Digitization has become a part of everyday life with the introduction of smartphones and availability of social media. This has brought the banking industry at the verge of possibly the greatest revolution in history as it is more of a matter of life and death for this industry to get the digital banking right. Banks are already at a crossroad with the adoption of digitalization as can be seen prominently. The banks or any other financial institutions still struggle hard to maintain banking relations through physical and more traditional channels such as the physical bank building itself. However, this process may not be as important as it was in the past as the consumers now have the power technology in their hands. Bill payments, account transfers, loan settlements are some of the features that can be done online and the physical branches are not required to complete these transactions.
Customers in the current age are not laggards, but are leaders. They have already routed for the more advanced financial solutions provided. For this purpose, banks are investing highly in digital products to meet customer needs and to some extent even exceed their expectations. A customer may be entertained by something that they are expecting or want but they are blown away by something that exceeds their expectations. This creates loyalty and goodwill. Digitization allows the financial institutions to provide to customers, the ease, which they most definitely require as exponential times call for advanced measures.
For the transition to the digital era to be successful, financial institutions are focusing more on digital exposure rather than industry experience, as the traditional rigid approach to banking is a thing of the past and more flexible payment solutions and financial products are the needs of today. However, the process of digitization in Pakistan is still not as much as in other developed countries such as the USA or Europe where the literacy rate is high and consumers are more aware of technology and know-how to use it. Whereas, in a developing country such as Pakistan, literacy rate is still considerably low and not a lot of people have access to technology. Mobile banking or online banking solutions may not be as easily performed by someone who possesses inadequate level of knowledge or does not have access to internet, as compared to those who have these resources available to them.
Banking functions have become more complex as margin for error is almost zero and proper functional IT units have been set up to keep abreast of the growing demand for digital financial transactions. This has in turn created more jobs and some source of comfort to the bankers as compared to the traditional banker who had to cater to the everyday financial transactions and maintain physical records. Now, the customers use digital platforms for financial transactions and the financial institutions can maintain records of each customer in their electronic databases and easily access them at any time when required by giving simple commands into the system. The basic aim of digitization in financial services should not be forgotten at any stage of the development process as the major factor is to provide services to customers at convenient rates.
Digitization has become a part of our lives and the financial institutions have been responsive to this change. There is a great scope of technology in the times to come as the world is only moving ahead and we are moving from the age where there were structured problems with predetermined solutions and moving to an era where there are unstructured problems, which require innovative solutions for resolution.