Learn about the advantages and disadvantages between traditional and digital banks

Currently, there are many banks available to Brazilians, and despite the positive side of having a greater variety, it can also pose a problem for a large portion of the population, who are unsure about which financial institution to choose to open an account, considering issues such as security and evaluating whether the bank is traditional or digital.

According to thefinancial educator, João Victorinotraditional banks are under a much more robust and demanding regulatory umbrella, with higher regulatory, fiscal, and personnel costs, while theneobanksthey have fewer legal requirements in comparison. For example, it is in the law that traditional institutions must provide rooms for the use of oversight agents.

"The Basel requirements, that is, a safety standard that sets limits on loans based on the financial institution's capital, supervision rules, and transparency in information disclosure, provide greater security for traditional banks compared to new banks, as the regulator adapts the rules for small ones, slightly easing some requirements," he explains.

João believes that people need to carefully analyze the characteristics of each bank before deciding to open an account with the financial organization. With that in mind, the financial educator decided to list the main advantages and disadvantages of traditional banks and digital banks.

Traditional Banks – Advantages:

1. They offer a wide range of financial products and services.
2. In-person service available, which can be useful in more complex situations;
3. Greater tradition and recognition in the market.

Traditional Banks – Disadvantages:

1. There may be higher bank fees;
2. More bureaucratic processes in some operations;
3. Less agility in technological updates.

Digital Banks – Advantages:

1. Fee waivers on many services, account maintenance, and credit card;
2. Account opening and operations completely online.

Digital Banks – Disadvantages:

1. Remote-only service, which may be insufficient in more delicate cases;
2. Product portfolio still limited in some cases;
3. Little presence for people who prefer physical contact.