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Digital banking - New trend of Gen Z

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What is a digital bank that Gen Z likes to use instead of going to the bank to make transactions. Currently, there are many digital banks present, but only about 5 digital banks are the ones I feel most satisfied and encourage you to use.

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To know what those 5 banks are, please read the article below.

What is digital banking?

Digital Banking is a banking application running on mobile devices that can meet most users' needs. Such as opening an online account, transferring money, receiving money, depositing savings, withdrawing money at ATMs can all be done right on the digital bank without having to go to the bank.

Digital banking is gradually changing the business model of many banks. In the past, banks took products and services as the focus of development, when applying digital technology. Banks must focus on customers, customer experience is the most important thing of a digital bank.

Why does Gen Z prefer to use digital banking?

The generation that uses digital banking the most is Gen Z, ie the generation born between 1995 and 2012 (some say 1997-2015). Here are the reasons why digital banking attracts modern young people:

#1. Maximum cost savings

Don't think that young people spend money wastefully, they know how to spend money when paying attention to every small fee of the bank. With digital banks, they are free of a lot of fees such as money transfer fees inside and outside the system, account management fees.

Instead of having to pay the balance fluctuation fee month via SMS, Gen Z chose to change the balance via a digital banking application. Because the phones of this generation always have a 4G or Wifi connection.

Some digital banks even waive cash withdrawal fees at any ATM in US, such as digital bank.

#2. Stay at home and do everything

All the transactions that a young person needs are almost met by a digital bank.

If you need a bank account, just download the banking app from CH Play or App Store. Then register an account and authenticate your identity using eKYC technology integrated inside the digital banking app, and you will have an account that can be used immediately.

If they need to save money, Gen Z only needs to choose to open a savings account, then transfer money to that account. Select the term and the interest rate will be displayed in full. Click “Agree” and the deposit is done.

And yet, if Gen Z needs a physical ATM card, just agree to issue the card, the physical card will be delivered to the customer's house in 3-5 working days. Others choose to open virtual cards instead of physical as usual, because they only use online.

#3. Pay all consumer bills

Electricity, water, wifi, cable, postpaid subscribers, phone card top-ups... all of which customers can use digital banking to pay. Some digital banking applications even actively save invoices and when the payment period is due, they will actively notify users.

With just a phone, digital bank and internet connection, young Gen Z people have done everything to solve their financial needs.

Compare Internet Banking, Mobile Banking and Digital Banking.

There are some terms related to digital banking that I want to clarify with you a bit. Currently, in the banking and finance industry for online transactions, there are 3 forms: Internet Banking, Mobile Banking and Digital Banking. I will analyze each product one by one.

#1. Internet Banking (Electronic Banking)

Internet Banking is the first form of bringing online transactions closer to people. Users only need to have an electronic device such as a laptop, phone, tablet and an internet connection. They open a browser and enter the bank's URL, log in to their account and make a money transfer. At the same time can use other simple services on it.

The key of Internet Banking is to use it through the browser on the device such as Chrome, Safari, Internet Explorer ...

Currently, this form of transaction is still operating normally, the user experience is much better than before. However, business users probably use more than personal users.

#2. Mobile Banking (Mobile Banking)

Since mobile phones became popular in 2010, banks have launched mobile applications one by one, making login and start-up operations quicker.

However, Mobile Banking is like wrapping all the features on the web into an app for users to download. Even in the past, banks also provided different Mobile Banking and Internet Banking login accounts, causing many difficulties for users.

In order to use Mobile Banking, users must go to the bank to register an account, personal information and identity before they can use it.

#3. Digital Banking (Digital Banking)

Later on, banks began to realize the explosion of mobile devices and the ecosystem around it. Should gradually switch from Mobile Banking to Digital Banking. It can be said that Digital Banking is an upgraded version of the previous Mobile Banking.

With Digital Banking, customers can do everything with it as mentioned above. However, there are two more forms of Digital Banking.
  • Digital bank issued by traditional banks: Is the official application of the bank, utilizing 100% of the bank's own resources to develop.
  • Third-party digital banks combined with traditional banks: Some fintech technology partners have available technology and marketing resources. Then, these fintechs combine with a certain bank to take advantage of that financial platform to make a digital banking application.

Notes on using digital banking

  • Actively protect personal information, absolutely do not give OTP codes to anyone, including bank employees.
  • Do not open too many digital banks at the same time because it will make you easy to forget your password and you should not open too many for anything. Just 1 digital bank is enough.
  • Do not lend your phone to others without having advanced security levels installed for digital banking apps or any other financial apps.
  • Some foreign organizations are impersonating digital banks. Before opening a digital bank account that is not listed above, learn carefully about the origin of that application. Avoid losing money.

Thousands of bankers will lose their jobs because of digital banking

The growth of digital banking has raised concerns about the employment situation at banks. Banking is one of the industries with a large number of employees to meet the service needs of customers.

However, since the advent of digital banking, the basic services of digital banking applications have replaced bankers. In the future, certainly, with the development of technology, digital banks will do more things than that. For example, some banks are moving to integrate Trusting Social credit scoring technology to provide unsecured loans to customers.

The reduction in the number of banking personnel is certain to happen in the future. Even the near future.

Only 5% of digital banks in the world are profitable

Many people wonder why digital banking offers so many free services. Is it profitable for their digital bank to take risks for such media campaigns?

Digital banks in the world are also struggling to attract users to use their platforms. There are currently 249 digital banks operating in the world, only 13 have reached the breakeven point. And 10 of them come from countries in Asia Pacific.

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