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Digital banking is similar to online banking in that banking services are delivered over the internet. However, digital banking encompasses more than online banking, which focuses on digitizing certain core aspects of traditional banking, such as payment reminders and access to bank accounts. Digital banking, on the other hand, digitizes every aspect of banking products for customers of financial institutions. Digital banking revolves around the customer and meeting all of their digital banking needs.
Digital banking encompasses a large range of financial services. The core aspects of online banking, such as access to savings accounts and credit cards are a part of digital banking, but it expands on the services available to a customer. With digital banking, customers can complete mortgage applications, access financial consulting services, and even take firmer control of how their financial information is shared through the use of open banking. Digital banking is also flexible and easy to update, ensuring that financial institutions will always have the ability to implement changes and improvements based on new technology or customer feedback.
However, the benefits of digital banking are not just customer-facing. Digital banking can be helpful for financial institutions as well. Generally, digital banking solutions are designed by IT experts with the user experience in mind. This means that systems and functions will be designed so that the average customer can easily access services, such as their checking accounts, without frustration, thereby increasing their opinion of the financial institution. Additionally, institutions will have access to digital marketing solutions. Digital banks typically include the ability to collect data as customers utilize their services. Analyses can then be run on this data to identify trends. Financial institutions can then use this information to target specific segments of customers in the way that machine learning (ML) has identified as being the most effective for that group.
The benefits of digital banking for financial institutes include: