In a world where you can open an account, apply for a loan, invest in ETFs, and track your expenses—all from a smartphone app—it’s only natural to ask: do we still need traditional banks?
The rise of digital-only banks, fintech platforms, and decentralized finance (DeFi) has dramatically reshaped how we think about money. For a new generation of savers and investors, especially Millennials and Gen Z, the local bank branch seems increasingly irrelevant. But before we write off traditional banks as a relic of the past, let’s take a closer look at what they offer—and whether they still earn their spot in your financial ecosystem.
Digital Disruption: How Fintech Changed the Rules
The explosion of neobanks like N26, Revolut, and Wise has disrupted the financial sector by offering sleek, low-cost, and user-friendly alternatives to traditional banking services. These platforms are optimized for mobile users and tend to focus on what younger consumers actually want: fee transparency, instant notifications, seamless currency exchange, and modern UX.
According to Statista, digital-only banks were expected to account for over 20% of new retail banking customers in Europe by 2025, and global digital banking revenues could exceed $ 1.3 trillion by 2030. These platforms are clearly gaining ground, not just because they’re digital, but because they’re leaner, faster, and often more aligned with the lifestyles of modern users.
What Traditional Banks Still Do Better
That said, traditional banks haven’t completely lost their edge. They still offer a degree of stability, regulation, and trust that many fintech startups struggle to match—especially in turbulent economic times. In fact, most neobanks still partner with legacy institutions for regulatory compliance or deposit insurance coverage.
Traditional banks also tend to offer more complex products under one roof—like mortgages, business loans, or pension plans—and can accommodate clients with broader needs. Moreover, they may still be the go-to for people who value in-person service, especially older generations or clients dealing with more nuanced financial matters like estate planning or wealth management.
Are You Paying for Legacy?
Here’s where the debate becomes practical: cost and value. Many traditional banks still charge account maintenance fees, international transfer costs, or foreign ATM usage penalties—charges that digital banks have largely eliminated. According to ECB data, the average current account fee in Italy was around € 45 per year, while most neobanks offer free basic plans with additional features at a modest cost.
For users with simple financial needs—think: saving, spending, investing small amounts—digital banks are not just sufficient; they’re often superior in cost-efficiency. However, for those managing larger or more complex portfolios, traditional banks may offer services (like access to dedicated advisors) that justify their higher costs.
Security and Regulation: Who’s More Trustworthy?
Both traditional and digital banks are subject to strict regulation in most developed economies. However, banking license status is key. Not all digital apps are actual banks; some are e-money institutions or financial intermediaries, meaning your money might not enjoy the same deposit insurance protections.
In the EU, traditional banks and licensed digital banks are covered under the Deposit Guarantee Scheme (DGS), which protects up to € 100,000 per person per bank. Before going all-in with any app-based financial service, it’s crucial to understand what license it operates under and whether it’s supervised by a national regulator.
A Hybrid Future: Why You Might Need Both
The future of banking isn’t likely to be black or white. Instead of choosing between “old” and “new,” smart users are combining the best of both worlds. Many keep a traditional bank for salary deposits, credit history, and long-term planning, while using a digital app for spending, travel, and savings automation.
For example, you might receive your paycheck in your Intesa Sanpaolo or UniCredit account, but use your Revolut or Hype card to manage daily spending or invest your spare change.
Your Banking Setup, Your Financial Strategy
In the end, the right setup depends on your goals and habits. If you prioritize cost, mobility, and digital tools, it’s hard to beat a solid digital bank. But if you value reputation, comprehensive services, and financial legacy, traditional institutions still have merit.
The smartest move is not to blindly follow trends but to understand what each option provides—and align it with your actual financial life. You don’t need to be loyal to one brand or type of institution. Instead, treat your banking relationships as part of your broader strategy, choosing tools that help you save, grow, and manage your money with confidence in 2025 and beyond.
Navigating the New Financial Landscape
As banking evolves, so should our mindset. This isn’t a question of tradition versus technology, but of personalization. The best financial setup is the one that works for you. So whether you’re swiping through a neobank app or walking into a brick-and-mortar branch, the real power lies in being informed, intentional, and flexible. Because in the digital age, banking is no longer a service—it’s a strategy.
