Filipinos known as frequent users of social media can adapt to newer technology. Knowing this, digital banking is not a new concept. Yet, a survey from Bangko Sentral ng Pilipinas says that 46% of Filipino internet users have doubts about the security of online transactions.
Decide for yourself
To see if digital banking is the right fit for you, it is only fair to know the advantages and disadvantages of the technology and decide for yourself.
1. No place and time constraints
The best reason why someone will choose digital banking is convenience. Going to a physical bank which opens at a specific time (not to mention it was closed during holidays) is such a hassle especially for busy individuals.
Digital banking is almost no different from traditional banks with online banking. However, the digital counterpart allows you to do more than the basic transactions of balancing checks, transferring money, and paying your bills.
Foreign banks like Maybank and ING would let you create a bank account through a mobile app and deposit money by only taking pictures of your checks. CIMB, another foreign bank, would let you apply for a personal loan of up to 1 million pesos right from their so-called OCTO app.
Traditional banks like PNB Savings Bank and Unionbank recently opened their digital banking branch. These digital banking branches have self-service kiosks and computerized tellers for more convenient banking.
2. Better interest rates and lower fees
Traditional banks have high-interest rates and banking fees to pay for their employees, banking equipment, security costs, and building maintenance across multiple branches.
On the other hand, digital banks need minimal physical branches to run effectively. Thus, they can offer better interest rates to potential customers. Almost every banking fees have lower, if not zero, costs which serve as additional savings. They don’t even require an initial deposit and maintaining balance.
These benefits, aside for fewer unnecessary expenses, removed to customers’ worry the frustrating deductions and deactivation of bank account due to lack of funds.
3. Paperless Transactions
Another convenience of digital banking is the absence of paper. You don’t need to stack paper receipts and statements of accounts to manage your finances. Every record such as transactions, remaining balance, and loan due dates are all accessible to an app.
Paperless banking could also help the environment. As 1 million pages of paper require 250 trees, going paperless will save trees and reduce carbon footprint.
1. Not capable of receiving cash
Using an app, checking your bank account and depositing checks at any given time is hassle-free. Unfortunately, a mobile device is not capable of receiving paper bills. This seems a small complaint and unfair to add as a disadvantage. However, fully digital banking could mean everything is done inside an app in any place as long as you have an internet connection.
Still, no need to worry about making a cash deposit. It is also convenient because digital banks partnered with financial firms such as DragonPay, MasterCard, and Visa. Perhaps, going to 7-Eleven branch is the easiest way to make cash deposits. You can take a quick bite and secure a bank deposit at the same place.
2. Not enough in-person support
With the current rate of the internet speed in the Philippines, a failure in banking transaction will most likely happen. Though digital banks have support hotline numbers and sometimes even an in-app chatbox, complainants could get a hard time trusting their reliability and efficiency.
The in-person support is where traditional banks beat the digital counterpart. Since traditional banks have branches as a go-to place for ATMs and over-the-counter transaction failures, you can trust that your issue if not resolved instantly will be addressed for sure.
Unless digital banks will assign technicians as in-person support for their partner payment centers, consider this as their great weakness.
3. More Prone to Online Hackers
Fully-Digital banking means the whole system is prone to cyberattacks. Even the traditional banks are prone to cyberattacks as they also conduct online transactions. One example is RCBC’s 81-million cyber heist of February 2016.
Hackers could do phishing of your sensitive personal information through email, text messages, and even social media. Beside digital banks, their machines and affiliate establishments are also prone to online hacking. The likelihood of a cyberattack depends on the digital banks’ security they have and the hackers’ potential skills.
The good thing is you can still do your part to protect your account from this online threat. Please keep in mind these cybersecurity best practices to avoid getting hacked:
- Change your online banking passwords at least once a month.
- Enable your two-factor authentication if the feature is available.
- Never share your password to anyone, especially online.
- Always use the bank’s official app or website.
- Avoid using public WiFi during online bank transactions.
The path to cashless transactions
If you’re old enough, you might be one of those doubtful about online shopping. Now, more people are willing to give their debit and credit card information to purchase something online for the sake of greater convenience.
As for online shopping, still many use cash to make a purchase. The same thing with banking, many still use cash to make a money transfer or a deposit. If this trend continues, the path to cashless future is going forward for the Philippines.
The greatest challenge, for now, is to convince the skeptical public to embrace digitization in banking.