Digital banking reduces a person’s bank visits and manual work, along with saving time. The COVID-19 pandemic has accelerated the process of digital banking due to its numerous benefits. Smartphone usage has resulted in an additional surge in digital banking during the COVID-19 pandemic. Moreover, swift transactions, 24/7 banking facilities, and smooth mobile banking have flourished the digital banking industry.
If you ask your grandparents or any person old enough to have witnessed changes in technology, they will tell you about the endless hours spent in a bank just to get one task done. The story doesn’t end here though; efforts to keep track of all transaction receipts, cheques, passbook records, and pending payments seemed to be tiring in those days. Don’t you feel lucky now to be born in an era that has tremendous technological facilities and scope?
According to a report published by Research Dive, the global digital banking market is projected to cross the $1,702.4 billion mark by 2026, from a significant market share of $803.8 billion in 2018, and exhibit CAGR of 10.0% in the 2018-2026 forecast timeframe. The exponential rise of technological development is suggested to be the driving force of the digital banking market growth.
What is Digital Banking?
Ideally, banks are boring yet important part of our lives. Boring because one has to wait for long hours in queue just to get cash or transfer money. If you hit your rewind button, then, about 30 years ago, banking systems dealt with a lot of paperwork. Computers and the internet were not advanced enough to run quickly. A lot has changed to date but a huge push to go digital came from the COVID-19 pandemic. This outbreak changed the shape of the entire banking industry by making it go digital.
In simple terms, digital banking means converting all traditional banking services to online or digital mode. These services could be deposits, transfers, withdrawals, applying for various financial services, account handling, loan management, and bill payments. Digital banking eliminates the need for paperwork such as demand drafts, cashing cheques, or pay-in slips. One has the complete liberty to perform all banking activities 24/7 without literally going to the bank. Digital banking facilities are accessible with a stable internet connection and any electronic gadget like mobiles, laptops, or tabs.
Customers’ preference for banks with digital banking options forced several small and large banks to go digital. Banks didn’t expect that consumers would opt for online banking services at a faster pace, and hence creating digital banking provisions at an accelerated rate in all financial institutions for clients became a necessity. Deloitte’s 2019 banking and capital market outlook suggests that banks are trying to match consumers’ expectations regarding banking by turning towards digital banking services. Moreover, ‘create digital capability’ was cited by 28% of banks as their foremost initiative. Almost 50% of the banks are making digital banking their top priority.
What are the Benefits of Digital Banking during the COVID-19 Pandemic?
There is a significant advantage of fund or money transfer as digital banking skips the hassle of issuing demand drafts or cheques. One can simply transfer money from one account to the other without visiting a bank from the safety of their homes. This ensures a low risk of COVID-19 infection and the liberty of transactions anytime and anywhere. A few notable options for online money transfers are IMPS (Immediate Payment Service), RTGS (Real-Time Gross Settlement), and NEFT (National Electronic Fund Transfer).
Apart from this, one has the luxury of downloading e-bank statements at any point in time. These bank statements can be saved on mobile phones or laptops and can be accessed easily. This prevents the need to visit banks and take printed copies of statements, thus preventing unwanted contact during the COVID-19 pandemic. Moreover, the installation of ATM machines in every nook and corner is aiding people in withdrawing cash, be it day or night.
Bill payments can be smoothly managed with digital banking by simply logging in to your bank account. All kinds of bills such as electricity, phone, gas, and television can be completed via digital banking. Mostly, several banks have auto-debit facility to pay bills automatically whenever issued. For instance, HDFC bank has started a pre-paid mobile recharge facility as part of the digital banking initiative. In addition to this, one can open a fixed deposit account in seconds, invest in mutual funds, and apply for loans and various insurance policies as well.
The rise in smartphone usage and the availability of strong network connectivity has paved way for mobile banking systems. Since everyone nowadays possesses a smartphone, one can download apps for transaction purposes. Google Pay, Apple Pay, BHIM, SBI’s Yono, Payzapp and many more are gaining popularity amidst the COVID-19 outbreak. For transactions, one just has to scan a QR code or know the phone number of the beneficiary. Mobile banking apps are like mini-digital banks that include all banking services on the go.
If at all you have to stop a cheque process, then simply log in to your account and click on update cheque process. Furthermore, one can track credits and debits of the account as banks send SMS or e-mails of transactions. These notifications aid in preventing frauds and one must report them as quickly as possible to the bank authorities. Beyond this, digital banking displays transaction history and any pending payments as well.
The Future of Digital Banking
This title wouldn’t have existed 50 years ago due to a lack of technical knowledge, but today this heading seems relevant. The digital banking sector will continue to grow in the upcoming years with a few changes in technology. Several banks are already utilizing artificial intelligence for meeting the financial demands and expectations of customers. Today it is artificial intelligence; tomorrow, it will be something else that’ll augment digital banking to a greater height.
Chaitali Avadhani is currently working in the content writing industry and has a Master’s degree in journalism and mass communications from Savitribai Phule Pune University. She is naturally attracted towards writing and is harboring experiences in the same field. Apart from this, she is a certified mountaineer and has passed out from Himalayan Mountaineering Institute, Darjeeling. Outside the office she is actively engaged in fitness activities such as running, cycling, and trekking.