Daniel Hutmacher explains what binary data types are and one use case:
Because binary values are essentially strings, they easily convert to and from character strings, using CAST or CONVERT. To convert the binary value of 0x41 to a plain-text character value, try
SELECT CAST(0x41 AS char(1)); --- 'A'The binary value 0x41 is equivalent to decimal 65, and CHAR(65) is the letter “A”. Note that I haven’t placed any quotes around 0x41 – that’s because it’s a numeric value (albeit in hex notation) and not a string.
A couple use cases I’ve seen are creating hashes (SHA1 or MD5) for change detection, storing password hashes, and encrypted columns—Always Encrypted uses varbinary data types to store encrypted information, for example.