From ‘Conventional Banking’ to ‘Convenient Banking’, India has come a long way when it comes to digitalisation. The aggressive measures that are taken by the government to promote ‘Digital India Movement’ is resulting in a revolution with a ripple effect, affecting almost every industry. Digital banking is one of the outcomes of such revolutionary step taken by the government. Under the guidelines of RBI, we are now able to use the banking resources more frequently and efficiently.
Here is why digital banking will take over conventional banking in the next couple of years:
Digital Darwinism is a phenomenon that takes place when technology evolves faster than an organisation can adapt. In India, technology and society are evolving faster than ever. In the last decade, India saw an increase to 36% of smartphone users and 26% of internet users. There is still a great opportunity out there that we can take advantage of getting access to the internet means opening a new world of resources. Owing to such disruptive technology, conventional banking system stands a little chance of sustaining in long run. After all, it is a question of comfort, convenience and enhanced user experience. One gets all of these with digital banking, not with physical banking.
2.Decreasing Cost of Bank Transactions:
Bank saw a phenomenal decrease in cost per transaction with the rise of technology. While the cost of transaction on branch banking was Rs. 70 to Rs. 75, ATM transactions cost Rs. 15 to Rs. 16, Online Banking transactions cost Rs. 2 and Mobile Banking cost Rs. 1 or less. This drastic decrease in cost of transactions has made users opt for internet banking as opposed to traditional banking. With banks coming up with strong security and data analysing system, room for errors has decreased, giving users a reason to trust online banking more and more.
3.Falling Rates of the Internet:
When the mobile internet first hit the Indian market, there was a very small group of people using it. Today, more than 460 million users are connected with internet, which by the way, is just 26% of Indian population. Opportunity is huge for digital banking. As and when more people get access to the internet, the more will prefer using digital banking over traditional banking. With Reliance Jio’s revolutionary internet rates, lakhs of people have started using smartphones and internet on regular bases. The future of internet seems promising as there will still be a phenomenal increase in user base.
4.Efforts of Government:
The joint efforts of Indian Government and the RBI in regards to Digital India Movement and Make in India Movement has further accelerated digital banking. The RBI is now taking lubricative actions toward providing a convenient mode of money activities. Introduction of services like BHIM and UPI has made bank transactions easier and cost-effective than ever before. Availability of 24×7 transfer facilities like IMPs has made transferring money a click away. Moreover, according to RBI report 16-17, there are around 2, 22,000 ATM and 25, 30,000 POS devices throughout India. With such wide variety of digital options, people are now moving towards digitalising their banking routine.
5.Innovation of Banking Sectors:
Indian banks are going through powerful transformation in all verticals and are moving forward at faster pace, bringing in new technological advancement in banking sector. The functioning of banks have become much smoother resulting to ease of access for general public. Technologies like ATM, Phone and Mobile Banking, Internet Banking, Branch Networking, CTS, ECS, NEFT, RTGS, etc. has enhanced user experience and further pushed usage of online banking system. The card-based delivery system has been a game changer in history of sales and purchase of goods and services. Expansion of ATMs and MPOS terminals enables increased transactions with decreased costs. Today, a local shop can easily be converted into a mini ATM with AEPS device (Aadhaar Enabled Payment System).
To wrap it up, Digitalisation is moving forward at full pace in India. Owing to such overwhelming response of Indians towards Digital India movement, the future will witness a rapid growth in a number of internet users. This means that all the industries, especially banking, will see a drastic change in its functioning. Conventional banking will soon be a thing of past and Digital banking a promising future.