Banking Has Gone Digital: Still a Naysayer?

Banking Has Gone Digital: Still a Naysayer?

In the senior high school department, I also teach two subjects — Media and Information Literacy (MIL) and Empowerment Technologies (EMTECH) — that although on a far side of my specialization, bring both curiosity and challenge as these come with a great deal of technical stuff. Well, I have been into blogging all this time, plus I got certifications.

In most of my lectures, I would emphasize the need for all of us, especially the digital immigrants and aliens, to catch up with or at least be informed about the fast-paced ICT innovations as nobody could ever agree that there would still be going back to the old ways.

What has been happening is a digital disruption, and this has been in all aspects of life, including finance where we may have observed the emergence of financial technologies from here and there. For instance, my aunt who has been an insurance and tax agent since her prime years, now uses e-wallets and mobile banking in her financial transactions with clients and the government agencies. She’s now sixty something and still amazed. More interestingly, she seems to understand, step by step, the basic principles behind it.

Banks and bank transactions have evolved and so the digital aliens, although there are still many who until now have not given their full trust in the digital systems with worries about reliability and security of transactions. We can never blame them. Things also worked well during their time.

In the recent European-PH Business Summit, BDO Unibank’s Senior Vice-President and Head of Cash Management Services Carlo Nazareno shared his insights and experiences about digital and online technology and how it has been transforming the local banking industry.

BDO Unibank’s Senior Vice-President and Head of Cash Management Services Carlo Nazareno said digital banking is transforming not only the way we spend and save money but is also turning our cities into smart ecosystems.

[1] Convenience and Real-Time Speed. Nazareno said that the push for digital solutions is mainly driven by the demand for convenience. Truly, lifestyles become even more fast-paced and people’s short attention spans demand immediate gratification provided by the internet. People now want the same near-instantaneous fulfillment and completion of online tasks—whether these are bills payments or banking transactions.

“Nowadays, with digital banking, long waiting times are no longer good enough. Having to wait three days for a check to clear, even having to wait one day or a few hours, seems too long already. Customers, clients, and entrepreneurs all want their money and their products available and in their hands in real-time, as fast as we can click on our touchscreens,” Nazareno further explained.

[2] Fair Price. This customer-centric environment leads to other related developments in digital banking. A commonly highlighted feature is getting digital banking services at a fair price. “Fair price, of course, can mean different things depending on which country a person lives, how open a country or culture is when it comes to digital technology, and even that income bracket customers belong to,” Nazareno said.

[3] Security and Information Ownership. Digital identities and footprints have always raised concerns about security and information ownership. Financial institutions around the world, banks in particular, have been making huge investments in security measures and infrastructures so to prevent hacking and data breach.

According to Nazareno, cybersecurity is already a given in today’s digital banking environment and the future of digital banking heavily relies on the level of assurance that banks and clients feel about the safety of their transactions.

Even as naysayers have been raising the specter of a Big Brother scenario, Nazareno believes that ultimately, the ownership of information always goes back to individuals and to their banks. In other words, the free exchange of data does not necessarily result in a transfer of ownership of that data.

[4] Open Finance and Open Banking. While security and information ownership should be put to the priority list, Nazareno also clarified the requirement for individual customers and their banks to share personal, sensitive information with various third parties in the light of digital transactions. “This means that we need free and open channels of communication to pass on a massive amount of data every minute, every hour, and every day. Individual persons, banks, and third parties need to allow the free sharing of data—while simultaneously putting up safeguards so that these data don’t get stolen and used for nefarious purposes.”

[5] Borderless Payments and Smart Ecosystems. Complete borderless payments may have not yet been achieved given the limitations in technology, in regulations, in the banking system, and many other factors, but these are to expect in the near future given the benefits. At the same time, these realities and trends in digital transactions will eventually be merged with smart technologies.

“Digital banking is transforming not only the way we spend and save money but is also turning our cities into smart ecosystems where the free exchange and analysis of data give rise to better products and services, better cybersecurity, and hopefully, safer environments for our families to live in,” said Nazareno.

We can all agree that the big disruption in the banking sector with the heightened interest in digital financial technology has been fueled by the convenience and factors aforementioned amidst the coronavirus pandemic. As what Nazareno believes, the net benefit of the technology has been proven to be worth the risk.

“The naysayers were telling us that digital technology would not be embraced right away because customers were fearful about security concerns, or that the technology was inadequate, or that people would be resistant to a digital shift simply because it was too new and unfamiliar. The past two years of the pandemic have shown us that the naysayers were right in some respects. Yes, there were those that remained hesitant to embrace digital banking and payments. And yes, the cyber security threat will always remain at the top of the agenda for banks and other institutions. But they were also wrong.”

“Overall, the shift to digital banking and payments has been unprecedented and even overwhelming. The pandemic forced us to adapt—many, if not most, of us, would no longer wish to go back to a pre-pandemic way of life. The world changed because people had to, they needed to, in order to survive and even thrive. This gives us reassurance that moving forward with digital banking is the only way to go,” said Nazareno.

For more information on BDO’s online banking services and cash management services, go to www.bdo.com.ph.  You may also call or visit your nearest BDO Unibank branch.