Is Your $$$$$ At Risk With Digital Banks?

Is Your $$$$$ At Risk With Digital Banks?

Is Your $$$$$ At Risk With Digital Banks?  No sirrrrs, I'm NOT here to harangue OR bad-mouth digital banking because it is generally safe and NOT that easy to hack.  And to be fair to digital banks, they are required by their respective country banking regulators to implement precautionary measures to keep the clients' monies safe.  Popular measures rolled across borders include data encryption, MFA [multi-factor authentication] and compliance with deposit insurance.  So, Is Your $$$$$ At Risk With Digital Banks???

So, WHAT lures us to digital banking?  The past year OR so, I've been receiving an avalanche of marketing emails and even SMS notifications from new digital banks now in operation in my country.  So, you might ask, have I fallen for those aggressive marketing ploys to date?  Unfortunately, I'll admit that I remain hesitant those enticing offers of higher interest rates for obvious reasons💧💧💧

So, WHAT holds me back?  First and foremost, let's admit it, through the years [decades in fact], we have all been comfortable with those traditional brick-and-mortar banks.  BUT given the recent collapse of U.S. banks Silicon Valley Bank and Signature Bank, it behooves that we look at the fine print of digital banking safety.  For your awareness, in-country banking regulators are the very cornerstone of consumer confidence in the banking system because of the required depository insurance💦💦💦

Be informed of 'fintech intermediaries' wherein the digital bank is literally linked with a traditional bank.  Look no farther than the most recent collapse of US-based SYNAPSE wherein the traditional bank to whom SYNAPSE was linked had not filed for bankruptcy.  So, technically, the helping hands of U.S. FDIC [Federal Deposit Insurance Corporation] was tied behind its back.  NOT to scare you folks but popular banking apps like PayPal [oh no, I do maintain a small-small account there] and Chime only 'PARTNER' with banks [INSTEAD OF OWNING THEM]😌😌😌

Feel free to browse the CNBC Synapse update @ https://www.cnbc.com/2024/07/02/synapse-fintech-fdic-false-promise.html.  Our takeaway:  Nothing wrong to have digital banking accounts BUT please LIMIT YOUR EXPOSURE.  Never be lured by the higher deposit interest rates by putting all EGGS IN ONE BASKET.  At the end of the day, prudence dictates upon us to be aware of the differences of e-wallets versus e-vaults so you have your answer to the question 'IS YOUR $$$$$ AT RISK WITH DIGITAL BANKS?💥💥💥