Your browser does not support JavaScript! Pls enable JavaScript and try again.

Digital Channels in Banking: Transformation and Trends

Jul 7, 2023Priyanka Adhikary
A customer paying for groceries online using a digital payment method on his phone.

In the current times, digitalization has taken the world by storm to such an extent that having to live without a smart device and a decent internet connection might sound challenging to many. Digitalization had its beginnings when computers were first introduced. However, it has come a long way since then, and now almost every sector, including the banking sector, has adopted digital processes to enhance customer experience and to optimize work.

The digital transformation in the banking industry has changed the way in which people use everyday banking services. Now, with just a smartphone and internet connectivity, one can transfer funds from one account to another across the globe, apply for loans, pay bills,etc.

The Evolution of Digital Banking

The roots of digital transformation in the banking industry can be traced back to the 1960s. It was during this time when ATMs and debit cards were launched. When the Internet became accessible to the public around the early 1990s, online banking became the new norm. However, like most things that kept evolving, technology also got more and more advanced. Just like how feature phones transitioned to smartphones, online banking paved the way for digital banking, making it easier for people to access various banking services right from the comfort of their homes. The transformation of digital banking in Singapore and across the globe was also a result that stemmed from the need to have easy ways to carry out everyday banking and financial transactions. Now, most banks across the world provide both online banking and mobile banking services. In fact, digital transformation in the banking industry has become so widespread that approximately 2.5 billion global users now use digital banking services.

To make things easily accessible, banks have also integrated artificial intelligence on their banking platforms so that customers can get their queries solved within minutes instead of having to rely solely on customer care services. The use of digital channels in the banking industry has also helped banks to optimize work.

Benefits of Digital Banking

While digital banking has several benefits, some of the topmost benefits to look out for are given below:

Personalization of Banking Services:

Personalization of banking services means showing customers personalized recommendations, services and updates that align with their requirements and lifestyle. By using customers’ data and high-end technology, banks deliver personalized banking services by predicting what their customers might need and use. The data even helps in offering tailor-made suggestions for each customer.

Enhanced Security:

Technological advances have also given rise to the increasing number of online frauds and scams. This increase has led banks to adopt advanced levels of security on their online and mobile banking platforms to combat fraudulent activities and ensure data privacy and protection. Banks also keep updating their security system to tackle the continuous rise in cyber fraud.

Easy Accessibility of Banking Services:

One of the most convenient benefits of digital banking is the easy accessibility of banking services. You can download the mobile banking app of your bank on your smart device and access several banking services such as funds transfer, bill payments, etc., from anywhere in the world.

Technological Trends Shaping the Digital Banking Industry

Though several banks are already using advanced methods to deliver fast and efficient customer service, some are also adopting technologies that can further shape the future of digital banking:

Use of Blockchain Technology in Banking for Better Security:

Blockchain is a type of Digital Ledger Technology that records transactions in a way that makes it tough to hack or cheat the system. The implementation of Blockchain enables financial institutions to process cross border transactions efficiently and securely.

Use of Artificial Intelligence:

Several banks globally are now even collaborating with Fintech companies to offer customers bespoke and user-friendly experiences. Through such collaborations, many banks globally have also been able to create AI-powered platforms. With the help of Artificial Intelligence, banks can use chatbots to upgrade customer experience. AI can also help deliver a more personalized experience by streamlining customer data, customizing services and interfaces and more.

Frequently Asked Questions

Why do banks need digital transformation?

Banks implement digital transformation strategies to improve customer experience and to automate work with less manual intervention. Digital transformation strategies also help banks retain customers by offering quick solutions. Through these strategies, banks can even cut costs and deliver optimized and efficient services quickly.

What is digital transformation in banking?

Digital transformation in banking is all about the integration of digital services and high-end technologies to improve customer experience. With the insights and data taken from the digital channels, banks can customize, strategize, and curate their services as per customers' requirements.

What are the current trends in digital banking?

Some of the current trends in digital banking are personalized services, use of Blockchain Technology, use of AI, cloud computing, advanced cyber security, and more.

Discover a world of wealth opportunities in Singapore

Join Citigold


This video/webcast/article is provided at your specific request and for general information purposes only. It is not intended as a recommendation nor an offer or solicitation for the purchase, loan, swap or sale of securities, financial products, services or currencies. Neither all nor part of this video/webcast may be reproduced or copied in any manner without the written consent of Citibank N.A. or its affiliates or subsidiaries ("Citi"). This video/webcast/article has been prepared without taking account of the financial objectives, situation, or needs of any particular investor. Any person or entity considering an investment should consider the appropriateness of the investment having regard to their financial objectives, situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment.

Investments are not deposits, are not obligations of, or guaranteed or insured by Citi, or by any government, insurance agency or other public institutions, and are subject to investment risk, including the possible loss of all or part of the principal amount invested. Past performance is not indicative of future performance; prices can go up or down. Investment products are not available to US persons.

Investors should be aware that it is their responsibility to seek legal and/or tax advice regarding the legal and tax consequences of their investment transactions. If an investor changes place of residence (including tax residency), nationality, or place of work, it is his/her responsibility to understand how his/her investment transactions are affected by such change/s and to comply with all applicable laws and regulations as and when the same become applicable. Citi does not provide legal and/or tax advice. If you have any questions, please contact your Relationship Manager.

Please click on the following link for other important disclosures associated with this video/webcast/article, including but not limited to disclosures relating to certain risk factors and/or specific country disclosures that are applicable to you, depending on the country of your residence:

Frequently Asked Questions