What is Digital Banking? Distinguish from Internet Banking

18/09/2022

The banking industry today is in a state of rapid change. In addition to the challenging macroeconomic environment, banks face ever-evolving customer behavior and increasingly high expectations in an increasingly digital world.

How effective is digital transformation in Digibank? / 29/09/2022

The keyword Digital Banking or Digital Banking is becoming more and more popular in the market, thanks to the positive benefits it brings to consumers. So what is Digital Banking? What features are there? Let's find out with CMC TS through the content below.

What is digital banking?

Digital Banking is a form of banking that digitizes all activities and services that can be performed at normal bank branches.

The pandemic has caused a huge shift in the way consumers interact with financial services, especially with banks. Users find it very easy to access and use the new applications to solve simple queries without the need for a branch.

More specifically, all operations and operations that you perform at a traditional counter are digitized and integrated into a digital banking application. With this application, you do not need to travel or wait at a bank branch and still be able to perform financial transactions.

Digital Banking is a form of banking that digitizes all activities and services that can be performed at normal bank branches.

Not only user activities, all banking activities such as risk management, capital sources, product development, etc. are also digitized in the form of digital banking.

Digital banking features

The digital banking application can be seen as a miniature bank branch in your phone, packed with useful features that simplify all financial operations and transactions.

1. Register Online

Customers who already have an account at the bank can access that bank's website to register for an online account. After just a few minutes of filling in the information, you have an online account right away without having to wait for office hours to go to the counter.

2. Payment

With digital banking, customers can easily pay expenses such as electricity, water, telecommunications, purchase bills, etc. quickly. You can completely make one-time or recurring payments, and set an appointment for automatic monthly bill payment on the mobile application. That way, no matter how busy you are, you can rest assured that you'll always pay your bills on time.

3. Transfer/Money Transfer 24/7

Digital banking allows customers to transfer money internally or inter-bank money quickly and conveniently anytime, anywhere.

4. Bank loan

Customers do not need to go to the counter to do the bank loan procedures on paper anymore, but instead are a few simple steps on the bank's website or application.

5. Savings

This is a highly appreciated feature because it makes it easy for customers to deposit or withdraw deposits directly through the application on devices such as phones, laptops, and iPads connected to the Internet.

6. Deposit money into the account

Customers now do not need to bring cash to a bank branch to make payment procedures, but simply transfer money from another account to their own account through the bank's website and application.

7. Account management, card management

This feature is an optimal solution suitable for busy people who can control their cash flow anytime, anywhere. No need for a mobile network, just an internet connection, you can fully understand the transaction history through notifications on the banking application. This is really useful for those who are traveling or working in another country who need to check the fluctuations in their account but can't follow up through SMS on their phone because of the different telecommunications network.

With digital banking, you can also lock your card and change the application password as soon as you suspect your account is in danger.

8. Participating in investment and insurance products

The combination of banks and insurance companies is a trend in the financial sector today. In other words, the bank becomes the agent that distributes an insurance company's products to its own users. This creates conditions for customers with insurance needs to access high-quality, more reputable products.

The digital bank also supports opening an online securities trading account so that you can participate in securities investment, manage stock portfolio management and monitor the movements of stock exchanges, etc. .

9. Personal and business financial management

Every transaction made is recorded in the account section with the available funds, making it easy for customers to track their spending and assets.

10. The security of digital banks is absolute and strictly monitored by banks

Specifically, to make certain transactions, customers must go through 3 security steps of the bank including entering the correct account name, encrypted password and OTP security code.

The security of digital banking is absolute and is closely monitored by banks.

Benefits of digital banking for consumers

As more and more digital banks enter the market, it is important to understand how modern digital banking solutions enable them to offer better and cheaper services than their competitors. traditional competitors.

1. Cost saving

Traditional banks invest a lot of time and resources in checking and accounting. By eliminating redundant back-office processes, digital banking software significantly reduces operational costs.

The digital banking system removes a lot of work from the banks by automating the processes involved in day-to-day transactions. Digitization reduces the number of steps and people involved in transactions, reducing the risk of costly financial errors.

2. Improved usability

Integrated KYC and AML protocols allow digital banks and customers to open accounts within minutes from any internet-enabled device. The ID verification and risk assessment system enables the bank to serve customers quickly and easily, allowing non-bank customers to access financial services.

A key advantage of digital banking is that it operates 24/7. This means that customers can make any transaction from anywhere and access a wide range of services.

3. Better Personalization

Digital banking software that enables personalized strategies powered by artificial intelligence (AI) and machine learning (ML). Banks can provide customers with the right financing options, interactive tools and educational resources at the right time. Automated budgeting, spending analytics, savings reminders and more to help inform and engage customers.

4. Features That Are Really WOW

Digital banks already have many features that established banks cannot offer, such as buying gold or investing in the stock market directly in the banking app. Digital banking customers can change their security settings, limit transactions, and even specify whether they want to enable NFC or pay with a magnetic stripe.

It can be said that the user experience for the features set up in digital banking is really positive, it brings convenience, satisfaction and solves a lot of customer problems in life today.

Differentiate Digital Banking and Internet Banking

Digital Banking and Internet Banking are similar in many ways. Typically being able to trade and manage accounts online. However, the concept of e-banking will be defined more narrowly. That is, e-banking is just a convenient service of a bank and can only transfer money, pay bills and manage accounts in a basic way, not as detailed as digital banking.

In other words, online banking focuses on digitizing “core” aspects of banking, but digital banking includes the digitization of all programs and activities run by financial institutions and customers. their implementation.

Digital banking systems are much more flexible and allow banks to add and expand features much faster than traditional systems. Digital banking relies on high-level process automation, web-based services and APIs to provide banks and their customers with a high level of cost-effectiveness, security and flexibility.

The following table will help you better visualize this difference:

Criteria	Digital Banking	E-Banking
Concept	Is a form of banking that digitizes all the activities and services that can be performed at normal bank branches.	A type of service that facilitates customers to check information or transact online with a bank account.
Nature	The concept of digital banking is broader and more comprehensive than e-banking and online banking.	The concept of e-banking only reflects a part of the application of digitization in the banking sector, and does not require digital integration for the entire banking operation.
Feature	Register online Pay Transfer/Money Transfer 24/7 Bank loan Saving Payment on account Account management, card management Participating in investment and insurance products Personal and business financial management The security of digital banking is absolute and is closely monitored by banks.	In essence, e-banking is just a service created to complement services on traditional banking platforms, focusing on the following features: Transfer money Pay Look up account balance
Means of operation	Phone, computer, laptop, ipad connected to the internet.	Phone, computer, laptop, ipad connected to the internet.
Main features	Digitizing 100% of the process, all customer relationships with the bank are handled online and automatically.	Help users transact quickly and conveniently Help the bank: Save costs, increase revenue Expand the scope of activities and competitiveness Improve the efficiency of capital use for banks

Conclusion

With the development of modern technology, banking digitization is no longer too difficult. This form of banking will help customers as well as financial institutions save cost and time significantly. This will also be the future of the development of the banking industry, a basis for banks to bring more value and convenience to consumers in the context of ongoing digital transformation.

CMC TS is proud to be the TOP 1 unit in consulting and implementing Digital Transformation and Security solutions for organizations and businesses in Vietnam. CMC TS is currently a partner in implementing IT, digital banking and digital finance projects for many banks - financial institutions and securities companies in Vietnam such as BIDV, VietinBank, Vietcombank, Techcombank, ABBank, CoopBank, PVcomBank, etc. ...