For most of us, banking is as simple as using a phone app or browsing the web. However, this is not the case for a vast number of depositors who must still queue long away from their homes. Even those with Internet connection and understanding are hesitant of using the internet to access new banking products or perform sensitive financial activities, and rightly so.
The Budget announcement by the Finance Minister on digi banking units would help overcome this gap. 75 digital banking units will be established in 75 districts, she said. These banking units will focus on digital transactions and provide a hybrid model for individuals who have yet to or are still experimenting with digital transactions.
Digi banking units will also benefit banks trying to decrease their physical footprint by opening fewer brick-and-mortar branches as part of a ‘light’ banking strategy. It will enable banks to grow regionally, resulting in greater deposits and increased savings and salary accounts in areas that can serve small and new local enterprises.
These units will also be less expensive to set up than a new branch, and they will be able to give a better client experience with the help of technology. The units can also be branded as new-age banks that can assist new consumers with tailored finance management solutions.
Digi banking units also require fewer employees and less maintenance due to technology tools, making them high-yield units for the parent bank. If nothing else, more of these units can promote financial awareness and a positive attitude toward digital banking, which is urgently needed.