Blog post by Kaira Sawhney
Banking industry is going through a significant change. Driven by the two major forces i.e. innovating technology and changing consumer demands and a lot of things can be seen as changing in the conventional banking models. While the digital banking model keeps evolving every day, traditional banks can also be seen adapting to latest innovations proactively. However, it is important that both the consumers and businesses understand the key differences between traditional and digital banks, as well as, keep an eye on their latest updates, to make the wise choice for themselves.
This blog post is focused at evaluating the key differences between digital and traditional banks while also taking a glance at what latest developments have been made in each sector.
Key Differences between Digital and Traditional Banks
Physical Presence – Traditional banks operate via physical branches while digital banks have their entire systems working online. While the difference is quite obvious, it completely depends on the consumer’s preferences which sector they prefer. If you’re more of a person who prefers one-on-one, face-to-face interactions, traditional banks are your best friend. Contrarily, if convenience is what matters to you the most and you have trust in digital transactions and are tech savvy – digital banks can be your go-to choice.
Account Opening & Services – Brick and mortar based traditional banks often have time-consuming and complex procedures required for account opening or availing any other financial service they might offer. Contrarily, digital banks offer paperless banking options where you can get an account opened within minutes or loan applications processed without having to fill-out lengthy forms or even visiting a physical branch. Now, it is totally a consumer’s preference to pick between the two for some people prefer comfort over everything while others are cautious when it comes to financial transactions. Digital banking is for those who would go for comfort over anything else while traditional banks are for the latter group.
Fee Structures – Most financial services offered by traditional banks come at heavy serve charges while digital banks would let you avail their maximum services for absolutely free. This is mainly because conventional banks have to cover for their excessive administrative overhead costs while digital banks take the edge with their very few infrastructure costs.
Customer Support – if you’re the kind of person who prefers face-to-face consultation and possess trust issues with the online systems, a traditional bank’s customer support system would be your best choice. They have in-office customer support that resolves your queries without hassle but requires you to visit your respective branch each time. However, digital banks have a 24/7 customer support integrated which can effortlessly resolve all your queries whenever there’s a need.
Technological Integration – there is no doubt that even traditional banks are adapting to the latest technology, their pace cannot match that of a digital bank. With the adequate integration of innovative technologies such as, AI and blockchain – digital banks are majorly enhancing their customer experience, offering custom-made financial services for each client while also ensuring an improved security.
Latest Updates in Traditional Banking
Traditional banks around the globe are understanding the need for technology adaption. They are evolving to stay in competition and meet the unstoppable customer demands. Many such banks are opting for hybrid models where they combine digital convenience with the existing branch model to accommodate the varying customer choices and preferences. Additionally, they are also investing major time and budget into digital transformation, offering AI-assisted customer support, enhancing their existing mobile applications, and providing modern fintech solutions such as robo-advisors.
Partnering with fintech companies is also helping traditional banks quickly adapt and offer innovative services to their customers on-the-go. Services such as peer-to-peer payments and digital wallets coming from a traditional bank are certainly an update and a promise towards a better future. Moreover, to compete with the premium user experience offered by digital banks – they are also prioritizing personalized services by utilizing data analytics, and offering custom-made financial solutions to their customers.
Latest Updates in Digital Banking
Neobanks or digital banks, are continuously growing while keeping up with their customer-centric approach. With banks such as Monzo and Revolut offering their financial services across borders and even tapping into markets that are underserved or underprivileged, global expansion seems to look like a key trend in the digital banking sector. Moreover, they’ve introduced cryptocurrency – allowing consumers to use their digital wallets for buying and selling digital assets. Therefore, a major chunk of the younger and tech-savvy market is attracted towards digital banks.
Several updates have been made in the regulations of digital banking. Asian countries are also launching digital banking licenses to further attract investors and encourage competition. Making the right use of data-driven tools and AI, neobanks are providing personalized services such as financial management, etc. They are also improving security using technologies such as biometric authentication and data encryption to increase customers’ trust and loyalty.
Which Bank Should You Choose?
It depends on your preferences and needs whether you choose a digital bank or a traditional one. If you’re a person who likes to deal face-to-face and find physical assistance and support better, traditional banking methods align your needs. However, if you’re a young, tech-savvy individual who prefers comfort over anything else, digital banks could be your go to place for financial assistance. It is also important to remember that while digital banking would be very helpful for the digitally native-with lower fees (consequence of lower cost of serving) and detailed, real-time bank balance and transfer notifications, brick and mortar first banks will provide personalized experience, an advantage for perhaps the older or more vulnerable customers-protecting them from potential fraud.
To conclude, the banking industry is undoubtedly going through a major change. Traditional banks are integrating the latest technologies into their existing systems while digital ones are evolving their technologies every day. No wonder digital banking methods are a major revolution in the financial services industry, traditional banks do not seem to go obsolete any time soon. Both of the sectors are striving to enhance their services and meet customer expectations, leaving the decision at your end so you can choose as per your needs and convenience.
Blog post by Kaira Sawhney
Banking industry is going through a significant change. Driven by the two major forces i.e. innovating technology and changing consumer demands and a lot of things can be seen as changing in the conventional banking models. While the digital banking model keeps evolving every day, traditional banks can also be seen adapting to latest innovations proactively. However, it is important that both the consumers and businesses understand the key differences between traditional and digital banks, as well as, keep an eye on their latest updates, to make the wise choice for themselves.
This blog post is focused at evaluating the key differences between digital and traditional banks while also taking a glance at what latest developments have been made in each sector.
Key Differences between Digital and Traditional Banks
Physical Presence – Traditional banks operate via physical branches while digital banks have their entire systems working online. While the difference is quite obvious, it completely depends on the consumer’s preferences which sector they prefer. If you’re more of a person who prefers one-on-one, face-to-face interactions, traditional banks are your best friend. Contrarily, if convenience is what matters to you the most and you have trust in digital transactions and are tech savvy – digital banks can be your go-to choice.
Account Opening & Services – Brick and mortar based traditional banks often have time-consuming and complex procedures required for account opening or availing any other financial service they might offer. Contrarily, digital banks offer paperless banking options where you can get an account opened within minutes or loan applications processed without having to fill-out lengthy forms or even visiting a physical branch. Now, it is totally a consumer’s preference to pick between the two for some people prefer comfort over everything while others are cautious when it comes to financial transactions. Digital banking is for those who would go for comfort over anything else while traditional banks are for the latter group.
Fee Structures – Most financial services offered by traditional banks come at heavy serve charges while digital banks would let you avail their maximum services for absolutely free. This is mainly because conventional banks have to cover for their excessive administrative overhead costs while digital banks take the edge with their very few infrastructure costs.
Customer Support – if you’re the kind of person who prefers face-to-face consultation and possess trust issues with the online systems, a traditional bank’s customer support system would be your best choice. They have in-office customer support that resolves your queries without hassle but requires you to visit your respective branch each time. However, digital banks have a 24/7 customer support integrated which can effortlessly resolve all your queries whenever there’s a need.
Technological Integration – there is no doubt that even traditional banks are adapting to the latest technology, their pace cannot match that of a digital bank. With the adequate integration of innovative technologies such as, AI and blockchain – digital banks are majorly enhancing their customer experience, offering custom-made financial services for each client while also ensuring an improved security.
Latest Updates in Traditional Banking
Traditional banks around the globe are understanding the need for technology adaption. They are evolving to stay in competition and meet the unstoppable customer demands. Many such banks are opting for hybrid models where they combine digital convenience with the existing branch model to accommodate the varying customer choices and preferences. Additionally, they are also investing major time and budget into digital transformation, offering AI-assisted customer support, enhancing their existing mobile applications, and providing modern fintech solutions such as robo-advisors.
Partnering with fintech companies is also helping traditional banks quickly adapt and offer innovative services to their customers on-the-go. Services such as peer-to-peer payments and digital wallets coming from a traditional bank are certainly an update and a promise towards a better future. Moreover, to compete with the premium user experience offered by digital banks – they are also prioritizing personalized services by utilizing data analytics, and offering custom-made financial solutions to their customers.
Latest Updates in Digital Banking
Neobanks or digital banks, are continuously growing while keeping up with their customer-centric approach. With banks such as Monzo and Revolut offering their financial services across borders and even tapping into markets that are underserved or underprivileged, global expansion seems to look like a key trend in the digital banking sector. Moreover, they’ve introduced cryptocurrency – allowing consumers to use their digital wallets for buying and selling digital assets. Therefore, a major chunk of the younger and tech-savvy market is attracted towards digital banks.
Several updates have been made in the regulations of digital banking. Asian countries are also launching digital banking licenses to further attract investors and encourage competition. Making the right use of data-driven tools and AI, neobanks are providing personalized services such as financial management, etc. They are also improving security using technologies such as biometric authentication and data encryption to increase customers’ trust and loyalty.
Which Bank Should You Choose?
It depends on your preferences and needs whether you choose a digital bank or a traditional one. If you’re a person who likes to deal face-to-face and find physical assistance and support better, traditional banking methods align your needs. However, if you’re a young, tech-savvy individual who prefers comfort over anything else, digital banks could be your go to place for financial assistance. It is also important to remember that while digital banking would be very helpful for the digitally native-with lower fees (consequence of lower cost of serving) and detailed, real-time bank balance and transfer notifications, brick and mortar first banks will provide personalized experience, an advantage for perhaps the older or more vulnerable customers-protecting them from potential fraud.
To conclude, the banking industry is undoubtedly going through a major change. Traditional banks are integrating the latest technologies into their existing systems while digital ones are evolving their technologies every day. No wonder digital banking methods are a major revolution in the financial services industry, traditional banks do not seem to go obsolete any time soon. Both of the sectors are striving to enhance their services and meet customer expectations, leaving the decision at your end so you can choose as per your needs and convenience.
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Kaira Sawhney