It was a tradition that bank accounts opened required extensive paperwork. This was necessary to fulfill a variety of obligations. These included the bank’s need for proper records and the government’s control over possible money-laundering activities. There was always paperwork involved in almost every transaction, even after the account had been opened. In some cases, this is no longer true. The transition from paper to digital is happening quickly. Randall Castillo Ortega, a FinTech expert and the founder of SME backer RACO Investment, knows that cashless banking is the future.
Already, the move away from paper trail mandatory has begun. Many banks offer incentives to customers that reduce dependence on paper receipts. However, the digital transition goes beyond just paper receipts and also includes virtual money. Castillo explains, “It is possible to pay virtually for everything, online or through a digital payment solution such as Samsung Pay. Consumers can simply swipe their smartwatch to complete transactions.”
Many banks are now completely digital and no longer have physical locations. This is a sign of virtual banking. DBS Bank is one such bank. It calls itself an “intelligent and intuitive” digital bank. As regulations adjust to digital solutions’ rise, it is possible to open an account online and submit all identification requirements electronically. This is in accordance with the financial regulations set forth by FinCEN (the Financial Crime Enforcement Network).
DBS and similar banks allow accountholders to access all aspects of their financial activities online. Simon says that digital branchless banks are becoming increasingly popular due to the fact that they offer all the same services as traditional branches. They can link their checking and savings accounts with their IRAs or money market accounts. These options allow consumers to have greater control over their money and enable them to manage their financial assets from anywhere in the world.
These digital banks offer more than a simple banking service that isn’t supported by the financial community. DBS’s digital bank, DBS digibanking, has been awarded several awards, including the Global Finance Award 2020 and Best Consumer Digital Bank (Asia Pacific), Most Innovative Digital Bank (Asia Pacific) and Best Integrated Consumer Bank Site(Asia Pacific). There will be more options for digital finance as the trend toward more opportunities continues to grow. This will improve the competitive environment and encourage more innovation.
Castillo adds, “What we are witnessing now is only the beginning of what’s to follow. It is clear that there will be an increase in demand for digital banking solutions over the next few years.”
The drive to a cashless society has been led by challenger banks. Revolut NuBank, KakaoBank are all examples of neobanks that have shut down physical branches. They now exist solely in digital space.
They are just the beginning. JP Morgan and Goldman Sachs are just a few of the incumbent players. These results are not all great. RBS’ “Monzo killer,” Bo collapsed after only a few months, despite a series of setbacks.
According to GlobalData analysts, the bank of the future will be digital. The government will need to offer solutions for those who can’t access the digital economy. The incentive to move to cashless societies lies in the reduction of the black market. Governments will explore and develop central banks digital currencies to address this.
If we look 10 to 15 years into the future, it is possible that digital banking will dominate the financial industry. Physical banks are confined to a small niche. This will be the case for sensitive transactions or those who still depend on physical banks for safe deposit boxes, secure storage, and for individuals who require it. However, overall, digital banking will be the norm.