The best digital banking services are those that combine innovation, convenience, and a focus on people in a way that makes it easy for customers to manage their finances on any device.
What is the definition of digital banking?
Digital banking means that all traditional banking products, processes, and activities are turned into digital files so that customers can use them through digital portals.
What exactly are digital banking services?
Most of the time, they involve the following tasks and actions:
- Obtaining bank statements
- Withdrawals of cash
- Funds transfers
- How to handle checking and savings accounts
- Getting bank accounts
- Loan management
- Bill payments
- Cheques management
- Keeping track of transaction records
Digital banking software enables you to use, understand, and manage all traditional services.
Are online banking and digital banking equal?
Online banking
Online banking is usually accessed through the Internet and lets you do basic banking tasks like manage your accounts and see your bank statements. An online banking system can only do so much, and it can’t be expanded quickly to offer more banking services to customers.
Digital banking
Digital banking uses high-level process automation, web-based services, and application programming interfaces (APIs) to help banks and their customers save money, stay safe, and have a lot of freedom. Modern banking solutions allow for a completely digital customer journey, creating data streams in real time and speeding up key analytics.
Digital banking uses high-level automation processes, web-based services, and application programming interfaces (APIs) to help banks and their customers save money, stay safe, and have a lot of freedom. Modern banking solutions allow for a completely digital customer journey, creating data streams in real time and speeding up key analytics.
The benefits of online banking for customers
As an increasing number of digital banks are entering the market, it is crucial to comprehend how contemporary digital banking solutions allow them to provide superior and more affordable services than their more established rivals.
Savings on costs
Checking and accounting take a lot of time and money at traditional banks. Digital banking software cuts operating costs by a lot because it gets rid of unnecessary back-office tasks. Banks don’t have to do as much work because digital banking systems automate many of the tasks that go along with daily transactions. Digitization cuts down on the number of steps and individuals involved in transactions, which makes it less likely that expensive mistakes will happen.
Increased individualization
Artificial intelligence (AI) and machine learning make it possible for digital banking software to use sophisticated personalization strategies (ML). At the right time, banks can give their customers the right financial options, interactive tools, and educational resources. Automated budgeting, analytics about spending, reminders to save, and many other tools help customers learn and get involved.
The various types of banking service
Even though the terms “neobank” and “challenger bank” are used by almost everyone today, it may be hard to tell them apart. Let’s go over the main kinds of digital banking institutions so you can tell them apart.
Neobank
Neobank is an online bank that doesn’t have a physical location. Its customers can access its services from anywhere using a mobile app. Many neobanks don’t have a bank license, so they work with an existing bank to do things that only banks can do. Most of the time, a neobank has a smaller range of services than a licensed bank.
Challenger bank
This word comes from the UK and means a new bank that “challenges” the banks that have been around for a long time. Challenger banks focus on the parts of the market that the big banks don’t serve well enough because they are easier to use and cheaper for the end user.
New bank
These neobanks are fully licensed and offer a full range of banking services. The only difference between them and traditional banks is that they only do business online. Revolut, Monzo, N26, and Starling Bank are all examples of new banks.
Read more: What are the benefits, drawbacks, features, and more of net banking?
