The world has gone digital and there are newer alternatives to all that we’ve done in the past, banking inclusive. Gone are the days when users had to queue for long hours to carry out the simplest of transactions like sending or receiving cash, especially foreign currencies. 

People no longer have to spend the bulk of their time in the banking halls trying to confirm their identities or filling out lots of paperwork before they can send or receive currencies other than the Naira, all thanks to the emergence of Virtual Banking Services.

However, many are yet to understand this newest way of sending and receiving money without stress. Hence, the need for this guide.

Some of the questions that we have heard about Virtual Banking include, what it is, how it is different from the traditional banking system and the advantages of using virtual bank accounts. So, let’s delve into it…

What is virtual banking?

Try to picture these scenarios:

You need to send some money to a friend, confirm that a customer has sent you payment for the services you rendered through your bank statement or that you need to change some Naira into USD to make an international payment for the new Oculus headset you purchased.

What if, for each of these, you had to go into the banking hall to get it done and there wasn’t any other way? Basically, that’s traditional banking.

And virtual banking is the alternative way you’ve probably been doing all of these things from the comfort of your mobile phone or computer, without the need to visit any physical bank.

A simple definition of virtual banking is access to all banking, business and financial related services without visiting any physical location before carrying these services out. A virtual bank allows you to bank online. 

How is a virtual bank different from a traditional bank?

The major difference between both forms of banking is in the location. While a traditional bank requires a physical location to operate and carry out most of its operations, a virtual bank operates fully online. Instead of making over-the-counter transfers, you can send them online.

It is, however, worth noting that traditional banks now offer virtual services via their mobile apps or internet banking, yet they are not referred to as virtual banks because of this. A virtual bank has certain advantages over traditional banks (even with virtual services).

Read more: Different Types of Banking: Pros and Cons

What are the advantages of virtual banking?

A major advantage that Virtual Banks have over their traditional counterpart is that virtual banks save time, energy and money; they eliminate the stress that frequently accompanies traditional banking. Here are some of the main reasons why virtual banking is trending in 2022:

1. Cheaper services

Virtual banking is considerably cheaper than traditional bank services and one of the reasons for this is because of the mode of banking. Traditional banks require brick and mortar locations that further need manpower to maintain business.

This means the traditional bank will offer lower rates and higher fees in order to make profits. The absence of these overhead costs in a virtual bank means they can offer better interest rates and significantly reduce their fees to favour the customer.

2. Convenience

As mentioned above, a virtual bank makes it possible to complete all your banking activities on the internet. That means you can complete local and international transactions with ease. You can also order your physical bank card and have it delivered to your home or request a virtual card to make online payments. All with a few taps on your phone or clicks on your computer.

You can also have issues resolved swiftly online without having to queue for hours after filling out forms to talk to a customer support representative for less than 5 minutes at a physical location.

3. Full control over your accounts

With Virtual Banking Systems, you can control what happens to your money at every point in time. You can easily make a budget based on your cash inflow and outflow and there is no need to visit the bank every month end to access your bank statement. Virtual banks give you 24/7 access to your accounts so you can plan your finances and complete transactions on time.

Are virtual banks safe?

One of the major concerns of people regarding virtual banking is security? People ask: are virtual banks safe? What happens to my money when a virtual bank closes?

You should, however, keep in mind that virtual banks are licensed to operate just like every other bank. The lack of a physical location has helped to adapt banking to the changing world and make banking services more accessible to people.

And while banking on the internet can be scary to many because of scammers and hackers, these virtual banks take extra precautions to ensure that their platforms are very secure and fit for financial operations.

What this means for the bank is that they invest in sensitizing people about online security while using state-of-the-art security protocols to ensure that their customers’ data and money are always safe.

Read also: How to Receive Money from the UK in Nigeria

Here are some security tips for anyone banking on the internet to keep in mind:

1. Use a strong password: Your password is the gate pass into your virtual bank account so it is important that you use a strong password that is not easy for anyone else to guess. A good way to ensure your password is secure is to use a password manager.
   This software helps you generate strong passwords for your account. It also saves you the hassle of trying to remember multiple passwords by saving them in a secure vault that only you can access.
   
2. Verify emails and web addresses: Before entering your bank details on any website, you should ensure you are on the official page of your bank. Even when you get emails that are from your bank, you should confirm that they are not phishing emails.
   
3. Use 2FA: Two-Factor Authentication (2FA) is an extra layer of security added to internet accounts to ensure that your account can only be accessed by you. 2FA requires that you enter an OTP (One Time Password) sent to your mobile number or from an authenticator app (such as Google authenticator or Authy) after entering your password to ensure it is really you.
   
4. Avoid public WiFis: Public wifis can be accessed by anyone. When you are connected to one, it is best to avoid accessing your banking apps. Only access your financial accounts while on your private network.
   

How to get started with a global virtual bank account

Seeing that you can use a virtual bank for local and international transactions such as sending money to foreign bank accounts or receiving money from abroad and also converting your local currency to foreign currencies, the adoption of virtual bank accounts is on the rise.

Grey offers one of the easiest virtual banking services in Nigeria and to get started is very simple:

1. Create an account

The first step is to create an account. Simply visit Grey and provide your basic details.

2. Complete KYC

KYC (Know Your Customer) allows businesses to protect you from fraud and ensure that fraudulent activities are not carried out on their platform. With Grey, the process is straightforward and hitch-free.

3. Get a virtual account

After successfully creating an account and completing KYC, you will be able to request your virtual accounts. Grey offers virtual USD, EUR and GBP accounts which you can use to complete international transactions. Once your account is approved you will be able to send and receive money from anywhere in the world. You will also be able to convert to naira which you can withdraw to any Nigerian bank.

Final thoughts

You can now begin your virtual banking journey with Grey, especially on the global scene.

Get Started with Grey Virtual Bank Account