Did you know that digital banking and online banking are two different terms? If not, then you are not the only one unaware of this. Believe it or not but half of the world’s population is not aware that there’s a difference between digital banking and online banking. Both these terms are used interchangeably but they do not mean the same.
Online banking, Internet banking, mobile banking and digital banking are terms that can be used interchangeably but there is a thin line that makes them different from each other. To begin with, let’s start with understanding what online banking and digital banking really mean.
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What is Online Banking?
When you use online banking services you access a bank’s services by logging on to their online website. You access the banking services by either logging in via your laptop or by your mobile. It is a broad term that encompasses mobile banking as well. When you are accessing a bank’s services from their website via a laptop it is “online banking.” However, the same thing done with a mobile is termed “mobile banking.”
It won’t be wrong to say that mobile banking is one essential part of online banking. According to reports, 80% US banks will offer online banking services to their customers by the end of the 21st century.
How is Digital Banking different than Online Banking?
More than often digital banking and online banking are confused to be the same concept. But when we take an in-depth look at both the concepts it is easy to point out a few differences. The way we access banking services and log in protocols are the same in both but the core objectives differ. To start with, the activities and functions, technology used, innovation etc., of digital banking is different from online banking.
Artificial Intelligence, Machine learning, Blockchain, 5G technology, IoT, AR and VR are some innovative technologies used for digital banking. With online banking there are also some limitations like weak user interface, complicated navigation etc.
Digital banking is a blend of online banking and mobile banking. It has two sides, one is online banking, which also includes mobile banking. The other side is the online process inside the bank offered to the customer. We can call it the back-end of online banking that is carried out with innovative technologies and software. Digital banking is the future of banking as it can leverage cutting-edge technology and software and goes beyond the traditional practices of online banking.
Digital banking has very high potential for improvement and development. We are rapidly moving towards a “no-cash” society, and digital banking is the system that has allowed an entire online economy to grow and thrive.
Online banking is a broad term and also involves mobile banking; digital banking on the other hand is a more “all-inclusive” term. It refers to all forms of financial transactions that take place with the help of technology. Therefore, it can be said that online banking is a form of digital banking, but digital banking is not limited to only online banking and this is the thin line that sets the two apart.
In a nutshell, online banking deals with only the essential transactions; this includes only the basics you require to manage your finances seamlessly. Digital banking is a step ahead it involves online banking and goes beyond it.