An Overview of European Online Banks
In today’s dynamic financial landscape, traditional banking institutions are encountering a formidable contender – the rising wave of European online banks. Let’s delve deeper into what makes these digital banking solutions stand out.
Digital transformation sweeps across different sectors, and the banking industry is no exception. Innovative online banks are altering people’s approaches to financial planning and managing.
Discover the many sides of using European digital banks and financial platforms as we set sail on an exciting journey throughout this article.
Table of Contents
What is digital banking?
Online banking allows customers to make transactions such as fund transfers, check deposits, and bill payments only by using their computer or mobile device.
More and more people are migrating to digital banking. This shift happens because traditional banks sometimes charge high fees for currency exchange or global transfers and might not support foreign stock brokers or cryptocurrencies.
Furthermore, it’s worth noting that while traditional banks and credit unions do offer online services, digital banks and financial platforms often excel in mobile convenience. While you won’t have the opportunity for in-person meetings, you can access your bank account securely and conveniently from your device.
This mismatch with modern needs propels the rise of digital banks and decentralized finance (DeFi), which cater to investors, travelers, freelancers, and small businesses, offering a fresh financial experience.
Top digital banks in Europe
Here is a thorough list of top online banks in Europe you may want to consider.
Monzo, a prominent UK-based digital bank, has gained recognition for its user-friendly mobile app equipped with robust budgeting and expense tracking features. Beyond this, it offers seamless management of recurring payments and even provides borrowing options when financial needs arise.
You can use Monzo in any country that accepts MasterCard without foreign transaction fees. It provides overdrafts, loans, quick money transfers, and links to online businesses.
Moreover, you can set budgets, pay direct debits, earn interest on savings, and organize your money into different pots for various purposes.
In short, Monzo is a convenient digital bank with strong budgeting tools and a user-friendly app, suitable for travelers and anyone who wants to manage their finances effectively.
Revolut, the UK-founded FinTech firm, stands out for its innovative offerings across 33 countries. Founded in 2015 to address issues with traditional banking, now Revolut revolutionizes global financial dynamics.
It offers swift, economical domestic and international transfers, P2P payments, affordable card usage abroad, and ATM withdrawals. The heart of its services is the debit card and intuitive app, streamlining banking activities.
Moreover, Revolut has secured a US broker-dealer license for diverse investment options and offers sought-after Revolut and Revolut Metal cards, with the latter giving 1% cashback.
Functioning as a one-stop shop, Revolut covers varied financial needs. Its services span personal loans, eMoney accounts, travel insurance, lower exchange rates, and cryptocurrency trading.
Notably, Revolut lacks overdrafts, joint accounts, and interest on savings.
Wise is a financial services firm established in the United Kingdom. Originally known as TransferWise, it gained prominence as a platform for affordable transfers and expanded its offerings to include banking services.
Renowned as a peer-to-peer online foreign currency money transfer service, Wise operates a multilingual website.
It allows users to open borderless free personal and paid business accounts and transfer and receive money globally in over 59 countries, with minimal costs compared to the major banks and PayPal.
Notably, Wise supports global ATM transactions, and local currency transactions and seamlessly integrates with Apple Pay and Google Pay.
Transfer fees depend on exchange rates, the amount sent, and the chosen payment method. Wise stands out for its transparent approach, while other financial institutions often levy hidden currency exchange charges.
Users widely applaud Wise’s service and web interface, although rare negative feedback highlights concerns about a SWIFT registration process and potential confusion about account creation. It highlights a common sentiment toward banking services: administrative complexities and unclear processes.
Established in Amsterdam in 2012, Bunq is a neobank that has captured the attention of young people across Europe. This socially responsible banking option has successfully acquired a substantial following because of its eco-friendly ethos and appealing travel features.
With more than 5.4 million monthly active users, Bunq has firmly established itself as a frontrunner among cutting-edge service providers.
It’s the first European challenger bank to sell mortgages. Moreover, it offers useful features like local IBAN accounts and user-friendly investment alternatives.
Higher transaction limits, travel insurance, and a metal debit card are just some of the perks of Bunq’s premium accounts.
Sustainability is the main focus for Bunq, as evidenced by their Green Card program, where users plant trees with every €100 spent.
However, while it has achieved much in these areas, there are still lingering concerns about the security and functionality of the app.
Monese simplifies and expedites online account opening, making it possibly the quickest method available. Though based in the UK, it’s accessible across 20 countries using GBP and Euro, offering free international transactions and transfers within the same currency.
It’s an all-in-one money management app for payments, bill payments, and even overseas transfers, with additional features like payment insurance.
Their banking app, available in a free basic version, features a range of helpful functionalities. However, fees for specific transactions could be substantial for frequent users.
As an inclusive digital bank, Monese doesn’t necessitate credit checks for current account setup. Therefore, Monese serves as an accessible solution for those facing challenges opening a bank account in the UK or Europe.
Monese’s Simple bank account is free of monthly charges, yet service fees apply for card delivery, cash top-ups, and international transfers.
The Classic account is tailored for individuals using Monese as their primary bank or for those frequently utilizing cash and international transfers.
Which is the best international online bank?
The already mentioned banks, such as Wise, Monese, or Revolut, are an excellent choice if you feel the need for international transactions. However, if these banks do not appeal to you, there are also other great options to consider:
N26 is one of the European challenger banks that offers international accounts, foreign currency transfers, and a debit card. Also, N26 offers features like apps, ATM withdrawals, and travel insurance.
Charles Schwab is a US-based digital bank that offers a European bank account with no ATM fees worldwide. Moreover, you can access investment and trading services. It makes Charles Schwab a great option for ex-pats and frequent travelers.
HSBC is a global bank that offers international bank accounts and a range of features like online banking, apps, and foreign currency services. You can access HSBC in many countries worldwide. Therefore, it is a convenient option for international banking.
ING is yet another option for digital banking. You can do all your banking, bill paying, and wire transfers online with ING. Nonetheless, it offers online access to savings accounts, investment options, insurance, and financial planning services.
With a keen focus on ‘Generation Z’ customers aged 16-25, Rebellion sets itself apart. They were the pioneering challenger bank in Spain to secure a banking license and provide International Bank Account Numbers (IBANs).
In order to cater to its youthful user base, Rebellion stays at the forefront of innovation. A noteworthy example is their integration of Google Maps ‘Location Intelligence,’ allowing users to access merchant location technology for added convenience.
Alternative digital financial service providers
Lately, we see more and more new financial service platforms that provide businesses with various finance management options. Using modern technological and conceptual innovations, these financial service providers offer monetary services in many forms.
One of the examples is swissmoney. A Swiss-based financial solution provider offers borderless personal and business accounts that you can open in under 10 minutes.
Money transfers, payments, and lightning-fast approval for top-ups are just some of the standard services made available by swissmoney. Besides basic services, swissmoney offers a debit card and an app that you can use to manage your digital assets in different currencies: traditional and crypto.
Despite its many banking characteristics, swissmoney is not a bank. However, the Swiss Financial Market Supervisory Authority (FINMA) has approved them as a legitimate financial services provider.
Digital banks in Europe: How to choose?
Choosing a virtual bank in Europe can be a daunting task. Here are some tips and factors to consider:
When it comes to choosing from many digital banks in Europe, research is fundamental. Do your homework and compare digital banks to learn more about their features, costs, and services.
You should start by checking out what previous clients have said about an online bank account. Insights into the bank’s customer service, availability, and customers’ general happiness can be gained from this.
Look for common complaints or issues that customers may have had and compare these across different neo and traditional banks.
As you choose a digital bank in Europe, it’s crucial to consider the associated account fees. Some online banks provide fee-free accounts or reduced fees compared to their traditional counterparts, enabling you to make savings on your banking expenses.
Nevertheless, it’s essential to be cautious of concealed charges that may not be immediately apparent. For instance, certain banks might impose fees for ATM withdrawals or foreign transactions. These costs can quickly add up if you frequently travel or use your debit card internationally.
Therefore, carefully review the fine print and inquire about potential charges to avoid hidden fees. Prioritize online banks that uphold transparency concerning their fees, offering competitive rates and lower costs when contrasted with other institutions.
Check, if the bank is insured and supported by either the FDIC or a European bank. This step guarantees the safety of your funds in case of any unforeseen issues.
Security is paramount in a bank, and every financial institution should exhibit high-level security. Robust measures, such as client verification, identity authentication, transaction confirmation, authorization protocols, and possessing a valid financial license for digital banking, should be integral.
The Federal Deposit Insurance Corporation (FDIC) provides crucial insurance for your deposit accounts, encompassing checking, savings, money market accounts, and CDs. This safeguard shields you for up to $250,000 per depositor within FDIC member institutions.
Many online banks carry FDIC insurance and often highlight this on their websites (Member FDIC). Despite the presence of the FDIC logo on a site, it is advisable to navigate to the agency’s official website to verify compliance.
Many top contenders grant users access to expansive networks of ATMs, often without subjecting them to ATM fees for cash withdrawals.
Nonetheless, the landscape varies; particular online banks, especially those with online savings accounts, might not provide any ATM access. A prime example is American Express Personal Savings, which doesn’t offer ATM or debit cards.
As you deliberate your online banking goals, meticulously assess which attributes matter most to you – seamless access for day-to-day expenses and cash retrieval or a repository for savings, capitalizing on a higher APY.
For those with frequent travel plans, aligning your choice with a bank boasting a robust ATM network for cash withdrawals can be a savvy move. However, among digital banks, certain ones furnish international cards, facilitating cost-free cash withdrawals at local ATMs.
When selecting a digital bank in Europe, tailor your choice based on your anticipated usage. Digital banks and their current account vary in their advancements, so consider your needs before making a decision.
If you need features like automatic bill payments or direct deposits, opt for a bank that offers these as standard to avoid extra fees. Moreover, assessing the bank’s mobile app and checking for an intuitive interface and 24/7 support is equally important.
However, many seek online accounts for specific financial goals, like higher savings rates. It is okay if you focus on one aspect of digital banking and keep other funds in a traditional bank.
Nonetheless, it is crucial to recognize that numerous digital banks are diversifying their offerings. Many banks are expanding their portfolio to encompass checking accounts, ATM or debit cards, certificates of deposit, personal and business accounts, credit cards, currency transactions, loans, etc.
While online banking might not match the comprehensiveness of full-service brick-and-mortar institutions, a growing number of online banks are venturing into more areas, progressively offering a wider array of financial services.
Ensure that the European online bank you select possesses the necessary licenses and regulatory approvals to operate within your country.
Seek out loan companies governed by reputable entities like the European Central Bank or the Financial Conduct Authority (FCA) in the United Kingdom. These regulatory bodies impose stringent requirements to ensure customer protection and uphold the integrity of the financial system.
Also, take note of any constraints linked to your nationality or profession. Many European digital banks presently do not serve individuals residing in sanctioned regions.
Nevertheless, they may readily establish accounts for those holding residency permits or citizenship from other countries. In this context, your objective is to ascertain the bank’s licensing jurisdiction and the specific country’s regulations it complies with.
Can I open a bank account online in Europe?
You can create an online account in Europe. And do it even without setting foot in a branch.
Opening a digital bank account in Europe may have different prerequisites and procedures depending on the bank and the country.
When opening a digital account in Europe, you will most likely be requested to provide personal information such as your name, address, date of birth, and nationality. You might also need to show proof of your identity, along with financial and job information.
Some banks may require a video call or other verification process to confirm your identity before opening the account.
It’s also worth noting that some online banks may limit who can open accounts with them based on factors like where the account holder resides physically.
Which is the best online bank in Europe?
There is no one answer to which online bank is the best in Europe. However, there are many widely accepted digital banks offering personal and business accounts, fund transfers, automatic bill payments, and debit cards to consider:
- TransferWise (Wise)
Are e-banking and online banking the same?
While people often use the terms e-bank and online banking interchangeably, there exists a distinction between them.
E-banking, or E-bank refers to a financial institution that operates exclusively online, without physical branches. All transactions occur digitally, and traditional activities like cashing checks or depositing physical money aren’t possible.
In contrast, online banking is the process of handling monetary transactions via the Internet rather than at a physical bank. The term “EFT” refers to the electronic transfer of funds.
You may manage your finances from the convenience of your computer or mobile device with online money management software.
In an effort to reduce foot traffic, several financial institutions are transferring their services online.