Here we are going to discuss the broad perspective of digital finance. Which is nothing but the digital transformation of the finance industry, How do they affect society? What are the boons and banes of Digital financial inclusion? Digitization is making the world a better place, isn’t it? How do smart technologies influence the finance industry is what we are going to discuss here.
Digital Financial Inclusion: Digital financial inclusion is a broad-spectrum that emphasizes digital access to traditional financial and banking services by those under-served societies. The digital transformation of financial services enables digital financial inclusion to even the most remote corners of the planet. The era of cloud computing and next-generation high-speed broadband connectivity solves even the unsolved financial glitches. Whether it may be the government subsidies or fund transfers from foreign accounts, digital financial inclusion pave the way to the seamless integration of benefits. The three key components of digital financial inclusion include,
- Digital Transactional Platform: Digital transactional platforms are those which store and process the user data electronically with utmost privacy and security.
- Retail Agent: Retail Agents are those that have access to resources for sending and receiving the funds, which converts the electronic stored value of the fund to hard cash.
- Electronic Devices that Access the Platform: Electronic devices such as mobile phones. tablet pc or laptops which access the data wirelessly without any hassles.
Digital financial inclusion greatly serves rural society by providing them with easy access to financial transactions.
Digital Finance Literacy: Digital financial literacy is nothing but the knowledge or skills to make the most use of digital devices and digital technology to do a financial transaction.
It is solely the individual’s ability to access digital resources for financial transactions. Safety and Security are the two prime factors in accessing digital finance tools. In order to be more secure about the fund transfer or about the safety of your private data, you should be aware of the sound principles of digital finances. This awareness about the digitalization of financial transactions is what we called as digital finance literacy. Digital finance literacy is a vital component of the cashless economy.
Digital Financial Services: Digital financial services are a whole lot of financial services that are offered in digital channels like PoS, ATM, Cash deposit Machine, etc with the internet facility. These services are delivered and accessed via the internet only.
This also includes personal mobile banking services like M-Pay, M-Money which provides both transactional and non-transactional services. Digital financial services are often denoted by the name of financial technology or FinTech. This digital age facilitates the growing number of FinTech companies that actually making our digital life simpler. Either it may be paying utility bills or riding a cab every payment goes online now. Digital financial services or the FinTech industry is reshaping our lifestyle and economy towards more productivity.
Benefits of Digital Financial Services(DFS):
- Accessible everywhere
- Very Easy and efficient
- Save lots of time and resources- no more waiting in queues for affecting fund transfer
- Every transaction is updated on real-time
- Ease of decision making
- Reliability and Flexibility in affecting a transaction
- Seamless integration of all digital platforms
- Increase in customer base with tech support
- Increases the reach through omnichannel digital marketing
These are the advantages of digital financial services that benefit both the business and consumers in society. The evolution of computing technology is changing the dynamics of conventional banking and financial systems.
Importance of Digital Finance Transformation:
- The word digital becomes so obvious in this smart technology epoch. The importance or the need for digital transformation in the banking industry is that to overcome the time consuming complex financial process with simple digital solutions.
- The digital revolution in financial technology gives people the utmost freedom to control their accounts. Every individual could affect any kind of transaction without seeking the help of their home branch or bank staff. The digital finance is so robust and user-friendly that it focuses the customer satisfaction.
- Digital transformation does not only simplifies the existing system, but it also facilitates the evolution of new financial products and tools that increase the productivity and efficacy of any task.
- The best example of digitalization and digitization is FASTag. The toll collection system now made simple. You could save more time and resources, go paperless, could be more productive with a secure transaction system. This is the power and importance of digital finance transformation.
- Digitalization transforms the existing banking industry not just by recording the transaction but to derive complete understandings of customer behavior and market approach. The banking procedure has evolved as an insight-driven functional system.
- It establishes high standards, faster processing, complete automatic execution with the utmost customer and employee satisfaction.
The Future of Digital Finance:
- With the evolution of artificial intelligence, machine learning, big data analytics the digital finance has got a lot more advanced features to offer for society. The fintech companies are progressively working towards to make disruptive changes in the financial industry.
- Robotic process automation and machine learning are making a significant impact in preparing annual financial statements, reconciliation statements in mighty banks and financial institutions.
- AI Cognitive computing, algorithm-based predictions and decision making on future values are being implemented in the traditional systems.
- Digital transformation in the banking and financial industry is absolutely producing ultimate functional excellence.
- AI backed real-time data processing, data reporting, and financial planning gives way to better management of finances that leads to exponential growth in the market and business.
- Digital finance leads to customer-centric design and quality with faster processing with in-memory computing. Finance on-demand strategy helps in making better business decisions.
- Smart contracts, made ease if tracking the assets, financial models and solutions help a lot way in predictive analysis. Algorithmic trading strategies help to forecast the overall gain percentage. And the future of digital finance has got a lot in its palette!
- Disruptive digital finance is elevating the standards of lifestyle and reshapes the financial institutions with high ideals and seamless quality.
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