By going digital, financial institutions are saving the money needed for building new branches, apart from automating a significant share of their daily mundane work.

For customers, they can perform basic banking activities like account balance checking from their homes, with just a few clicks on their smartphones. 21st century digital-only banks are giving their customers more attractive fee schedules and interest rates.

As per Bankrate’s 2023 emergency savings report, 57% of Americans were uncomfortable with their level of savings, something which online banking can address with their tailored solutions.

Today, we will explain in detail why going digital might be the best banking decision for you.

24×7 Banking Access

Physical branches of a bank don’t operate on a 24×7 basis, but mobile apps do. And this comes in handy during emergencies. What if you face a medical emergency or need to transfer funds to your friend urgently? Internet banking will help you to sail through these emergencies.

You will be able to transfer money anytime and from anywhere with just a few clicks on your smartphone.

By using mobile check deposit, you can deposit a check from your house even during the night. While the legacy banks were known for their rigid duty times, digitization has broken them down completely.

No Need For Branch Visits

Checking savings bank account balance, transferring funds to another user, requesting a new chequebook, setting up standard instructions, initiating money transfers, opening a Fixed Deposit account, and paying utility bills, all these functions were used to perform through branch visits a few years back. However, the arrival of mobile banking has changed the scenario.

You can pull off the above functions from your couch through a single interface of your bank’s app, while saving the transportation cost.

Makes Saving Money An Easy Affair

United States-based Ally Bank app offers features like automatic transfers to savings accounts, along with round-ups that move rounded-up change into the customers’ savings.

The US Bank app is known for alerting customers when its algorithms spot money-saving opportunities. California-based all-digital Varo Bank is offering a ‘Save Your Pay’ feature that automatically stashes away a pre-set percentage of the customer’s paycheck each time it deposits.

Having banking apps with spending alerts has emerged as the perfect money optimization solution for 21st century customers, something which all-digital neo/challenger banks are making full use of. This helps the customers to keep track of the latters’ account expenses, apart from organizing them into spending categories like utilities, dining and transportation.

Some apps are even offering built-in budget creation solutions. Then there are digital banking interfaces, where you can set your financial goals and save money as per that. Your banking app will even allow you to download account statements to your smartphone.

Giving Tailored Financial Products

Neobanks and challenger banks are known for offering their customers tailored products through digital routes.

You can digitally draw up your financial goals and start categorizing your money-saving activity as per your needs. Ten years back, the same process would have involved immense paperwork.

The 21st century banking apps make your life easier by deploying AI and Machine Learning, which, through the analysis of large volumes of data in a quick span, predict your banking behaviour, and decode the latest market trends and sentiments, before suggesting your investment options.

AI solutions are also suggesting 21st century customers the best time to invest in stocks, apart from warning them about market risks.

In short, digital banking solutions are also helping customers to make informed decisions on financial instruments like mutual funds, stocks and bonds.

A Strong Data Security

Compared to the physical branches, digital banking apps invest heavily in guarding their customers’ crucial data.

Yes, you may run the risk of losing access to your banking app, if you don’t remember your username and password, but these are the safety features, along with multi-factor authentication, which keep your data safe.

Some bank apps have taken the game to the next level by asking its customers to log through face/fingerprint scanning, before they access their accounts.

Apps of Wells Fargo, Ally Bank, Chase and Bank of America let their users access their digital solutions to turn their debit/credit card off if it gets misplaced. Earlier, this function required the customers to call a toll-free helpline number, or in the worst case, to make a panic visit to the branches.

The post Five reasons why your banking should take a digital route appeared first on International Finance.

Also, the latest United States government data says that since COVID, the country is witnessing record numbers of new business formation applications. The start-up sector is driving the boom with its massive growth numbers (as per the March data, the nation is having some 71,153 start-ups, the largest by any country)

Here comes the crucial role of the lenders. While they have this incentive to maximise their profits, they also need to keep the boom going by making the loan approval process absolutely hassle-free.

Innovation is the key here. This article will shed some light on the lenders and how they maximise their profits while improving the borrowers’ experience.

Embrace tech to reduce lending application time
Whether buying homes or requiring capital to start businesses, consumers are not ready to wait for lengthy procedural things on lenders’ part. All they want is quick application answers. The faster the lending company comes back with the replies, the more deals they can close. To reduce procedural delays, the lending industry can look towards income verification platforms. An application called Truework helps lenders with verifying the income details put by the customers on the loan application forms in a matter of seconds.

Rely on electronic documents to cut down on procedural delays
If you are an old-school lending company still believing in things like having too many papers at your offices for routine procedures, please, get smart. As per a report from the information management association AIIM, companies using electronic documents and paper indexing methods are eliminating the need for more staff and operational costs. This is also reducing the physical data-entry tasks. The lending staffers can also spend less time maintaining applicants’ data. This method is enabling the lending institutions to not only process the loan application documents at a much faster pace, but they are also increasing the profit amount by avoiding tasks such as collecting papers, taking photocopies of them, storing and forwarding them manually to desks, while completing each stage of the loan origination process.

Upgrade your digital game
As per the latest data, in the US alone, digital market users will be more than 200 million by the end of 2022. So the message is very clear for the lending industry, make your presence strong in the virtual world.

A good solution towards this can be to tie up and invest in an app that provides an easy user interface for loan applicants. Very soon things like visiting bank branches to apply for loans, doing paperwork, and procedural inquiries will be a thing of the past, thanks to the rapid growth in smartphone and internet markets.

Established players such as Bank of America, Capital One and Bank of Hawaii are already having top-notch banking apps.

Don’t ignore the power of social media marketing
The virtual world is not only growing at a terrific pace, but is also registering a steady increase in its consumer base, comprising people of all ages. Platforms such as Facebook, Instagram and TikTok are emerging as powerful marketing tools.

Now what the lenders do here?
Create business pages across these platforms, go for PPC (Pay-Per-Click) campaigns or paid social media marketing, run advertisements to find out your target audiences, including home, automobile buyers and people looking out for loans to start businesses. What COVID and the global lockdowns in the last two years have done is make people stay active on the internet more and more to combat home confinement blues. This factor has contributed to online ad spending reaching new heights in 2021.

Another medium can be organic social media marketing. Put up free, informative marketing content on Facebook, Instagram, TikTok, Twitter and LinkedIn, and engage your customers.

However, if a Hootsuite blog is to be believed, organic marketing has restrictions as only a smaller percentage of a brand’s followers can see those advertisement posts. On Facebook itself, these campaigns reach only 5.5% of the company’s customers, despite updates in ranking algorithms patterns.

How about referral bonuses for the customers?
In the loan business, compromising on interest rates or installment fees as per the customer’s convenience is always a big no. Yet, the applicants having a good experience with the lenders always benefits the latter as the same customers will always prefer the concerned company first, if he/she has to take loans again.

So it’s imperative that these companies work on bettering the customer experiences, from the first to last points of paperwork and other procedures.

Canada-based Tangerine Bank has found a solution to this in the form of $50 referral bonuses to the customers, which not only gives the latter incentives to use the ‘Positive Word of Mouth’ to promote the lender amid their friend and relative circles, but also helps the bank to get new customers.

Monetary incentive-based referral programmes are becoming part and parcel of financial institutions dealing from personal savings to cryptocurrency. It’s high time that lending firms follow this method as well, to increase their profits.

Be it affording houses, cars or needing loans to start businesses, lenders have become a go-to option for people. The more hustle free the loan approval process is, the better it gets for the applicants. Having positive word of mouth always matters in any business, in terms of having a continuously expanding customer base. The same truth applies to the lending sector as well. The smoother the loan origination process is, it results in quick profits at the end of the day.

The post Adopt tech, win borrowers’ trust: New mantra for the lenders appeared first on International Finance.