Digitization is paramount for Banking, Financial Services, and Insurance (BFSI) industry that pushes the digital payment envelope. Digital banking allows financial organizations to gain a competitive edge, become efficient and offer users the convenience of banking anytime, anywhere.
The demand for digital wallets, bank applications, and cashless payments gained immense traction as users started realizing the efficiencies of digital banking. As per a recent report by Grand View Research, “Digital Banking Platform Market Size Report, 2022-2030“, the global digital banking platform market size is anticipated to expand at a CAGR of 20.5% from 2022 to 2030. For digital banking to succeed, financial organizations must bust these myths to offer a robust user experience and increase customer engagement.
Myth 1- Only National and Global Banks can Leverage Digital Payment Platforms
The digital payment platform encourages financial organizations to reach customers in a new setting by offering a more straightforward and convenient mode to connect with customers helping businesses establish a rich omnichannel brand experience.
Moreover, adopting digital banking is necessary for small regional banks since they offer solutions to support the community. A community bank, for example, supports the agriculture community and has created effective financial solutions to address their specific requirements.
In the digital world, businesses can now take these specific financial solutions to the specific community globally. Therefore, with digital payment platforms, regional or smaller banks can maximize their revenue in niche markets and allow them to enrich and enhance customer experience.
Myth 2- Digital Payments Are Complex, Expensive, and for Younger Generations
Many digital payment platform providers offer cloud solutions to diminish these platforms’ hosting and maintenance complexities. At the same time, these cloud solutions priced by services allow financial organizations to pick and select adequate services that efficiently support the client base.
This approach encourages businesses to adopt digital services at the same rate as a company grows. Moreover, digital payment platforms are a new source and not a mandatory infrastructure upgrade with no ROI.
Additionally, with the rise in smartphones and the transition of network speed from 3G to 5G, mobile devices have become a host of new applications and services. As per a recent report by Sopra Steria, “Digital Banking Experience Report 2022,” 68% of customers are interested in an app that unifies all the payment methods in one place. Whether e-commerce or banking, mobile services are transforming all older and younger people’s lives.
Myth 3- Increases Fraudulent Activities
There are various digital payment methods, like payments via electronic devices: credit/debit cards, mobile payment gateways, and mobile payment applications. Due to preconceived beliefs, merchants and customers hesitate to adopt modern digital payment systems. The misinterpretation regarding digital payments is prone to fraud, holding no value.
Financial organizations must understand that digital payment gateways leverage robust security factors like data encryption, address verification system, and Payment Card Industry Data Security Standards (PCI DSS), offering a secure transaction medium.
Hence, businesses must not hesitate to adopt a modern digital payment platform since they effectively integrate merchants and customers through a unified platform making the transferring and receiving cash seamless and contactless.
Myth 4- Local Payments Methods (LPMs) and Digital Payments Affect the Security of Global Payments
Global payment networks and digital payment technologies have efficient security features- multifactor authentication linked to customer-affiliated banks. These payment features allow US-based online retailers to touch the global market, and they should no longer restrict their market and will continue to facilitate traditional payment methods.
Myth 5- Digital Banking Replaces Physical Branches and Does Not Offer Tailored Services
Digital banking complements physical branches making them efficient and diminishing the need to open expensive units in under-served areas. Financial organizations essentially adopted digital solutions after the pandemic. Most customers still rely on in-person banking experiences, especially for important transactions. Customers prefer in-person meetings for discussing home equity loans or small business loans.
The financial organization must evaluate the branch performances from an operational point of view when determining the best way to balance digital banking and physical branches. They must assess performance across units to enable a cohesive experience across digital and online channels. This allows businesses to serve customers anytime, anywhere.
Interestingly, with digital banking, financial organizations can offer tailored, rapid, better service and personalized advice to customers via browser applications, emails, or social media.
The chatbots can resolve the queries in seconds and let the team take over to offer supplementary assistance.
Also Read: Cloud-based Payment Infrastructure: The Future of Fintech
Myth 6- Banks are Unsure if Digital Banking Can Comply with Strict Rules
Digital banking ensures compliance with quality standards like ISO 27001 and ISO/IEC 27018 with complete traceability. There are efficient and tight NDAs and SLAs that ensure compliance with the data, privacy, and security rules and are customizable to include ad banners, products, and digital channels. Businesses can implement the services per the specifications or select on-premises infrastructure for complete control integration.
Conclusion
As per a recent report by Sopra Steria, “Digital Banking Experience Report 2022“, 92% of respondents hold an account with a traditional bank, while 39% have an online, digital-only bank account. Digital banking effectively guides banks via a secure and convenient platform with a solid password. Moreover, customers find it easier to utilize financial and non-financial banking products and services, allowing them to access digital banking accounts seamlessly.
Additionally, digital banking supports online funds transfers without interruption and tracks credits and investments. Therefore, businesses must station transparent objects and aim before deploying technologies that support digital banking to avoid resource drainages. It is essential to evaluate digital banking initiatives from a customer experience perspective and not from the level of technology adopted.
With all the myths busted above, it is time for financial organizations of all sizes to embrace digital banking initiatives fully. This will facilitate swift transactions, immediate bill payments, and streamlined account data tracking.
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