How has Digitalization Disrupted the Banking Sector?
The banking sector forms the cornerstone of any economy, and digitalization has indeed disrupted the banking sector. Digital banking is referred to as the delivery of banking or financial services and products via electronic medium such as the internet, the telephone, mobile phones, etc. Generally speaking, digital banking is the move to online banking where services are delivered over the internet. A true digital banking platform is characterized by a digital front end, automated E2E processes, innovative digital products, personalization, and new business models & enhanced ecosystem. High level of process automation and web-based services allow access to financial data through desktop, mobile, and ATM services. Wallets, mobile baking, internet banking, digital cash, ATM, customer service, SMS services, and IVR calling are some of the common digital banking services that we use in daily life. Online banking facilitates checking balance through the internet, bill payment, transfer of funds, set up recurring bill payments or transfers, make credit card payments, order cheques, monitor CIBC investments, and others.
The digital revolution of the 21st century is changing the customer-bank relationship. The millennials need to be connected to their financial data 24/7, which has given rise to the era of digital banking. This new paradigm of banking is increasingly being embraced by financial entities who want to differentiate themselves in the competition by providing a digital experience. Improving user experience has become a key area of concern for banks who are incorporating digital tools in their ecosystem to address evolving purchasing behavior of consumers. Plus, the need to optimize distribution in an increasingly multi-channel environment is key to digitalization. From the bank’s point of view, digital banking provides the advantages of increased mobility, enhanced customer loyalty and account retention, higher transaction volume, and targeted and customizable marketing for banking services.
Current Trends in the Digital Banking Space
Numerous requirements in terms of customer experience, which cannot be fulfilled by banks alone have created a favorable groundwork for the entry of FinTechs in the digital baking marketplace. These non-traditional competitors are entering the market on the back of the gaps created by banks. The light structure of FinTechs, young brand image, and cutting-edge services focus on niche markets where banks do not cater. Digicash, Paypal, and Kickstarter are among the popular FinTechs.
The digital banking sector has witnessed the entry of non-traditional new competitors, retail companies. Retail companies possess deep technological know-how and abundance of data on consumer behavior, which provides them unprecedented leverage. Majority of minerals would be keen on availing financial services from companies such as Amazon, Apple, or Google due to their highly positive image, which has helped these companies revolutionize the digital banking experience.
New entrants are likely to play a crucial role in the future of the digital banking landscape. New business models in digital banking have made it easier for out of banking industry players to enter the arena, which was highly fenced until now.
White label banking is a new business model in digital banking, which allows telecom/IPS to render financial services by partnering with banks to utilize bank’s baking licenses, existing core infrastructure. This model eliminates all major organizational hassles and combines the expertise of both banking and telecom for better business outcomes. Additionally, it allows access to financial services without having to look after compliance and regulatory requirements. Furthermore, selling value-added services to the existing customer base is much easier.
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Digital Banking Market ShareA new market study, titled “Digital Banking Market Share ” has been featured on Market Research Future.More Information@ https://www.marketresearchfuture.com/reports/digital-banking-marketHow has Digitalization Disrupted the Banking Sector?The banking sector forms the cornerstone of any economy, and digitalization has indeed disrupted the banking sector.
Generally speaking, digital banking is the move to online banking where services are delivered over the internet.
A true digital banking platform is characterized by a digital front end, automated E2E processes, innovative digital products, personalization, and new business models & enhanced ecosystem.
Online banking facilitates checking balance through the internet, bill payment, transfer of funds, set up recurring bill payments or transfers, make credit card payments, order cheques, monitor CIBC investments, and others.
This new paradigm of banking is increasingly being embraced by financial entities who want to differentiate themselves in the competition by providing a digital experience.
Improving user experience has become a key area of concern for banks who are incorporating digital tools in their ecosystem to address evolving purchasing behavior of consumers.
Digital Banking Market ShareThe sudden challenges created by the ongoing COVID-19 are captured effectively to exhibit the long term growth projections in the MRFR report on Digital Banking Market Share.
The growth sectors of the Digital Banking Market Share are identified with precision for a better growth perspective.Technological and digital development is presently moving at a breakneck speed and has completely revolutionized the way many end-user industries work.
According to Market Research Future (MRFR)‘s latest report, the global digital banking market is projected to achieve a healthy CAGR of 8% during the forecast period of 2016 to 2022.The proliferation of technology across various parts of the existing banking system and the high penetration of smartphones are some of the key factors driving the growth of digital banking services.
Various qualities of digital banking such as easy availability, ease of use, and low to no cost are major contributors to the adoption of digital banking.
Additionally, banks are continually improving their digital banking service offerings and improving existing services such as internet banking, mobile banking, and ATM services among others.
The rapid increase in preference for e-commerce has further increased the use of digital banking for the purpose of digital payments.Bank fraud is a risk to the digital platform with cyber-attacks growing in sophistication, which has prompted the banking industry to employ stringent security solutions.
