Branchless banking pros, cons

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You can expect to see more branchless, or online-only, banks emerge in the next 5 years, according to Accenture, which is a global technology-services company. Accenture’s May 2014 survey found that by 2020, branchless banks and even nonbanking companies could grab one-third of the total banking revenue in North America.

Should you go branchless? MoneyRates.com, which compares U.S. bank rates, says its 2013 survey, which was released in February 2014, found that 63 percent of the online checking accounts have no monthly maintenance fee, compared with 29 percent among all banks. Overdraft fees from online checking accounts also are less expensive, at $24.39 per occurrence, compared with $32.03 on average at conventional banks.

Of course, branchless banks don’t have face-to-face interaction “that makes it easier to solve problems or offer solutions or guidance,” says Nessa Feddis, who is the senior vice president and deputy chief counsel for consumer protection and payments at American Bankers Association. However, branchless banks typically provide the same other customer-service options as do conventional banks, including email, telephone and mail.

An area where the two bank types are alike is security. Both guard transactions with 128-bit encryption, which is the highest level.