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People won’t trust the potential of digital banking unless it is proven that the bank exists in a physical form. Hence, it is more difficult for digital banking to become entirely digitized.
Fremont, CA: Every industry is digitalizing, and digital transformation in banking has not been a smooth journey. While electronic banking is growing popular today, it is also true that digital banking services are facing several challenges, especially for retail banks. Given the constantly changing demands of customers and increasing obstruction from rapidly emerging financial technologies (fintech), traditional banks are forced to innovate and adapt to digitization.
Here we are going to look at some challenges and opportunities digital banking deals with
Digital banking challenges
Complete Digitization is not Possible
While many people are positively responding to digital banking, there is still a significant portion of the population who are dubious about it. People won’t trust the potential of digital banking unless it is proven that the bank exists in a physical form. Hence, it is more difficult for digital banking to become entirely digitalized.
Various non-financial organizations are out there who provide services quite similar to what digital banking is expected to do. For instance, Facebook has made it possible to transfer money directly to someone's bank account. Financial institutions are comparatively slower in making these advancements because they have to comply with several rules and regulations.
Opportunities Available for Banks in Digital Banking
Smartphones are not anymore a luxury, thanks to innovation. As the number of smartphone users has increased over the past years, mobile banking is becoming more popular among people. Soon, mobile banking will be people's first preference, boosting the opportunity for banks to generate more revenues from transactions.
Round the Clock Service
Digital banking enables banks to provide 24x7 services to their customers, which implies that they can deposit or withdraw money from their account anytime, that too, without standing in the queue.
Increased Number of Borrowers
Banks make profits from the interest customers pay for their loans. Digital banking will allow them to get access loans online without mush hustle, consequently increasing the number of borrowers.
See also: Top Banking Tech Solution Companies