming so popular, you have to look at their advantages.
As far as finances are concerned, security is the greatest concern for customers and institutions. Because virtual accounts are run purely online, they offer a level of security that traditional banks cannot match. They are a highly secure platform with features like device encryption to guarantee customer data security.
Also, for added security, most virtual bank accounts use multi-factor authentication and biometric login features for your mobile apps and online bank accounts.
The level of safety and security these accounts offer have earned more customer trust allowing for easier operation of funds without bureaucratic processes to help secure funds.
Traditional banks have come a long way. But they still can’t match the convenience that virtual accounts offer. Users can access a full range of banking services anywhere in the world.
Your account information and access to services are with you wherever you go. The services are not limited by location or time zone.
Virtual accounts are also time-saving. You don’t have to worry about time-consuming tasks like going to the physical location to make payments or asking for support. Everything is available online and on the go.
Better spending insights
The customisable nature of virtual banking helps you benefit from features such as round-up savings and saving pots.
The accounts also incorporate artificial intelligence and machine learning. They can provide spending insights to help you budget and set financial goals. These features can help you manage spending and achieve your financial goals quickly.
Higher interest savings
Traditional banks don’t offer the best interests of saving accounts. Among the many perks of operating a virtual account is that it is much cheaper than a regular bank. That translates to higher interest on savings because of the costs you save. In a virtual account, your money might work harder for you.
Online customer support
Virtual bank accounts utilise online 24/7 customer support services. You can access support services at any time, anywhere in the world. You save much time and effort compared to traditional banks, where you have to deal with long queues and wait for business hours for assistance.
Also, virtual accounts have better technology, simplifying your banking operations and reducing the need to contact customer support.
More environmentally friendly
The advantages of virtual banking are not only fiscal. They also extend to the environment. For starters, there are no paper statements, no driving to the bank and no additional spaces necessary to house the staff, reducing virtual bank accounts’ impact on the environment. Also, with virtual bank accounts, you can become completely cashless further saving resources required for printing money.
Examples of Virtual Bank Accounts
Virtual bank accounts are growing in residential and commercial spheres. Businesses have also discovered the benefits associated with virtual accounts. The accounts are becoming more popular each waking day with growing examples of virtual bank accounts.
Fintech companies have dominated the virtual bank account market because of their readiness for innovation and technology. Pay iO offers one of the most popular virtual accounts with robust features for private and business use.
The accounts allow users to hold different currencies and enjoy competitive currency conversion rates when they need to exchange currencies.
With a broad network that features some traditional bank facilities, a Pay iO virtual bank account allows you to enjoy the convenience of both worlds. Users also enjoy unparalleled security features, including encryption and multi-factor transaction authentication.
This is another top virtual bank account that is most common among those travelling. Revolut offers easy international money transfers with no hidden charges. Also, you can hold your money in 30 different currencies allowing you to choose which currency is most favourable depending on your location.
The service aims to be among the first in the world to become a super financial app with its range of innovative products that generate hundreds of millions annually.
To make transactions easier, Revolut offers a pre-paid debit card that enables cash machine withdrawals in 120 countries. It also has other unique features like vaults for budgeting money and a cryptocurrency exchange that allows users to convert currencies into cryptocurrencies like Bitcoin, Ethereum and Litecoin.
Some of the largest economies in the world have also embraced virtual banking because of its convenience and reliability. Singapore, Europe and Hong Kong are some of the major destinations that have heavily invested and rely on digital banking to keep their economies running. Singapore recently granted 4 digital banking licenses, while Hong Kong has become the preferred destination for many virtual banks because of its promotion of innovation.
Tips to Help You Make the Most Out of Virtual Bank Accounts and Keep Your Money Safe
The most beautiful thing about virtual bank accounts is that they put the power back in your hands. That means while the providers invest in high-end security features, the security is also in your hands, and it’s up to you to use these features. These few tips should help keep you and your money safe while using virtual accounts.
Have a strong password
This password is the gate pass into your virtual bank account. It’s essential to use a strong password that isn’t easy to guess. The best practice is using a password manager to help you generate strong passwords for your account and save you the hassle of remembering multiple passwords by saving them in a secure vault that only you can access.
Verify emails and web addresses
Before entering your details on any website, double-check to ensure the web address is correct and that you’re on the official page of your bank or provider. When you get emails from your bank, verify that these are not phishing emails trying to get your details.
Even with a strong password and password manager, we strongly recommend using 2FA as an extra layer of security when using your virtual bank account. This will help the provider determine that it is you when logging in.
Don’t use public Wi-Fi
Anyone can access public Wi-Fi, which can sometimes be used to hack into your device and get your financial information. When accessing your account, you should always use a private network.