In this amazing time, digital services have become extremely important. The Internet makes it possible to continue working, studying, communicating, and relaxing.
In December 2019, few people thought that they couldn’t live without the Internet, but now everyone will agree. But on the other hand, advances in mobile money, fintech services, and internet banking pose challenges for the growth of smaller organizations in the finance industry and expose unequal access to digital infrastructure.
Many countries are promoting digital finance by lowering fees and raising limits on mobile money transactions. As financial companies and banks accumulate customer information and develop new methods for analyzing the creditworthiness of borrowers, digital payment services are actively transforming into digital lending.
Market lending, which uses digital platforms to communicate between lenders and borrowers, is increasing every year.
Expanding access to financial services is beneficial for the state and society. Research has shown that expanding the provision of traditional financial services, for example, to small businesses and low-income populations has similar dynamics with increasing economic growth and decreasing income inequality.
Therefore, we can say that digital financial integration also affects the increase in GDP.
Digital financial services enable governments to quickly and securely provide financial assistance to people and businesses, helping to mitigate negative economic impacts and potentially enhance the momentum for recovery.
Technology in Trading
Technology has widely become adopted in the Forex field as well. Nowadays we cannot imagine brokers that do not use modern services that make traders’ jobs easier.
Traders are no longer required to execute manual transactions – robots and automated trading machines will do everything for them. All of the best online Forex brokers rated on this website use Forex trading robots.
So, with the following features, they can be easily distinguished from the other ones.
High Potential of Financial Services
The massive shift to remote work outside the office of employees of financial organizations and banks has become another challenge in the conditions of self-isolation.
In such a situation, banks should always be ready to ensure the safety and continuity of the entire infrastructure, both from a technological point of view and from the point of view of information security.
In general, the remote mode of operation could lead to a greater extent not to problems with the information security of the bank, but to a lack of server capacities, which should ensure the uninterrupted operation of the banking infrastructure in the remote access mode.
Bridging the digital divide between and within countries to capitalize on digital financial services is a challenge for global and national leaders.
For the comprehensive implementation of digital financial services, it is necessary for potential customers to have equal access to digital infrastructure (access to electricity, availability of mobile communications and Internet access, digital identifier), increasing financial and digital literacy and removing prejudices against the use of personal (personal) data.
People are increasingly moving away from cash payments in favor of convenient and fast one-touch payments. Self-isolation also played a significant role in this.
Most clients of financial companies and banks have a positive attitude to the digitization process in the financial sector. People like the opportunity to pay for services without leaving their homes.
The remote method of making transactions is considered more efficient than the “traditional” one, which requires a personal presence, for example, at a bank branch. Therefore, the number of people using financial services online is increasing.
Large banks against the background of the self-isolation regime recorded an increase in demand for digital cards, Banks increased the issue of digital cards during self-isolation.
A number of banks that had never issued such cards before decided to start issuing them.
What Is the Advantage of Electronic Cards?
There is an advantage for the bank – saving on plastic media. Issuing a digital card is 70% cheaper, as there are no costs for materials, production, packaging, and logistics. Transaction costs, maintenance, and product upgrades remain.
There are benefits for clients. Digital cards are more convenient and faster to issue; you do not need to personally come to the bank branch for them.
Some banks, due to self-isolation, continued to service expired cards. But, not all retail outlets can accept an expired card. The fact that non-renewed cards are definitely not welcome for payments in online stores abroad, doesn’t come as a surprise. Therefore, if the holder of an expired card is abroad, then it is better to get a digital card.
What Are the Risks of Digitalization in the Financial Sector?
The risks associated with the digitalization of financial services are not yet sustainable and do not threaten the system as a whole, but they are relevant for individual users.
The main problem is cybersecurity. It is no secret that digitalization in the financial sector of the economy is especially sensitive to the risks of fraud.
Leaks of personal data, including the fault of individual bank employees, unreliable protection of networks, and insufficient financial literacy of the population lead to the fact that opportunities for fraudulent transactions are “opened up” for unscrupulous persons.
Regulators need to ensure consumer and data protection, cybersecurity, and interoperability between users across countries.