Remember the days when you had to go physically to the bank, hope that the person working there is having a good day, and fill out a bunch of forms just to be able to send some money to a friend? Well, these days are gone thanks to online banking.
Things are much simpler nowadays. It might be difficult to explain online banking to your elderly, but that’s how the financial world works today.
On top of that, we have online banking platforms, which are essentially online banks, and they’ve introduced some features that changed how we handle money. But it all makes sense, and the world needs to change.
Just pull up your phone and check your last 10 transactions. I bet at least 2 of them are international, whether you are paying for Netflix or buying something online.
This means that the money is sent to another country, which in traditional banking is a total nightmare. Trust me, going to a bank to send or receive money will have you submit a huge load of documents like invoices, contracts, reasons for payment, and many other things.
But as the world becomes more complicated, we need something to simplify our lives. That’s where online banking platforms come to save the day.
Does this mean that they are entirely different from traditional banks?
Well, let’s find out.
The Rise of Digital Banking
Online banking platforms are quite new to this world, and they’ve emerged as heroes to digitalize the financial world. Have you heard the name Neobanks and wondered what the heck is that? Well, it is another word for online banking platforms.
They’ve changed the entire financial industry by offering a seamless and convenient banking experience. An experience that even your grandma can handle. The days of rushing to the bank before it closes and looking for a parking spot for hours are gone. Now, online banking is accessible from everywhere in the world and it is available 24/7.
You just need your computer or smartphone, and you are good to go.
Customers can now apply for a loan, pay their bills, and transfer money whenever they like without going to the bank.
On top of that, online digital platforms like Genome are usually way less expensive than traditional banking services. Just because they don’t have as many costs as traditional banks, like rending out offices for physical branches, they have lower fees.
You can check out Genome on the link below:https://genome.eu/
The Pressure on Traditional Banks: Adapt or Perish
The rise of digital banking platforms has put traditional banks under immense pressure. They’re like the VHS tapes of the banking world, trying to stay relevant in a Netflix era.
- Investment in Technology: Traditional banks have been forced to pour money into technology upgrades, developing their own online and mobile banking platforms to keep up with customer expectations.
- Security Challenges: With the increase in digital transactions, ensuring robust cybersecurity measures has become a critical focus for banks to protect sensitive customer data from cyber threats.
The Perks of Going Digital: Why Customers Are Loving It
Digital banking platforms have not only simplified transactions but also personalized the banking experience for customers.
- Personalized Services: By leveraging big data and AI, digital banks analyze customer behavior to offer tailored financial services. Imagine getting investment advice or loan options that perfectly match your financial habits – that’s the magic of digital banking.
- 24/7 Availability: Digital banks don’t have closing hours. Whether it’s midnight or a lazy Sunday afternoon, your bank is always open, ready to serve you with a smile (or at least a cheerful emoji).
Challenges Faced by Traditional Banks
Despite their efforts to modernize, traditional banks still face significant challenges.
- High Upgrade Costs: The cost of upgrading technology and infrastructure can be a hefty burden. It’s like trying to turn an old jalopy into a sports car – possible, but expensive.
- Customer Preferences: Some customers still prefer face-to-face interactions for complex financial decisions. While digital banks offer convenience, traditional banks retain their appeal with personalized customer service.
The Digital Advantage: Statistics to Know
The numbers speak for themselves when it comes to the growing popularity of digital banking:
- Market Growth: The digital banking market is projected to reach a staggering $9 trillion by 2032.
- Adoption Rates: In 2023, retail digital payments in India skyrocketed, increasing from 162 crore transactions in FY13 to over 14,726 crore transactions by FY24.
- Geographic Dominance: Asia Pacific leads the digital banking market, with over 69% share in 2023, thanks to widespread internet connectivity and a tech-savvy population.
The Future: What Lies Ahead?
As we hurtle into the future, the interplay between digital and traditional banks will continue to evolve. While digital banks offer unparalleled convenience and innovative services, traditional banks are stepping up their game with technology investments and personalized customer experiences. The key will be finding a balance where both models coexist, catering to diverse customer preferences.
