Remember banks 10 years ago? It was a time-consuming activity for everyone. Whether it was depositing money or quench, getting a loan, or even withdrawing money, it required us to visit the bank and stand in the queue. The entire business involved a lot of time and effort. However, things have changed. Traditional banking methods have completely transformed. Today, the banking sector is the most advanced industry experiencing a revolution of sorts called digital banking. Digital banking is not only the present but also the future of the banking industry. It has completely changed the way we bank and handle the business of money transforming conventional banking to convenience banking. Let’s learn more about this process and the importance of digital banking.
What is Digital Banking?
Often digital banking is referred to as online banking. However, it is a broader concept that offers banking services through digital platforms. Digital banking is a process of performing banking through smartphones, laptops, computers, tablets, and the internet. It makes all the banking activities available online. It allows you to perform traditional banking activities with a few clicks on your smart device without having to visit the bank. One can perform these activities anytime, anywhere. In simple words, digital banking is the digitization of banks and all backend and front-end activities.
Using different kinds of technologies such as big data, analytics, artificial intelligence, machine learning, and more. It is aimed at improving the customer experience. Most of the banks provide digital banking solutions to their customers with the help of a website or mobile app.
Some of the common features of digital banking solutions include:
- Fund Transfer
- Cash withdrawal
- Access to the paperless statement and download statements
- Payment of bills
- Loan application
- Account management
- Stop cheques
- Keep a check
- 24/7 banking
- Access to customer service
And set up account alerts and reminders, and more.
Digital banking has drastically changed the way we bank and customers use banking services along with cash distribution.. Most of the banks are now using digital banking platforms to reach their customers and these have become an integral part of the banking industry. Digital transformation has been a gradual process and it is still underway. Experts suggest that this is just a beginning and there is a long way to go.
Digital banking has proven to be extensively beneficial in different aspects. Here is why digital banking is important.
1. Eco-friendly: With rising environmental issues, banks are going green too. A lot of their efforts can be attributed to digitization It is an important step contributing to the bank’s ability to become eco-friendly. With digital banking, a lot of paper Is saved. You can now download digital statements, cheques, forms, etc. Meanwhile, people do not have to travel to the banks which reduces the usage of fuel and electricity consumed in office spaces. These small steps have helped the banking industry to emerge as an eco-friendly industry.
2. Cost savings & increased revenue: Digital banking has reduced an enormous amount of operational cost for banks. This has enabled them to provide the customers with better interest and services at cheaper transaction rates. It eliminates expenses related to back-office operations. Now there is no need for the banks to invest in expensive hardware or software for legacy systems. With the automation of several business processes, now there is a need for smaller staff. Experts suggest that digitization of banks can reduce up to 50% of expenses for the banks. Besides cost reduction, digital banking has the ability to generate increased revenue.
3. Remaining compliant with regulations: With new rules and regulations in place, it is a challenging task for banks to meet the standards set by regulatory authorities. With the involvement of a legacy system, this becomes even more difficult. Meanwhile, with digitization and branchless banking, the structure has become simple to follow.
4. Staying relevant: The technology that has facilitated massive digital transformation for banks has also led to the rise of competition. Fintechs and tech giants are invading the banking space and giving competition to the banks. In order to become viable and stay relevant, digital banking allows banks to offer services just of the same quality as technology-driven fintechs. Modern investors and customers rely on technology; therefore, digital banking is a necessity for the banks in order to beat the competition, improve customer satisfaction, and attract and strengthen the customer base.
5. Benefits small and big businesses: Digital banking allows fund transfer and money transactions from anywhere and anytime. This is why e-commerce website is flourishing. Similarly, small and big businesses do not have to rely on bank operation timings. Instead, they can carry out business even at odd hours. They can even avoid costly fees with simple payment solutions that are carried out on automated digital platforms. As a result, businesses are saving a lot of time and money on the manual processes. Consequently, this contributes to their business productivity and growth.
6. Increased efficiency and productivity: Thanks to the computer and modern technology, banks have become more efficient and productive. It allows the bankers to focus on their prime goals by reducing the burden of tedious, redundant jobs that are being automatically performed by the digital platforms. Meanwhile, machine learning allows better insight into customer behaviour and expectations. Therefore, banks are able to provide better products and services with seamless customer intimacy.
7. Improved customer experience: Most part of digital banking is ultimately aiming at improved customer experience. With digital banking solutions, customers have better control over their money and accounts. They can keep track of transactions and avail more personalized products and services. This is what makes banks more viable for their customers.
Digital banking has completely changed the landscape. It has transformed the way banks and customers interact with one another. Despite some reluctance from people, more and more customers are getting connected to digital banking platforms for the numerous benefits it has to offer. It has made banking a lot simplified. Truth be told! Digital banking is a massive revolution that will change the future.