The Rise of Digital Banks

As we grow heavily dependent on computers, smartphones, and the internet, it is inevitable that most of our activities shift– or at least make use of technology– to keep up with the changing habits of people that also brings convenience. 

Take banking for example. While queueing in physical stores or banks is still common, banks have also made a crossover to mobile and digital media to bring their services to their customers in the form of “fintech”. You have probably heard of this term, a portmanteau of the words “finance” and “technology”. This term has been floating around for quite a while now and it refers to how technology is being used to bring financial services more conveniently and efficiently to customers. While the definition of the term may vary and may widely covered the banking industry, I think it is safe to say that fintech is the foundation of how digital banks are created.

Digital banks are not new in the Philippines. I, for one, got aware of digital banks around three years ago, through CIMB via Gcash and ING Philippines. However, the concept of digital banking was new to me at that time and I have active traditional bank accounts opened in some of the top banks in the Philippines so I did not see the value of applying for the digital ones. 

What are digital banks and digital bank accounts?

Digital banks are app-based or online-based banks that are established without the need for a physical store (bank branches) to operate. Transactions and account management are done exclusively online or through a mobile app.

What makes digital banks different from traditional banks?

No maintaining balance. Since the maintenance of digital banks is purely online, there are fewer costs and expenditures to spend money on.  Usually, a maintaining balance or initial deposit is required when opening a traditional bank account. Bank people explain that this maintaining balance is used to keep our bank accounts active and also a source of funds to maintain banking facilities (i.e. physical stores) to keep the operations going. If you are familiar with prepaid cards (which used to be hot bank products back then as well), you might have learned about non-maintaining-balance cards like Unionbank’s EON, however, this card has an annual fee of at least Php500.

Convenience. Digital banks offer quick transactions through dedicated mobile apps in just a few taps without the hassle of lining up in a physical bank’s store.

Paper trail. Since every transaction is done online, records of transactions are also stored online, preventing piling up of bills, receipts, or any paper waste that will just eventually collect dust in your home or go to trash bins.

Higher Interest-bearing accounts

Did you know that when you save your money in traditional banks, your money will only grow at least 0.1% annually? With digital banks, your money can earn at an interest rate of 1% or higher. 

Fewer Charges (or none at all!)

Transferring funds to and from digital banks are free of charge. Cashing in and cashing out are also free of charge.

Cash withdrawals are often free of charge through dedicated ATMs but may be charged around 15-20 after several consecutive withdrawals per month.

Also comes with debit cards

Most of the digital bank accounts that I have usually come with a debit card that is VISA-powered, thus making it useful for international transactions as well.


While there are good points that make digital banks a great option for saving and growing your money, there are also some risks and disadvantages.

Internet connection reliance

if ever you need to transfer funds, check your balance, or cash in and out of your account, you need the app on your smartphone to be connected to the Internet.

Risk to cyberattacks and glitches

Since data are saved and stored through cloud storage, the possibility of hacking and losing data through unforeseen circumstances.


I am not sure yet how digital banks perform in terms of client support for issues regarding accounts, transactions, deposits, and other services, but customer assistance may or may not be stable or established as of yet.

Upon some research and comparisons against traditional bank accounts, I see the benefits and advantages of having digital bank accounts, so together with my traditional bank accounts, I opened and tried out some of the popular ones. Check out the list below.

  • CIMB (CIMB via Gsave)
  • ING Philippines
  • Tonik
  • Komo by Eastwest Bank
  • iSave by Maybank

I will write about (or review) these cards in the coming days. 😊😊😊

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