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Role of digitization in Banking Sector
- Digitization is the process of converting data into digital format. Digitization means the adoption of technology.
- Digitization is not an option for the banking industry, rather it is inevitable because every industry is being digitized and banking sector is no exception.
- With the help of technology, banks are able to reach out to more customers and provide better services to them.
- Mobile banking
- Automated Teller Machine
- Debit cards
- Internet Banking
Advantages of digitization in banking
- Improved customer experience.
- Reduction of costs for banks and customers as well by using ATMs, cashless transactions etc.
- Technology is non-discriminatory. Everyone will be treated same at banks.
- It reduces human error.
- Repetitive tasks will be eliminated by automation.
- The rural and urban gap will be eliminated.
- Productivity will be increased.
- With the increasing cashless transactions, fake currency threat will be reduced.
- Cashless transactions ensure transparency and reduce black money formation.
- In digitization Cashless transactions counter tax evasions.
- The problem of fake currency notes can be eliminated by digital payment.
Disadvantages of digitization in banking:-
- Digitization reduces the effort of employees and hence results in loss of jobs. Loss of jobs will be compensated through a creation of new jobs such as cyber security, research team for innovation in technology etc.
- Banks will be more vulnerable to cyber attacks as Cybercrime sand other modes of thefts will be increased. There is a lack of digital awareness in the country, forget about awareness about cyber crimes.
- A large part of Indian population is digital illiterates so they are not comfortable with banking digitization.
With the increasing usage of smartphones, digitization of banking sector is inevitable to catch up the increasing expectations of the world. It indeed reduced human errors and increased convenience. But the fact that cyber threats are on the rise, banks must be very careful and should be prepared to handle cyber attacks.
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