What Does Digital Banking Mean?

 At its most basic level, Online Banking uses technology to deliver Digital Banking services. Some wrongly believe that it simply means using an online platform, but it involves more. Using the most updated technologies at all levels and across all service delivery platforms is what it means to be digital.

It acts the same in the branches,  head office, online service delivery platform, banking app, ATMs, and point-of-sale machines. The difficulty with viewing banking online overlooks the bank's other digital initiatives. The internet or mobile platform serves as the front end of the banking service delivery.

There are many middle and back-end functions, including risk management, treasury, product development, marketing, relationship-based sales teams, etc. These functions should get digitised for the bank to be considered a Digital Bank.

What does Digital Banking involve?

Is it worthwhile for banks to go digital if it means more than the Android or iOS apps? According to a survey, nearly half of them believe that digital adoption is crucial for developing client relationships and that it is also the most persuasive argument. Here are a few instances of how banks benefit from the same:

Efficacy

Despite holding many interactions with retail clients, banking has been unusually hesitant to take advantage of any technological potential. Many banking systems have got digitised, but unlike other customer-facing businesses, the entire system is still not operating as a single digital entity.

Airlines and logistics companies, for example, rely heavily on technology to run smoothly, yet most banks are yet to achieve that level of efficiency. Banks consider digital as a valuable tool than the foundation upon which their systems are built. It enables banks to encourage people to use Internet Banking to access their Savings Account.

Cost savings

Functions are automated. So, redundancies are lowered, and this results in cost savings. There are, however, additional benefits, such as synergies resulting from access to more qualitative data and shorter market response times. When customers open a Bank Account online, banks save a lot of money.

Increased competitiveness

Digital Banking in India lets banks reach a larger customer base and build closer relationships with younger, tech-savvy generations. Banks deliver services of equal quality to compete with new-age tech behemoths and innovative Fintech start-ups.

Agility

Digital banks are more adaptable than traditional banks. Their automated features are built to work differently and respond to market shifts. For example, during the financial crisis of 2008, there was a heightened emphasis on risk management. Banks require years to train and attract enough risk professionals to manage their assets properly.