How Has The Digital Revolution Changed Banking?

Digitization has changed the banking sector in India. Digital banking is an important part of the banking system, where customers can access banking services at the tip of their fingers. With digitization, customers do not need to visit the banks or contact agents to get work done. Now, people can check their account related details, transfer funds and pay bills online, as well as check the status of loans on the go.

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How Has The Digital Revolution Changed Banking?

Benefits of Digitalization:

Some of the advantages of digitization are summarized below:

• Digital Presence: This is one of the key advantages of digitization. Now, with the help of digital tools, any individual or company can set their digital footprints and show presence on the web. Digitization has enabled entities to establish their presence on the internet through digital tools like social networks, websites, blogs, corporate pages, networking sites and has also enabled multiple visibilities of the company and sales channels. Many companies have accepted the transition and changed their outlook towards conducting business from traditional forms.
• New Contact Channel with Customers: Digital advancement not only opens new avenues for business, but also new ways to communicate and maximize the reach. Nowadays, the customer can connect with the company easily through e-mail, social networking or smart phone apps. This helps the company learn about the customer grievances and solve them easily.
• Better Decision Making: Digitization goes hand in hand with data management. Digitization has enabled people gather knowledge more easily. Knowledge can be used to make better decisions. Digitization in the business market helps companies get reviews and customer complaints are resolved easily. With this knowledge, the success or failure of any products or services can be easily understood. The business can make improvements and take informed decisions.
• Improves Efficiency and Productivity: Digitization can help entities improve their performance and services based on customer reviews. If the digital tools are used intelligently, then it can lead to a significant rise in productivity and can help the organization improve its efficiency. There are certain faulty areas of the company that can be rectified by using digital technologies and reduce production or operational costs.
• Encourages Innovation: Digital transformation provides scope for more and more innovation in technology and provides a base for newer innovations to be accepted easily, thus opening avenues for new trends and possibilities offered by technology. It will also create a new atmosphere where traditional methods are integrated with technological innovations that boost productivity and efficiency.
• Improves Working Conditions: The adoption of digitization covers many areas. One of these is the improvement of working conditions. There are newer employment options like flexible working hours and work from home. Improved working conditions offers multiple benefits, not only for employees, but also for the company. It helps decrease attrition and increase talent retention. The new generation of workers demands digitization of jobs. If these are not offered, then these will probably be much less interesting.
• Makes Communication and Teamwork Easier: Digitization has helped streamline the process of business. Technological innovation has helped track business and employee productivity. It has helped sort out many issues related to employee efficiency. Some of the software and applications have improved internal communications. We can observe this through the teamwork that is needed to implement measures of digital transformation, and through basic choices like implementing internal management systems.

Digital transitions have impacted the banking sector. It has changed the way banks offer services, the way they manage customers as well as investments and productivity. Digitization has helped banks increase customer base by providing banking services online and through smartphone apps. Digitization has reduced human error and provided a strong reporting system increasing efficiency of banking services and their customer care support.

Online Banking:

For commoners, the biggest visible change in the banking industry has been the increased use of online banking. Earlier, customers had to physically visit the bank to avail services and make transfers. Paying utility bills was difficult and time consuming. With the advent of online banking money transfer and procurement of account related information, this is now a simple and hassle free process. The user only needs to enter the necessary details and access various banking facilities.

Online banking can be accessed through both bank’s website and mobile application. You only need the user ID and a password to operate the accounts. With online banking, managing cash has become easy. Now, you can pay utility bills directly through the net banking account and make transfers to other accounts easily. The process is simple and easy to use and is much quicker than traditional banking methods.

The services can be availed round the clock and on weekends as well. There are endless benefits of online banking. However, the one that’s most important is how easy and accessible it has made banking to users.

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Data Driven Investments:

With the digital revolution being widely accepted across all sectors, one of the main changes that have taken place is the accessibility of data. Data can now be gathered from more than one source. This can be anything from up to date financial data to the outcome of a company, the perception and visibility/reach of a brand on social media and so on.

With the increase in accessibility of data the investments decisions taken by the banks will be more informed and accurate. With correct business decisions being made, banks can reduce their losses and maximize gains by associating with return generating brands and companies. The investments made by the banks must be in safer hands and the increased amount of data helps them to make more informed and profitable decisions.

Monitoring Of Activity:

Digitization has also helped improve employee efficiency and monitoring of their activities. There has been a considerable increase in the number of bank officials being arrested and punished for illegal practices in the last 5 years. This includes incidents of accepting bribe for sanctioning loans, errors in banks audits and insider trading, activities that couldn’t be traced without the implementation of digital technology.

Frauds can be traced by picking up internal emails or instant messaging, evidence can easily be found, meaning more prosecutions and therefore more name and shame.

However, this is not simply a case of punishment once people are caught; instead a major aspect that the digital revolution has given is the ability to track anomalous actions. This means that if a payment over a certain amount or a result that seems strange appears on a bank’s system, then it will automatically be flagged. This helps keep illegal activities within the banking industry at bay.

Customer Safety:

Banks keep your money safe. This is the main function of banks. Everything else is just an addition to the functions and services offered by the banks.

The ability of banks to track suspicious activities be it misuse of credit/debit cards or hacking of personal information is vital for banks to reduce crimes related to banking.

So, digital revolution can mean customers data can be more easily stolen by hackers and scammers. The money is no longer safe as it can be stolen by scammers without any signature or PIN codes. This is not true. The advancement of technology has meant the implementation of advanced systems and complex algorithms that enable banks identify potential threats and frauds.

With better technology and innovation, banks have secured customer data. Banks notify customers through SMS, e-mails or app notifications in order to authenticate transactions that are made using banking services. This can be anything like excessive spending by using credit/debit cards and using cards in different countries, or simple withdrawals made using cards.

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