Essay – Traditional Banking vs Digital Banking | SBI PO, BOB Manipal, NICL AO 2017 Descriptive

Hello and welcome to exampundit. Here is another Essay on Traditional Banking vs Digital Banking which have been aced by Pallavi and Tripti Srivastava.

Winner – Pallavi

Traditional Banking vs Digital Banking
TRADITIONAL BANKING:
Brick-and mortar banking
is a traditional banking system that typically offers full service
banking including safe deposit boxes , withdrawal of cash etc. Brick-and-mortar
refers to an organization that possesses a building or store for business
operations. Brick-and-mortar businesses are companies that have a physical
presence, which is a physical store and offer face-to-face consumer experiences.
Advantages of Traditional banking :

People nowadays think of internet
banking is better than brick-and-mortar banking. However, brick-and-mortar can
also provides some of the benefits to customers. Some of the advantages of
brick-and-mortar banking are stated as below:
Ø  Convenience: Some people prefer
choosing traditional banking methods compared to internet banking, especially
for those senior citizens. The convenience and time efficiency of
brick-and-mortar banking are more suitable. They can ensure that they can get
the transaction receipts provided when they see their money change to another
hands after successful of a certain transaction.
Ø  Customer Service: Brick-and-mortar
banks are best to provide the customer services. Most of the older generations
prefer using brick-and-mortar banking services because they know the service
well and can go to the branch to withdraw their money, bank in money or even
deal with the staffs. Furthermore, they can ask from the bankers to get
information that they want face to face with the staffs 
Ø  Security : Security is always the issue
and so they are still many people prefer to use brick-and-mortar banking
services. If the customers have problems, they can easily ask for assistance
from a bank representative to sort out their problems. Some people also feel
comfortable when they actually see the money change hands as compared to online
banking wherein all the proof that they get about their transactions is the
receipt provided to them by the site after completion of a certain transaction.
Disadvantages of Traditional Banking:

Ø  Slow Service: However, through this
traditional banking service, the banks will require longer time period for
making loans to customers. Sometimes, it involves more prerequisites, and also
slows of shifting money compared with internet banking. This will make those
customers feel troublesome and refuse to use brick-and-mortar banking service
again
Ø  Location: Customers need to go back to
the physical branch for some banks’ services like taking loans from banks or
withdrawing money from saving accounts. When they encounter problems related to
their banks’ accounts, they need to rush back to the physical branch and ask
help from the representative to solve the problems. If the location of the bank
is far, it is inconvenient for those customers who are old or are not able to
drive,
Ø  High Cost: Brick-and-mortar banking
need to pay high amount of expenses costs as they need to build the branches in
everywhere to provide convenience to their customers.
DIGITAL BANKING :

Digital banking become a new age of banking program. Online
banking payment is defined that through internet to transfer funds or money
from one account to another account to develop banking activity such as paying
loans or bills, shifting funds, inspecting account details and balances.
Besides that, users also can pay mortgages and buying futures, warrants,
options and others through online banking payments. So that, online banking
payments can also be intituled internet banking payment.
Advantages of  Digital Banking
:

Ø  Convenience : Internet banking allows
users to pay all types of bills or make any transactions or investments through
internet. If customers find that they have busy working schedules or they
simply do not find it convenient to visit their banks, then they might want to
consider using internet banking.  Internet banking is a fast and easy way
of managing their bank accounts and it has the potential to save them a lot of
time and money. This means that the users no longer need to go to banks, press
button for a queue number, sit and wait for the their turns. The idea of online
banking is just taking the advantage of the internet, which connects the users
to their banks. The users are able to connect themselves with their banks and
they may choose the number of transaction like balance inquiry, fund transfer,
bill payments, loan applications and even stock or mutual fund trading with a
proper secure authentication process. 
Ø  Flexibility: Moreover, internet banking
also allows the users the ability to view their accounts at anytime. As soon as
they log into their accounts, they will be able to see whether there is
anything amiss when you check on your deposits and debits. 
Ø  Safety : when people do not have much
time even for personal work, Internet banking solves their problems. Many
people who use internet banking services believe that as their accounts can be
accessed by user name and password that only they know, their money is in safe
hands. Whatever information they need about their bank account is only a click
away. 

Disadvantages of Internet Banking :

However, like all good things,
even Internet banking has certain disadvantages.
Ø  Lack of trust : Lack of trust is one of
the disadvantages of internet banking. Many people still do not trust the
internet banking services through internet. This is because they prefer to deal
with human beings as they trust others like them rather than to trust a machine
especially letting the machine to manage their money. They will worry that
whether their money will be safe if being processed through internet banking.
Ø  Security : security threat has been a
big concern to the publics. There are some cases of forgery have been happened
in internet banking. There are some websites which can hack the usernames and
passwords of internet banking users and later misuse them. In such cases, many
people lose their money without getting informed and they will only know huge
loses have been incurred when they receive the bill
Ø  Accessibility: Another concern about
internet banking is its accessibility. If the internet server in the area that
the users stay goes down, the users will be unable to access their accounts to
make any payments or transactions through internet banking.
Ø  Customer Service: Last but not least,
customer service affects people to use internet banking too. One very common
disadvantage of online banking is when a person has some problem or query. In a
normal bank, if one faces some problem, one can go to some employee of the bank
to solve it. However, in the case of Internet banking, one will find oneself
making endless calls to the customer service department.

Both the traditional and digital banking have their advantages and disadvantages. However, the popularity is dependant on the accessibility and government’s effort to make the product intelligible among the masses.

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Traditional Banking vs Digital Banking

Runner Up – Tripti Srivastava

Banking
started from the ancient times when merchants made grain loans to farmers and
traders who carried goods between cities .Later,  lenders based in temples made loans and added
two important innovations : they accepted deposits and changed money . Since then
in India and china money lending activity started . It plays a crucial role in
every body’s day – to –day life. It works as an intermediary by pooling savings
and channelizing them into investments through maturity and risk
transformations. Thereby keeping the economy’s growth engine revving.
Traditionally,
banks exist physically for serving the needs of the customers. It was consuming
a lot of time of the customer as well as money for visiting the bank and get
their transaction done such as-check bank balances ,transferring money from one
account to another and also there were the time limitations  of the office hour after which  they could not do any transaction. A customer
who was often travelling abroad  could
not pay close attention to their finances The cost incurred by the traditional
bank in operation of different activities of the bank was huge and employees of
the bank could serve to few customers and rest were returning not served.
On
the other hand digital banking is the digitization(or moving online) of all the
traditional banking activities and the programs that historically were only
available to customers when physically inside of a bank branch . It saves a great
deal of time of the customer and money in visiting the bank for checking
balances or to transfer money from one account to another as their account can
be accessed readily from anywhere with a computer and internet access . It
helps the customer who often visits abroad in maintaining their finances. It
has no time limitations for the transaction or office hours of the banks.
There
is some advantage of traditional banking over digital banking such as in
digital banking cyber security threat has increased which was not there in case
of traditional banking. For performing digital banking one should have
electronic gadget and the knowledge to operate it and the most important thing
is internet connectivity . But seeing the advancement of the people and their
needs and their busy schedule the facilities provided by the digital banking
overtakes its disadvantages and with the increase  in foreign exposure of the business, and
smartphone penetration it has become easier for anybody to perform the banking
activities online.

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