Fully Digital Banking: Why Offshore Banks should Take This Route

We are right in the middle of the digital age. Everything seems moving faster than before, in term of tech adoption in our life. Changes are inevitable, and in the cut-throat business world, those who are responsive to changes, thrive.

The best way to go is by riding the wave and capitalizing on the trends. Unfortunately, not all sectors are adapting well. One of those is the banking industry.

Banking industry’s transformation

Banking is known as a “boring” industry that is slow — too slow, often — in tech adoption, even on the brink of becoming irrelevant.

Yes, banking is becoming irrelevant: With P2P (peer-to-peer) lending, online payment platforms, digital currencies, and so on riding at the back of the digital wave, banking will soon become a thing of the past — if the industry is not changing, that is.

Some banks are smart enough to make a breakthrough. Collaborating with fin tech firms, banks are launching services that are safe to be considered as ‘cutting-edge.’ A select few even bets a lot on fintech, trying to capture new business using technology.

Some other banks are even disrupting the entire organizations, and go digital all-out — typically by closing their branches and transform themselves into a digital, branchless banks.

Perhaps the most exciting change among the rest is the rise of digital-only banks. Take Atom Bank, for example. For the first time since almost three decades ago, U.K. bank First Direct is not the most recommended one; it’s been replaced by Atom Bank.

Offering a full-fledge digital banking service, such as saving accounts, mobile lending platform for SMEs, and mortgages — all accessible from a mobile app — Atom Bank are getting top-rated recommendations from the customers, as well as banking comparison services.

Those transformations contribute to the emergence of a new kind of banks: The fully digital bank.

What is a fully digital bank?

According to Banking Exchange, a fully digital bank is a mixture of banking service characteristics found in mobile, online and omnichannel banking. A fully digital bank offers customers a personalized service, which is accessible by any means that suit the customers’ needs. Some of the features may include:

- Video banking service: Do transactions in real time using face-to-face video interface.

- Mobile banking: Do transactions using your smartphone via an app.

- Online banking: Access your account from anywhere in the world, anytime you want.

- Customer “training” service: Teach customers how to use mobile devices for accessing banking services.

- Customer behavioral monitoring: Collect customers preferences and tailor products/services according to their liking.

- Branchless: Open any types of account, buy any kind of financial products and sign up for any services customers want via any channels they want without physically visiting any particular bank branch.

- And so on.

As you can see, a full digital bank is not simply an omnichannel bank or online bank. It’s a bank that use digital technology to win customers by servicing them well through custom-tailored products and services crafted according to their preferences.

What offshore banks should do

We don’t pretend to be a so-called know-it-all expert, but we know what’s going on in the market. We’re also aware that tech makes things easier, and we would expect banking services to be much easier to access than today.

We also hope the same thing for offshore banks — for the sake of their survivability.

In today’s age of transparency, offshore banks can no longer keep their customers’ information behind a veil. The veil has been torn by various policies (FATCA, CRS, etc.) Although asset protection (and secrecy) can be offered through other different methods — e.g. Shell companies, offshore trust funds, offshore real estate investing, and so on — going offshore for the sake of banking purposes mean that you want flexibility and protection over secrecy.

Opening an offshore bank account is still a complicated process to many, and adopting fully-digital policies mean that offshore banking services can be accessible by many. Not only helping clients, but this is also benefiting offshore banking agencies and International business corporation service providers.

More accessible services mean more asset protection options for clients, as well as more banks for agencies to partner with. Both leads to more business for the offshore banks.

The offshore banking sector is getting there, but unfortunately, a fully-digital banking service seems like years to go. Tech adoption is on the rise, but it’s as far as online offshore banking services and systems (i.e. T24, eShore and International Private Banking Systems — IPBS,) including digital products like offshore online trading or buying offshore bonds online.

Takeaway

Offshore banks should offer more services like what our partner bank in St. Vincent does with their gold-backed offshore bank account, offshore online trading, offshore bond investing, and so on.

But the range of digital services shouldn’t stop there: Bitcoin trading, mobile banking, etc. should be next in the list.

All in all, what offshore banks’ customers want is pretty straightforward, really. They want to better-secure their hard-earned money, but they don’t want the hassle to do so. Right now, accessing offshore banking services are made much more convenient than ever, thanks to online-banking-enabling technology. However, it doesn’t hurt for offshore banks to offer more convenience for clients — especially when everyone else is doing it.

It’s time to change the ‘shady’ image of offshore banks through smart technology adoption.