The Rise of Digital Banking: How Fintech is Revolutionizing the Financial Industry
Over the past few years, the financial industry has been significantly transformed mainly due to digital banking. Fintech- a mix of finance & technology, is changing the way we interact and handle our money, make transactions or even investments.
Gone are the times where a long queue of people waited in front of the bank for mere money deposit. Now it’s no more paperwork and worry because everything is quick, seamless and easy. Just a few clicks on your screen and you can transfer money to your friend, make COD payments, pay restaurant bills and even make purchases in an offline store. Wow, that’s so convenient, right?
In this blog, we will explore more on Digital Banking and how it has transformed rather reformed the whole financial industry. Along with that let’s also cover the implications of it on consumers and businesses.
Rise of Digital Banking
Nowadays, every consumer wants to get things done in a few seconds or minutes perhaps. Because of other digital platforms the customer wants every service to fit their fast-paced digital life. Obviously it is not totally possible, yet. There are certain services that can be provided.
In the past no one would have thought that we could shop and manage finances through our mobile. But today this leap seems like a necessity. Can we say that this shift in technological paradigm was not just about tech advancement but a customer need and preference? Think over it and comment in the section below.
Fintech is not just about digital banking. It includes other aspects like AI, Blockchain, Mobile banking, Digital Banks and other advances. The focus today is on just one part of it i.e. Digital Banking.
Now the question comes- What is digital banking? Digital Banking or as consumers call it- Internet Banking or Online Banking is a broad concept that means transactions are done via the internet or some technology. As of 2023, 48% of the entire population uses mobile banking as their primary method for payment and other transactions.
Types of Digital Banking
Enlisted below are a few types of Digital Banking.
1. Mobile Banking
Mobile Banking is simple. Users will download the banking application on their mobiles and use it. All services like making payments, balance enquiry etc becomes accessible via phone.
2. Digital Wallets
Digital version of a regular wallet is a digital wallet. With this wallet a user can make payment to any online platform. It can also be linked to your bank account. Popular examples like Paytm, Airtel, Google Pay etc. These are safe and secure.
3. UPI
Everybody has heard of UPI now, especially after Covid-19. It stands for Unified Payment Interface. Using this mode, a user can send money from his bank account to any other account using one platform. Usually, the mobile phones are used and a passcode has to be entered to authenticate the transaction. You can link any number of accounts to one app.
4. Banking Cards
For digital payments you have to have banking cards. In order to get a card you have to understand why you need one. Cards can be issued based on the use-case, monetary limit etc. There are 4 types of banking cards:
Debit Card
Credit Card
Prepaid Card
Virtual Debit Card
Benefits of Digital Banking For Customers & Businesses
Digital Banking has a positive impact on customers and businesses provided they use it in a secure and diligent way. Here are some of the benefits.
1. Improved Customer Experience
With digital banking, mobile banking customers can easily check and manage finances. They can use mobile apps and websites for it. The other end of improved customer experience is better business management. Otherwise customers won’t be happy.
2. Increased Security
When tons of customer sensitive information is stored, banks use security and safety measures as per the IT Act, 2000 to protect it. Hence, the level of security and privacy increases.
3. Cost Saving
Traditional banking involved a lot of physical movement which caused a lack of efficiency and a fee for even a small job. But now everything is switched to an online mode which doesn’t require physical space which results in cost saving. Ofcourse, there are many more factors apart from this that lead to cost savings.
4. Financial Inclusion
More than 50% of the global population still lacks financial literacy. By giving them the option to access banking anywhere and everywhere is a step towards financial inclusion. Even the economies that are under-developed can benefit through this.
Rise of Digital Banking: Is it really revolutionizing Fintech?
Overall due to the rise of Digital Banking, fintech is gradually reshaping how we interact with financial institutions and deal with our money. Slowly, financial inclusion is helping people adapt to this technology. In the coming years we will surely see more innovations so that every person can have access to digital banking.
Buckle up, get on the exciting ride to witness how the financial industry will unfold before us due to digital banking.
What do you think about digital banking technology? Comment down below.
