Banking has been prevalent amongst us for over centuries now. Let’s take a look at how it has evolved over time, from a simple barter system to the fully digital neo banking system. Though initially reserved only for the wealthy or influential at the start, banking has grown to become a basic necessity for each and every individual. What differentiates old-age banking from the new is the physical presence and face-to-face interaction of the former.
A traditional bank typically has a headquarters and several branches operating in multiple locations. “According to a 2016 Global Consumer Banking Survey, which surveyed 55,000 consumers in 32 countries, 60% said they would want to visit a physical branch or speak with a real person in order to purchase a new financial product or ask for advice. “ Because of the in-person transactions, traditional banks always had the advantage of being more reliable and trustworthy. The brick-and-mortar arrangement enabled customers to have more faith in banks handling their finances.
However, the lack of flexibility of traditional banks when it comes to banking round the clock or when on travel, gave rise to the importance of digital banking. Digital banking has fast replaced traditional banking among millennials. “In the same survey, 66% of consumers said a great digital presence was an important characteristic of their chosen bank.” To be more relevant to the times and be of better use to their customers, almost all traditional banks have incorporated the digital route, from ATMs to remittances. The online services of a bank these days include- account opening, managing their money online, transfers, remitting, applying for a loan, and more. Since it’s both quicker and has less effort, digital banking techniques are quickly replacing traditional banking techniques. Banking app usage and online payments at retail outlets are skyrocketing, with more and more people using fewer physical cash transactions. Also, online banking is promoted with countless cash backs and rewards, prompting more crowds to shift to digital payments. This transition in the banking mindset of the current population has led to the rise of even online-only banks known as NEO banks. NEO banks are fully online without even a single physical branch. They are positioned to offer all the functionalities of a normal traditional bank with the added advantages of being fully online, faster, and having attractive cash-backs and discounts. The future of the banking industry looks promising for digital banking, and it’s time the traditional banks rethought their entire banking strategy to suit the fast-paced environment and needs of their current customers. The success of a bank today lies in how quickly it can adapt technologically to meet the demands of its customers, meanwhile maintaining the personal touch and faith that a traditional bank could offer.