26th Oct 2022

The Sun is Setting on Traditional Banking

Would it not be alarming when you come to find out that the very foundations of your bank are about to be shaken up? Indeed! It would worry any banking head. This is what’s happening to traditional banking today. It’s going through a complete remodelling process. Ever wonder what’s causing this stir? Digitalization! Which further led to the birth of digital banking. Let’s find out how digital banking is taking over. 

Conventional banking: A sinking vertical 

The traditional banks have retained the podium for decades and it’s time their monopoly ended all thanks to digitalization. The arrival of digital technologies has opened newer and more efficient avenues for forward-looking financial institutions. In addition to the hassle of travelling all the way to the banks, here are some of the elements that compromised the traditional banking regime.  

Transactional costs 

One of the major drawbacks of traditional banking is the surmounting costs of transactions. Every transaction is associated with a fee. There are high account fees, card fees, transaction costs, and borrowing costs bundled with multiple charges that exert a negative impact on today’s digital customers. 

Confined availability 

Traditional banks have designated hours during which they can cater to their customers’ concerns. In case of any queries after the designated banking hours, be they urgent or not, the customer will have to wait for the next day to get them resolved.  

Minimum balance policies 

Conventional banks still necessitate a minimum amount of opening or maintaining an account. In some banks, there are higher amounts deemed mandatory to be always kept in the accounts to ensure it remains functional.  

Insecure mechanisms 

The evolution of technology has enfeebled legacy IT structures of banks to relentless cyber-attacks that can cost them highly sensitive data of their clientele and compromise their existence in the market. With digital cyber security frameworks, this can be avoided. 

Creating banks that work bionically 

Despite stringent regulations, the banking industry is one of the world’s most thriving verticals. To keep up the same momentum, banks need to foster a pathway that ensures bionic operations. Technologies like AI and data analytics can help your bank deliver interactive experiences and attain real-time updates on its customers’ interactions. On top of that, a bionic approach renders agility, which is pivotal to succeed in this competitive market. Do you know what else has helped banking customers become shrewder? Mobile applications.   

A smooth sail: An app, not a building! 

97% of millennials and 89% of consumers prefer mobile banking apps. Why? Because they need the convenience and efficacy of the brand they interact with. Hence, giving rise to “invisible banking”. This concept allows customers to just tote their smartphone anytime and anywhere and get a range of financial needs resolved. We can precisely say that today’s customer carries a bank in their pocket. 

Future of digital transformation in banking 

We’ve already established that digital banking has made our lives easier but to what extent? Let’s find out: 

Round-the-clock access 

There’s no established time or date that keeps you from using your digital account. You have year-round 24/7 access to your digital account from where you can perform banking activities. There are some minor exceptions such as periodic maintenance which is also intimated quite earlier.  

Optimization of funds 

The digital technologies leveraged by digitally transformed banks help you keep a real-time track of your spending and suggest strategies through which you can save money by leveraging multiple practices and tools. 

More customers control 

Digitalization has enabled customers to file loan applications, get credit or debit cards, as well as deposit a check virtually and send funds to recipients of their choice. All of this keeps customers more in control. Hence, keeping the happiness metrics higher.  

A secure digital banking garrison 

To combat theft and fraud, there are mechanisms such as multi-factor authentication or blockchain technology that help banking institutions safeguard their customers’ sensitive financial information.  

Banking in metaverse 

If you are looking for an interaction with a bank rep but only virtually, metaverse banking has got you covered. Now you can do every banking activity in a virtually designed bank branch where you can walk in, interact with the avatars of bank reps and communicate as if you were in a real or physical branch. How cool is that!  

Make your bank more human with digitalization 

The infusion of digital solutions has reshaped the way human interactions work. Though traditional banks are still considered to be somewhat reliable, the core focus in this era is on convenience and convergence, and digital banking solutions deliver that.  The speed, accuracy, and ease of digital banking are second to none. The future of banking is already here, and banks need to be a part of it if they have not done so.
If you aspire to enable your banking institution to be digitally adept, please visit our website @TechvistaSystems or our LinkedIn handle at @Techvista