Is Digital Banking the Future?

by Giselle Lobo Writer & Blogger

Digital banking entails completely digitalising the entire banking process of an entity. Many banks offer online services either via their website or through mobile, however, the two concepts are distinctly different. A digital bank is one where all the processes (customer-oriented and back-end) are digitalised, whereas traditional banks offer online services only to their customers. Let’s see why digital banks are here to stay:

Innovative Products: As we move to an age of smart devices and artificial intelligence, our expectations tend to increase. We have little time for endless (and often meaningless) paperwork, especially for banking transactions. We are constantly looking for innovative products which suit our ever-changing needs. Instant bank account opening, lifetime free credit cards, brokerage-free investment options, are some of the things we look for, but traditional banks may find difficult to offer. In terms of competitiveness, traditional banks may lag behind in meeting customer expectations.

Cost-Effective: We as customers, would prefer not to pay exorbitant fees for banking transactions like ATM withdrawals, funds transfers, which should otherwise be free. Digital banks are more cost-efficient because their overhead and operating costs are minimal. Most transactions are free and moreover, interest rates on savings accounts and deposits yield higher interest rates.

Competitive Customer Service: There are still some traditional banks which insist on customers visiting a branch for some processes. This is considered not only time-consuming but also unnecessary. Digital banking does away with the need to go to a physical branch because they don’t have any.

Streamlined Processes: Digital banks make use of the best financial and banking technologies to offer the best products and services. The processes and instructions are easy to follow. Even resolving customer queries and requests have a shorter turn-around-time.

Adaptive Technologies: The heart of digital banking is keeping up with customer expectations. These banks are forever looking at new and innovative ways, so customers are not inconvenienced. The access to too much information means research more before choosing products. Very few traditional banks have the option to compare products, while digital banks give customers the option to choose from a range similar products.

Digital banking apps has a more customer-engaging approach than traditional banks. Moreover, with the rise in demand for smart technologies and artificial intelligence, these banks are more likely to adapt than traditional banks.