Digital Banking in India is a drastic move. It took over the traditional banking systems and replaced it with online or internet banking systems. This revolutionary move changed the business of money is done. At first, people were reluctant to this change due to lack of education, concerns about the safety of the money, and more. However, gradually so, the various digital banking services have been embraced and it is often referred to as a change from “conventional banking to convenience banking.”
Brief History of Digital Banking in India
It might be hard to believe that there was a time all the banking processes were conducted manually and at brick-and-mortar financial institutions. It must be noted that this time was not so long ago. The examples of the earliest forms of digital banking are ATMs and debits cards that were first launched in the 1960s. Changes continued to happen after the emergence of the internet in the 1980s. During this time, technological innovations began in the banking sector.
The rise of digital banking in India began in the 1980s. The computerization of data was first introduced in the late 1980s. However, the major changes were made after the liberalization when India was finally exposed to the global market. The Indian banking sector opened its gates for private and foreign banks. Due to the competition from these new banks, the public sector banks started moving towards adopting newer technologies, Core Banking, and digital methods of customer services to stay relevant in the market.
With the advent of foreign banks, the 1990s witnessed the emergence of various digital banking products in Indiasuch as ATMs, Electronic Fund Transfer, Computerization and Branch connectivity. With the beginning of the 2000s, India began experiencing the marvels of the internet. This decade saw the introduction of internet banking that led to the evolution of easier and convenient ways of handling money. Banking in digital erabecame easier, paperless and signatureless with IMPS (Immediate Payment Service), RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer), Online Banking, and Telebanking. With the digitization of most of the banks, RBI (Reserve Bank of India) continued to take initiatives that supported the revolutionary change and overcome the challenges of digital banking in India.Meanwhile, from 2011 onwards, the commercial banks continued to make banking even more convenient by way of new technologies of mobile banking, biometrics and cheque truncation systems. 2016 witnessed a milestone when the government announced United Payment Interface (UPI), a digital banking service, that enables people to carry out funds transfer to and from different bank accounts through a smartphone.
Today, online banking is one of the most powerful instruments of banking. Banks continue to improvise their customer services with the new technologies.
Benefits of Digital Banking in India
The various benefits of various digital banking products and services stress the importance of digital banking in India. Here are a few digital banking advantages to consider.
Convenience: The biggest advantage of digital banking services is convenience. Now you don’t have to visit your bank for withdrawing, transferring or depositing the money. With a click of a button or with the help of nearby ATMs, all of this and more can be achieved. Long gone the days, when you had to spend time standing in long queues at the bank.
Anytime Banking: With the help of online banking, mobile apps, and even telephone banking you can even obtain the summary of your bank account. You can access your account anytime and anywhere. All you need is an internet connection or an access to the ATM. Now, you don’t have to visit the bank branch, all of it can be done at the ease of your home, or even when you are on vacation.
Abundant features: With the introduction of technology in the banking sector, there are innumerable features and services that are offered by banks. Besides transferring money and other banking-related operations, many banks offer services like email statements, P.O. Boxes, investments tools, loan calculators, financial planners, tax preparations and more, which makes these complicated processes a lot easier.
Quality Customer Services: With the help of digitalization, the customer services have improved manifold. Banks have become more efficient at providing quick solutions over the internet, emails, mobile phones etc. At the same time, banks can easily acquire customer feedback and learn more about their customer expectations, behavioral patterns and more.
Improved Business and Customer Experience: Digital Banking has benefited small and big, all sizes of businesses. It has improved customer experience. With the help of online payments, shopping experience, food delivery services, social networking, cab services, mobile recharge services and more have changed the way they do business.
Apart from the above-mentioned benefits of digital banking in India, we must consider that it is a cost-efficient and eco-friendly way of banking. It allows unlimited mobility to the customers and bankers, easy methods of bookkeeping, accuracy, and it is less prone to human error.
The Future of Digital Banking in India
Digital Banking in India is certainly a weighty move for “Digital India” that seeks to digitally empower the country. As technology continues to evolve, we can expect more of technologically innovative banking solutions which are easier and effective. This is just the beginning. With Artificial Intelligence, Chatbots and Blockchain Technology are expected to completely take over traditional banking methods and transform the way the money is handled. Digital banking is all about change. The biggest challenges lie in changing the mindset of the people and educating them about various modes of banking in the digital era.
