How Effective Is Internet Banking?
Nowadays we spend most of our time on the mobile, whether we are on public transportation or at work. Every service is being digitized in order to adjust to the mobile application platform. Previously, every customer had to visit a local bank branch to either create our account or take a loan.
Currently we don’t need to visit local branch bank to either create an account or a loan, it could be easily done on the mobile via digital bank’s service. Every financial transaction is being rapidly digitized and saves time for the customers, who usually don’t have the time to visit a local bank.
Why Is It So Efficient?
24/7 Services
Every transaction for internet banking runs for 24 hours 7 days, unless there are some technical issues going on. Even during the weekend or late night, you could simply send money through the internet or mobile application.
Online Account Setup
Internet banking provides easy account setup towards the customers, unlike visiting physical branches to create a bank account. Internet bank account can be set up in either mobile application or internet, and also setting up the account process is much more precise and simple compared to setting up the account in offline bank.
Chat Bot
Even though internet banking does not have a teller, who can help the further needs of the customer, it provides chat bot and customer service team to help the customers. So that customer can either easily ask any further questions customer might wonder at anytime.
Document Management System(DMS) / Digital Signature
Usually bank needs to file numerous customer’s documents in the back office, and if any documents get lost or misplaced, it brings out big issues to the back office and cause problems toward the customer.
However, internet bank handles document filing by document management system. which means every document is being stored and saved in the document management system database, and easy to find any documents as well.
Moreover, digital signature feature in Document Management system saves time and process for the customers. Every signature process can be simply done on the internet or mobile application. The customer doesn’t need to visit the branch to put official handwritten signature for documentation work
Famous Internet Banks
There are several Internet Banks that provide a variety of services, and here is the list of Internet bank(worldwide) below:
Kakao Bank (Korea)
Kakao bank is one of the 1st generation digital banks in Korea, along with K-bank. Kakao bank is originated from Kakaogroup(known for Kakaotalk service, which is a messenger application). Kakao bank offers simple steps for opening an account, which takes about 5~8 minute to open up an account. Also customer can also access ATM anywhere inside Korea free of charge.
Atom Bank (UK)
Atom bank is based in the UK, and provides all the financial, banking services through the mobile application. Atom bank is internet bank that is exclusively built for mobile application platform. So every transaction is being done through the mobile, which saves up a lot of time for the customer, who have busy schedules.
Ally Bank (US)
Ally bank is a popular online bank based in the United States. The best features in Ally bank are, customer can create many free checking and savings account with no monthly maintenance fees or minimum balances. Also, interest is being compounded on a daily basis, which means customer will make more money on interest compared to accounts that compound monthly.
Webank (China)
Webank is the bank for online and mobile application users, it’s known as China’s very first internet banking. Also Webank is based off from TencentC, which is China’s tech giant. Webank service has launched its service starting from 2015 January, and also connected to Wechat ,China’s famous messenger application. Also bank services and financial transactions can be done inside Wechat application as well.
Advantages and Disadvantages of Online-only Banks
Advantages:
1. Interest rate
Most internet banks offer better interest rate than commercial banks. Because every service is done through online, internet bank provides higher interest rate than the ordinary bank that has physical branches.
2. Easier loan process
Unlike commercial banks that have very strict and meticulous loan process, including paperwork and strict credit rate requirement. Internet bank provide simple loan process, regardless of the job position if customer can meet the certain requirements of credit rate. Moreover, interest rate for loan is lower than commercial bank.
Disadvantages:
1. Cash issues
Since every transaction is being processed online, you can’t withdraw cash when you urgently need it in certain situations. If you want to withdraw cash you will need to visit the ATM or physical branch to receive the cash.
2. Operating issues
Internet bank’s system is all based on online. In any case either server goes down or technical issue occurs, it might cause inconvenience toward the customers, where they can’t use the service or send money to client/company on specific time.
Robo Advisor Is a Game Changer
Most customers visit offline banks for asset and wealth management counseling. whether they are distributing asset wisely or investing on high profit rate financial product, such as ETF, Pension funds, and etc. As internet banking came up to surface and digitizing bank services.
Currently in Internet bank robo advisor is giving aid for asset and wealth management services through the Artificial intelligence technology, where based on individual’s financial condition robo advisor will give suggestions for setting up the customized portfolio and investing.
Moreover, In future robo advisor will also conduct financial research and data, and create industry, trend report. In order to provide latest trend and information toward the customer.
Future of Internet bank
As mentioned above, digitization takes place due to rapid technology development, and internet bank will have various features added onto current platform. Moreover, in the near future there will be more internet banks in our digitized society, and there will be low demand for teller in the bank. That being said, chat bot will replace the role of the teller, and answer the questions from the customers.
Security issues of the Internet bank would be resolved by the blockchain technology, where individual’s account would be protected under the blockchain technology. When new blocks are always added to the end of the chain, they are always stored in chronological order, and once the block is made, it cannot be edited and the data it stores is secure. So it is hard to manipulate the financial transactions or hack the individual’s account.
Last but not least, as mentioned above market size for Internet bank will grow bigger as time passes by, and new technologies will be embedded on the financial services, such as (IOT)Internet of Everything, AR (Augmented Reality), VR(Virtual Reality), and A.I customized financial product, AI will create financial product based on individual’s financial status. In near future, fintech will be a key component of Internet bank.
Invest In the FINTECH Industry
There is no doubt that the fintech industry has grown exponentially in recent years. Others even believe that fintech will do for the world what the internet did back in the late 90’s. To find stocks related to this industry, open KOSHO!
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