Abstract — This paper consideres,
proposes and describes possibilities and methods for using digital electronic
technologies for transformation of classical banks into modern digital banks.
Digital electronic technologies are widely used, including banking, bank
operations and services as one of important sectors. Application of different
types of digital technologies, including computers, computer networks, digital
communication, Internet and information and communication technologies, with
appropriate software, enables increasing speed, security and efficiency of all
banking operations and services. It gives many benefits and advantages to the
banks and to users of banking services. Way to use modern digital technologies
to effectively transform classical financial data bank into digital data bank
on the example of typical commercial/retail bank is proposed and described. It
is also proposed organizational model of the digital bank. Advantages of using
digital technologies and digital banks compared with classical banks are given.
Keywords — Digital electronic technologies, Information technologies, Bank
transformation, Classical bank, Digital bank.
INTRODUCTION
Modernization of banks, banking sector, financial institutions and financial sector necessarily involves introduction and application of modern digital electronic technologies based on using different kinds of computer systems, computer system networks, digital communication, Internet, mobile phones and similarly. It also needs appropriate data bases and software applications (APP) for different needed bank services. All it increases speed, security and efficiency of all banking and financial operations and services. It also brings many benefits and advantages to the banks and to users/clients of bank services. All this processes lead to transformation of banks from classical financial retail data banks into modern digital data banks [1-5]. Possibility and way to apply modern digital electronic technologies for efective transformation of classical financial data bank into digital data bank are considered, proposed and described in the paper. The process of transformation was ilustrated via proposed transformation phases on example of a commercial bank. Organizational model of the digital bank and organization of the bank information system were also proposed and given.
CLASSICAL
AND
DIGITAL
BANK
The classical bank with its the
biggest part is a retail bank. Such banks are waiting for the clients to come
into tha bank premises with their requests and needs for the services. Such way
of work creates many problems and disadvantages to clients and to banks.
Clients need to go to the bank premises and to wait for the service wasting
their time. Banks need to provide enough premises and space for the clients and
enough personal for the services. It is also well known that it is very hard to
adapt the classical bank to use growing power of digital and mobile electronic
technologies and devices. In the time of appearance of the computers, data base
servers and communication links banks were one of the leaders in the
introduction of the new technologies. But, the latest expansion of digital and
mobile technologies and devices banks were received quite unprepared. The main
reason is in the classical retail bank organization that is impossible to be
adjusted, without significant changes, to new technology, in the way it takes
full advantage of it. The basis of the classical bank is the Central Unit. The
unit includes the strategic and operational management of the bank, information
technologies (IT) center, marketing, call center, back office, accounting,
legal service, head of retail and corporate and other support services. Fig. 1
shows principle of typical classical bank organization. The Central Unit dictates
the working procedures, designs and puts the products on the market, manages
the operation of the bank network. The bank network consists of belonging
branches, agencies and counters. Recently, the bank network was expanded with
automated teller machine (ATM) and point of sale (POS) devices. That in some
way represents a limited usage of modern digital technologies. The basic
problem of this approach is the fact that the modern person/client, through the
use of modern digital and mobile technologies, mobile smart phones and mobile
computers, more and more information and services receives remotely using such
devices. So, the need of client to come in the bank for a service becomes
unnecessary and very rare. But, the basic concept of classical bank is to attract
clients to visit their branches and offices. Banks try to use modern digital
and IT technologies, but in a wrong way. Banks send emails and text messages,
publish information on their web pages in order to attract clients to visit
their offices. But, that is a real problem. Modern client would like to be able
to get banking services on their mobile devices and to be able to realize the
services from home, from working place, when is on a journey, etc. But, the
concept of the classical bank is still to do everything to attract client to
visit bank office and to present and sell to lient products there. It should to
be changed and to enable clients to use and obtain banking services from
anywhere and at any time.
CONCLUSION
It is clear and no doubt that serious changes should be
implemented in the banking sector in the future applying modern digital and
mobile electronic technologies and systems. The way how it will be performed
can vary in accordance with the specific factors. Here is proposed and
described one of possible and expected ways. Speed of introduction of all
mentioned activities and technologies will depend largely on the speed of
adoption of the necessary legal regulation. It is related to the digital
signature and other regulations that will replace the need for physical visit
and presence of the client in the bank branches. It will also depend on the
degree of client pressure to the banks to be able to use bank services remotely
by modern mobile devices and systems. It is recommended that banks already
perform some such activities and introduce such digital systems in order to
more readily accept these changes. Even more, in accordance with their
possibilities the banks should initiate these changes. Symbioses of banks and
telecom operators, according to their perspective, have great chances to give
good results, especially for local or regional organizations. It can be very
good seen the tendency among bank clients to complete the entire retail
business in a centralized way. For example, the buyer wants to buy a new
kitchen. The buyer wants to select from one place model of the kitchen that
suits to him/her and settle the commercial conditions at the same place
(chooses a loan and makes a payment). The opinion is that if a bank does not
create itself as a leader in this process, someone else will become a leader.
In this sense, many professionals think about companies working with the most
modern digital and mobile technologies and systems that successfully developed
social networks, search engines and Internet shopping as new retail leaders.
Such modern companies have a greater perspective to take over retail business
and therefore retail banking in the future. The banks are actually very
threatened if they do not access to the necessary changes and application of
digital and mobile electronic systems on time. There is an opinion that banking
is necessary but that banks are not.
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