A lot has changed since 1999. Almost every part of daily life has evolved — including banking.
In that year Prince famously sang about, you likely used a brick-and-mortar bank or an ATM for all your banking transactions. The concept of a digital-first bank would’ve seemed impossibly high-tech. Yet the first wave of digital banking arrived just one year later with the emergence of online banks like Axos Bank, which opened its virtual doors on July 4, 2000.
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Back then, few people likely imagined that digital banking would become the preference for many customers, or that they would rely on 24/7 service and peer-to-peer payment systems. It would have been equally hard to believe that, a quarter-century later, Axos would be on the floor of the New York Stock Exchange, ringing the iconic stock market bell to mark the opening of trading on Sept. 10.
This moment inspired GOBankingRates to take a walk down memory lane and explore just how much banking has evolved over the last 25 years.
1. The Rise — and Rise — of Online Banking
Before online banking became popular, paydays were a Mad Max-style rush to the bank before it closed. You had to wait to see if a loan application was approved — and every second felt agonizing. Managing accounts meant endless paperwork, not to mention balancing a checkbook.
Now, you’re no longer beholden to branch hours or long wait times. As forerunners of digital banking, banks like Axos pioneered ways to translate traditional branch services into websites and mobile apps.
According to Roman Eloshvili, founder and CEO of XData Group, the rise of digital banking has reshaped customer expectations.
“If 20 years ago, waiting days for a transfer or a loan approval felt normal, then today, customers expect real-time transactions with instant updates,” he said. “And as AI-powered tools come into the spotlight, those expectations will only grow. Speed and convenience are the name of the game now.”
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2. Customer Service Comes 24/7
“Can I put you on a brief hold?” If you ever had to call your local bank branch or a customer service line, you know that “brief” hold could stretch on forever. And in 1999, you had few other options if you had a question about a banking service, product or transaction.
Today, customer service is available around the clock. Chatbots can answer many common questions at any hour, but banks are going even further to educate customers.
Most banking apps now offer holistic views of customers’ finances while helping them track goals. Banks like Axos even provide financial education hubs, offering multimedia content on personal finance topics, and even a podcast — something that would have been nearly unthinkable in 1999.
There are also tools to calculate your APY or budget for a mortgage — retiring the need for the Texas Instruments calculator you might have kept in your desk drawer.
3. Cybersecurity Is at the Forefront
In the days when grunge was king, a bank’s first line of protection was often a security guard. Now that online banking reigns supreme, banks have had to evolve, devoting vast resources to cybersecurity and fraud prevention.
Eloshvili said that in 1999, the idea of online fraud was just beginning to emerge. “But today, it’s growing at a very concerning pace, and banks have to invest billions in systems that can protect customer data and monitor suspicious activities in real time,” he said. “A lot of this work happens under the hood, so customers rarely see it directly, but their money is safer for it.”
Some of that work includes multi-factor authentication, biometric security, AI-backed fraud detection, encryption and stricter regulatory compliance — all of which would have seemed like science fiction back in 1999.
4. Regulatory Practices Have Changed Dramatically
Like any institution, banking has had its ups and downs — and the years since 1999 have brought significant regulatory changes. The early 2000s saw a tech-driven recession, followed by the 2008 financial crisis. Eloshvili said both periods contributed to tighter oversight.
Customers gained stronger protection measures, which sometimes meant more paperwork and verification steps.
“But it was a necessary trade-off between safety and convenience, and banks have had to work hard over the years to smooth over the processes and keep them from being too clunky,” he said.
5. Digital Payments Are the New Norm
Picture it: You’re out to dinner with friends and don’t have enough cash to split the bill. Your friend offers to cover you. If this were the late 1990s, you’d have to visit an ATM, wait for your bank to open or even write a check to pay them back.
Thankfully, the rise of digital payment systems like Zelle lets you pay friends — or the person who mows your lawn, walks your dog or cuts your hair — instantly. Adios, IOU.
Some banks integrate their own peer-to-peer payment systems directly into their platforms. For example, Axos allows you to use your checking account to pay friends directly using their email or phone number.
Bottom Line
Banking has transformed dramatically since 1999. With the rise of online banking, customers now demand faster, more secure and more convenient services — and banks are meeting the challenge.
Perhaps no greater sign of how far banking has come exists than Axos, one of the first online banks, ringing the iconic NYSE bell to celebrate its 25th anniversary.
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This article originally appeared on GOBankingRates.com: 5 Ways Banking Has Completely Transformed Since 1999
