virtual bank

(redirected from Internet-only bank)
Also found in: Financial.

virtual bank

A financial institution that handles all transactions via the Web, email, mobile check deposit and ATM machines. By not having the overhead of physical branches, people expect a virtual bank to offer higher interest rates on their accounts. Traditional banks may also own a virtual bank subsidiary.

Also called a "direct bank," "neobank," "branchless bank" and "online bank," the first bank without branches debuted in 1989 in the U.K. when First Direct bank offered telephone banking. However, in the mid-2000s, many virtual banks emerged due to the ease of access via the Internet and mobile phones.

Virtual Banks vs. Online Banking
All transactions in a virtual bank are handled entirely online, whereas "online banking" is an Internet-based option offered by regular banks. See mobile check deposit and online banking.
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References in periodicals archive ?
KT sought to raise its stake in the internet-only bank to 34 percent after a related law came into force in January.
The nation is expected to receive applications for a third internet-only bank in October as it seeks to enhance the financial industry.
In March, the Office of Thrift Supervision approved a deal that would form BankBlackwell, an Internet-only bank and the first black, federally chartered African American savings bank in 10 years.
This month they became the first internet-only bank to win a Best Buy award from Which?
Becker is chairman and McCreary president of First Internet Bank of Indiana, the first Internet-only bank in the state (and only the fourth in the country).
The prospect can become upbeat given the Financial Services Commission (FSC) Chairman Choi Jong-ku said Statistics Korea's classification makes it difficult to view Viva Republica as non-financial capital, a remark that helps the consortium hold greater stakes in the envisioned internet-only bank.
And you can do even better with some internet-only bank accounts (such as with Abbey National's own subsidiary Cahoot, which pays more than 4pc interest on credit balances).
Japan Net Bank, set up in October 2000 as Japan's first Internet-only bank, had the largest number of accounts, at about 400,000, among the four banks as of the end of September this year.
The Financial Services Commission (FSC) will receive preliminary applications for a new internet-only bank for two days from March 26.
Hana Financial Group (KRX: 086790), a South Korea-based banking group, has said that it has entered into a partnership with SK Telecom and Kiwoom Securities to form a new internet-only bank.
The Internet-only bank first-e at www.first-e.com is opening savings accounts online ahead of its full launch later in the autumn.
Industry sources say Naver, the biggest search portal, was never interested in becoming "the third bank," following in the footsteps of K bank, the first internet-only bank, and Kakao Bank.

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