With the rapid boom of innovative technology in the past few years, banks have been forced to keep up with the changes. The digital transformation of the banking industry has been ongoing for quite some time now. In fact, it has been happening for almost a decade and it is still going on! This digital revolution has brought about various benefits that customers can take advantage of – from mobile payments to online transfers.
Online banking is one of the most popular services that many customers utilise daily. It's not just the customers who benefit from these changes, though – banks have also increased their customer base by making services more accessible to mobile-savvy users and those who are unbanked.
So, what are the differences between traditional and digital banking? This blog will try to answer this question and present some important statistics about digital banking.
Traditional Bank
Let's explore the advantages of traditional banks – why they are still around and still a strong choice for many people. Traditional banks have been around for hundreds of years and have a lot of experience. If you go into a bank branch today, you will be able to see that they are more than just cash machines – they offer every aspect of financial services from loans, mortgages, insurance policies, and investments.
However, due to the increasingly rapid development of the Internet, banks have faced a difficult situation. The disadvantages that traditional banks face in the Internet banking era include ineffective service quality, low transparency, and poor customer service.
There is a lack of service quality in traditional bank branches because it is hard for them to deal with large volumes. Banks try their best to solve problems through telephone calls or messages sent by email or letters. However, these options do not provide the highest level of convenience. In addition to their slower reaction speed, traditional banks lag in adjusting their business models and improving efficiency, resulting in transparency and customer service.
Digital Banks
Digital banking is booming. According to ReportLinker, the global digital banking market will reach $30.1 billion by the year 2026. Big banks are getting their business models disrupted by digital-first companies offering more services and better customer experience. As online and mobile technologies become more advanced, people are increasingly choosing digital platforms to manage their money over traditional banks.
Through digital banking apps, users get to do everything from their phones without having to go into a physical location. Having full access and control to manage their accounts in their apps anytime anywhere can truly improve their daily lives, saving them time, money, and energy. What's more, digital banking apps use advanced digital security methods to authenticate customer identity via facial recognition on top of other modernised features such as virtual cards and personal finance managers, chatbots 24/7, and more.
80% of people prefer online banking over visiting a brick-and-mortar establishment.
95% of people are confident that the bank can protect their data.
90% of people use online banking tools to check their account balances.
73% of people worldwide use online banking at least once per month.
47% of consumers use online banking to update their account details.
62% of consumers have a better awareness of their financial situation thanks to mobile banking.
59% of people find the online banking method more secure for complicated processes
As we can see, more users are becoming firm believers in digital banking. The increasing penetration of smartphones, coupled with more people going cashless, means that digital banking is poised for growth over the next few years. Customer experience is such an essential factor when it comes to banking services that digital banking is currently very popular among customers. On the other hand, traditional banks have been slow to respond to the changes in customer preferences, but they are now taking steps to improve their services and compete with digital-only rivals.
Banking online definitely has several benefits over traditional methods with instant services and convenience in managing your banking needs anywhere, at any time of the day or night. Let digital banking improve the quality of your life and take away all the hassles you may experience with banking at the physical branches. If you're interested in learning more about how you can enjoy the benefits of a digital banking app, click here now.
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