Recent Trends, Major Opportunities and Challenges of Digital Banking in Indian Context

Abstract

By enabling clients to carry out their daily financial activities at their convenience, digital banking has opened the door to a new range of banking services. In developing nations like India, digital banking systems are expanding quickly as a result of the widespread use of mobile phones and the internet. The banking transaction landscape has quickly evolved from traditional to convenience banking, which presents a huge opportunity to transition to a cashless and cash-lite society. With the goal of promoting "Digital India," the Indian government has made a number of efforts to improve and strengthen the digital banking system. The GoI wants to create a "digitally empowered" economy that is "Faceless, Paperless, and Cashless" as part of the plan. The banking sector has gone through several major stages of digital transformation during the past few decades. The purpose of this change is to make banking more affordable, efficient, and accessible for all of the nation's residents. This transition was aided by increased competition among public sector, private sector, and international banks. In an economy's financial system, the banking sector is extremely important. It makes it easier to build and maintain a reliable payment system that satisfies the needs of enterprises, the government, and the general public. It also functions as a method of delivering credit that people who require money can use. The center of an economy is generally represented by the banking sector. Consequently, the development of the banking system depends on its strength and health. Currently, the Indian banking industry is going through an IT revolution and is moving toward digitization. The way that banks and other financial institutions operate has been completely altered by the internet and IT. In the late 1980s, information technology was introduced to the Indian banking industry. However, the IT revolution is currently in a more intensive and significant phase, which may have the ability to alter not only the banking environment but also the general composition and course of the economy. Both customers and banks have benefited from the modernization of the banking industry following the arrival of IT and the internet. The banking industry has expanded to include transactions outside of the branches as well, including via mobile devices like smartphones and tablets. The term "Digital Banking" may be an adequate description of the current stage of banking. In addition to the variety of digital banking channels and their availability at the right time and place for the customer, as well as their advantages of comfort and safety, several conclusions were drawn, the most crucial of which is that digital banking services are an important way to lower costs for the bank and the customer together, helping to lessen customer concerns and increase their faith and beliefs in the bank. The statistical research also revealed a statistically significant positive association between the use of digital banking services and client trust. The development of a safe digital ecosystem to offer clients adaptable solutions when necessary, the bank's interest in marketing the goods and services it offers, and raising customer awareness of banking were the most crucial recommendations. Keywords: Digital banking, Digital Indi