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Digital banking is the natural evolution of financial services and the banking industry in the digital world. As an increasing number of services adopt digital infrastructure in their operations, customers are beginning to expect new products that offer digital services.
Currently, the digital finance market is experiencing rapid growth, with the latest statistical analysis indicating that the scale of digital finance will expand from $7.9 trillion in 2021 to $10.3 trillion by 2028. Digital finance is more popular than ever in recent years, and the digital interaction between small business owners, consumers, and banks is expected to continue accelerating in the future.
I.What is a digital bank?
- In simple terms, a digital bank is a bank that operates online, providing customers with services that were traditionally only available at physical bank branches.
- Digital banking accounts operate entirely online, requiring compliance with local regulations and the application of relevant financial licenses for legal operations. Many traditional banks are now actively entering the digital banking space.
- Digital banking platforms leverage financial technology to connect and integrate their services with other financial providers, offering customers a comprehensive range of online digital financial services.
II.What services do digital accounts provide?
- Users can manage all their financial activities, including payments, investments, and expense analysis, through smartphones and other online channels. The most common operations and activities, traditionally confined to physical bank branches, are now instantly accessible on mobile phones, computers, and compatible smart devices, eliminating the need for customers to visit a physical bank branch.
＞＞Obtain bank statements ＞＞Cash withdrawals
＞＞Monitor transaction records
＞＞Fund transfers ＞＞Savings account management
＞＞Bill payments
＞＞Virtual card and careless payments
＞＞Competitive foreign exchange rates and fees
- Digital financial software makes all traditional services more accessible, understandable, and manageable. There is an increasing investment in the payment sector driven by financial technology. This brings disruptive innovation and growth to the market, benefiting many businesses, especially small and medium enterprises.
- The adoption of digital technology is expected to facilitate cross-border payment transactions. Currently, there are numerous choices available in the digital financial platform space.
- Users can manage all their financial activities, including payments, investments, and expense analysis, through smartphones and other online channels. The most common operations and activities, traditionally confined to physical bank branches, are now instantly accessible on mobile phones, computers, and compatible smart devices, eliminating the need for customers to visit a physical bank branch.
＞＞Obtain bank statements ＞＞Cash withdrawals ＞＞Monitor transaction records
＞＞Fund transfers ＞＞Savings account management ＞＞Bill payments
＞＞Virtual card and careless payments ＞＞Competitive foreign exchange rates and fees
- Digital financial software makes all traditional services more accessible, understandable, and manageable. There is an increasing investment in the payment sector driven by financial technology. This brings disruptive innovation and growth to the market, benefiting many businesses, especially small and medium enterprises.
- The adoption of digital technology is expected to facilitate cross-border payment transactions. Currently, there are numerous choices available in the digital financial platform space.
III.The Advantages of Digital Accounts
With an increasing number of digital financial platforms entering the market, understanding how modern digital solutions enable them to offer better and more cost-effective services than traditional competitors is crucial.
- Cost Savings
Traditional banks invest significant time and resources in auditing and accounting. By eliminating redundant back-office processes, digital financial software significantly reduces operational costs. Digital banking systems automate processes related to everyday financial transactions, easing the heavy workload of banks. Digitization reduces the steps and personnel involved in transactions, thereby lowering the risk of costly financial errors. - Enhanced Accessibility
Integrated KYC and AML protocols enable digital banks and customers to open accounts within minutes using any internet-enabled device. Authentication systems and risk assessments allow banks to quickly and easily provide services to customers, extending financial services to non-bank customers as well. A key advantage of personal banking is 24/7 service, meaning customers can conduct transactions and access a wide range of services anytime, anywhere. - More Personalization
Digital banking software enables the implementation of sophisticated personalized strategies supported by Artificial Intelligence (AI) and Machine Learning (ML). Banks can offer relevant financial choices, interactive tools, and educational resources to customers at the right time. Automated budgeting, expense analysis, savings reminders, and many other tools contribute to informing and engaging customers. - Reduced Account Opening Barriers
In contrast to traditional banks, digital accounts eliminate tedious paperwork, in-person branch visits, and lengthy account review times. Applicants only need to submit required information online, allowing for immediate processing and quick access to account details.
The proliferation of digital finance is an established trend, much like AI technology is the future of technology. It’s the reason why customers prefer navigating the financial landscape and businesses prefer charting a path to success. The rising adoption of digital banking indicates that the time for financial institutions to undergo transformation has arrived, with digital banking being the means to achieve these changes.
IV.Digital Account Q&A
Q: Is it safe to keep funds in a digital financial account?
A: Digital financial accounts are regulated and authorized by local authorities, such as being supervised by the Hong Kong Customs in Hong Kong. According to regulations, customer funds are kept separate from the company’s operational funds and are stored in low-risk financial institutions in regions like Europe or the United States to ensure the safety of the funds. Alternatively, surplus funds after receiving payments can be transferred to other physical bank accounts overseas.
Q: What are the limitations or differences between digital financial accounts and traditional banking services?
A: Digital financial accounts primarily operate in electronic fund transfers and currency exchange. However, for services such as credit, collateral, or checks, traditional banking services are currently the only option. Additionally, in the case of significant transactions in digital financial accounts, relevant documentation may need to be submitted for review before the transaction is approved and funds are credited.