With the FinTech disruption all around us, digital banking, seamless transactions etc. being the play it was time to research and get on to a digital bank and say goodbye to atleast one of the traditional ones we (my missus and I) bank with.
A digital bank mostly is a bank that does not have a physical branch at all, meaning its only digital or you can contact through a call center. In the last few years there have been plenty of digital banks that have been cropping up in Germany and are doing great, like comdirect, ING Diba, DKB and the newbie N26 who seems to be everyone’s darling – they are becoming like “Apple” in the digital banking space, it’s like a must to have them.
And N26 has English support in Germany. Yes, you read it right, customer support in English.
So as we started our research, we needed 2 things very clearly:
Firstly the fee on transactions and on cash withdrawals had to be free anywhere in the world, given the amount of travel we are currently doing. DKB stood out on the NO CHARGES front. For all you N26 fans, they charge nearly 2% on cash withdrawals outside of mainland Europe currently.
You must be thinking, whether banks in Germany charge for cash withdrawals and the answers are yes and no. It totally depends on the bank, as banks align to the following consortiums or groups as they are called, where there are no changes on the withdrawal, else you could end up paying upto 10 euros per withdrawals.
Type of Groups:
The advantage with these digital banks is that they give you a master or visa credit card, which does not charge this fee when you withdraw from the respective visa or master ATM in Germany and mainland Europe.
The second aspect we looked out for is a bank that would give us a return for having money with them on our current account. Traditionally a current account (salary account or basic account) in Germany does not pay any interest and you have to open specific savings account to earn a return, whilst in India, the salary account doubles up as the savings account.
DKB ticked this as well, paying out 0.2% p.a. for up to 100000 euros, so you do get a little back and not only that, if you hold money on you Visa account, meaning you top up your credit card account and it pays upto 0.7% like most other digital banks do as well. Whilst these numbers might seem absolutely low compared to countries like India, we have to understand that with inflation being so low in Germany, interest rates are also really low.
So, we got online on dkb.de and filled out our form on their portal, took exactly 6 minutes and ping, we had an email asking us to do a video identification. So you could choose a video identification from the comfort of your laptop or do a physical identification where you take the documents and head to the local post office / any other physical bank branch along with your passport and residence permit.
Click on the link for the videoident in the mail, install a plug in and voila, you have a live person on the videoconference asking you to show your passport and other ID’s given by you on the online application.
Three minutes exactly, with a few actions as advised by the person on the other side and you are done with the identification process.
5 working days later you receive your congratulatory email and your account is up and running. They then send you a host of letters with you cards, Pins, and online banking instructions and you are up and running.
10 minutes, with no need to meet any representative of the bank or get an appointment to meet a person to open a bank account which is customary with the traditional banks in Germany carrying hoards of paper work or standing in a line in a post office or going to your existing bank for the identification etc. that is efficiency and loads of time saved.
What’s also so cool is that the entire process is so digital in the back end. Like my credit check, my identification, etc. etc. are all so seamlessly integrated that it took me just 10 minutes to open an account. This is the bliss of digitization, the tech disruption we are talking about and ease of doing business in the mobile era.
Whilst in India, probably you have people coming over physically to check you credentials for a credit card or loan and the process takes weeks to get a sanction.
In terms of security, you download another app to receive your TAN (transaction authentication number) like an OTP (One time password) instead of email or SMS. I believe it’s a little more secure as probably a program is reading your computer or SMS with your knowledge. But in todays world, guess anything can be accessed.
I have also read in some forums and have experienced it as well that these digital banks do reject opening accounts but this is common in Germany and as per law, the banks need not have to give you any reason. My experience with comdirect was the same in 2013, when they rejected my application without reason though I was referred by a customer of theirs.
My guess is that unless you are a EU citizen, you need to have a decent credit history or at least a very long term visa, like Permanent Residence for them to get you on immediately. Especially in the last 2 years with a huge influx of Indians arriving in Germany thanks to IT Outsourcing, who are more tech savvy than the ageing majority of Germans, the banks have become more rigorous in their selection criteria to open accounts and give out credit cards and loans.
Since you have reached till here, I hope you have enjoyed this experience of mine and want to try opening an account, so just click here DKB.de and go through what I went through.
Happy Digital Banking.