Banks continue to evolve and adapt to new technologies as the world has become increasingly digital. The Internet and Mobile Banking mediums have changed how consumers conduct banking, leading to a more competitive banking environment. Various alternative financial services outside traditional banking institutions come in today's highly interconnected world.
These include peer-to-peer lenders, money transfer services, prepaid cards, and other non-deposit alternative financial services. Let us understand how the internet has significantly impacted banking systems, changed customer behaviours, and brought new regulatory requirements.
- Changed customer behaviours
The rise of the internet has significantly impacted the consumer banking industry by changing how they do banking. With the proliferation of mobile technologies and smartphones, customers can access banking services like smartphones, laptops, and computers. This has led to a dramatic increase in customers accessing banking services.
Customers can now open a Bank Account or check Personal Loan interest rates while applying for it from the comfort of their homes.
- Offering alternative banking products
Banks now offer alternative financial products and services, including wealth management products and services, global trade financing, and financial technology services such as cryptocurrency. These products were previously only available to large financial institutions. Still, the rapid adoption of digital technologies has led to the growth of small, digital-only banks, some of which offer a range of these services.
The other features include an online EMI calculator, tools for checking Personal Loan interest rates or credit scores, and more.
- New regulatory conditions
New regulations have shaken the banking environment by increasing business costs for traditional banks. This has led banks to rethink conventional banking operations and develop new business models to serve customers. For example, banks are shifting towards offering 'digital-only' services such as mobile banking, online Savings Account opening, online Personal Loan application, etc.
Others are scaling back to traditional banking operations to focus on profitable services like asset management.
Conclusion
The internet has changed banking in many ways. It has made it easier to access banking services and increased the number of people with access to them. It has also enabled banks to offer a range of alternative financial services. New requirements increased business costs for traditional banks. It remains to be seen how these changes will play out over the long term, but the internet has significantly impacted banking.