Introduction
Over the past few years there has been a clear rise in digital banking and, although the pandemic was a catalyst for this, it can be argued that this was always inevitable with the constant globalisation in today’s society. In light of this, with more FinTech and digital banking platforms coming up like mytalu, this blog explores whether physical banks are set to become completely redundant in the future.
1. Pros of digital
One of the main advantages of digital banking is its 24/7 availability therefore making it a lot more accessible and convenient as there are no cut off time restrictions. This factor is essential as it expands the potential target market to remote locations where there might not be a physical bank nearby. As well as this, another key benefit of digital banking is that it is completely paperless meaning it is eco-friendlier and more sustainable and contributes to the goal of green finance. Overall, digital banking has completely shifted the way society viewed banking and has become a more innovative and smarter way of handling finances.
2. Cons of digital
Despite digital banking being a positive change in the finance sector, some people still have their reservations about it. One of the main concerns is no face-to-face interaction with a banker as you would have in physical banks. Although this mostly affects an older demographic as they are less accustomed to relying on an AI (Artificial Intelligence) chatbot for their baking issues all the time, there are ways around this and with the rise of AI, chatbots could become more advanced and personalised. As well as this the constant access to cash could be an issue as some demographics heavily rely on it such as small businesses. Another reservation people tend to have has been to do with security however with new technologies such as blockchain and KYC procedures, these make digital banking extremely secure and minimise any risk of fraud.
3. Pros of physical banks
Regardless of whether more people are shifting to digital banking, traditional physical banks still hold a grip on society due to their familiarity. One of the key aspects of physical banks that is appealing to customers is its wide access range to banking and investment services in more depth than it would be online as you would be able to have face-to-face meetings with the banker to support the customer in any decision making. Additionally, physical banks also have access to a wider range of ATM services too which can be seen as an advantage.
4. Cons of physical banks
Primarily, a major disadvantage of physical banks are how expensive they are to operate, putting them at risk of closing down as well as their strict opening times as it does not accommodate everyone from all walks of life. This is due to people having to be inconvenienced by going to the branch to carry out any financial services, however with digital banking becoming more popular, traditional banks now offer online services making it easier for transactions but their online services are still limited. Also, in light of the new UK law proposal that encourages people to register with a bank near them is a way to tackle the issue of inconvenience but still doesn’t solve it completely.
Conclusion
To conclude, after reviewing the advantages and disadvantages for both digital and traditional physical banking, it is clear that both have good qualities however digital banking seems to be meeting the needs of society more at this current moment in time. Despite this, people may be more accustomed to have accounts in both digital banking platforms as well as traditional banks to gain the most of what they both have to offer. In terms of what the future holds, it is unclear as to whether traditional banks would disappear completely; however, with all the new advances there could be better ways to access their services in the future.
