Online vs. Traditional Banking in 2025: Key Differences & Pros/Cons
Did you know that by 2025, the number of online banking users is expected to exceed 216 million in the United States alone? This surge in online banking 2025 interest is particularly relevant for business owners, freelancers, and finance teams looking for cutting-edge solutions. If you’d like an explanation of various bank types, check out our Types of Banks: How They Work & Who They’re Best For guide.
In this article, we’ll examine key differences between online and traditional banking in 2025, highlight the pros and cons of each, and explore how a service like Mural Pay might fit into the picture for businesses handling cross-border transactions.
The Rapid Rise of Online Banking
Online banking has evolved considerably from the early 2000s. The industry has moved far beyond simple web portals and now offers extensive mobile apps, AI-driven analytics, and 24-hour digital customer service channels. According to data reported in 2024, 55% of Americans preferred using mobile apps for their banking, compared to 22% who accessed banking services on computers.
These trends are continuing to shape 2025, with online systems offering real-time alerts, AI-powered budgeting tools, and near-instant account setup.
What This Means for Businesses
Flexibility: Companies can access account data and authorize transactions from any region, which is essential for global payments.
Streamlined processes: Automation in invoicing and payroll helps finance teams reduce manual workloads.
Advanced features: AI-powered insights benefit businesses looking to optimize expenses and manage cash flow.
Because of these perks, even some major banks that operate worldwide have invested heavily in digital platforms. For a closer look at financial institutions with global reach, see our piece on major banks that operate worldwide.
The Adaptation of Traditional Banks
Traditional banks—brick-and-mortar institutions with physical branches—still hold a significant market share. Many have adapted by rolling out enhanced mobile features and chat-based support. While these banks may once have relied on foot traffic at local branches, 2025 sees them investing in AI chatbots, video consultations, and robust mobile apps for day-to-day transactions.
Key Strengths of Traditional Institutions
Established trust: Decades or centuries of history can foster a sense of security.
Face-to-face interactions: Human guidance still matters, especially for larger loans or more complex financial questions.
Physical presence: There are scenarios—like depositing large sums of cash—where a physical branch can feel more convenient.
At the same time, many traditional banks have had to invest in cybersecurity, since they’re also competing in a rapidly shifting environment. Some still maintain older infrastructure that isn’t as nimble as fully online banks, but their global presence can be beneficial for large corporations with wide-reaching operations.
Tech Innovations Shaping Banking in 2025
AI and Personalization
By 2025, artificial intelligence plays a central role in both online and traditional banking models. AI chatbots handle routine inquiries, while machine learning algorithms monitor transactions for possible fraud. Personalization has also grown in importance—many banks offer suggestions based on your spending profile, whether that’s a recommended savings account or a quick alert about unusual activity.
Biometric Security
Fingerprint scanning, facial recognition, and voice authentication have replaced older login methods in many cases. According to data compiled for 2025, 28% of digital bank customers said they were comfortable using face or voice recognition to verify their identity online. This focus on robust security resonates with businesses and freelancers who conduct high-volume cross-border transactions or handle sensitive payroll details.
Open Banking and Partnerships
Open banking regulations have pushed banks to collaborate with fintech startups for deeper integrations. Third-party apps tackle everything from expense management to automated invoicing. In turn, businesses gain more freedom to customize their own financial tech stack. This open ecosystem lends itself to specialized services, including global payment solutions like Mural Pay—which offers a business-first approach to instant transactions and batch payments.
Pros and Cons of Online Banking in 2025
Pros
Round-the-clock access: Users can open accounts, initiate wire transfers, and check transaction histories at any time.
Fewer overhead costs: With online banks lacking physical branches, they often pass those savings to customers via lower fees.
Faster adoption of new features: Online-only institutions can quickly roll out AI tools and integrated dashboards.
Enhanced APYs: Many online banks offer higher interest rates on savings or money market accounts due to reduced operating expenses.
Streamlined cross-border payments: Online platforms typically provide quick currency conversion and international transfers, which is helpful for businesses paying overseas contractors.
Cons
Limited face-to-face service: Some users prefer speaking to a person in person, especially for high-stakes decisions like business loans or expansions.
Cash deposit complications: Although partnerships with retailers or ATM networks may exist, depositing large sums of cash can be a headache.
Reliance on internet connectivity: An outage or patchy coverage can impede access to core services.
Fewer product offerings: Certain online banks may not supply the same extensive range of credit, loan, or wealth-management programs as large legacy institutions.
Skepticism for older clientele: Tech-challenged customers may need extra support or prefer established local bankers.
Pros and Cons of Traditional Banking in 2025
Pros
In-person consultation: For tasks like large loan origination or negotiating improved interest rates, face-to-face meetings can carry weight.
Wide branch and ATM networks: Cash deposits, withdrawals, and cashier checks can be simpler for some customers.
Established protocols: Traditional banks often have well-defined procedures for compliance, regulatory matters, and even legal disputes.
Cons
Higher fees: Overhead expenses, such as branch maintenance, can translate into monthly service charges or ATM surcharges.
Limited hours: Many branches still follow standard business hours, which may not align with the schedules of global companies.
Slower tech adoption: Legacy infrastructure can slow down the introduction of advanced features or integrated platforms.
Potentially lower interest rates: Savings and checking accounts with traditional banks often fall short of the APYs offered by digital-only competitors.
Complex cross-border transactions: International payments can involve added fees and lengthier clearance times.
Handling Fees and Exchange Rates
Fee structures differ sharply between online and traditional banks. Online banks usually charge little to no monthly maintenance, while traditional ones may bundle more robust services—like specialized loans, local safe-deposit boxes, or dedicated relationship managers—into these higher fees. For businesses that send money abroad or pay remote teams, exchange rates and hidden transfer charges are especially relevant. Online institutions often partner with fintech solutions to offer competitive currency conversions. In contrast, some older banks rely on networks that impose extra surcharges or less favorable exchange rates.
Because many businesses are now scaling worldwide, having a service that handles high-volume transactions efficiently matters. If you’re looking to optimize payment flows, see our piece on strategies for handling higher transaction volumes to learn how automation and specialized networks can help.
Cross-Border Considerations and Mural Pay’s Role
For entrepreneurs and finance teams managing global operations, cross-border transactions can be one of the trickiest parts of banking. Delays, high foreign exchange fees, and multi-step approvals are not unusual with some legacy banks. This is where fintech-focused platforms like Mural Pay stand out.
Mural Pay caters to businesses that need instant payments or multi-currency transactions. They support stablecoin on/off-ramps—an option particularly relevant in regions like LATAM where companies explore digital assets to speed up settlements. And because Mural Pay focuses on compliance (KYB/KYC), it meets the regulatory requirements crucial for international operations.
Why This Matters for 2025
Growing freelance workforce: More companies rely on freelancers or contractors abroad, making quick, low-fee payments a necessity.
Demand for multiple currencies: Access to over 40 currencies is often non-negotiable for modern businesses covering various markets.
Stablecoin interest: As stablecoins gain traction for real-time settlement, platforms that convert stablecoins into local currency can address liquidity concerns in emerging economies.
If you’d like a deeper look at the broader context of cross-border accounts, our guide to international banking covers regulatory details, account setup, and strategic tips.
Security and Fraud Prevention
Security remains a critical factor for both online and traditional banking. Biometric authentication, advanced encryption, and machine learning–based fraud monitoring are standard across much of the industry in 2025. For large and small companies alike, data breaches can translate into financial and reputational harm.
Trends in 2025 Security
Real-time monitoring: Suspicious transactions are flagged automatically, allowing quick freezes or additional verification steps.
Multi-factor authentication: Beyond passwords, many banks require biometric data, single-use PINs, or device-based confirmations.
Behavioral analytics: AI tools detect unusual login habits or purchase patterns to shut down potential fraudulent activity faster than a customer could report it.
Which Banking Model Is Best for You?
The decision between online and traditional banking often comes down to your specific circumstances:
Global expansion: Businesses dealing with international clients may favor online platforms offering competitive FX rates and quick cross-border settlement.
Cash-intense operations: Companies needing regular cash transactions might lean toward a bank with a strong local presence.
Detailed financial planning: If you need in-person advice for wealth management or complex loan structures, a traditional institution may be more suitable.
For smaller organizations or individual freelancers, the lower fees of digital banks can be attractive—especially if you seldom handle cash. If you run a larger enterprise juggling multiple payments and payroll cycles, having advanced online tools plus a physical branch partner might be the right hybrid approach.
Wrapping Up
By 2025, the lines between “online” and “traditional” banking have blurred considerably, but each model retains unique advantages. For those ready to streamline day-to-day transactions, digital accounts can offer immediate savings, AI-driven insights, and flexible cross-border payment options. Meanwhile, physical branches still cater to those who value personal relationships and tangible presence.
If you’re looking for more ways to optimize your company’s transactions, you might explore our guide to the best payment methods for small businesses. Whichever path you choose—online, traditional, or a combination—remember that alignment with your operational needs, customer experience, and long-term growth strategy is paramount.
References
Fortunly. (2021). “Online & Mobile Banking Statistics.” Available at: https://fortunly.com/statistics/online-mobile-banking-statistics/
Bankrate. (2024). “Online vs. Brick and Mortar Banks.” Available at: https://www.bankrate.com/banking/savings/online-vs-brick-and-mortar-banks/
American Banker. (2025). “The Rise of the Invisible Bank.” Available at: https://www.americanbanker.com/news/the-rise-of-the-invisible-bank
