The concept of digital banking is based on the principle that a financial institution provides customers with products and services in digital form. Such banks and clients interact on a wide range of issues — electronically and in real-time. Digital banking involves the use of mobile applications, browser interfaces, and end-to-end continuous data processing.
Simply put, digital banking aims to move online traditional banking activities. So, potential customers can access banking services via mobile apps and web interfaces.
Digital banking for banks includes:
- Automation of the operational processes;
- Online services;
- APIs and more.
Digital banking, Mobile Banking and Online Banking: What Are the Differences
People use these terms interchangeably, but digital banking takes the best from mobile and online banking.
Online banking is a banking technology that allows bank clients to access their accounts and conduct operations from any computer connected to the Internet. Additionally, online banking for businesses provides tailored services and features specifically designed to cater to the unique needs of businesses, such as cash management solutions. Online banking services include:
- Monitoring and control of account;
- Bank statements;
- Payment for television, Internet, and other communication services;
- Money transfer from one account to another;
- Currency exchange;
- Loan repayment and others.
Mobile banking is a type of remote banking service that is provided through a bank’s mobile applications. Its key differences from online banking are:
- Ability to find ATMs nearby;
- Log in to the app using biometric data;
- QR codes recognition;
- Recognition of account details via camera;
- Instant push-notifications;
- Contactless payments.
Digital banking, as we mentioned before, combines features of online banking and mobile banking and offers banking services completely online.
What are the benefits of digital banking for banks and customers?
Digital banking has a lot of advantages and benefits for banks and customers. If we talk about banks, it allows them to cost savings, increase their business efficiency, increase accuracy, and provide better customer experience. Also, digital banking helps banks to accelerate internal and external processes. It is a way to survive in the changing banking world for traditional banks.
When talking about customers, digital banking provides them convenience, security, best rates, lower fees, ease of use, and new banking features.
What technologies and enablers do digital banks use?
Technologies and enablers used by banks allow them to adapt to the new environment. Most of the enablers are used in other industries. But banks are starting to notice and utilize them in order to transform digitally.
Used enablers and technologies include:
- Banking as a service;
- White label banking;
- Banking as a platform;
- Cloud-based infrastructure and infrastructure as a platform.
What must the fully digital bank have?
The uneven development of digital banking around the world is a great challenge for countries with developing banking and financial systems. Here are several criteria banks should meet to be considered fully digital.
- Ability to block a card in case of loss or theft;
- Multi-currency accounts and currency exchange options;
- Reliable data security;
- Integration with accounts from other banks;
- Integration with a stock market;
- 24/7 support;
- Ease in opening bank accounts.
Digital banking has become an important part of banking. Banking services offered by digital banks give people access to a large number of financial tools and instruments. Today, you can open a bank account remotely in a matter of minutes. Solving your business-related issues with a bank has also become much easier. You don’t need to visit a bank; all operations can be done from your phone or laptop.