Bìznes Inform (Apr 2020)
Virtual Banking: Challenges and Prospects
Abstract
The article researches digital innovations in the banking sector, and discloses the prospects for the development of virtual banks, taking into account the experience of the financial services market in foreign countries. It is clarified that the modern banking sector offers many innovative concepts that combine the interaction of the virtual and physical worlds, with the purpose of building up their own business model and provide more efficient customer service. Key aspects of the operation of such models as: mobile banking, multifunctional banking center with a full range of services, virtual banking center, self-service accounting branch, financial interactive video kiosk, personalized banking and «digital traces» management are disclosed. It is defined that the future of banking belongs to the institutions located in cyberspace. Such institutions identify themselves as retail banks operating exclusively on a digital platform and are designed to compete with traditional financial institutions. It is determined that over the past ten years there has been a revival in the sphere of virtual banking in European countries. Based on the world experience, key provisions for the digital bank's launch are presented, which include: architecture and operating model, products and services, distribution channels, system operation, cybersecurity and finance. The advantages of virtual banking for the founders and clients of such institutions are defined. These are in particular, the following: convenient way of banking operations, reliability, operational efficiency, lack of need to organize a network of branches along with staff of employees, etc. Challenges and shortcomings of virtual banking are defined as follows: difficulties in registering a new customer and navigating the site; trust in the virtual world of financial services; lack of an adequate level of financial literacy; risk factors associated with spyware and viruses; problem with regard to evaluation of business, etc. In sum, it is proven that virtual banking has significant potential for development, as the active use of cyberspace is increasingly becoming characteristic of both clients and owners of financial institutions.
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