Digital banking involves providing financial services via an online channel. With the advancement in technology and customer loyalty in traditional banking down since the 2008 financial crisis, digital banking continues to gain popularity. One notable example is Toronto-headquartered, Black Banx. Black Banx was launched in 2015 by creator and CEO, German billionaire Michael Gastauer. The digital bank provides services to over 45 million customers, with operations in 180 countries, and brings in billions of dollars in revenue every year. Organisations like Black Banx continue to flourish within the market for a number of reasons, most notably: security, accessibility and sustainability.
Security
Online banks are as secure as traditional institutions, with deposits protected and the best practices implemented to make sure customer data is protected. At Black Banx, funds are protected using the company’s globalised approach. By developing strong relationships with banks across the world, client money is never held in one country, it’s split to ensure safety. Black Banx provides the highest level of protection by keeping segregated accounts at leading banks in various countries. As a result, customer funds are globally diversified and protected by multiple jurisdictions.
In addition, the digital bank is PCI DSS 3.2 certified. Complying with data security standards, a team of experts ensure security is of the highest priority within the company. Servers are located in ISO certified data centres, taking into account the highest standards of the banking industry. Payment software uses fully encrypted and secured ISO 20022 certified messaging schemes for payment execution and data transfers. It’s obvious digital banks understand traditional banking customers’ worries surrounding the security of their funds, however, there’s little to no difference when looking at the protection traditional banks offer compared to the likes of Black Banx.
Accessibility
The accessibility of digital banks is tied into financial inclusion – providing financial services to those generally excluded from the finance sector. With digital banks offering fast sign up and immediate access through online or more likely, a smartphone app, digital banks are open to anyone that needs them. This is a core message of Gastauer’s Black Banx. Black Banx aims to provide financial services to individuals, businesses and institutions. With account opening completed in minutes, and no discrimination based on income, employment or where they are in the world, an individual can have their hands on a bank account – a first for many – almost instantaneously. It’s this first step that spurs on financial inclusion. Institutions like Black Banx are able to promote economic growth, both locally and globally, by providing services to those who are normally excluded from the sector.
Black Banx increases the simplicity of online banking, provides transparency with the introduction of cross-border flat fees, and dramatically reduces transaction times. Customers are able to use established global networks to process money without transaction limits. This enables them to send and receive payments almost instantly. Gastauer added, “We [Black Banx] want to build products and experiences at the intersection of our business and consumer ecosystems, unlocking seamless value for both.”
Sustainability
Digital banking has been said to have raised the bar in terms of sustainability, and Black Banx is a prime example of this. In the fight against climate change it’s important for companies to implement strategies that prove they’re working in the best interest of the environment. Black Banx has set an ambitious goal to become net zero by 2030 across all direct and indirect emissions. The digital bank has committed itself to aligning all business activities with the objectives and timelines of the Paris Agreement. Gastauer added, “Our aim is to be thoughtful and transparent in the way we address the climate crisis and to be held accountable for our actions and actions.”
Black Banx has three main elements of its sustainability strategy: stay at home, go digital and work from anywhere. Employees are encouraged to work from home with the idea of reducing fuel and energy consumption. As a positive, employees can eliminate lengthy commutes to work and back, allowing more time to be spent with family and friends. Business meetings are slowly being phased over from physical to digital, something that dramatically increased since the Covid-19 pandemic. The switch saves valuable working hours and reduces fuel usage.
Overall, digital banking provides a range of benefits that traditional banking lacks. Black Banx has become a notable company in the fintech industry as it alleviates financial exclusion whilst providing general banking services to those in need.