The advent of the internet has resulted in a paradigm shift of our relationships with the key variables of the society and economy. It has even effected long-lasting changes in our interpersonal relationships. Starting with cable wires and fixed phone lines in the 1990s, the three-decade-old internet has now brought the whole world in our palms through smartphones. According to data from Internet and Mobile Association of India (IMAI), there were 451 million active internet users on a monthly basis in 2019. In January 2020, the internet penetration in the country was 50%, while the number of internet users stood at 687.6 million.
Every single activity, including banking, has been transformed because of our connected existence through the internet.
Banking services in the pre-internet age:
Before the arrival of the internet, banks were seen in the perspective of branch banking: of doing transactions in a traditional physical, brick and mortar structure. Cash was the primary mode of carrying out transactions, with scores of customers queuing up to avail banking services. Cheques were transported physically to execute payments. Overall, banks were primarily known for being the custodians of cash and valuables, and its name evoked an image of an imposing structure, equipped with secure vaults.
Banking services in the present age:
The present era banking is nothing short of a banking revolution brought by the internet. The point of sales machines have been brought to the doorsteps of customers through web and mobile-based apps. The features of present age banking have invariably transformed the relationship between banks and its customers. This is because of the following key transformative changes:
- Internet Banking/Online Banking: Because of the internet, there is a significant rise in the number of customers who prefer Online Banking. The transaction mode has shifted from being branch-based to mobile apps, digital wallets and online payment platforms. Digital cash, where payments are executed at the tap of a button, has become the preferred currency in the digital ecosystem. Using Online Banking, you can access a wide slew of services from the comfort of your home. These include bill payment, money transfer, and monitoring of your account. You can avail different payment and settlement options, like National Electronic Funds Transfer (NEFT)and Real Time Gross Settlement (RTGS) in the specified banking hours. For immediate transfer of funds, you can opt for Immediate Mobile Payment Services (IMPS). These online fund transfer services have provided tremendous convenience to customers.What’s more, you can use any device like desktop, laptop, tablet or smartphones to avail Online Banking services.
- Digital banking services: A key indicator of the transformation brought about by the internet is digitisation of banking services. Be it opening a fixed deposit/recurring deposit, credit card payment, updating KYC information, applying for loan, in-person support, getting access to account and loan-related documents, and more, banks now provide a plethora of online services.
- Reduced costs: Reduction in cost is another indicator of transformation Though banks incur a significant expenditure on technology, there are reduced costs because of digitisation of operations. These benefits, in turn, are passed to the customers, who can now avail reduced costs, like low ATM fees and transaction charges
- Multifarious banking services: Banks now also provide investment advice, manage brokerage accounts and offer Portfolio Management Services (PMS). You can even purchase online insurance products.
- Investments made easy: Online Banking has transformed the relationship between banks and customers by providing easy options for investments. For instance, you can now easily choose to invest in Systematic Investment Plan (SIP) Mutual Funds from your salary account or select to invest in Mutual Funds, while-on-the go, through Net Banking services. Banks also provide direct credit redemption to your bank account via the Investment Services Account (ISA).
The bottom line:
Thus, the internet has introduced manifold changes in the relationship between banks and its customers. Digitisation has transformed banking services. Now you can use the multifaceted banking services not only to manage your finances in the best possible manner, but also to make wise investment decisions, create a sound portfolio and take the right steps towards realising your financial goals.