FREE NOTES ON DIGITAL BANKING 2024 | MOBILE BANKING
In this article, we will cover a topic from the Syllabus of Digital Banking which is Applicable for 2024 Exams. The article is free to take short notes for the Digital Banking Exam 2024 & covers the ‘benefits of providing Mobile Banking services’ to Banks. So, read the article to find out what benefits the banks get when they offer mobile banking to their customers.
SIGNIFICANT BENEFITS OF MOBILE BANKING TO BANKS
With the advancement in technology, banking is also becoming more and more technology-savvy due to the development of different mobile technologies.
According to a survey, smartphone users are still growing and they have crossed 750 million in 2023 in India. The people who are using the banking applications are also progressing. Underwritten are some of the factors which explain why banks should invest in mobile applications.
THE NEED OR BENEFITS FOR MOBILE BANKING
We can clearly see the benefits which are available for the banking customers, mobile banking also offers many benefits to the banking industry itself. Here is why:
MOBILE BANKING HAS LOWERED THE BANK’S EXPENSES:
The banks’ overall efficiency is increased when there is an increase in the number of mobile transactions because of the following reasons:
- It is paperless and environment friendly
- Saves money on printing and the delivery
- There is no need to hire additional workers
- It is cheaper than the ATM transactions
- It saves the operational costs of running the branches of banks.
SIGNIFICANT RETURN ON INVESTMENT (ROI)
According to a study, mobile banking has impacted customer engagement and the return on the investment in banking applications is significant. It has been found that by increasing the adoption rate of mobile banking, an average Bank can generate millions in its income and can reduce its cost up to 15%.
CUSTOMERS ARE USING MORE SERVICES THROUGH MOBILE APPLICATIONS
When mobile banking customers are compared to branch-only customers, it has been found that mobile banking customers are using more products than the ones who visit the branches for banking services. The reason is that mobile banking customers are more engaged with companies and their services.
MOBILE CUSTOMERS STAY WITH BANKS LONGER
The attrition rate has decreased in the number of customers over a period of time & it is lower in the case of mobile banking users when compared with branch-only or even online users.
MOBILE CUSTOMERS COMPLETE TRANSACTIONS MORE FREQUENTLY
Having immediate access to financial information can influence mobile banking users to transact or make additional transactions. This is the reason why mobile banking users are generating more revenue than non-mobile banking users. It has been estimated that banks are generating 66% of their revenue from mobile banking services than branch-only customers.
IMPROVED CUSTOMER EXPERIENCE
If customer experience is positive, it leads to an increase in the business even if it’s from a bank. Following are the reasons why the customer experience has increased with the use of mobile banking services:
24/7 Availability: Mobile banking has provided the customers to avail banking services at any time of the day from anywhere. So, it is not limited to working hours or the locations of branches or ATMs anymore. Having round the clock services, customers are able to operate their accounts whenever they want.
Instant fulfillment of customer needs: The most appreciable feature of mobile banking is that services are available at your fingertips. There is instant gratification with the customers because they are satisfied immediately.
Personalization: Today businesses have realized the importance of providing a personalized customer experience. In the case of the banking industry, it is especially important to build trust with the customers. By collecting data on the behavior and preferences of customers, banks now can create unique experiences for them which increases customer satisfaction and credibility.
CONTROL OVER FINANCES OF CUSTOMERS
Customers get all the control over their finances and they are able to monitor their account balances, alert for their transactions, they can open deposit accounts or close them and do many more other functions using mobile banking.
It is one of the major concerns for the customer. You know online and mobile banking both have their own risks but having additional hardware security makes banking services through mobile applications more secure.
Various gesture patterns and biometric security systems like fingerprint and retina scans are used in addition to passwords and two-factor authentication to increase security. Almost every institution is using encryption to protect its financial information and maintain its privacy. This is also a fact that malware is less threatening because there is the proliferation of application platforms. Even if a customer loses his or her phone, the banking data remains safe.
GATHERING CUSTOMER ANALYTICS
Mobile applications are used to collect and analyze actionable metrics of the customers by helping banks understand how the banking customers are interacting with the application and for what purpose. This has allowed the banks to measure and improve their services as well as customer experience.
RETENTION OF USERS WITH PUSH AND IN-APP NOTIFICATIONS
Multiple benefits are offered by push and in-app notifications as they make the customers aware of any discounts and offers which are relevant for them. You can also let the customers know about the increased limits of credit or rates of interest.
USING ARTIFICIAL INTELLIGENCE
Mobile applications allow the use of artificial intelligence too. AI can be used in mobile applications by way of addressing queries of customers on a large scale through chatbots. The future prospect of AI is promising in efficiency, speed, and security. Financial Institutions are already planning to adapt their mobile applications with AI.
So, all these are the benefits that banking companies are or can take from the use of Banking applications. Today, almost every Bank has its own bank application through which it is providing the facility to overlook the accounts as well as to transact using their accounts to its customers.