Digital Banking’s Adverse Effect on Banking Industry Essay : The introduction of digital banking in past few years has affected almost every sphere of lives. The system to make the economy go cashless was the motive of the government thus launching Digital India campaign and also banning high value currency notes of Rs. 500/- and Rs. 1000/-.
Digital banking system reduced the printing of currency notes to large extentas most of the transaction are now being transacted online with the help of internet banking, point of sale machines, digital wallets, debit and credit cards.
The Digital system of banking will wipe out black money, huge sums of money were being hoarded in closets and lockers for carrying illegal businesses and other illegal activities. Digital transaction system has made it easier for the Government to monitor tax evasions, as most of the users will be registered online and transacting online. Cash system, had made it easier for tax evasions. Crimes like robberies also have been on the decline as most of the people transact through the digital system rather than carrying cash currency.
Apart from these advantages the digital economy has lead hacking of accounts and personal information. Many people accounts have been hacked where huge sums of money had been ripped from their bank accounts. Several people have faced issues while visiting ATM machines, where in their debit cards were skimmed and money had been withdrawn by these ATM thief’s.
Most of the rural and remote areas are still not able to follow digital system and are still covered under the cash system of banking due to lack of digital facilities available in the location. Certain sectors of the society are being affected which carry out most of their transactions through cash system.
Lack of internet facility, low internet speeds, limited smartphone and broadband services, very less PoS machines are the roadblocks towards achieving full digitalization that is here the main substitute for cash transactions. However, new apps like PAYTM, GPAY PHONEPAY, etc making it easier to facilitate online transactions with ease, from a mobile phone.
Digital transactions can be processed even when the banks are closed or post banking hours, thus making it easier to process transactions any time of the day or night. The Digital Banking system has reduced staff required in the banks, thus reducing the cost incurred on the staff salaries. Applying for loan has also been made online including other related facilities.
To sum up, Digital Banking has proved advantageous and disadvantageous to a certain extent.
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