It is the twenty-first century and disruptive innovations are substantially sweeping off traditional banking systems. Who would have imagined, 20 years ago, that, today, it would be possible to send money to someone living miles away, pay utility bills, and get bank loans within a few seconds, without passing through the walls of a bank? The advent of digital banking has transformed the way banking services are offered. It is still rapidly unfolding and more advancements are underway. Nigeria has largely embraced the potentials of digital banking. Even traditional banks are now opting for the adoption of a digital bank, with Standard Chartered Bank and others like Wema, with ALAT, joining the league.
What is Digital Banking?
Digital banking is an innovative improvement to the banking system, and it involves the digitization of traditional banking services. What this means is that, via digital banking, regular banking activities like withdrawal, money deposits, transfers, loan application and management, can be done over the internet, thereby, eliminating the need for a physical bank. Digital banking puts a bank into everyone’s hands, anywhere and at any time.
The Difference Between Digital Banking and Online Banking
Digital banking is very synonymous to online banking, and they are often used interchangeably. However, there is a fine margin between both banking systems. Although online banking allows anyone to perform several transactions without visiting a bank, it still does not completely eliminate the need for a physical bank. It merely complements the services that traditional banks offer. Services like transfers and deposit of large sums of money still require customers to visit a physical branch of a bank.
Digital banking, on the other hand, encompasses online banking and other services that totally eliminate the need for a physical banking infrastructure. A digital bank is like an invisible bank. Every transaction can be carried out through a digital bank without customers ever having to step into the four walls of a bank.
Why Do We Need Digital Banking?
Visiting a bank is commonly associated with experiences of inconvenience and discomfort, from the long queues to the hours spent on processing a basic transaction. With digital banking, all of these can change. The banking experience no longer has to present uncomfortable encounters. You can be on your bed and experience the ease of accessing financial services that would normally require a visit to the bank. Digital banking offers convenience for banks and its customers.
So much money is spent on developing and maintaining physical banking infrastructures. So many people, in rural areas and some other areas, do not have a physical bank branch with reasonable proximity to them, hence, they are excluded from the benefits of the financial system. Many even have to travel several miles to visit a physical bank in order to perform a basic transaction. Digital banking presents a means to cut down operating costs of banks, improve the experience of customers, and enable extremely fast execution of transactions by eliminating the need for a physical bank branch.
Advantages of Digital Banking
- Uninterrupted Access to Banking Services
Since digital banking does not rely on physical banks, it is not affected by closing office hours, public holidays or any circumstance that, in the case of traditional banking, would interrupt access to financial services. Digital banking allows customers to have round-the-clock access to financial services.
- Reduced Costs
Digital banking eliminates the dependence on paper forms for transactions, as this is substituted with electronic transactions. This, and the elimination of running costs associated with a physical bank, reduces the expenditure of banking platforms and, in turn, reduces the cost required for customers to access banking services.
The ease of performing any transaction without having to visit a bank makes the banking experience of customers much more convenient and time-saving. Customers can put the time saved into other productive activities rather than enduring the time-consuming long-waits at traditional banks.
Top Digital Banking Platforms in Nigeria
Here are some of the popular digital banks in Nigeria
- ALAT, by Wema Bank
- Kuda Bank
- Rubies Bank
- Standard Chartered Bank
What The Future Holds
What we have experienced so far with the rise of digital banking is just a taste of what is yet to come. As technology continues to advance, the future will see better versions of the digital banking experience with improved personalized services, smart banking assistants, better interface, interactions and usability, plus the birth of a plethora of innovative banking services which will be readily available at everyone’s fingertips.