“Financial Institutions must be able to deliver and easy to navigate, a seamless digital platform that goes beyond a miniaturized online banking platform.”
-Jim Marous, Publisher – Digital Banking Report
How many of you have actually visited a bank in recent times?
Do you remember the last time you visited a bank to transact money?
Not sure, right?
The reason for this can be understood better if you acknowledge the fact that you live in an era of digital banking. Your buying behavior and modes of payment have changed drastically over the last decade. Cheque and cash are old schools now, and it is more about online banking, mobile banking, and Internet banking.
This cashless economy has not only made things easier for you but has also made it all instant and quick. You no longer have to carry wads of cash or wait for banking hours to receive and transact money.
While you do have quite an options when it comes to virtual banking, here, we would focus majorly on digital banking, mobile banking, open banking, and online banking.
So here is the primer on different ways to bank.
You are using online banking service every time you log in to your online bank account. In other words, transactions conducted electronically using the internet as a gateway are called online banking.
“Online banking refers to banking services where depositors can manage more aspects of their accounts over the Internet, rather than visiting a branch or using the telephone. Online banking typically is comprised of a secure connection to banking information through the depositor’s home computer or another device.” – Techopedia
Pros of Online Banking
Almost every financial institution nowadays gives this facility to its customer to reduce the hassle of visiting their physical branch.
Some banks even allow you to deposit cheque by simply taking a picture of it.
No more tedious process of banking with the long queue with restricted working hours and unpredictable weather conditions with equally unpredictable mood swings in hot, sweaty and humid conditions.
With the advent of online banking, a person can virtually monitor and transact money 24/7 without having to wait for the banking hours.
Also, the alert messages and emails allow you tomonitor your account anytime and detect any fraudulence well in advance.
Cons of Online Banking
The biggest drawback of this mode of banking is that it can’t be used to deposit and withdraw money.
Also, your online banking experience is dependent on your internet connectivity.
While there is a tendency among people to confuse this term with online banking, digital banking is definitely not the same as the former. While online banking literally limits you to the services provided by your banks like NEFT transfers, automatic payment reminders, and the likes, digital banking goes beyond this.
Online banking focuses on digitizing the “core” aspects of banking, but digital banking encompasses digitizing every program and activity undertaken by financial institutions and their customers.
Pros of Digital Banking
When you talk about digital transactions, you think of mobility, feature-laden transactions, predictive and profile-oriented banking with functions like booking tickets online and purchasing a product/service online.
It is also about using e-commerce businesses for doing your day-to-day transactions and your regular online banking without any hassle on-the-go.
Digital banking also means attractive cash-backs, discounts, and vouchers while transacting digitally.
Cons of Digital Banking
While the advantages outweigh the disadvantages, there are a few drawbacks involved in digital banking as well. You may not be very comfortable making large payments digitally.
Also, you may tend to get lured into unnecessary online shopping just to use the cash back and vouchers that you get whiletransacting digitally.
But who considers shopping a drawback ever, right?
You may say that online banking and internet banking are the same.
However, there is a new facet of online banking that goes over and beyond the understanding and scope of online banking.
Open Banking! Ever wonder what that means to you?
Through this concept, people can share their transaction data with third parties to boost competition in the financial market. Sounds interesting, right?
Pros of Internet Banking
It allows you to initiate and make payments directly from your account as a bank transfer. It also enable you to keep a check on your finances in a better way.
Through open banking, you are not only transacting, but you are also streamlining your finances andmanaging it more effectively.
With this, you can also get more customized services as per your spending behavior, leading to a more responsible and systematic lending process.
Cons of Internet Banking
This concept is relatively new, and that literally translates to many trial-and-error instances and a general mistrust related to its security and authenticity.
People who are not adept at digital technology might not be able to reap its full benefits.
You all have used this at some time or the other. Every financial transaction you undertake using your Smartphone applications is termed as mobile banking. Apart from the commercial apps, your financial service provider would also have a mobile app with which you can transfer cash and make bill payments conveniently on your mobile.
This is by far the most trending among all the banking types, and the onus is that you would only need your Smartphone and an internet connection for this kind of banking!
Pros of Mobile Banking
Mobile banking has a lot of scope in the virtual banking space and encompasses transactions through mobile wallets, digital payment modes, UPI transfers (like the BHIM app), etc.
There are many mobile apps which offer you safe and secure transactions and much more, ‘anywhere – anytime’ with just a click. For example, SBI has SBI Yono, SBI Anywhere; ICICI Bank has iMobile. HDFC has HDFC Mobile and Pay Zapp. Kotak Mahindra’s Banking app is Kotak 811, while Axis Mobile provides Axis Mobile.
We also have Payment Banks committed to the inclusion and service to the last mile like PayTM, Vodafone m Pesa, Airtel, Fino and so on.
This banking mode is very fast and convenient and hence the most preferred one among the younger and older generation alike.
You don’t have to physically carry your cash or your card as your mobile wallets function as virtual money which can be transferred in an instant.
Transactions that are done on your mobile apps also get irresistible cash back, vouchers, and coupons that can be redeemed on your future transactions or purchases.
You can not only spend easily but also keep track of all your spending in a month.
Cons of Mobile Banking
While there are so many positives in mobile banking, there are certain points to ponder and be wary of in this mode of banking as well. Unlike websites, the mobile apps that you use for digital transactions have to be great at data encryption.
Did you even consider the fact that your mobile wallets and apps may get into wrong hands in case you don’t lock your phone?
You may fall prey to hackers if you use them on an unsecured or public Wi-Fi connection. Then again, when your service reception is poor, you have the possibility of getting intercepted by hackers and unauthorized parties.
These are still nascent, but filled with potential, No ‘brick and mortar’, completely ‘Digital Only’ banks.
Built from scratch, digitally, to provide customers with seamless user experience, these are the banks which add ‘digital offers’ to basic banking products and services, regardless of the banking license.
They compete independently and on equal terms with traditional banks or digitally manifested traditional banks.
Few of the examples of Neo Banks are Atom Bank, Fidor, GoBank, mBank, Moven, N26, Open and WeBank.
TEKNOSPIRE: Moving beyond ‘Just Payments’
Teknospire offers a comprehensive suite ‘FinX’ for your financial needs. With a mission to build and deliver the right technology, and keep it rolling with partner banks and other FI’s for the masses, our offerings vary from the FinX- Digital Financial Services to FinX – Mobile financial services to Business Intelligence to Analytics.
Teknospire’s mission of bringing Financial Inclusion @ the last mile is echoed by our CEO Mr. Vishal Gupta @ Mirchi Love.
Financial Institutes can best position themselves to capitalize on digital banking emergence by being ‘Customer Comfort Centric’. Teknospire helps you by not only bringing seamless technological transition but also keeping ‘Customer-centric’ approach in mind, identifying and delivering the right product and services, customized especially for you.
With Open Banking, by adding ‘Banking and Non-Banking’ products and features, banks, and Financial Institutes are able to extend their services beyond the ‘traditional zone’ and broaden their approach beyond financial services to complement further as ‘Complete Customer Banking Journey’.
Teknospire enables the banks / financial institutions to build a digital ecosystem with Omni channels interface, along with all possible digital services dispensation at the last mile. The services can be disbursed via B2C interfaces or through the assisted channels (digital touch points/agent network).
To be able to digitally evolve the banks / financial institutions need at least 6-8 different platforms and Teknospire brings them all bundled into one single offering, to cut down the cost, effort, and effectiveness of digital evolutionfor these institutions.
Acknowledged by Oracle, Teknospire offers the ‘plug and play’ solution, FinX, ‘Digital Bank in a Box’, to connect with ‘the right people’ by extending your technology in the most secure, cost effective and accountable way for the disbursement of resources to provide financial inclusion to the last mile.
‘FinX ‘ addresses the 360º digitization of banking and payments, especially addressing the last mile, without any extra hardware/capital expenditure.
The solution addresses banking, digital consumption of household/VAS micropayments and merchant payments and hence the name “FinX 360º”.
Our API model has been listed with Oracle marketplace which can be used for creating, authorizing, capturing, voiding, refunding a payment as well as getting information on previous payments.
With the advent of digitization, you sure have a lot of options when it comes to financial transactions. Growing customer demand for digital access, convenience, with a focus on ease in operation, security and seamless transactions across different platforms and channels, it is yet to be seen whether the banks are investing in digital services rightly? Are they doing enough? and are they doing the right way? only the time will tell. But then, in this world of fast-evolving digitization, we are just the click NEAR!
It is a comprehensive blog post about the different ways to bank. It would be beneficial for people when it comes to financial transactions. Thanks for the post!