As the world grows increasingly digitized, banking and financial institutions are beginning to move into the virtual space more and more. Digital banking is becoming a more popular option for many companies and individuals, and for good reason.

Digital banking provides the opportunity for more effective, efficient, and thorough banking services to be readily available anywhere at any time. This turn towards virtualization of necessary commodities, such as banking services, has the potential to revolutionize how we interact with digital platforms in our day to day lives.

Digital banking provides a myriad of opportunities and services that greatly impact financial activities for corporate entities, businesses, and consumers alike. This digitization can help build a better and safer future wherein banks and bank accounts are more adaptable to change. This article will explore the rise and benefits of digital banking, and how its adaptability is essential in times of crisis.

The Rise of Digital Banking

Digital banking is a virtual service that allows customers and bank associates 24/7 access to accounts and related services by way of devices connected to the internet. This is done by organizing networking, servers, security, and storage together to form a centralized location from which the banking data and services can be accessed.

In many cases, this is done by way of cloud computing – an on-demand delivery of services that offers all the needed essentials for a strong virtual infrastructure, such as what would be needed for a virtual bank.

Digital banking has more simple beginnings, with the invent of ATMs and debit cards in the 1960s. In today’s times, almost the entirety of banking activities can be carried out within the virtual space. These activities include (but are not limited to):

  • Checking account balances and transactions
  • Setting up auto-pay for bills
  • Applying for financial programs
  • Digitally depositing checks
  • Transferring money

Benefits of Digital Banking

There are several advantages to digital banking that make it a more ideal and efficient compared to traditional banking methods. Among some of the best benefits are increased security, higher cost effectiveness, simplified transactions, and better opportunity for strong customer support.

Read on to learn more about how digital banking provides each of these benefits:

  • Increased Security: For digital banking operating within a cloud computing service, vastly improved virtual security and protection from hackers and malware is perhaps one of the greatest advantages offered.
  • Cost Effective: Not only can digital banking cut down costs necessary for in-person services and transactions, it also offers the opportunity of lower fees and higher interest rates for patrons.
  • Simplified Transactions: Activities that would have traditionally taken up large portions of time can now be completed within minutes via digital banking, freeing up bank associates to spend more time on core objectives.
  • Strong Customer Support: Digital banking is better at bridging the gap between customers and bank associates by allowing for much faster conflict resolution.

However, the arguably biggest advantage of digital banking is its ability to adapt and maintain flexibility in times of crisis. With increasing levels of uncertainty in the world, having confidence in banking processes and services is currently of the utmost importance.

Adaptability of Digital Banking in Times of Crisis

With the ongoing Covid-19 pandemic and rising socio-economic and political tensions, many people have begun to feel fearful of the future for their banking accounts and financial security. In a recent Lightico poll of 1,000 consumers, 82 percent held concerns about visiting their bank’s physical location, while 63 percent are more willing to try out digital apps and services than they were before.

Digital banking provides consumers and associates with the ability to stay well connected to financial services even through times of crisis. Not only does it allow access from any location at any time from an internet-connected device, but it also provides a better sense of security thanks to safely-stored and constantly backed-up data to prevent major information losses in the event of a crisis.

According to West Monroe, crises have historically provided banking institutions with both challenges and opportunities, leaving each a bank’s survival up to its own flexibility and innovation in response to changing times.

Transforming a banking institution into a well-rounded and well-functioning digital banking virtual space is crucial for adapting to and surviving a crisis. Not only can customers safely access their accounts from home, but bank associates have the opportunity to provide top-notch service from the safety of their homes thanks to secure networking and computing provided by digital banking.

Practical Advice for Getting Started

The user experience should be considered at every stage when building out your channels strategy and implementing new tools and techniques. For that reason, it’s important to collect user data on your customer’s journeys before starting. It’s possible this data may already be available at your institution, but if it isn’t, the two most common ways are through surveying your current users or hiring a research company to survey a controlled group. By understanding your users real experiences and requirements, you can ensure your developments don’t become wasted investments.

Consider the technology you already have readily available. For example, if you’re planning to leverage a digital platform to improve your onboarding process for more tech savvy generations, mobile phone cameras are already one form of technology that is at your disposal. Some banks have begun leveraging phone cameras to streamline the onboarding process by scanning passport photos and then using AI to compare that passport photo to a live video stream of the person saying something like “Hi, my name is John Smith and I’d like to start an account at Bankington Bank”. This sort of simplification of the onboarding process takes away a common barrier some users may face when joining somewhere new, and it leverages a form of technology your new user has readily available. There are a range of suppliers that provide the process and technology required to set this up and meet compliance obligations, helping you fight fraud and give your customers what they want.

Decide whether you want to build out something new, or work with what you currently have. Updating and customizing legacy platforms can be a great first step to ensure no investment is wasted during your digital platform implementation journey. There are a range of great tools such as ServiceNow and Temenos that help facilitate the customer journey, but if you choose to work with what you have now, it’s important that you or your team assess how these platforms can be used to enhance your current processes and systems rather than render them useless. This includes considering your current customer service journey and experience and ensuring digital banking platforms provide your customer service team with the information they need. Many of these tools have open API’s, so your technical team, or a consulting firm like CPQi can help customize and integrate these platforms into your current systems, giving you a streamlined service. For example, integrating your mobile application or website tracking and analytics systems with your customer service team’s tools will help provide your users with an easier assistance journey. Or flagging certain moments in-app, such as searching for an answer to bereavement related financial issues, or difficulties repaying mortgages, and offering person-to-person customer service, can help both your team and the user resolve any issues quickly without becoming frustrated while looking for a difficult answer.

Final Thoughts

Virtual spaces are becoming the forefront of banking activities, and more and more consumers are looking for institutions that offer digital banking services. Being able to meet these changes in demand is absolutely essential moving forward, as the digitization of industries continues to reshape the future. CPQi offer a variety of omnichannel banking technology services to some of the largest banks in the world, if you’d be interested in a free omnichannel banking consultation, just drop us an email at info@cpqi.com and we’ll book you in with one of our consultants.

Written by Mauro Mambretti, Managing Director of CPQi LATAM