Digital Banking

What is Digital Banking?

Digital banking is a place where banking services such as deposit, withdrawal, payments and financing are all done digitally online. Almost all the banks in the world have a web presence and most of the banks now have their own mobile banking app.

Digital Banking - It benefits everyone

Digital banking or mobile banking benefits both the banks and the consumers. 

For banks, digital banking automatically extends their banking hours from 8am to 5pm Monday to Saturdays to 24/7. Their clients can quickly look up their balances, transfer money, pay bills and even request password resets and other administrative tasks on their own.

Banks push a lot of retail banking tasks to the consumers and make them into a DIY (Do it yourself) task right on their web site or mobile app. This reduces the amount of employees needed to staff their call center and their banking centers.

From a consumer’s point of view, there are so many benefits of becoming part of the digital banking movement. 

First, consumers don’t need to ever walk into a branch. They can conduct almost all of their banking needs right online or through their mobile app. Even if they want to withdraw money, they can drive up to an ATM (Automated Teller Machine) and quickly retrieve their cash.

Fighting traffic, waiting in line at a branch and missed bank’s opening hours are a thing of the past.

Plus there are other capabilities such as transferring money to your friends and loved ones. Making a payment to your utility providers can all be done on the bank’s website.

Some banks have an investment arm as well. Their clients can also buy, sell and trade equities right in the mobile app or website.

Digital Banking - New Account Opening

Traditional banks have invested billions of dollars into their online presences. There are also a new breed of banks that have zero branch network and leverages other ATM networks for their clients to withdraw cash.

These branchless banks are also known as Neo Banks. These banks are mobile native advertises their services online and through other media such as TV, radio, billboards and other physical marketing channels.

Banks such as Chime and Varo have gained a lot of popularity over the years, especially attracting the younger generation of consumers that revolve their lives around their mobile phones.

However, there are thousands of credit unions, community banks and local and regional banks that still need more digital banking services. They are either technological constrained or skill set constrained.

There are many technology vendors to help smaller sized banks with new account opening, decision engines and account servicing to get them online and into the digital banking world. These banks need to be able to compete with larger banks and neo banks and they need to have an online presence fast.

Digital Banking - New account opening tech stack

• Bank Account Opening: Platform - An online application is a must to take information from an end customer to provide all necessary information to get an account established.

• Bank Account Opening: Decision Engine - A real time, automated decision engine that the bank’s fraud and risk management team use to set up third party vendors they need to verify the client’s identity as well as check into Early Warning Services for prior issues relating to the applicant.

• Bank Account Opening: Credit Underwriting - From time to time, the bank may receive permission from the bank account applicant to pull a credit report to see if they qualify for any other products such as a credit card. If so, the decision engine must be able to pull credit during the new bank account opening process and prompt the end user that they are also pre-qualified for a credit card.

• Bank Account Opening: Bank Core Integration - Once the application is fully approved by the Account Opening platform, it is required to have the application information send to the bank core servicing system to be fully onboarded. The originations platform must have the ability to integrate with the bank’s bank core system. The platform can integrate directly or go through a third party API layer vendor such as PortX.io

LendAPI Bank Account Opening Software

If you want an out of the box solution, LendAPI provides a bankdemo.lendapi.com demo platform. You can sign up and experience the difference. The LendAPI Bank Demo system is currently integrated with PortX.io for any bank core servicing system integration.