IT and IOT are the talk of the new era. IT had revolutionized the industries and made life easy by automating tedious tasks. Along with automating tasks, IT had helped industries like banks in attracting and retaining customers, enhance marketing and promotion techniques without burning down cost. The research paper revolves around the need, birth, growth, pros and cons of digitalization in banking industry. The reasons that had pushed the population to adapt the digital way of banking and surging growth of e wallets.
Motivated by its IT intensive nature, the research focus of this paper lies within the financial service industry.
This paper discusses the effect of digitalization on the banking Services from the perspective of business, customer and technology relationship. The results include that digital technologies enables new business models, cause (dis-)intermediation and customer centricity becomes increasingly important for financial service providers. Additionally, the interaction between user and technology changes and information is increasingly digitized
The need for digitalization in banking arose in the 1970s with the introduction of ATM Machines, electronic trading in 1980s and the early move into online banking in the 1990s, digital banking has not looked back since. Specially with innovation and discoveries being made by the minute.
However, Digital Transformation is far beyond just moving from traditional banking to a digital world. It is a vital change in how banks and other financial institutions learn about, interact with and satisfy customers. An efficacious Digital Transformation begins with an understanding of digital customer behavior, preferences, choices, likes, dislikes, stated as well as unstated needs, aspirations etc.. And this transformation leads to the major changes in the organizations, from product-centric to customer-centric view.
Banks began using Information Technology initially with the introduction of standalone PCs and migrated to Local Area Network (LAN) connectivity. With further advancement, banks adopted the Core Banking platform. Thus branch banking changed to bank banking. Core Banking Solution (CBS) enabled banks to increase the comfort feature to the customers as a promising step towards enhancing customer convenience through Anywhere and Anytime Banking. Different Core Banking platforms such as Finacle designed by Infosys, BaNCS by TCS, FLEXCUBE by i-flex, gained popularity.
With the digital transformation of banking sector, came the need for UX design for banking apps/websites, where companies like Fortune cookie, Techdew and Cooper help the players of digital marketing bridge the gap between their offerings and customer demands.
More on need for UX design in Digitalization along with how they are not only helping the end users have a better experience, but also, help the banks improve their processes and save a lot of resources from getting unnecessarily wasted will be discussed further ahead in the paper.
Digitalization has certainly helped change a lot of aspects on digital banking and its core value, Following are some such aspects that the birth of Digital banking has supported/ promoted/enhanced.
Digitalization has enabled the banks in serving their consumers anywhere and everywhere they need via Digital banking be it through their laptops, desktops or phones.
It allows the ease of access for both, service provider and service seekers, this type of low contact service providing works smoothly solely with the help of UI and UX design for banking, ie; since there is little to no physical contact between the bank and the customer. The only point of contact they have is through the interface and functionalities of the websites/applications.
In today’s hectic world, people do not have enough time to physically go to the bank and get their work done.
Digital banking services allow the consumers to access their accounts anywhere they are, anytime they want, processes like money transfer, loan seeking, bill payments, and standing instructions for bill payments etc. are all just an app /a website away.
Activities like updating passbooks, contact information, adding beneficiaries to one’s account is now just as easy as going to the ATM and withdrawing cash, thanks to the passbook machines and account management through net banking.
Specially with the introduction of E-Wallets like Phone Pe, PayTm, Chillar etc. and the ability to integrate such e-wallets with one’s bank account has made things even easier in terms of managing their personal funds.
With the help of Digital banking the banks are able to reach places they were not present before without having to open up 100s of branches all around the country.
Even in case of rural areas where people may not be very well versed with the technology, UI and UX design comes handy where personalization becomes possible so it suits the person who is using it which makes it even more approachable and usable which drives customers towards the app and help the banks increase their consumer base and gain more business.
Another big advantage of digitalization is tools like Google analytics and other data analytics tools that help the banks assess the past records and make adjustments on the real-time basis to know what sells and what they need to push in the market.
From the financial aspect, thanks to digitization and an efficient UX design for banking, customers have actually started preferring digital banking over paying actual visits to the banks, which reduces the bank’s cost regarding the physical locations in terms of opening up new branches or spending a lot on bigger buildings etc.
Even online, open-source is at such a boom right now the development and maintenance of the apps and websites costs very little.
Lean & Green Banking
There is a scope to introduce Lean Management in Banking in order to handle large number of customers and their accounts in far and wide branches of banks in a country like India. This could be possible only through conscious efforts by the managements through heavy investment in hardware, software and intense training of the operating staff at all levels. One side bankers are expecting more business through customer satisfaction but on the other side, the technology effect makes the customers not coming to the bank but bank is going to the doorstep of the customers [Goyal KA and Vijay Joshi (2011)]. 
Green Banking is also gaining importance in recent times. While the banking industry is undergoing computerization, networking and offering of on-line banking is naturally
gaining momentum [Mohmed Aminul Islam (2010)]. Besides several benefits of computerization like speed, accuracy, ambience, efficient handling of sizeable business,etc., there is a factor like paper-less business resulting in waste management, eco-friendliness and pollution control [Ela Sen (2010)]. 
Marketing and Promotions
Since the Digital revolution, marketing techniques have changed drastically, organizations have started preferring digital marketing over traditional marketing.
This digital transformation has actually made it easier for banks to reach their targeted customers in a much more efficient way than traditional media.
Digital marketing has helped the banks a lot in the 2 most important things for any organization:-
Customer Attraction & Customer Retention
To ensure customer attraction, social media marketing has proven to be very affective in targeting specific customers for specific offers and deals.
Along with social media, back linking and advertising on the bank’s own websites and apps have proven to bring in quite a lot of traffic.
Recent research reveals that financial services firms’ use of social media marketing is up 31% year-over-year, a significant increase over past years. Increasingly, bank marketers who engage with customers on the most popular social media channels and maximize the effectiveness of each platform will realize a brand loyalty advantage over competitors that don’t. 
Channel optimization is also critical for creating differentiated digital customer experiences. Banks must provide a seamless user experience for customers to conduct their banking transactions across multiple devices and platforms by using both native apps and mobile sites with a common look and feel, and that offer ease of use. Yet with the advent of new marketing capabilities, especially digital marketing vs. traditional marketing, it is difficult for marketers to prioritize investments and make effective choices. For banks, the challenge is to balance scalable campaigns with appropriate investments in technology and skills, such that both drive sizable and sustainable returns on investment. Programmatic advertising
— or the use of complex software and data modeling to purchase digital advertising — has become
common topic of conversation for both bank marketers and advertisers. Along with native advertising and personalization, it has become the latest innovation in customer acquisition, as it drives engagement to places where people are, not where marketers wish them to be. 
The digital transformation of banks since the digital revolution has helped the banks grow at an exponential level which has in return created a whole other domain of IT within the banking sector, including information security, banking tool development, IT consultants dedicated to Digital banking etc.
However, there has been a debate on whether the digitalization in the banking industry good or bad for the employment opportunities of people, since there are concerns regarding robotics and automated processes.
In a conventional bank branch, a clerk seated next to the cash dispensing teller was a sought after banker because he used to update the pass book of the account holder after the cash withdrawal or a deposit. That job has almost vanished in the past decade with few account holders getting a pass book. Coming years would see even the position of the teller, who is fast being replaced by sophisticated automated teller machines. 
The transformation of traditional banking into digital banking is agreeably automating a lot of processes but has also created a lot of other job opportunities, in the IT sector (as mentioned above).
Just like others, the banking industry had also created a lot of opportunities, just in different roles or domains.
Just like any other domain/field, digitalization in the banking industry has come with their Pros and Cons.
Cons being the risk of information hacking, the server problems that hind the workflows and people’s hesitation to go online and adapt to change (employees as well as customers).
The pros are in favor of both, service providers and service seekers of banking. In terms of social change, economic advantage, ease of access and many other things.
As for the future, we are quickly moving to a complete digital form of banking with the rising numbers of totally online banks like PayTm and older banks adapting the digital ways and slowly moving majority of their offerings online like SBI’s YONO.
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