COVID-19 outbreak: Digital banking in crisis period
Government decided to close all government offices and its services from March 26, 2020 to April 4, 2020 except hospitals, limited banking services and emergency utility service providers. The Shop Owners Association of Bangladesh across the country have also decided to shutdown all shops and supermalls except food, medicine and life supporting services' business.
During this COVID-19 crisis moment, the Bangladesh Bank as well as most of the scheduled commercial banks are requested the clients as well as the businessmen to use alternative digital banking platform and also requested them not to rush in the banking premises except any emergency needs. Many banks of our country are providing various alternative digital banking services since long through sophisticated latest technology and secured security.
Digital banking is part of the broader context for the move to online banking, where banking services are delivered over the internet staying at home, office, supermarket, transport vehicles or moving places from anywhere and anytime. The shift from traditional to digital banking has been gradual and remains ongoing, and is constituted by differing degrees of banking service digitization. Digital banking involves high levels of process automation and web-based services and may include
Application Programming Interface (APIs) enabling cross-institutional service composition to deliver banking products and provide transactions. It provides the ability for users to access financial data through desktop, mobile and ATM services.
A digital bank represents a virtual process that includes online banking and beyond. As an end-to-end platform, digital banking must encompass the front end that consumers see, the back end that bankers see through their servers and admin control panels and the middleware that connects these nodes. Ultimately, a digital bank should facilitate all functional levels of banking on all service delivery platforms. In other words, it should have all the same functions as a head office, branch office, online service, bank cards, ATM and point of sale machines.
Many people of our country have smartphone, laptop and they also use internet, facebook and other digital services but it is a matter of fact that a very few of them use the digital banking services like i-banking, ATM/VISA card, Master Card, POS, BKash, Qcode, mobile wallet, mobile banking, different Apps etc.
Out of the digital banking platform, Internet banking (i-banking) is an innovative digital banking technology based product frequently used in our country that can be used from the house, office or on the way to moving. It is a global banking technology that can be operated from anywhere of the world and any time. It is the best digital banking technology based product. Islami Bank Bangladesh Ltd, Southeast Bank, Standard Chartered Bank, Al Arafah Bank, City Bank, Trust Bank etc are providing the i-banking services since long with hi-fi security. Most of the banking clients are unaware of the customer friendly technology based i-banking facilities and services.
Those who use smart phone, laptop or computers having Internet connection and a valid email address either in yahoo.com or gmail.com, they can easily use the i-banking transaction facilities from anywhere and anytime. Facebook uses have a great chance to use the Internet based i-banking transaction facilities as they have Internet connections. The account holder must have a regular valid account in the respective bank and the registration can be made through either bank's website or contracting with related branch.
A secret password and separate PIN number has been provided for fund transfer related transactions. A One Time Password (OTP) key is send to the user cell phone before every translation that is valid for a few minutes and for this, every translation of the i-banking is 100 per cent secured and safe. It is absolutely error free transaction and have no risk of hacking.
The salient features of the i-banking is to glimpse of the account statement, balance inquiry, cheque requisation, cheque stop payment, clearing cheque status, fund transfer within and outside the bank, DPS payment, mobile recharge, GPAY service, utility service gas & electricity bill payment, Internet bill, air ticket, hotel booking, e-commerce, RTGS, EFT, NPSB etc services and it can be availed by any i-banking users in any time of a day staying out of the bank premises. It is very useful for the busy businessman as it can be used 24 hours in seven days in a week.
Mobile banking transaction can be made for a small amount but in i-banking it can be made in a big amount up to a certain level that vary from bank to bank. Service charge of the i-banking is also much less than that of the online remote transaction. It doesn't use the bank premises at all and for this it is called the best alternative digital banking product. This service is very useful during crisis moment of pandemic, lockdown, holiday, strike and any other urgent need.
The reason digital banking is more than just a mobile or online platform is that it includes middleware solutions. Middleware is software that bridges operating systems or databases with other applications. Financial industry departments such as risk management, product development and marketing must also be included in the middle and back end to truly be considered a complete digital bank. Financial institutions must be at the forefront of the latest technology to ensure security and compliance with government regulations.
Major benefits of digital banking are-
Not only do digital platforms improve interaction with customers and deliver their needs more quickly, they also provide methods for making internal functions more efficient. While banks have been at the forefront of digital technology at the consumer end for decades, they have not completely embraced all the benefits of middleware to accelerate productivity.
One of the keys for banks to cut costs is automated applications that replace redundant manual labour. Traditional bank processing is costly, slow and prone to human error. Relying on people and paper also takes up office space, which runs up energy and storage costs. Digital platforms can reduce costs through the synergies of more qualitative data and faster response to market changes.
Digital solutions help manage marketing lists, allowing banks to reach broader markets and build closer relationships with tech savvy consumers. These platforms can track customer history and provide quick access to email and other forms of online communication. It's effective for executing customer rewards programs that can improve loyalty and satisfaction.
The use of automation can speed up both external and internal processes, both of which can improve customer satisfaction. Instead of banks hiring and training risk management professionals, it's possible for risk management software to detect and respond to market changes more quickly than even seasoned professionals.
Traditional banks that rely mainly on paper processing can have an error rate of up to 40 per cent, which requires reworking. Coupled with lack of IT integration between branch and back office personnel, this problem reduces business efficiency. By simplifying the verification process, it's easier to implement IT solutions with business software, leading to more accurate accounting.
All businesses big or small face a growing number of cyber threats that can damage reputations. Here banks can benefit from extra layers of security to protect data and clients can save time and cost. Everyone should use this client's friendly technology based alternative digital banking product during this COVID-19 crisis moment. It will save time, reduce tension and free of potential contagious.
The writer is a first assistant vice president (FAVP) of Islami Bank Bangladesh Ltd (IBBL)
(Disclaimer: The views expressed in the write-up is solely personal, it does not reflect the view of IBBL)