Have you observed a decline in bank openings in your neighbourhood or the permanent closure of once-popular branches? The millennial and Gen Z generations are driving much of the global shift towards digital banking because they prefer it to traditional brick and mortar locations. Let's look at a few of the causes of this transformation.
1. People Want the Freedom a Digital Bank Account Brings
One of the biggest drawbacks of physical banks is their geographic restrictions. If you use an ATM from a different brand because you're on the road or otherwise unable to visit your preferred physical bank, you can be charged more.
The conventional method of depositing paper checks at the bank necessitates a trip there. However, many banks now permit mobile deposits if the cheque is photographed using the smartphone camera.
Many customers no longer desire to interact with physical banks at all due to easier online access. Customers who frequently travel or who live in other countries should be especially aware of this. People can now work remotely in full or part from any location with an internet connection. It makes sense that many people seek the same flexibility in their financial alternatives.
For frequent travellers, mobile banks often offer favourable conversion rates. Additionally, using your bank card for in-person purchases frequently eliminates the extra fees that could otherwise be associated with making purchases while away from home.
With no physical branches, consumers may complete all transactions with an all-digital bank by using their smartphones or a web interface. That is practical given how mobile-centric modern culture currently is. Simply utilising their cellphones, people may do anything from video chat with a doctor to hold meetings with colleagues around the world. They desire that banking also provide them with that flexibility.
2. All-Digital Banking Aligns With Progress
Many consumers used to get actual paychecks and mail checks to service providers to pay their bills only a few decades ago. Both scenarios are far less frequent today; the majority of businesses no longer provide or accept checks. Instead, direct deposit is used to pay employees. Additionally, individuals can set up automated withdrawals from their bank accounts at the appropriate times to take care of things like utility bills, credit card payments, and more.
All-digital banks enable customers to manage their money according to their own timetable. Some or all of the steps involved in applying for a loan or starting a new account can frequently be completed online at the convenience of the user.
According to a 2022 Deloitte research of international banks with digital choices, 80% of those with the most sophisticated digital banking services permitted customers to open accounts entirely online using their cellphones or web portals.
All customers can now bank with greater flexibility thanks to these upgrades. For instance, many people's schedules preclude setting up appointments during the regular office hours of a physical bank. Customers also frequently dislike making phone calls and waiting on hold for a long time. Now, customers may frequently obtain the relevant information by using a live chat or emailing a request.
3. People Appreciate Banking Privacy and Tighter Security
Digital banking transactions at a bank involve a number of security measures that are difficult for unauthorised users to get past. Digital banking is safer than security measures that unauthorised persons may conceivably get through by taking tangible property like bank or ID cards because it depends on your information.
Data and information in transit must be encrypted by all financial institutions. In addition, some banks demand that their clients create six-digit identity numbers. Then, they must give three of the six information requests that the banking system makes at random during each access attempt. The user will lose access if they repeatedly provide incorrect responses. Because the right response varies each time, a hacker has a little window of opportunity.
People may also be able to access their accounts using smartphone fingerprint readers at banks that operate partially or entirely online. When compared to passwords, which frequently contain details that are easy to guess or are reused across multiple websites, fingerprints are a more safer and stronger verification technique because they are unique. So, when banks have a digital presence, banking security is often stronger.
People can use apps to automatically freeze or unfreeze their bank cards, preventing unauthorised usage, at many fully digital banks as well as traditional banks that provide some digital services. Additionally, you frequently receive real-time push notifications of transactions, enabling you to immediately identify anything fishy.
4. Customer Support Is Still Available
Some people who aren't experienced with fully digital banks might be concerned that if something goes wrong, they'll be screwed. Thankfully, support is still available, but you can access it online.
The fact that most bank websites operate the same way regardless of brand is another advantageous feature. Therefore, the majority of banking websites use the same procedures for fixing access issues. This implies that you can attempt to resolve a problem before getting in touch with a customer support agent.
If you still require assistance, you can easily get it by entering the specifics of your request in a chat window or support form. After logging in, you may often do that on online banking portals, sparing you from having to type your name, email address, or other identifying information before speaking with a customer service representative.
Support for online banking is not always available around-the-clock. However, the hours for assistance are frequently longer than what traditional banks provide.
The Future of Digital Banking Looks Bright
Many consumers today choose digital banking for a variety of reasons. Naturally, the majority of these benefits are available to banks that just offer digital options as well as to those that offer complete digital services. However, you may anticipate that the latter group of companies will gradually provide more digital-first or digital-only capabilities. Giving customers those options will improve banks overall.