GUIDESBANKING
New-age banking vs online banking: What are the differences?
3 MIN • 
LAST EDITED BY PRANAV KARNAD ON JULY 17, 2025.
LAST EDITED BY PRANAV KARNAD ON JULY 17, 2025.
GUIDES LAST EDITED BY PRANAV KARNAD ON JULY 17, 2025.
The main difference between digital banking vs online banking is that digital banking is a broad term, referring to the new, digital advances we are moving towards in the space of banking. Online banking is more specific to using a bank’s web-based services.
Like I said earlier, online banking is a term that generally refers to using a website of a bank or a financial service provider like an NBFC. This could be to make any specific action like a transaction or viewing balances, or repayments due and such. You could do this either through your laptop or mobile web.
Digital banking covers every activity which is performed electronically, involved in the area of banking. This may not be restricted to a bank’s website. Therefore, online banking is a part of digital banking. These include mobile banking, digital wallets and banking via SMS. Another digital banking feature which makes it different from online banking could be the use of virtual assistants and chatbots, biometrics, and various other tech, all aimed at enhancing customer experience.
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It’s interesting to note that, according to the Regulatory Authority, digital-only banks don’t legally exist. It’s simply a service or a feature offered by existing banks to help consumers access services digitally. You might have heard of branchless banks or ‘neo-banks’. Technically, in India, neo-banks are not banks at all. They’re simply interfaces to an existing bank. You can read more about digital-only banks here .
At the end of it, it’s important to remember that these are technical terms that are gradually going obsolete, as banks and fintechs are working towards bringing all of these experiences together for customers. For example, a lot of online banking today can be carried out through UPI apps or authorised third party apps like Fi Money, through which you can use a bank account, make payments, investments, buy digital products and so on.
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Digital banking is a broad concept which incorporates all banking and financial services which can be undertaken digitally, or electronically.
Monzo and N26 are two examples of digital banks which operate from the UK and Germany, respectively. In India, the Regulatory Authority does not officially recognise digital-only entities as banks. These are loosely termed ‘fintechs’ or financial technology companies, that offer an enhanced customer experience through apps, but are dependent on banks for the actual service being provided. For example, Fi Money is among India’s top fintechs that provides a savings account for customers that’s actually created in partnership with Federal Bank
