Finance Banking

Future Of Digital Banking

Published at 07/14/2011 23:13:35

 Digital banking is another name for online banking. Online banking service is fast, secure and a handy way to take control of your finances. It is available 24 hours a day, 365 days a year. While the branch is still the most significant component of channel investment, digital banking is an increasingly important element of any bank’s distribution strategy. The banking industry has faced an inevitable challenge on their business to deliver their products and services in a much more efficient way by utilizing digital channels. An observation across different countries in Asia Pacific, FS providers have slowly extending their presence in digital space, not just to distribute, but they also need to interact with their customers. A combination of factors is driving the explosive growth in online banking. There has been a proliferation of low-cost PCs and other networking devices in the home market, which is causing a surge in the number of Internet users. Because many of the security concerns have been alleviated, these Internet users are becoming comfortable using the Internet as a transaction-based medium.

 The future of customer interactions rely on the internet banking channel, FS providers need to build a set of strategies in monetizing the online channel as their long term plans for the overall expansion strategies. Interestingly, consumers in developing countries have provided a strong indication on the importance of mobile phone banking as one of the banking channels. More than half of consumers in developing countries agree that mobile phone banking is an important channel of banking, relative to only over 27% of consumers in developed countries who agree. While many banks have improved their websites to target new customers, not many banks have explored opportunities behind the login page of their Internet banking. Enormous amount of customers' information behind the login page will allow banks to target customers in an effective way.

 Technology has changed retail banking. FS providers are extending their presence in the digital space. They are leveraging mobile phone technologies to reach customers in Asia Pacific. Digital banking is the key driver for 2011.

Consumer demands for digital banking are high in Asia Pacific, especially in the developing countries. The demand for mobile banking is high across developing countries. With this growing interest in digital banking, online security is fundamentally important for the successful implementation of mobile banking. Addressing security concerns is the most challenging aspect of multi-channel banking. The younger generations are influenced by virtual opinions. They are incorporating this branch of banking more and more into their lives. FS providers are focusing on improving the customer experience through new investments in IT. They are investing in new digital channels to expand their distribution networks. 

Tips and comments:

Banks need to support consumer demands for mobile phone banking in the next 12 months. Mobile phone banking will be the growth area for transactional banking in the next 5 years. PFM tools will slowly become a standard feature of banks' online offerings. Banks cannot ignore the presence of digital communication.