Question

"Digital banks" discuss their advantages and disadvantages for the whole banking industry

Answer 1

Advantages of Digital Banks:

1. Pay Bills Instantly: One get's to access within a mouse's click and pay their utility bills off online using digital payments like IMPS, NEFT methods. Secure networks offer trust and reliability to the customers. No need to stand in the endless queues to deposit or to pay fees in line like in the older days.
2. Can Check Transactions anytime, anywhere: One can have the accessibility within an internet connection and bank credentials to the pass book of the Journal entries, no need to go for a bank in order to print or write the entries over any longer and this is because of digitization of the banks.
3. Transfer in between the same bank accounts: No more higher transaction fees to be paid in order to transact in between two accounts within the same bank accounts, and this can be done online websites of the official banks.
4. No face-to-face customer service: Takes off the intermediation which helps the client approach himself to the withdrawal and deposit of the cash entries at his ease from any location and no need to operate the accounts within a time bound since the features are available 24/7.
5. Can Easily transfer money to Trading Accounts: If any demat trading accounts are tagged along with the current bank accounts, one can easily trade with the help of online digital bank credentials without going to a bank for making a transfer from one's account to the trading account of a brokerage.

Disadvantages of Digital Banks:

1. Service Interruptions: At times, we all suffer from the internet getting disconnected and the payment gateways may face a problem of credit being done twice or once and not getting repaid within the same time horizon. This might be not the case when one deals with the retail banking.
2. Easily hacked if passwords exposed: If passwords happen to be known to any hackers online can easily hack the information to misuse and increasing more to the risk of holding an account.
3. Technology might not be everyone's cup of tea: Older people who may be hesitant to use the online banking could possibly deny usage of regular internet banking.