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What do the consumers want from banks today? Are they happy with the traditional in-person service, or have they moved on to the digital world expecting digital banking services?
There is no debate that digital banking has become a preferred method of conducting business. Though many still rely on the traditional format, it is time to move towards digital banking.
So, what is digital banking? It is a system where all banking activities happen through one/more digital platforms, cutting down on paper-based transactions. It means all banking activities are possible through the website, mobile banking applications, or other digital channels.
Banking services are made accessible from any time and across any handheld device. There is also a high level of automation within the system to allow for self-service. The digitally savvy customer looks for organizations that offer seamless digital services at all times.
These digital banks utilize open banking and APIs for all third parties to connect. All this makes them the ideal open source banking platform for customers.
Reports of Surveys and Studies carried out by Banks and Research Firms
Customers are looking for banks that:
Customer Behavior Concerning Banks
Top Reasons Why Traditional Banks are Failing
Most of us are familiar with Traditional Banking. It was all about “face-to-face” interactions and attention to customers, even if it meant waiting for hours. While the entire strategy behind banks was to build strong relationships with customers and continue the journey together, the system has been failing over the years. Banks need to rethink their business strategies and adopt digital technologies.
Operating expenses are high in the traditional banking system due to maintaining physical space, resources, and branches that customers can access. Multiple bank branches across the demography add to the operational costs.
Traditional banks have fixed working hours, beyond which customers need to wait until the next working day. Customers cannot access their account any time they wish to, and they need to visit the branch for clarifications or other activities.
Processes set in a traditional bank are slow when compared to digital banks. There is a protocol and a hierarchy to follow, and if one person is unavailable, there are further delays. Similarly, the need for paper-based transactions causes delays. Transactions between banks are slower, especially during the holidays or weekends.
While almost all traditional banks have a website for the customers to access, the offered services are limited. Many require the customer to visit the bank to present required documents. This process applied to products, such as debit or credit cards. All these are limitations that prevent customers from enjoying the services offered and cause undue delay in case of emergencies or unplanned contingencies.
Four Major Advantages of Digital Banking
In online banking, there is an increase in the interest rates for both savings and current accounts. Even though the difference is minimal, it does make a difference in the long run, especially if you maintain a large sum in your account consistently.
There are few additional charges in traditional banking, such as non-maintenance of minimum balance, checkbooks, demand draft charges, & debit card fees. Since online banks work with lower operational costs, the customer enjoys additional benefits. While ATM withdrawal limits and credit card charges are applicable, they are negligible at the end of the day.
A crucial advantage of digital banking solutions is the level of convenience it provides. Customers can access their account anytime, from anywhere, and on any handheld device. They can check their account balance, transfer/receive funds, apply for loans, and do other activities online. Digital banks offer instant alerts and notifications for completed transactions. Bank notifications help customers keep track of their spending or income or any fraudulent activity. While most traditional banks offer these instant alert services, they’re not available at all hours, and you need to visit the branch to clarify.
One of the concerns associated with anything digital is security lapses. Digital banks are secure where your data is protected. If ever someone other than you tries to access your account, you will receive an alert. Similarly, there are passwords and two-step authentication features that add a layer of security.
Banking has moved beyond the four walls and is now exploring the virtual world to offer customers unparalleled service and is sure to become the way of the future, even in small towns.
Neutrinos Enables Digital Transformation in Banks
At Neutrinos, we offer digital banking solutions empowering banks to build stronger relationships with their customers. Our low-code platform helps banks build a banking omnichannel to provide digital banking products and services at any time and through any channel.
Read our blog “Digital Transformation in the Financial Services Industry” to understand the benefits of using low-code app development in finance.
Are you looking to achieve digital transformation in the banking sector?