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Online Banks vs Brick-and-Mortar

The past few years has seen the rise of the online bank, typically the choice of younger generations, online banks such as Monzo, have become increasingly popular and mainstream, now competing with the traditional brick-and-mortar banks. I have been with a brick-and-mortar bank since the age of 15 – my parents took me to open my first current account instore, with the assistance of an advisor. Later, I opened a student account with the same bank when going to university, and eventually, I used their services to take out a mortgage on a property – it made sense to me to stick with what I knew. However, having recently lost my card, I attempted to freeze it using my online banking and found that the process was not an easy one – the conflicting instructions resulted in me being unable to access my account or use mobile payments until my replacement card arrived – which wouldn’t be for 5 days. In a panic, I researched my options, deciding that a back-up card and account would be useful, and that the quickest way to open one would be with an online bank. The process was relatively pain-free and very fast, it took under 5 minutes to enter my information and my account was approved within another 10 minutes. My card arrived the next day.

Brick-and-mortar banks

The traditional method of banking is still preferred by many; the face-to-face assistance on offer, along with the physical banking destination is a concrete presence that provides some customers with the confidence and peace of mind needed when trusting your finances with an institution.

The ability to speak to someone in person enables these banks to create personal and long-lasting relationships with their customers. It is not unusual for an individual to stay with one bank their entire lives, having built up a connection with the establishment, and a familiarity with their procedures and operations.

An account with a retail bank also allows you to deposit cash and cheques with relative ease, a feature that is not provided with all online banks.

Online banks

Having set up and used an account with an online bank for some time now, there are definitely benefits – and downfalls – to the services offered. Online accounts are quicker to set up; there are security measures such as voice and face recognition, document checks and personal information requirements, but the process is fast and seamless. The physical card came unbelievably quickly and worked straight away.

On the whole, I preferred the interface of the online banking app a lot more: it was cleaner, easier to navigate and allowed me to review my spending categories with more ease and clarity. I am able to freeze my card instantly and view all my card details on the app. It was also easy to add money to my account and send money to other contacts. One of the main benefits for me was the international feature of the card – whereas my bricks-and-mortar bank charged me to use my card abroad, I was able to use my online card without any fees when away in Europe. My online bank also pays me more interest on my savings.

However, when trying to add the card to my contactless wallet on my phone, it didn’t work. When I tried to troubleshoot this problem, it was not easy to do so, and I was unable to reach someone directly to resolve the issue. At this point, it would have been very useful to have access to a physical branch to which I could go and talk to someone who could help me.

Whilst there are clear pros and cons for both banking methods, there is no definitive right or better choice when it comes to choosing one. The right choice for you will depends on personality type and circumstance – dependent on how much you value face-to-face service, returns on your savings, how often you travel or how technologically minded you are. I still use my brick-and-mortar account for the majority of my transactions and direct debits but use my online bank when transferring money to friends and going abroad. This works well for me and also gives me peace of mind knowing that if one card is lost, I should still have access to another as I rarely carry them together. The ease of user experience on the online account does not outperform the benefits of face-to-face service for me, and I will not be abandoning my brick-and-mortar bank anytime soon.

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