Virtual banks

Virtual banks are increasingly popular among investors. Since they have combined more advantages than the regular banks, people are attracted towards it. Now a day we are hearing more positive news about them. As the name suggests, almost all their entire activities happens online. Having all their activities focused on the web platform their operating cost minimized. No need for branches and no need for high paying multiple advisory. Consequence of all these the money savings are passed on to the customers virtual banks. In banking industry, the bank charges are very high and they are charging for each withdrawal but this kind of charges can be avoided in the online banks.

In virtual banks the administration fees and other regular bank charges are absent. You not only pay less but also the offer higher interest rates for your money deposited with then unlike the other street banks. With online banking, you can access your money at any time, 24h/24 and 7 days / 7. Sites are secure and the customer service is often of good quality. You can also automatically save practicing payroll deductions and pay yourself first. This behavior is preferred to achieve affluence smile icon Virtual banks. Finally, there is no bank fees charged; no minimums and most importantly, no limit transactions.

Online Banking Part.II

The only entities that have managed to sustain their existence are those that are backed by a bank, maintaining an independent identity. This allowed them to diversify their services, taking advantage of operational know-how and organization of their parent and thus offer very attractive prices. Boursorama is a convincing example of this model. Since its merger with Society General, Boursorama is no longer confined to the business broker but has become a real bank.

However, if the online bank has no place as an organization independent financial, recent operations have shown that online banking is now essential to any actor with a network. New entrants in the banking landscape have understood. Insurers having embarked on the adventure of assurfinance began with an offer to acquire or develop online banking in addition to the existing branch network.

The acquisition of online banks by banks should not be seen as a way to computerize the customer relationship. Indeed, banks are seeking to boost their network by opening branches. The agency is the best way to attract customers, offering Internet users the ability to simplify the management of operations.

However some players have managed to build a profitable business model around online banking service. This model is based on tactical development articulated in two phases:

(I) a startup focused on specialized and profitable activities. For example, the tactic is to capture customer deposits and generate commissions on high value added activities (securities, life insurance ...) and for which the customer is willing to pay.

(Ii) enlargement to daily banking activities (current accounts, credit card) which are less profitable because of investments in infrastructure require significant yield little and are subject to very strong competition.

Online Banking Part.I

The acquisition of Egg by Citigroup shall deliver to the agenda the question of the model of online banks. Founded in 1998 by Prudential, Egg has always been deficient - the French branch was sold in 2004 to Auchan in the development of banking activities and never managed to achieve the objectives in terms of customers. This is the situation common to most of the independent online banks. However, their creation in the late 1990s, online banks seemed to have a promising future thanks to the Internet phenomenon. How to explain such a setback?


At the beginning, the online banks were intended to attract a large clientele (Egg counted on a portfolio of 1 million customers in 2003, five years after its creation) by proposing a new banking model: an account management possible at any time and from any Internet-connected computer, with an offer "discount". Using the Internet as the only interface between the bank and the customer had to allow significant savings, both in terms of personnel but also capital assets. Thus, online banks offer rates were very aggressive on a range of services equivalent to that of a traditional bank. However, they failed to offer prices low enough to stand out, to forget the absence of physical relationship between the customer and the banker, and manage to capture some of the customers used to a classical model.

Weakened by the explosion of the Internet bubble in 2000, online banks could not withstand the intensity of competition in the banking sector, especially as traditional banks, although behind the banks line, developed or acquired equivalent services. The interest of a "pure player" of online banking has therefore been questioned since it was possible to combine customer relationship in a network, and maximum flexibility via the Internet.

Second life Of Online Banks Part.II

Boursorama is a convincing example of this model. Since its merger with Societe Generale, Boursorama is no longer confined to the business broker but has become a real bank. However, if the online bank has no place as an independent financial organization, recent operations have shown that banking online is now essential to any actor with a network. Newcomers in the banking landscape have understood. Insurers having embarked on the adventure of assurfinance began by acquiring or developing a range of online banking in addition to the existing branch network.

The acquisition of online banks by banks should not be seen as a way to computerize the customer relationship. Indeed, banks are now looking to boost their network by opening branches. The agency is the best way to attract customers, offering Internet users the opportunity to simplify the management of current operations.

Nevertheless, some players have managed to build a profitable model around online banking service. This model is based on tactical development articulated in two phases:

(I) a startup focused on specialized and profitable activities. For example, the tactic is to capture customer deposits and generate commissions on high value added activities (securities, life insurance ...) for which the customer is willing to pay.

(Ii) extension to activities of daily bank (current accounts, credit card) which are less profitable, because requiring investment in major infrastructure, earn little and are subject to very strong competition.

Second life Of Online Banks Part.I

In their early days, online banks were intended to attract a large clientele by proposing a new model of bank: Account Management possible at any time and from any computer connected to the Internet, with an offer "discount". Using the Internet as the only interface between the bank and the customer had in fact enable substantial savings, both in terms of personnel but also capital assets. Thus, online banks offer rates were very aggressive on a range of services equivalent to that of a traditional bank. However, they failed to offer prices low enough to stand out, to forget the absence of physical relationship between the customer and the banker, and succeed in capturing some of the customers used to a classical model.

Weakened by the explosion of the Internet bubble in 2000, online banks could not withstand the intensity of competition in the banking sector, especially as traditional banks, although lagging behind the banks line, developed or acquired equivalent services. The interest of a pure player in online banking has therefore been questioned since it was possible to combine customer relationship in a network, and maximum flexibility via the Internet. The only entities that have managed to sustain their existence are those that are backed by a bank, maintaining an independent identity. This allowed them to diversify their services, taking advantage of operational know-how and organizational parent companies and thus offer very attractive prices.