51% of US adults bank online, and over 160 million people used online banking in 2019. However, despite simplifying services and enhancing the customer experience, banks still face challenges. These 4 challenges hinder the growth of digital banking.
1. Traditional Banking Habits
Despite the wider population adopting digital banking, some people are still wary about the new way of doing things. 49% of American adults haven’t embraced digital banking because they were used to traditional banking. Humans are creatures of habit, and it can take time for people to break habits. Some Americans are hesitant to embrace digital banking because they simply don’t know how to use online banking platforms. Digital banking marketers must show these customers the benefits of digital banking. They can explain how online banking solves traditional banking problems efficiently. There’s no need to go to bank branches, and most services have low or no transaction fees. Going digital also makes it easier to access financing, all a person may have to do is type “loans near me” to find good lenders.
2. Security and Fraud
Security is a major challenge facing digital banking. Cases of hackers illegally transferring funds from customers’ accounts have been in the limelight, making people fearful. Unlike with traditional banking, cybercriminals only need your banking information to steal your money. Back in 2015, people with online banking accounts in the UK lost a whopping 130 million British Pounds to cybercriminals. Therefore, poor cyber security remains the biggest challenge to digital banking adoption.
3. Technical Issues
A system crash or a bug in the computer code can cause a huge loss running into millions. Operations may have to be shut down temporarily, and customers may be unable to make transactions–leading to loss of trust in digital banking. Banks also risk losing sensitive data if they have poor data storage systems. They must have secure digital platforms and mobile apps to prevent technical hitches. Digital banking marketers should also tell customers what they can do to keep their accounts secure–like not sharing passwords.
4. Cross-border Transactions
The implementation of cross-border transactions marked an important milestone in global trade. But these transactions are still expensive and take time. This is because most banks still use traditional infrastructure, such as national banking infrastructure. Incompatible software and non-uniform digital banking development make cross-border transactions slow and complicated. To iron out such problems, banks should adopt new technologies such as blockchain which enable flawless cross-border operations. The demand for digital-banking continues to grow, but banks must overcome these challenges to convince more customers to embrace the banking method. They must invest in internet banking awareness to make digital-banking adoption successful.
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