First, it was customers pushing banks to adapt to the digital wave, and now non-bank enterprises growing as competitors are pushing traditional banks to become digital enterprises. And why not – when data shows retail banks that digitize could achieve a 20% increase in revenues and a decline in expenditures by 30%. On the other hand, for wholesale-banking digitization plans can reduce the cost-to-income ratios by 12%.
The data seems intriguing? Isn’t it? Let’s take a closer look at some of the other reasons of Why should a bank go digital?
Banking Has Evolved
The customer of the modern era is not satisfied with a withdrawal and deposit services; he is looking for customized banking like daily interest on saving bank account, 5-min loan approval, or trip-based insurance. All these features cannot be provided via a physical-only branch. And so to meet customer’s expectation, you need to go digital.
Banks aka business
Well, a hard known fact that irrespective of you calling yourself as Bank, NBFC or anything, you are running a business and business means revenue. Revenue could be generated either by getting more clients or board or cutting the operational cost. And adapting to a digital strategy provides you an advantage of doing both. With digital branch you don’t need to setup a physical branch, recruit new employees, buy office furniture, etc. but still can board a new client on customer’s devices [more like BYOD(Bring your Device)] like a smartphone or desktop.
In fact, globally, many banks are shutting down their bank branches with digital channel initiative.
Banking needs to speed up to 5G
The traditional banking is not at all fast, flexible, and scalable. They need to integrate with 5G speed, or they die. In fact, one of survey 80% of the technology effort in the bank’s digital program was spent on integration, and this was because the current systems are not able to cope up with high-speed digital applications. So better to adapt now.
Banking is a fundamental right
I often repeat this, but banking is not legally but humanely a fundamental right to every person living on this earth. I mean you think about a person in some other country, but he has a bank account, wouldn’t things be so easy for him/her to shop, travel, pay bills, get a loan, invest and exposure to hundred such services.
Setting up a branch, getting each person on board physically is a challenge only banks via digital means could make it happen.
Banking is Fun
Think about it, a guy every 1st day of the month with his passbook goes to the bank, waits patiently, meets the cashier, withdraws cash and returns. You need to provide some options to your customer. Isn’t it? I wouldn’t be surprised if riding on a national highway in India or any other developing nation I stop by at a tea point and the owner asks me to pay via a card or digital wallet. Let your customer connect you via a video call? Or how about offering your customer a customized credit card. It’s all possible if you decide to sail on digital wave.
After reading our post, if you feel you have made up your mind and looking for a technology provider, we are just a call away.
Teknospire, a technology provider, is helping banks, NBFC’s, and other financial institutions across the globe to ride the digital transformation wave smoothly. Our Digital Banking, Mobile Banking, Data Analytics, Reconciliation, and Neo Banking are just a call away.