Is My Money Safe in a Digital Bank Account?

Shalom Solomon 30th March, 2021

Digital banks are the future of banking in years to come. At present, more and more people are subscribing to the internet to meet their everyday needs. Why not banking too?

Digital banks are simply internet only banks. That is to say, they carry out all the functions of a traditional bank but, they do not have a physical location.

Digital banks are growing increasingly popular not just for the convenience of banking whenever and anywhere you want, but for a number of reasons too.

They offer speedy transactions, low banking fees and higher interest rate when compared to the traditional banks. Also every operation is carried out online meaning, you'd never need to stand on a queue for any reason.

With all these benefits though, a number of people are still reluctant to use digital banks. Their major concern being that these banks have no physical location. Naturally, they do not feel comfortable sending their physical cash to a bank that they cannot see or touch.

This is the biggest advantage raditional banks have over digital banks.

So far, security concerns have been the major drawback for digital banks. Most often than not, when posed with the issue of digital banks, people express concern over their legitimacy.

Are digital banks safe to use?

We'll see. Let's go through some of their major features for now.

Photo Credit: Pexels

1. Are They Approved by the CBN?

Yes. Almost all digital banks are registered and liscenced by the Central Bank of Nigeria as Microfinance banks. So, if you are unsure about a digital bank, you can always confirm if such a bank is liscenced by the CBN. An easy way to do that is to search for the bank's name using the search box on the CBN official website.

2. ID Checks and Authentication

Before opening a fully operational account, digital banks would require the submition of a soft copy of a government issued ID and or just your NIN and BVN. Though some banks like Kuda have the tier 0 account where you can only make cash deposits of a maximum of 300,000 without providing the necessary documents and information.

3. Security Measures

With digital banks, you can protect your account with a unique password. Meaning that, no one can access your account and make transactions without the password. Some digital banks alos offer users the option to lock the debit cards from their mobile phones. So in cases where the card is stolen, it would be impossible for any withdrawal to be made.

4. Do You Have Access to Your Money?

Yes, you do have access to your money. I'll tell you how.

Debit cards: Digital banks issue debit cards for free in some cases for a little sum, to users. You can make withdrawal from your account using any ATM across Nigeria.
Transfers: You can transfer funds from your digital bank account to a regular bank account and make withdrawal.
Notifications: a notification or an alert is sent to you on every transaction. Either through an SMS, an email or both.

So, are digital banks safe to use?

Yes, they are. Your money is safe in a digital bank. Not only do they offer good security measures to protect your account, they are also liscenced by the Central Bank of Nigeria.

Now, more digital banks would keep coming up with time, it is left to you dear reader to ensure that such a bank is fully liscenced before using their services. No matter attractive their interest rate and other benefits may seem, be sure to confirm if they are legit.

Check out our post on the Top Digital Banks in Nigeria

Thanks for reading :)