The Impacts of Digital Banking: Experience, Environment, and Evolution

The world is moving faster than ever thanks to digitalization and automation. You can find out the weather via your phone quicker than you can walk outside to see for yourself. You can use artificial intelligence (AI) to help you write an email. And you can use digital banking to manage your finances from essentially any device.

Over the past few years, digital banking has accelerated. The pandemic provided an additional catalyst for many consumers to start banking online, with about three-quarters of the U.S. adult population using digital banking, finds Insider Intelligence.¹ And once consumers start using digital banking, they tend to enjoy it.

With digital banking, you can deposit checks, view balances, transfer money, review your digital statements, and analyze investments.

As a result, online and mobile banking users obtain convenience, a reduced environmental footprint, and a more robust banking experience.

And as technology continues to evolve, new digital banking and related financial services are emerging. Innovations in areas like AI and smart devices (such as your watch) can help you bank smarter and safer.

A more personalized, streamlined experience

By being able to manage money through a banking app or website, you can save time while getting more relevant service. Over three-quarters of adults now prefer mobile banking or online banking, compared with in-person banking, according to Forbes Advisor.²

Rather than waiting in line at a branch to deposit a check or going to an ATM to withdraw cash to pay back a friend, you can conduct these types of activities almost instantly through digital banking. One difference can be that the transactions are cashless, but it’s often more convenient and secure to transfer money online rather than carrying around cash.

Some of the top reasons for using digital banking include "easier transfers, lower costs and better notifications," finds a PYMNTS survey.³ Banks can also use advanced analytics to better understand customers and make more relevant suggestions, similar to how streaming apps give you personalized recommendations based on what you watch.

For example, digital banking data can enable your bank to provide more relevant alerts, such as for security issues like suspected fraud, as well as financial alerts like for upcoming bill payments. Personalized data can also be used to recommend credit cards, certificates of deposit (CDs), and other banking products that could be a good fit for your financial situation.

As you're building your wealth while taking care of your family, you don't want to spend endless time researching financial opportunities or reviewing one-size-fits-all recommendations. Instead, you want quickly and accurately to get relevant guidance, which digital banking can help facilitate.

Reduced environmental footprint

Digital banking not only provides a better experience in terms of personalization and convenience; it can also reduce the environmental footprint of banking–a concern that's increasingly on consumers' minds.

In both your personal life and your work, you may already be taking steps to make a more positive environmental impact, such as buying an electric vehicle or reducing unnecessary business travel. In fact, "78% of consumers say a sustainable lifestyle is important to them," finds NielsenIQ.⁴

When it comes to your finances, relatively simple changes, like switching from paper-based to e-statements can reduce deforestation, while banking from your phone cuts down on carbon emissions from driving to a branch. Plus, having fewer physical bank branches reduces the energy needs of these offices.

"Moving from paper to digital bank statements, every account holder can save monthly the same amount of greenhouse gas (GHG) emissions generated by charging 5 smartphones," finds EcoAct.⁵

Granted, that's a relatively small amount of emissions avoided, but every step helps. Once you start layering in swapping paper for e-statements of products like money market funds, mutual funds, and credit cards, you can reduce emissions further.

Plus, digital banking can enable you to get a complete overview of your accounts–e.g., savings, investments, and retirement–so you can more easily make decisions that improve your overall finances while helping the environment.

You might see that you have a healthy savings balance, for example, while running short of your retirement goals, so you can correct course accordingly. Without digital banking, you might not have made that connection when reviewing unwieldy paper statements from different accounts.

As more individuals engage in sustainable practices via digital banking, financial institutions are also looking for ways to improve sustainability across business units. Santander, for example, has created a Global Green Finance Team that helps find synergies and builds alignment between investment and retail banking as we progress toward our goal of group-wide net-zero carbon emissions by 2050.

Growing technological evolution

The exciting thing about digital banking is that technology continues to emerge and evolve, which fuels new and better financial services for customers.

Some emerging technologies that will likely advance digital banking—along with related financial services like investing and retirement planning–include the following:

• Artificial Intelligence: AI and its subset, machine learning, can be used in many ways, like increasing efficiency and security. As the world becomes more interconnected and internet banking proliferates, cybersecurity gets more complex and serious. Banks can use AI to quickly analyze large quantities of data to detect issues like suspicious logins and transactions.
  
  AI and machine learning are also being used for areas like financial advisory services. Robo-advisors can provide a lower-cost way to build portfolios customized to your goals.
  
  If you prefer a one-on-one relationship with a financial advisor, these technologies can help your advisor support you more effectively. Saving time via AI can give your advisor more bandwidth to understand your needs and come up with creative solutions, whether that’s to help you retire early, expand your business, take care of your aging parents, or reach many other goals.


• Blockchain: If you’ve already invested in crypto, you’re probably familiar with blockchain. But this distributed ledger technology—where the same digital records are stored and updated across many devices rather than one centralized location—can have many other use cases, many of which remain to be fully developed. For example, blockchain could enhance digital banking security and transparency by providing a clear, verifiable way to confirm account ownership and record transactions like international payments.
  
  “The blockchain contains a certain and verifiable record of every transaction ever made, which mitigates the risk of double spending, fraud, abuse, and manipulation of transactions,” notes Deloitte.⁶
  
  Blockchain could even streamline processes like buying a house. Making title transfers on the blockchain, for example, could be more efficient than digging through paper records in county offices.


• Internet of Things (IoT): In some sense, the IoT has already been used in banking for decades via the use of ATMs. But IoT devices—which essentially include any internet-connected physical object, like some sensors and cameras—have come a long way. New innovations are increasing security, convenience, and expanding financial opportunities.
  
  For example, IoT devices like smartwatches and other wearables can make it easier to bank from anywhere. Digital wallets that function via a smartwatch, for instance, can mean that you can go from a five-mile run to buying a post-workout smoothie with a simple tap of your wrist.
  
  Wearables can also support more secure banking. "Many of these devices use biometric security, in the form of fingerprints, FaceID, or other irreproducible physical signatures, to authenticate each user and reduce the risk of fraud," notes Mastercard.⁷
  
  As you introduce more IoT devices into your life, you might even be able to share some of that data with your bank to get better customer service.

Santander in the digital banking landscape

Digital banking can be a win-win for banks and consumers. At Santander, we're continuing to invest and innovate our digital banking offerings to strengthen security and create a more enriching experience for customers. Santander PROTECHTION, for example, gives you digital controls for cards, alerts, and more, so you can bank securely.

The efficiencies we all gain from digitalization mean that your dedicated relationship banker has more time to help you maximize the banking tools and services at your disposal, which ultimately helps you achieve your financial goals.

Want to start taking advantage of digital banking and personalized service? Learn more about the benefits of Santander® Private Client.