The types of changes we’re seeing in financial technology daily are crucial for businesses to pay attention to. New trends in FinTech will influence the changes that occur in businesses of all sizes, especially when it comes to the customer experience. One of the bigger transformations we’ve seen recently is the shift to digital-only banking. Now, let’s be clear that digital-only banking is not limited to sending that E-Transfer to your friends and family.
The concept of digital banking refers to the use of digital technologies, such as the internet and mobile apps, to access and manage financial services and products. On the other hand, digital-only banking (also known as online banking or internet banking) refers to a type of banking that is solely conducted through digital channels and does not have a location for you to visit.
What’s in it for consumers?
Customers of a digital-only bank can perform all of their banking activities online or through a mobile app, including checking account balances, paying bills, transferring money, and managing their finances. Banks that are digital-only often offer competitive interest rates and lower fees compared to traditional banks, since they do not have the overhead costs associated with maintaining physical branches.
Some examples of digital-only banks include Ally Bank, Chime, and Capital One 360. These banks offer a range of products and services, including checking and savings accounts, credit cards, and investment options, all of which can be accessed and managed online or through a mobile app.
Risks
We have to keep in mind that while digital-only banking has become increasingly popular in recent years, it is not without its drawbacks. Many customers may prefer the convenience of visiting a branch for in-person service or to deposit physical checks, for example. Additionally, digital-only banks may not offer the same level of customer service or support as traditional banks, and there may be risks associated with conducting these transactions online.
How can they be resolved?
Despite these drawbacks, the shift towards digital-only banking is likely to continue, as more and more consumers become comfortable with using digital technologies to manage their finances. Businesses that can adapt to this trend and offer digital services will be setting themselves up for success long term. But why is that?
Trends
Companies embracing the hottest trends are certain to gain attention from consumers in today's market. In addition to digital-only banking, some of the biggest trends in FinTech include artificial intelligence and machine learning which improve financial services and products, along with the growth of mobile payments and the previous rise of cryptocurrency.
Artificial intelligence and machine learning are consistently being used to analyze financial data and make predictions about market trends, as well as automate tasks such as fraud detection and risk assessment.
What’s interesting is that mobile payments, which allow consumers to make payments using their smartphones, are becoming more popular as a convenient and secure alternative to traditional methods of payment. Additionally, cryptocurrency, which is an asset that uses cryptography (solving codes) for secure transactions, is another area that gained a significant following in recent years. While cryptocurrency may have lost its glowing reputation, mobile payments are still important to watch for, even with the crypto dip.
The Takeaway
The FinTech industry is constantly evolving and businesses need to be aware of these changes to stay competitive. Digital-only banking, which allows consumers to access and manage their financial services and products through digital channels, is one of the major trends in FinTech. While it offers competitive interest rates and lower fees compared to traditional banks, it may not provide the same level of customer service or support and there may be risks associated with conducting financial transactions online.
However, the shift towards digital-only banking is likely to continue as more consumers become comfortable with using digital technologies to manage their finances. Businesses need to stay up-to-date on these trends and adapt to them to succeed in the future.
Written By Ben Brown
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