Digitisation has become a buzzword in the banking industry in recent years. With the advent of new technologies, the banking sector has seen a significant shift towards digital channels, processes and products. Banks have invested heavily in digitisation to provide customers with a seamless banking experience, while also improving operational efficiency and reducing costs. We can see the customers adopting digital channels across key markets, making traditional banks adopt digitisation more aggressively.
US Banks mobile app usage is up (66%) compared to those who go to a physical branch monthly (12%). And in UK those aged 12-23 would be most interested in banking with PayPal (44%), Apple (27%), Amazon (27%) and Google(Source: Marqeta). New age payment options like Apple Pay which has more than 500 million users and WeChat Pay’s Chinese user base is over 900 million continue to grow at a tremendous pace. (Source: Loup Ventures). According to McKinsey’s 2021 Personal Finance Survey, the share of consumers in Asia actively using digital banking has jumped to 88% this year, compared to 65% four years ago. More than 60% of Asian consumers are now open to switching to a digitally-focused “direct” bank
Digitisation has transformed the way customers interact with their banks.
Gone are the days when customers had to visit their local branch to carry out routine banking transactions. Today, customers can access their accounts, check their balances, transfer funds, pay bills and even apply for loans from the comfort of their own homes using their smartphones or computers. This has resulted in greater convenience and flexibility for customers, who can now manage their finances on-the-go, anytime, anywhere.
Digitisation has also revolutionised the way banks operate.
With the help of automation and artificial intelligence (AI), banks are now able to process transactions faster and more accurately, while also reducing the risk of human error. This has led to improved operational efficiency and cost savings for banks, who no longer need to rely on manual processes to carry out routine tasks.
Digitisation has enabled banks to offer a range of innovative products and services to their customers.
For example, digital banks have emerged as a new breed of banks that operate entirely online. These banks offer customers a range of services, including current and savings accounts, loans, and investment products. Digital banks are able to offer these services at a lower cost than traditional banks, thanks to their lean operating models and the use of technology. New age digital banks release new features every 2-4 weeks compared to traditional banks which could take upto 4-6 months, this would change with more and more adoption of digital transformations across the industry
Digitisation has also enabled banks to enhance their security measures.
With the increasing threat of cyberattacks, banks have invested heavily in cybersecurity measures to protect their customers’ data and prevent fraudulent activities. Banks are now using advanced technologies such as biometrics and blockchain to strengthen their security protocols and safeguard their customers’ information.
Digitisation has also opened up new opportunities for banks to collaborate with fintech companies.
Fintech companies are startups that use technology to offer financial services that are faster, cheaper and more convenient than traditional banking services. Banks can partner with fintech companies to offer their customers new and innovative products and services, while also benefitting from the fintech companies’ technological expertise.
So, digitisation has brought about significant changes in the banking industry. Banks have embraced digitisation to provide customers with a seamless banking experience, while also improving operational efficiency and reducing costs. With the use of automation, AI, and other advanced technologies, banks are now able to process transactions faster and more accurately, offer innovative products and services, enhance their security measures, and collaborate with fintech companies. As the banking industry continues to evolve, digitisation will play a crucial role in shaping its future.
