An Overview of Branchless Banks (Strictly Online Banking)
Branchless banking offers a solid alternative to those who are skeptical of banking with a local or national bank, along with many perks.
Although you may not have heard of them, branchless banks are a relatively popular substitute for banking with a traditional branch. These services are usually provided online, allowing the user to use their banking functions from the comfort of their home. The internet, ATM machines, and mobile phones are three popular mediums used to access branchless banks. Branchless banking has gained popularity quickly in Europe and Asia, but is still gaining ground in the United States. There are several branchless banks in Kenya, Indonesia, and the United Kingdom.
Branchless banking is spreading because it offers several benefits to the customer. First, they save the user a good sum of money, because these banks don’t have distribution channels to maintain. As a result, branchless banks do not have an incentive to charge their clients any excess fees, as the fixed costs of their business is very low. In fact, it is estimated that branchless banking is 50% cheaper than banking with a standard branch. Consequently, the use of branchless banking is frequent among those who have low incomes.
There are several benefits associated with branchless banking, other than financial savings. For instance, with branchless banking, the bank isn’t closed on Sundays. Services usually operate 24 hours per day, depending upon the agent providing the branchless bank. You also forgo the long lines at the bank whenever you take advantage of this new technology. The ATMs offered by branchless banks are also more convenient than the ones provided by standard banks. For instance, most branchless ATMs allow you to withdraw cash in smaller increments. While most regular ATMs only allow you to withdraw a minimum of $20, several branchless banks allow you to withdraw amounts as low as $1.
There is also little to no paperwork involved with branchless banks. Thus, this system of banking is very convenient for those with low income or low literacy. Many people are too busy working to have time to deal with the stresses of dealing with a standard bank. The simplicity of branchless banks makes it easier for anyone with limited time to manage their finances.