4 Reasons All Digital Banking Is Coming Whether We Like It or Not
Have you noticed fewer banks opening in your community or seen once-popular branches close for good? The world is going through a digital banking transformation, partly because many people from the millennial and Gen Z generations would rather bank digitally than through physical branches. Let’s explore some of the factors causing this change.
1. People Want the Freedom a Digital Bank Account Brings
Geographical limitations are among the main downsides of physical banks. When you’re traveling or otherwise unable to visit your chosen physical bank, using another brand’s ATM may result in additional fees.
The traditional approach to depositing paper checks at the bank requires an in-person visit. However, many banks now allow mobile deposits when you capture the check with your smartphone’s camera.
With greater online access, many people prefer not to deal with physical banks at all anymore. That’s especially true for customers who travel frequently or reside in multiple countries. Now that people can work fully or partially remotely, they can work anywhere with an internet connection. Many understandably want similar freedoms with their banking options.
Mobile banks typicallyprovide favorable foreign exchange rates, appealing to frequent travelers. Plus, making in-person transactions with your bank card often eliminates the additional charges that can otherwise result in buying things away from home.
An all-digital bank eliminates physical branches and allows customers to do everything with their smartphones or through a web portal. That’s convenient since modern culture is already so mobile-driven. People can do everything from video chatting with a doctor to meeting with colleagues around the globe by merely using their smartphones. They want banking to give them that flexibility, too.
2. All-Digital Banking Aligns With Progress
Only a few decades ago, many people received physical paychecks and sent checks to service providers to pay their bills. Both possibilities are much less common now; most companies have stopped distributing or accepting checks altogether. Instead, workers get paid through direct deposit. In addition, they can sign up to handle electricity bills, credit card payments, and more, with automatic payments taken from their bank accounts at the correct times.
All-digital banks also help people handle their finances on a chosen schedule. If you’re interested in applying for a loan or opening a new account, some or all of those steps can often happen online at a customer’s convenience.
A 2022Deloittestudy of global banks with digital options indicated that 80% of entities with the most-advanced digital banking offerings allowed people to open accounts fully online with their smartphones or through web portals.
These improvements make banking more flexible for every customer. For example, many peoples’ schedules don’t allow for the making of appointments during a physical bank’s typical business hours. In addition, customers often don’t want to make a phone call and wait on hold for several minutes, either. Now, they can often get the necessary information through a live chat or by submitting an email-based ticket.
These advantages are likely why younger generations are particularly eager to embrace digital banking. A November 2022 survey from technology providerFISindicated 32% of millennials would likely use banking services from a fintech company or digital bank in the next year. It was 22% for Gen Z users, but only 5% of baby boomers gave that response.
3. People Appreciate Banking Privacy and Tighter Security
When someone does a transaction at a bank with digital services, they must pass various security checks hard for unauthorized users to pass. Since digital banking relies on your information, it’s safer than measures that unauthorized people could theoretically pass by stealing physical property like bank or ID cards.
All financial institutionsmust encrypt data and informationin transit. Beyond that, some banks require customers to set six-digit identification numbers. Then, they must provide three of the six the banking system randomly requests upon every access attempt. The person will be locked out if they give the wrong answers a few times. Since the correct answer differs each time, a criminal has a limited hacking window.
Banks operating partially or wholly online may also allow people to access their accounts using smartphone fingerprint readers. Since fingerprints are unique, they’re a much safer and stronger verification method than passwords, which often include easy-to-guess details or get reused across sites. So, banking security is typically stronger when banks have a digital presence.
Many all-digital banks, along with traditional banks that offer some digital services, allow people to use apps to automatically freeze or unfreeze their bank cards, preventing unauthorized use. Additionally, you often get real-time push notifications of transactions, allowing you to spot anything suspicious instantly.
Digital services also have superior banking privacy because you could make transactions from your smartphone and at home. People can eavesdrop on your business at a physical branch or look over your shoulder as you use an ATM. However, if you have a digital bank account, everything happens through an app, including any interactions with representatives.
4. Customer Support Is Still Available
Some people unfamiliar with all-digital banks may worry they’ll be out of luck if something goes wrong. Fortunately, assistance still exists, but you get it without visiting physical branches.
Another helpful aspect is that most bank websites function similarly, regardless of brand. So, the samesteps for resolving access problemsapply to most banking websites. That means you could try to address an issue before contacting a customer service representative.
Then, if you still need more help, getting it is as easy as typing the details of your request in a chat window or support form. Many online banking portals allow you to do that after logging in, saving you from typing in your name, email address, or other identifying details before communicating with an agent.
Digital banking support is not necessarily a 24/7 option. However, the hours for getting help are often longer than physical banks offer.
The Future of Digital Banking Looks Bright
There are many reasons why many people prefer digital banking today. Of course, most of these perks apply to all-digital banks and those with only some digital options. However, you can expect the businesses in the latter category to progressively provide more digital-first or digital-only features. Offering those capabilities will change all banks for the better.
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