Digital Banks: Revolutionising finance for a Smart Bangladesh

Digital banking is the latest wave within the financial industry, resulting in success stories across various corners of the world. This success is attributed to its user-friendly nature, widespread accessibility of digital devices, and the ubiquitous presence of internet connectivity. 

The transformation initiated by digital banking is already reshaping conventional banking practices, benefiting both customers and service providers. Given that convenience and the speed of service are fundamental determinants of success in the 4th Industrial Revolution, the idea of digital-only banks holds tremendous prospects. 

This is primarily due to changes in customer lifestyles and improved accessibility, facilitated by the elimination of unnecessary paperwork. Furthermore, the increasing acceptance of conducting financial transactions digitally and the growing number of digital device users emphasise the significant prospects for digital banks in the near future. 

Digital banking offers a cost-effective approach to delivering financial services, minimising operational expenses in contrast to traditional brick-and-mortar branches. Consequently, embracing digital methods for banking operations will lead to a reduction in operating costs and empower customers to personalise their banking experience according to their individual preferences. 

Finally, through the reduction of paperwork and physical branch infrastructure, digital banking establishes itself as an environment-friendly channel for delivering financial services, ensuring a seamless digital experience.

In our country, digital banking services possess the potential to offer substantial benefits and conveniences to the customers. Digital banks can assume a pivotal role in promoting financial inclusion and broadening avenues for transactions considering economic and demographic variables. 

Given the significant number of underserved individuals, digital banks can guarantee essential access to financial services for unbanked populations. Furthermore, digital banking channels can streamline the collection of payments for various services and the distribution of benefits, enhancing overall customer convenience. 

Notably, Bangladesh's youth population is technologically adept, and digital banks align well with their lifestyle and preferences. Meghna Bank, in line with the vision of Smart Bangladesh, is actively participating in boosting the country's digital economy. 

Through the provision of user-friendly and efficient digital services, Meghna Bank is playing an essential role in facilitating the transition to a more digitally-driven economy. 

Globally, the Gen Z demographic exhibits a strong feeling towards adopting digital banking platforms, not only for their routine financial transactions but also for their lifestyle requirements. 

This preference is driven by their comfort and the user-friendly nature of these platforms. Gen Z individuals are particularly motivated towards digital transactions, especially via mobile applications, QR Code, and Near Field Communication (NFC) technology, which allows for the convenient tracking of financial activities. 

Meghna Bank has strategically placed itself to cater to this tech-savvy demographic by introducing dedicated products and services tailored to their preferences and needs. 

Recognising the inclination of Gen Z and other digitally-minded customers towards modern banking solutions, Meghna Bank has embarked on a journey to provide innovative financial products designed to enhance convenience, security, and efficiency. 

Mobile wallets and digital banking represent two transformative pillars in the financial industry, reshaping how individuals manage their finances in the digital age. As technology continues to advance, mobile wallets and digital banking are expected to evolve further, offering even more sophisticated and user-centric features to meet the evolving needs of consumers worldwide. 

Mobile wallets offer streamlined payment solutions and transaction tracking, catering to the tech-savvy and beyond. Digital banking, on the other hand, provides a comprehensive suite of financial services accessible online, including account management, various payments, loans, savings schemes, and fund transfers. 

Meghna Bank has launched MeghnaPay, a digital wallet to leverage these trends. Recognising the growing preference for digital and mobile-first banking experiences, Meghna Bank offers innovative products and services tailored to meet the needs of this digitally-minded segment. 

We provide user-friendly mobile banking apps, secure mobile wallet solutions, and a wide array of digital banking services accessible via web and mobile platforms. By offering these convenient digital services, Meghna Bank not only enhances customer experiences but also contributes to the country's digital economy. 

These efforts foster financial inclusion, drive economic growth, and empower customers to navigate the financial landscape with ease and confidence. Meghna Bank's commitment to innovation and digitalisation underscores its vision of being a transformative force in the financial industry and a key player in shaping the digital future of the nation.

Digital banks distinguish themselves from conventional banks primarily in their operational model and service delivery approach. The principal distinction between these two modes of banking services lies in the requirement for a physical presence. 

Conventional banks maintain physical branches that facilitate direct customer interactions, while digital banks predominantly operate online and leverage alternative financial service delivery channels, relying on online platforms for customer transactions. Another notable difference lies in accessibility. 

Digital banks provide round-the-clock service, empowering customers to conduct financial transactions at their convenience, from anywhere with an internet connection. In contrast, conventional banks operate within fixed service hours and often necessitate the physical presence of customers for banking services. 

Furthermore, digital banks typically offer a more limited range of basic banking services, while traditional banks provide a broader spectrum of financial services to their customers. Meghna Bank has strategically positioned itself to bridge the gap between these two banking models. 

While maintaining physical branches for traditional banking services, Meghna Bank has also focused significantly on digital offerings. Meghna Bank is offering user-friendly mobile banking apps, secure mobile wallet solutions, and comprehensive digital banking services. This dual approach allows Meghna Bank to secure digital experience, providing both traditional banking services and modern digital solutions. 

In the present time, cybersecurity within the banking industry is given the utmost priority. As an integral component of cultivating trust and confidence among customers, financial institutions are unwaveringly dedicated to preserving transaction security. Digital banks typically employ robust encryption algorithms to safeguard sensitive transaction data both during transmission and storage. 

Additionally, organisations implement multiple authentication methods throughout transaction processes. The widespread adoption of Secure Socket Layer (SSL) technology is another common practice, effectively thwarting fraudulent attempts by establishing a secure and encrypted connection between the customer's device and the bank's server. 

Furthermore, financial institutions rely on reliable and advanced fraud detection systems driven by Artificial Intelligence (AI). These systems continually monitor customer transaction activities and are actively employed to safeguard customer assets. Meghna Bank places paramount importance on cybersecurity. 

Employing robust encryption, and multi-factor authentication, the bank ensures the utmost security of customer transactions and data, establishing trust and confidence among its clientele in the digital banking landscape.

Digital banks in various economies operate online, providing financial services through web and mobile platforms. This banking system has significantly influenced individuals' methods of conducting financial transactions, resulting in a positive transformation of customer behaviour. 

This change in consumer preferences has prompted banks and investors worldwide to adopt digital banking channels. For instance, financial institutions are incorporating Open Banking APIs, Blockchain technology, and AI-based transaction monitoring systems to offer customer-centric financial services. 

It has evolved into an essential component of the global financial industry, offering convenience, accessibility, and innovative banking solutions to meet the evolving needs of customers across various regions of the world.

The author is the head of Digital Financial Services at Meghna Bank Limited.