With more and more people conducting most of their banking through the use of technology, it can be difficult to define what the difference between all the different terms are.
Even people with the most rudimentary understanding of technology will have heard terms: online banking, digital banking and, in the last few years, mobile banking.
We may be forgiven for thinking that they are all pretty much on in the same thing, but there are certain differences which you may need to be aware of. First of all, let’s define what each of the terms mean and what their main features are.
Online Banking
This is the form of banking that most of us are most familiar with. It can be a pretty broad term and even encompasses what has come to be known as mobile banking. Online banking is simply any form of personal banking which we conduct using the internet. This can anything from checking our balance and previous statements to setting up direct debits, paying bills or transferring money to another account of an individual.
For many years, online banking was conducted with a laptop or desktop computer, but the massive advances in smartphone technology means that a growing number of people can now use mobile apps to carrying out many core banking functions.
As online banking has evolved, so have the services offered and customers can now even apply for loans, send money internationally with a few clicks of a button and even receive payments early through their online bank accounts.
Digital Banking
Digital banking is more of an overarching term which refers to all forms of financial transactions taking place with the aid of technology. Therefore, it could be argued that online banking is a form of digital banking, but that digital banking is much more than just online banking.
As we move more rapidly towards a cash-free society, digital banking is the system by which an entire online economy has been allowed to grow and thrive. So we may interact with various aspects of digital banking on a daily basis.
Digital banking can refer to the many digital products available to businesses to make them run more efficiently, such as accountancy and payroll software and payment technology. This can either be a physical store or an online merchant.
Many of the transactions we complete on a regular basis are classed as some form of digital banking, for example, booking tickets for events, paying for car parking, ordering and paying for food or using a store-specific app.
One particularly profitable area of digital banking which has shown a surge in recent years is the idea of data as currency. Companies will trade data which gives insights into customer behaviour as a commodity as it allows them to make predictions and shape policy.
Therefore, digital banking is the catch-all term by which all financial activity which exists through technology can be referred to and there is plenty to suggest that greater integration will develop as the technology evolves.
