How Can Digital Banking Help Growing Economies Like India?

Digital banking has paved the path for a revolutionised banking system. Banking services being available 24x7 on-the-go equips people with improved transparency and control over how they manage their finances.

But while online digital banking has transformed personal finances, it can also offer vast country-wide benefits, especially in growing economies like India. Here are some of the ways online banking is helping the country keep up with its growth momentum.

How Can Digitalization in Banking Help India?

1. Expanding the Reach of Basic Banking Services

Financial inclusion is a key enabler in achieving sustainable and inclusive development. But according to a World Bank Report, “India is among seven countries home to half the world’s 1.4 billion adults without access to formal banking, a recent World Bank report has flagged.”

Digital branch banking allows financial institutions to expand their reach without increasing their physical footprint. In fact, the RBI has recently launched 75 DBUs  (Digital Banking Units) in small towns and districts across the country to make financial services accessible in the unbanked regions.

2. Improved Access to Government Assistance

The development of rural India is vital for the economy in the long run. As a result, the government has introduced several schemes for rural development. Digital technologies like online Aadhaar verification and digital transfers make it easier for people to access the benefits of such schemes.

Moreover, even during the COVID-19 pandemic, the government abundantly relied on online technologies to distribute financial assistance to the masses and help them navigate through the challenging period.

3. Improved Financial Literacy and Encouragement of Investments

Financial investments are critical in helping people build a more secure financial future. Moreover, as capital investments also impact the country's economic growth, it is essential for the government to improve financial literacy and make investment products more accessible.

Digital banking is making huge waves in helping the government achieve these objectives. With an Online Banking Account, customers can seamlessly access an extensive range of financial products, including Mutual Funds, Insurance, Government Schemes, and more.

4. Streamlines Banking Processes

The best digital banks more or less eliminate the need for customers to visit the bank. Be it opening a New Savings Account, booking a Fixed Deposit (FD), or checking transaction history, customers can conveniently access these products/services from the comforts of their homes.

For instance, AU Small Finance Bank offers services like AU 0101 App, AU 0101 NetBanking, AU Video Banking, and even WhatsApp Banking for enhanced convenience. As the banking sector is vital to the country's economy, more streamlined and efficient banking processes will positively influence the economy. 

5. Encourages Innovation and Entrepreneurship

The growing popularity of online banking and digital payments has also accelerated innovations in the sector. UPI is one of the biggest examples of digital success in the country. The future of digital banking will introduce several such innovative online payment solutions. 

Moreover, even many of the most successful start-ups in the country revolve around fintech or financial technology. These start-ups also attract foreign investments to strengthen the country's economy further.

Online Banking for a Stronger Economy

Digital banking can potentially transform the financial prospects of crores of Indians. With a trusted banking partner like AU Small Finance Bank, you can be a part of this digital revolution and contribute to your country's growth and development.

Learn more about AU Small Finance Bank's wide range of digital offerings and see how we can make everyday banking more convenient, time-efficient, and secure for you.

Sources:

https://www.downtoearth.org.in/news/economy/india-still-among-countries-with-poor-access-to-banking-report-83542

https://techcrunch.com/2022/10/16/india-launches-75-digital-banking-units-in-rural-areas-in-financial-inclusion-push/