Digital banking is an important ingredient for the future of banking

Abstract

Banking industry consumers are exposed to unprecedented digital and FinTech experience characterised by innovative financial products and services. This development is supported by ever expanding Internet reach, proliferation of smartphone adoption and telecommunication network growth. Consequently, digital banking has emerged, introducing economies of time, cost and space for the consumers of financial services. This paper aims to diffuse the impression about the redundancy of traditional ‘brick-and-mortar’ branch structure after the advent of digital banking. The scope of the paper includes the evolution of ‘hybrid banking’, which is variously dubbed ‘bricks and clicks’ and ‘offline and online combo’, and so on. It is, in fact, the right mix of physical and digital features of banking that can cater to all categories of banking customers. The rationale of hybrid banking has been supported with various arguments and examples from the South Asian and Western banking markets. The potential of digital banking in Pakistan, given its unique demographics and trends, is highlighted. Insight and awareness presented by the paper include saving of time, space and cost using digital solutions, customer delight, cybersecurity biometric authentication, retina scanning and facial recognition, omnichannel experience, fickle customer loyalty, millennial customers, digital natives and the significance of digital specialists. Many would also be interested in the distinctive features of Pakistan’s banking market with the technology-prone youth bulge of 120 million and a vast financial inclusion gap.