WHAT IS DIGITAL BANKING?
For some time now, banks and other financial companies have been putting a big effort to update and digitalise their processes to adapt to the digital transformation and offer online banking and create digital banking branches for the new 4.0 customer.
There is a common misconception between digital banking and online banking.
Digital banking refers to banking institutions that operate 100% online but are backed by the resources of a traditional bank (from the same group), which acts as an umbrella.
In other words, it is a fully digital bank that only offers online banking, but has the backup of a bigger and established firm which, at the same time, can offer online banking as part of its services, but whose whole strategy does not revolve around it.
Therefore, digital banking strategies revolve solely around online banking using mobile applications, the web, new technologies… Thanks to this, they offer their services and products 100% online and perform completely digital onboarding processes. This makes the user experience is much more fluid, quicker, and easier to carry through for the completion of any transaction or process: registration, contracting, saving, onboarding…
In addition, this digitalisation allows the fully digital bank to save on costs derived from face-to-face processes and can offer its services to its customers at a lower (or any) cost.
Thus, by implementing state-of-the-art digital banking technology that allows the fastest and most smooth remote banking, banks and customers leap forward towards a new form of digital banking that is more efficient, improves UX, and optimises time in any transaction.
Moreover, it is important to highlight that digital banking is part of “open banking“.
Open banking advocates for a transparent service as a new way of communicating with the customer, being always online, offering personalised services, and leaving small print out of the equation.
9 ADVANTAGES OF FULLY DIGITAL BANKING
- Eliminates physical constraints and customer service schedules
- Gives the option of face-to-face transactions, maintaining the confidence of the most traditional users
- Faster and more efficient financial management from the fully digital bank’s app or website
- Anywhere, anytime customer service and support
- Transparent and effective communication through real-time notifications and alerts
- Easier, more convenient, and much more secure user experience
- Automated online payments
- Lower (or even none) costs and fees for transfers, account opening, etc.
- Fraud prevention and risk management.
Digital banking is 100% online and allows customers to control their finances remotely from any device, with personalised attention at any time and place and without the need to travel.
However, unlike FinTech banks, digital banking still offers the possibility of going to a physical branch or ATM in person.
Despite this benefit, the star advantage of digital banking and the one that weighs most heavily in users’ decision to choose a fully digital bank over other options is 100% online banking.
Digital banking technology ensures users can carry out all their transactions through any device with an internet connection, without having to go to the branch office.
From opening an account from home or creating digital piggy banks to signing a mortgage, digital banking technology customises the online banking processes to the customer’s needs, simplifies it to just a few clicks, and improves personalised customer services.
Other options for online banking are the option of programming transfers directly from the fully digital bank‘s app or website to a regular beneficiary. This saves users a lot of time and effort in their interactions with the bank.
The ease of use and cost reduction in transactions made abroad are also advantages of digital banking to be taken into account, as it changes the paradigm of online banking for financial institutions, companies, and users. It allows users to make transactions all over the world, with fewer commissions on payments outside the national territory and cutting costs on transfers in other currencies, among other international advantages.
ONLINE BANKING VS DIGITAL BANKING: THE ROLE OF FINTECH
Digital banking is not something new, but it is currently making its boom thanks to its 100% online banking operability through any device with an Internet connection and with a full scope of channels available: desktop website, mobile, app…
This allows operations to be carried out 100% digitally and with greater agility, efficiency, and security than in traditional banking and face-to-face identity proofing.
Therefore, since most of these digital banks are usually created as a brand extension of bigger traditional bank firms to offer 100% digital banking and expand their market, being a fully digital bank implies that all your bank processes are offered online through digital banking technology with the caveat of sharing some facilities to also offer the option of in-person transactions.
At the same time, this is also what differentiates digital banking from FinTech banking.
While digital banking is backed by a traditional bank of the same group and has access to physical commercial offices, FinTech banking does not offer this option.
What is clear is online banking is much more agile, secure and convenient than traditional banking, it saves costs and time, and increases the processes’ security in terms of hacking and theft.
These benefits against traditional banking have become the determining factors that are attracting users from traditional banks to digital banks, and from digital banks to FinTech banks.
Either one the option you decide to pivot your company towards a more digitalised banking offering, it is vital to choose digital banking technology that ensures all your processes comply with all the necessary standards set by eIDAS and AML5 and are approved by your country’s Central Bank and the European Bank.
Download here for free this comprehensive guide to know all about eIDAS and AML5.
DIGITAL BANKING TECHNOLOGY: THE QUALIFIED ELECTRONIC SIGNATURE
A qualified electronic signature (also called QES) is the only electronic signature that complies with all the standards required to electronically perform high-risk operations.
The QES legitimately and unambiguously links, through a qualified electronic certificate, the signatory to the content of a document and creates an unbreakable and irrevocable link between both.
The qualified electronic signature is the most important prerequisite for the development of digital banking, as it allows companies to perform all online banking activities and services such as digital customer onboarding and remote contracting of services with the highest level of legitimacy.
Besides, the use of QES for digital banking offers even higher security than face-to-face processes and complies with all eIDAS and KYC regulations, allowing the company to access more than 500 million customers within all of Europe.
Electronic IDentification is the only qualified service provider on the market to offer a patented, end-to-end solution for automatic video identification and qualified electronic signature without human intervention in seconds.
Thanks to this, Electronic IDentification can guarantee the highest level of security and legal protection that currently exists in remote identification to any fully digital bank, FinTech bank, or traditional bank that is currently implementing or want to start implementing an automatic and fast digital onboarding process.
Click here and request a free demo to discover the Electronic IDentification’s Qualified Electronic Signature (QES) in depth.