Given the rise of digital marketing and internet of things, it is no surprise that most services and industries are shifting either completely or partially online. The banking industry is no different and with the growing need of cashless and touchpoint transactions, the future of banking is digital.
What is digital banking?
Digital banking – often used as a catchphrase – is essentially the digitization of banking services by the use of digital retail banking platform. By digitizing banking operations, regulators can ensure that banking operations are much safer, less risky, have increased efficiency and higher rates of customer satisfaction. Customers and bank users would be able to withdraw money, make payments, request banking services, and apply for a mortgage, etc. all digitally.
Not only do digital marketing channels enable customers to get more work done without physically visiting their bank, service reps wouldn’t have to deal with long queues and be able to serve customers through email or telephone much more easily. In fact, the benefits of digital marketing are two-fold, and have varying implications for both financial institutions and for customers.
What are the benefits of digital banking for financial institutions?
The very first benefit of digital banking for financial institutions is saving money. Digital banking enables banks and credit unions to save costs on their human resources and IT infrastructure. Online banking systems and automation allow banks to reduce their operating costs, streamline bank-end administrative processes and reduce losses made through human error. If banks choose the right processes and partners to digitize their operations from the very beginning, they are likely to benefit from continuous innovation and optimization of services because their partnering company is likely to specialize in this matter.
The second benefit that financial institutions are likely to experience is competitive advantage. Digital banking and completely digitized banking operations are disruptive in the industry of financial institutions, and if banks are looking to maintain their competitive advantage and a precedence over their competition, it is imperative that they invest in digitizing their banking operations.
What are the benefits of digital banking for banking customers?
The very first benefit of digital banking for customers is the fact that through digital channels their bank accounts can be accessed 24/7. Globalization and ecommerce has led to a rise in the need to have access to one’s accounts around the clock – and not just 9-5 like in the previous decade or so. Not everyone can make the time to physically visit their branch and hence online banking is extremely convenient for banking customers.
The second benefit of digital banking for customers is that it is faster and it reduces the time spent in banking operations. Customers don’t have to set aside a time during the day to visit their bank and don’t have to wait in long queues anymore. They can access their account online and get things done simply by authenticating their identity and clicking a few buttons.
The third benefit of digital banking for customers is that it gives them more options to make payments. Online banking can be used to pay bills, make payments, split bills, etc. For instance, utility payments have been made extremely easy through online banking as one wouldn’t have to visit multiple outlets to pay their bills and everything would get done on their smartphones.