If you’re like most of us, your bank is just a part of your everyday life. It’s where you keep your savings, receive your salary, or go for a mortgage or loan. Whether you ever go to a physical branch or not, you probably open your online banking app at least every few days.
Even if you’re quick to change your broadband provider or where you get your coffee, there’s a good chance you’ve never changed your bank. Maybe it’s still the one your parents chose. It doesn’t matter if the customer service is appalling or you don’t agree with the fees. The chances of you switching are about the same as the chances of you getting divorced. We are loyal to our banks. They define the economy as we know it.
In the face of the 2009 financial crisis, banks are only becoming more popular. About 95% of households in the UK and 93% in America have a bank account. That number is rising, coming close to 100% in some areas and for higher income brackets. As those controversial government bailouts show, our economy needs banks. But have you ever thought about how well they serve our needs? Not your particular provider, the whole banking system?
Let’s take a look at the pros and cons of the modern banking system.
First, what’s good about banks? Quite a bit. There’s a reason banks have been around so long. They’re generally the safest and most convenient place to keep your money.
Financial problems are a common source of stress. But you don’t need to worry about the safety of your money when it’s in a bank. Banks do still get robbed or hacked, yet they’re a lot safer than a pile of notes under the floorboards which could get lost in a fire or flood. Should anything happen to your money, bank accounts are insured in most countries. Home insurance tends not to cover large amounts of cash.
Then there’s the matter of convenience. You can access money kept in a bank account anywhere with an ATM, even abroad and usually 24 hours a day. Online banking has removed the need to head to a branch to check your balance or pay a bill. Banks have evolved to meet our major financial needs. Most offer a diverse range of services – checking and savings accounts, private services, investments, retirement accounts, loans, safe deposit boxes and more.
There are also many drawbacks which make banks less practical at times.
The most obvious drawback to modern banks is their fees. Many people work abroad to support their families and find a large chunk of their wages goes on transfer fees. You might also get charged for becoming overdrawn, for withdrawing money abroad, for closing an account, for refused direct debits, or for using certain ATMs. While low interest rates are not a fee, they do mean your savings lose value over time.
Despite high fees, transfers and transactions can take days to clear. This isn’t necessary anymore. Money gets transferred digitally these days – no one is mailing a check or delivering a pile of bank notes. The problem is that banks have to jump through a lot of legal and technical hoops to shift money.
Online banking has presented other problems. The perception of banks as 100% secure leads many people to be careless with their details. Every day, thousands of people fall victim to phishing scams. Many others use the same passwords for different accounts or get hacked.
Over the last few years, banks have begun placing more emphasis on their online services. Some newer banks have no brick and mortar branches. This is great unless you don’t have reliable internet access. Older people might be uncomfortable with online banking or might find it confusing. If a bank’s server goes down, everyone loses access to their accounts.
Brick and mortar branches can be inaccessible to many people. This is a problem as some services, such as depositing cash, can’t be done online. Most banks are open 9-5 on weekdays, times when most of us are at work. With branches shutting each day to cut costs, the convenience factor isn’t as persuasive as it used to be.
Another big issue is that banks may mislead customers. Remember the Wells Fargo scandal when employees opened 3.5 million accounts for customers without permission? Many victims paid fees for services they didn’t need or want. Others saw their credit scores suffer, again through no fault of their own. And who can forget PPI? Millions of people paid for a useless product, again often without their consent. Cases like these are not unusual.
So where do we go from here?
Until recently, we didn’t have a good alternative to traditional banks. Cryptocurrencies now offer a way to manage our money without centralized control.
That’s why Wirex is releasing an advanced cryptocurrency banking platform. You’ll have access to those vital everyday services- making and receiving deposits, setting up standing orders, a debit card and more – without many of the problems traditional banks pose.
We’ve come along way since the days of moneylenders in temples. With a crypto friendly bank account, you’ll have the best of both worlds. Reliability, plus transparency and flexibility.