The time when you had to wait in line for hours at the banking hall just to send and receive cash is long gone. In the current digital era, you can access your bank account anywhere, anytime. Virtual banks can help with this.
Captive, branchless, and anytime-anywhere virtual banks offer services similar to conventional banks. To make a transaction, one only has to press a few buttons on the computer or phone. All online banks provide their clients with an application that makes managing money on the phone easier.
This article will review the emergence of virtual banks, their differences from regular banks, the benefits and common features, the evolution of banking, and how to open a virtual bank. You’ll also discover how to pick a virtual bank and so on. Let’s begin.
What is Virtual Banking?
A financial organization that offers banking services over the Internet or other electronic channels rather than physical branches is referred to as virtual banking or online banking. Customers can use websites and mobile applications to manage their funds with virtual banks.
At present, you can make use of traditional bank accounts to send money, pay bills, and also manage your finances through a website or an app. Virtual banks have the same services but operate solely online without any physical locations. This lowers the overhead expenses of physical branches for the banking services provider.
Benefits of Using Online Banking for Business Owners
Saving money on banking expenses is a significant benefit of virtual banking that you won’t receive by using digital tools at traditional banking. The majority of virtual banks do not charge fees for overdrafts, monthly maintenance, or minimum account balances, and usually, their fees are lower than those charged by traditional banks. The interest rates or annual percentage yields (APY) provided by digital banking platforms are often 1.0% to 2.0% higher than those of traditional banks.
- Access your finances from anywhere: You are free to conduct your financial activities from anywhere. You can make and receive payments at any time and in any place where you are conducting business. You can use applications or websites to perform online banking transactions.
- Easily pay bills and monitor your spending: Easily track your spending and pay bills with digital automation tools that help you manage deadlines and make informed financial decisions so you can better control your expenses.
- Safeguard your account: Online banking is more secure than using cash. You can easily pay anyone without worrying about theft or loss, plus you have full control over each transaction. It will be easy to remotely lock your card(s) and roll back fraudulent transactions in case your account has been compromised.
Common Features of Virtual Banking Platforms
The majority of virtual bank accounts share these characteristics:
- Deposits of mobile checks
- Automated payments and real-time notifications can help you better manage your cash flow and remember deadlines.
- Accounting software, payment acceptance software, and tools for billing and managing expenses
- Sub-accounts, which let you set aside funds for long-term company objectives or wages
Online and Virtual Banking: What Are the Differences?
As banking changes, it’s good to know the difference between online and virtual banking to make smart money choices.
| Feature | Online Banking | Virtual Banking |
|---|---|---|
| Overview | Banking using the internet with regular banks. | Banking that’s only online, with no branches. |
| Physical Presence | Connected to banks that have physical branches. | Completely online, no branches at all. |
| Services Offered | Basic banking services, with some in-person help. | Similar services, often with unique digital tools. |
| Customer Interaction | Provides help online and in-person. | Mostly offers help online through chat or email. |
| Fees | Might have higher fees since it costs a lot to manage branches. | Usually has lower fees or no fees at all because there are no physical branches. |
How to Select the Right Virtual Banking Platform for Your Company?
Below, we have mentioned five major things that can help you select the right virtual banking platform for your company:
- Insurance for deposits: Look for an account that has Federal Deposit Insurance Corporation (FDIC) insurance. They provide regular deposit protection up to $250,000, so you won’t lose your money if a bank fails. With sweep networks, many accounts now provide even greater safety.
- Minimal fees, High annual percentage yield: Check for the best interest rates and fees; high charges can lower your earnings, but a high annual percentage yield (APY) on a checking account can help your money grow without needing to move it elsewhere.
- User-friendly app: Opt for a business bank account that is the most widely chosen by business owners and also includes a mobile banking app for transactions on the go.
- Accessible customer support: Customer service is crucial because virtual banking is conducted fully online. Select a business checking account that comes with live chat or a phone number where you can reach representatives.
What Do I Require to Open a Virtual Business Bank Account?
With most virtual banking services, opening an account online is simple and takes only a few minutes. Although specific criteria may differ, you will normally need to supply the following:
- A few essential details about you and any other business owners
- Your social security number, driver’s license, or any unique identification.
- Your EIN or tax ID number
- Legal documents for businesses (see below)
- Perhaps a minimum initial payment
The kind of business you operate will determine which legal documents you must submit:
- Sole proprietorships: A business license and name registration certificate are necessary.
- Partnerships: partnerships need a state certificate of partnership, a business license, a partnership agreement, and a business name registration certificate.
- LLCs: Articles of organization, an LLC operating agreement, and a business license are necessary.
- Corporations: Articles of incorporation, corporate bylaws, and a business license are necessary for corporations.
The Evolution of Virtual Banking
Despite being a relatively new addition to commercial banking, virtual banking is already changing due to new trends. AI and machine learning are enhancing recommendation algorithms and chatbots to help you see relevant products and get problems fixed quickly.
Open banking is another prevalent term that can help business people become more effective. It allows the integration of banks with fintech firms to offer different financial services in a single location.
Blockchain technology and cryptocurrency can provide transactions that are completed in a shorter amount of time; in addition, they are more secure and less costly.
Both customers and business owners are going to find virtual banking a bigger part of their daily routines. There are plans for voice banking and using smart devices like Google Home and Alexa. Augmented reality (AR) could make banking more engaging. Security will always be a big concern, especially as virtual banking gains popularity.
Cheqly: Banking Made Easy for Your Business!
Starting a bank account with Cheqly can give your business a great boost, as it provides a simple way to open a small business account with no monthly fees or minimum balance requirements. With FDIC protection of up to $250,000, your funds are secure. As a business owner, you’ll benefit from a range of financial management tools, robust security features, and experienced customer support.
Open Your Cheqly Account Today and enjoy easy banking.