What is meant by digitization :-

  • Digitization is the process of converting data into digital format. Digitalization means the adoption of technology. But these two words are being used interchangeably.

Role of digitization in banking :-

  • Banks are not just a part of our lives, but have a significant role in our daily lives. For many, day will not end without at least a single financial transaction. Thus banks always try to adopt latest technologies to enhance customer experience.
  • Digitization is not an option for banking industry, rather it is inevitable because every industry is being digitized and banking sector is no exception.
  • Mobile banking is increasing at a fast pace more than online banking.
  • Advantages of digitization in banking :-

    • Improved customer experience.
    • Reduction of costs for banks and customers as well by using ATMs, cashless transactions etc.
    • With more digital data available with banks, they can take data-driven dynamic decisions by using digital analytics. This benefits both customers and banks.
    • Technology is non-discriminatory. Everyone will be treated same at banks.
    • Number of customers will be increased for banks because of the increased convenience of banking.
    • Digitalization reduces human error.
    • Need of handling large amounts of cash will be reduced.
    • Opening and maintaining bank accounts are never been this easier.
    • Repetitive tasks will be eliminated by automation.
    • Rural and urban gap will be eliminated.
    • With the increasing cashless transactions, fake currency threat will be reduced.
    • Productivity will be increased.
  • Disadvantages of digitization in banking :-

    • Digitalization reduces the effort of employees and hence results in loss of jobs.
    • Some bank branches may cease to exist with the increasing use of online banking.
    • Banks will be more vulnerable to cyber attacks.
    • Privacy may have to be compromised. No one can hide crores of rupees in banks and just act middle class. :P
  • These disadvantages are just temporary. Loss of jobs will be compensated through creation of new jobs such as cyber security, research team for innovation in technology etc.
  • It’s not that banks are going to have less work, but it’s just that the role of retail banking sector changes.
Also Read :  Is India ready to be a Cashless Economy?

Conclusion :- 

With the increasing usage of smartphones, digitization of banking sector is inevitable to catch up the increasing expectations of the world. It indeed reduced human errors and increased convenience. But the fact that cyber threats are on the rise, banks must be very careful and should be prepared to handle cyber attacks.

Afterwords :- What is your stance on this topic? Express your thoughts in the comment section below.

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  • Thamizharasi Babu, Apr 7, 2021 @ 11:10 am Reply

    Yes sir, You are absolutely right

  • shayaq Pasha, Jan 3, 2021 @ 12:50 pm Reply

    You have made a good point ,In addition to this point , if bank are increasing job in cyber security ,there must be the Chances of leaking data by internal employees,that can be solved by taking additional care of the internal security.hope it’s help.

  • Pramal kumar Samanta, Nov 10, 2020 @ 10:54 pm Reply

    How many citizens are well conversant with net banking ? It will create a big hindrances to many urban,semi urban and rural people to draw money from the banks.There are a good no .of people who do not
    use smartphone, not to speak of Laptop or other means. First, train all segments of the society and next come to digitisation of the banks.

  • Sravani, Aug 13, 2019 @ 7:07 pm Reply

    Banks are significant part of our daily lives. Digitization has only forced them to change traditional methods into improved modern methods. Now sending money, depositing money, opening an account, cheque clearance has become a lot easier than before. All of it can be done remotely, with a simple click of a button.

    • Ab hoon, Aug 13, 2019 @ 9:52 pm Reply

      Yes I agree with your point

    • Anshul Mittal, Sep 6, 2020 @ 5:50 pm Reply

      Yes it is true that but the other side u can see the increase cyber crime as Jamtara is best example

  • Priyanka Chaudhary, Mar 7, 2019 @ 1:49 pm Reply

    Yes now a days digitzation is necessary in our lives every person used it for there personal or professional works . Bank are not just a part of our lives but have a significant role in our lives . Digitzation has advantages and disadvantages as well we knw now a days all are busy with there work no time to go in a bank and stand in a long line for payment so online banking apps helps us for doing payment from home digitzation bcomes easier in our life . And yes it also have disadvantages of cyber attacks , loss jobs etc but it not permanent . So from my view digitzation is good for everyone and govt should provide training and awareness to uneducated peoples .

  • KAUSHAL KISHORE, Mar 6, 2019 @ 11:20 am Reply

    I am disagree because in small village there is no net connection.Most of the people are not awarness about internet banking.People come to bank to deposit or collect amount.They have no money to buy smartphone.Now a days people of urban will also cheated through online.Fraud people call and ask OTP to people and transact any amount.If our net connectivity is slow we do not transact any thing.

  • Supriya kumari, Sep 14, 2018 @ 6:43 am Reply

    In my point of view digitisation is good for all because in today’s era all are used of digital banking like mobile banking ,internet banking ,ATM,debit card etc. There was a time people stand in line long time due to bill payment but in this time help of net banking you can easily make the payment online without any problem. Now a days using net banking there is no paperwork everything is digital. It helps save time or money. Now people can do all personal and professional task with the help of it and solve all the problems sit in drawing room by using quick transection and online banking. It also help the reduce human error and improve customer experience .it also helpful for banking because people using cashless transection and fake currency threat will be reduce. It helps number of customer will be increased. Where as many disadvantages of digitisation are it’s creation loss of job while using net banking and online transection. Banks will be more vulnerable to cyberattack. Privacy may have to be compermised. As the online transection don’t require any kind of signature so must be careful about the security of your account. So in my opinion role of digitisation are many advantage and disadvantage both.

  • sandip, May 27, 2018 @ 11:10 am Reply

    yes.digitization is the big solution to the customers who are far away from banks and unable to attend banking services.despite having its all round achievements ,its facing challenges to give services to financial inclusion in cost effective way.otherwise the digitization may not be acclaimed as universal banking solution to all.

    • Team GD Ideas, May 28, 2018 @ 7:23 pm Reply

      Good point Sandip! Digitization has a great role in financial inclusion.

    • Jitendra anrolia, Sep 7, 2018 @ 5:54 pm Reply

      But one thing is that people who live away and in remote area the will get a lot of problems in digitization.

  • Tinku paul, May 8, 2018 @ 7:00 am Reply

    According to me digitization in banking is good .Nowadays Bank is playing the significant role in our life. Very few peoples are there at least they don’t have single transaction everyday.Most of the peoples everyday they have bank transaction.First of all peoples doesn’t need to go to outlet or go to bank to make their payment , they can make their payment to sit their drawing room through their smartphone it is time saving as well as they don’t need to depend on others. Secondly bank can reduces the cost of manpower as a result many bank has been merged. But still in rural area many peoples are uneducated they have problem ,If govt.arrange training for the people it will be better to them to learn . Also bank has to take care of cyber crime ,Bank should introduce new technology to secure customer account. Peoples hard money should not waste.

    • Jitendra anrolia, Sep 7, 2018 @ 5:57 pm Reply

      Govt or Banks should arrange training period for rural people to learn these new ways of banking . It should be done as soon as possible .

      • Sarvesh, Sep 8, 2018 @ 6:21 pm Reply


  • Sweta, Apr 17, 2018 @ 12:28 pm Reply

    I agree to the digitization of the banks. Surely, there is always this discomfort of learning new technology by the adults who haven’t used it, surely there are some temporary problems that the people will face, the same happened with de-monetization too. Initially it was difficult but it was for a far greater cause. For this too, there are far too many pros for it than cons. And I guess that should be taken into account when discussing things like this,

  • Vjay, Dec 1, 2017 @ 8:17 pm Reply

    I am agreed with the Digitisation and the thing is we are adopting all technology and utilising that , but how much we can avoid or we can face if any threat may come is matters . We should adopt whatever change which will help to grow our Daily life style and at the same time we should improve our security systems also.

    • Jitendra anrolia, Sep 7, 2018 @ 6:00 pm Reply

      But as the technology is improving the number of crime in banking sector is increasing .

      • priya, Sep 13, 2018 @ 10:38 am Reply


  • Praveen Reddy, Dec 1, 2017 @ 1:07 pm Reply

    I would like to say that all the banks are striving hard to make their transactions digitalize to the customer on their fingertips.At the end of the day we all can make all our payments digitally without the help of any third person.Keeping in mind that many of the people in india are still illitrated who can’t navigate through the application so all the banks are making a simple and very easier environment at high security standards in which a common man can make it easy to use by some practice.

  • priya, Sep 1, 2017 @ 8:39 pm Reply

    yes…it’s an evolution. and as we all know each and every evolution takes some time. so those disadvantages are surely temporary.. at first few will protest it but after some days they’ll accept it. so if there is an evolution rising then we all should support it. hence nothing will create any problem. and especially we youngsters should take the initiative steps to make it successful. so i don’t think there is any problem or dangerous disadvantages in it. if you are against it then once think about the previous evolution, demonetization. most people started protesting at first. but after few days everything was normal. so as of my point of view whatever makes life easier and errorless should be accepted. it may take some time, but it will definitely give us a developed lifestyle. and our country will surely be developed. :) :) :)

  • jai shankar, Jun 30, 2017 @ 2:26 am Reply

    Digitisation also brings transparency so all the scams that happened in the past would be avoided.People would fear while taking bribe which leads to reducton in black money and ultimately it would lead India towards corruption free society.

  • Ashish, Mar 7, 2017 @ 11:25 am Reply

    but one whose age is 45 and more do you really think he/she will go for change and how much difficult it will be for him/her. the one who is skilled specialized in their zone, for them how they will be compensated…

    • GD Ideas, Mar 8, 2017 @ 10:57 am Reply

      That’s a real challenge.

    • vinay, Mar 10, 2017 @ 1:54 am Reply

      yes i agree, it is realy a big challenge but we are the part of the youngest country in the world and it is well known that changes always take some time to adopt them.

      • Aditya, Sep 1, 2018 @ 12:08 am Reply

        @Vinay, But not in case of Indian banking system. here people don’t even like changes. they just want go through traditional way entire life. Actually the sole purpose of the gov. jobs previously was to get some dowry & save money for rest of the life. but this thinking needs to be changed or people needs to be replaced ;)

    • Rishu, Sep 8, 2018 @ 1:18 am Reply

      @ashish digitiation brings an updation in the services, not over hiding the traditional one. If an age of 45 don’t want to use services at their home then offcourse they can do their banking by visiting at the bank branches, doors are open for everyone.

  • Sikha, Mar 5, 2017 @ 10:11 pm Reply

    Yes agree that many will lose their jobs but still digitalisation of banking sector by converting banking sector from paper to paperless is quite good for economy and it is a sign of development of banking sector as the economy will grow with the growth of banking sector it will indirectly generate more employment in the economy

  • Anish Bhola, Jan 27, 2017 @ 1:15 pm Reply

    like you have mentioned that the loss of jobs will be compensated by the creation of new jobs, but how is it possible for a person who sits at a counter in bank to facilitate the transaction to help those who got jobs in cyber security department. Both the sectors are entirely different and require completely different skill set. So it might be possible that those who have lost jobs may not be able to find new jobs.

    • GD Ideas, Jan 27, 2017 @ 2:58 pm Reply

      Absolutely True. These days many jobs are losing relevance. It is inevitable for many to learn new skills.

    • Suraj, Mar 6, 2017 @ 9:29 pm Reply

      Before facing such problem banks should traine their stafs by providing them with cyber security courses..

      • Lalit Pawar, Mar 14, 2017 @ 9:52 am Reply

        it is not that the bankers will lose there jobs in banking rather there will be less job creation in the banking sector and the future job shift will be towards cyber security. banking is not possible without professional banker so yes there may be some lean period in banking but everything will be fine soon and no current employee have to learn anything new. It will be just job shift from one sector to another in future. Hope this helps ☺

        • Team GD Ideas, Mar 14, 2017 @ 10:09 am Reply

          Well explained. :)

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