One of our daily activities involves banking. Now, the banking industry is keeping up with the latest market trends and follow the digital banking concept.
Digital banking in India:
It is an umbrella term that includes online banking, PC banking, internet banking, mobile banking apps, and other data-driven channels. Digital banking services include making transactions, submitting requests, and handling other banking activities online. The internet banking system started in 1996 in India. Since many banks have followed suit and provide banking facilities across mediums.
Importance of digitisation:
- Numerous factors brought in mechanisation and digitisation in the banking industry in India.
- A system called Magnetic Ink Character Recognition (MICR) helps in sorting and processing cheques. Every bank has the MICR system in place and follows it as well.
- The other step was more of an innovation. Banking is a repetitive and monotonous job. Employees tend to make mistakes. Therefore, to minimise the errors and speed the process, banks use computer technology with standalone computers and local area networks.
- As the networks grew and banks connected, Centralised Online Real-Time Exchange (CORE) banking came into being. The services provided here are financial transactions, accessing accounts from the participating bank branches.
- This resulted in different modes of fund transfer, which primarily include RTGS, NEFT, and IMPS.
- Nowadays, people are more inclined to their smartphones and banking taps this aspect as well. You can find banking here as well.
Benefits of digital banking:
There are a couple of digital banking benefits that not many are aware of –
- Customer service: With the internet available everywhere freely, the customer only needs a device and decent internet connectivity. It saves not only time but also the expenses as you no longer need to travel to the bank to carry out the transactions. You can also get rid of the never-ending queues. Sit at the comfort of your home or work and get the desired task done.
- Availability: You can track your records anytime and use the digital banking services round the clock. Transferring funds has only become easier, quicker, and safer.
- Time constraint: You had to wait for longer period to avail of service earlier. Banks earlier had boards put up outside the branches specifying the time limit for each facility.
- Online bill payments: Another benefit under digital banking is that customers need not carry cash everywhere they go. You can get all bills such as utility, credit card, and EMIs paid immediately. You can even set schedules for them. This way, you will not delay the bill payments.
- Lower overheads: The operating costs of the banks have reduced drastically. This has made it possible to reduce service charges and offer higher interest rates for deposits. Lower operation costs mean more profits for the bank.
Latest trends:
The benefits themselves stress the importance of online banking. The socio-economic factors emphasise on why one needs to switch to digital banking today. Considering the fraudulent activities are on the rise, it is safe to conduct financial operations digitally.
Precisely why more and more are introducing new features over banking apps and internet banking. These include –
- Electronic wallets: Since you can use the smartphone for almost every daily task, the Government encourages people to adopt electronic wallets. There has been rapid increase in the use of debit or credit card and the trend continues.
- Chatbots: Under the customer care operation section, the banks have already employed the chatbots feature. In case of any query, the customer care executive responds to them through chatbots. The banks have improved the quality of interaction and services rendered.
- Mobile technology: Since the digital banking services are expanding technologically, and banks have their presence felt over mobile banking apps too. More and more features get added frequently. Sometimes banks use this medium to promote their campaigns also.
- Paperless transactions: Banks are realising that there is no scope for physical, financial operations anymore. Banks focus on end to end digital marketing only now.
