It is a fact that many customers have not entered the door of any bank for a long time due to the Covid-19 pandemic. The majority of people prefer to conduct their financial transactions via online with the acceleration of digitalization during the pandemic. At this point, so to say, digital banking saved their lives. Or should we say internet banking? Was it online banking? Or mobile banking? What about virtual banking or remote banking?
It’s true that these terms are starting to mixed up. But no worries, even some professionals still confuse all these terms or cannot clearly distinguish. But let’s not fall into the void, and let’s define all banking terms under the umbrella of online banking and digital banking from the beginning, and so, clarify the differences between each other.
Online banking is the service that lets people start using banking services and transactions by logging into the bank system themselves. If customers prefer to do this on their computer via the bank’s website, it is called ‘Online Banking’. But if they do this on their mobile devices such as a tablet or a phone and use the bank’s mobile application, it is simply called ‘Mobile Banking’.
Online banking includes mobile banking, depending on the device a customer uses. In other words, mobile banking can be defined as using online banking via a mobile phone. On the other hand, the terms ‘Virtual Banking’ and ‘Remote Banking’ are also used to describe online banking.
Whether the customer wants to log into the bank system to check assets, make a transfer or pay their bills, the service that the customer uses will be called as online banking. In addition to these simple transactions, people can also access many extra banking transactions via online banking or mobile banking. For instance, they can conduct loan applications or increase credit card limit.
Mobile banking is very important part of online banking. Nowadays people prefer to be mobilized because their mobile devices are enough to access any services and to handle all financial services which they need. At the same time, using the mobile application is a great experience preferred by many customers because of its opportunities.
According to the Ipsos-Forbes Advisor USA Weekly Survey of Consumer Confidence, 76% of Americans mostly preferred to use their bank’s mobile app for their daily banking transactions in the past year, and only 21% of respondents said they never used their bank’s app before.
It is estimated that by the end of the 21st century, 80% of US banks will have offered online banking to their customers. The biggest plus of online banking is that customers can access banking services 24/7 from anywhere.
Digital banking involves online banking and much more… Many sources accept digital banking as a combination of online banking and mobile banking. But that would underestimate the scope of digital banking.
In fact, we can say that digital banking has two sides. One is online banking, which also includes mobile banking, as we’ve mentioned before. This part covers the online services and experiences that the bank offers to its customers.
On the other hand, there are online processes also inside the bank that make it possible to provide all these services offered to the customer. In short, we can define it as the back-end of online banking, the internal business flow that is led by innovative technologies and software.
That’s why everyone is calling digital banking the future of banking because it covers financial business and customer services as a whole. Digital banking can refer to many technological or digital products designed to enable financial businesses to operate more efficiently, such as back-end accounting and payroll software, and payment technologies.
There are many innovative technologies that are used in digital banking:
- Artificial Intelligence (AI),
- Machine Learning (ML),
- Internet of Things (IoT),
- Augmented Reality (AR),
- Virtual Reality (VR),
- Quantum Computing.
With all these digital technologies, banking will now be able to offer much more personalized, invisible, and comprehensive experiences.
According to the data in the Mobiquity survey, nearly 90% of the respondents said that they would continue to use digital technologies to make life easier after the pandemic is over. Thus, financial institutions and banks should adapt and invest in digital banking as soon as possible both creating relevant external customer experiences, and atomizing, optimizing internal business flows with innovative FinTech solutions.
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