Digital economy, in simpler terms, is any economic activity based on internet and world wide web. It also refers to an economic activity which occurs from online connections among people, business, data etc.
The banking system is an integral part of every economy. So, bank’s role is much more pronounced while transforming the financial transactions into digital economy. Hence, the concept of digital banking gets emerged in our banking industry. Recently, Covid 19 pandemic has accelerated adoption of digital services in banking system.
Basically, digital banking focuses on mobile banking, internet banking, branchless banking, RTGS, connect IPS, Electronic cheque clearing, mobile wallet, QR code based touchless payment options, online KYC and so on. It enables customers to transact through different secured digital channels while bank takes care of data security and regulatory aspects.
Population shifting to digital banking has been increasing but to become digital economy in a country like Nepal, it is not an easy way. In a country like Nepal, there is still a problem for shifting towards digitalization due to the disruption of technology, lack of technical expertise and also only minimal people have access to internet.
However, digital transformation of financial transaction should be a continuous process since it is a worldwide concept with numerous advantages like convenience in banking, 24*7 availability of access to banking function, paperless banking, no need of physical presence which saves time and money as well.
Hence, the bank’s role for transforming the financial transactions into digital economy can be illustrated as:
Financial literacy program should include the digital literacy programs as well or there should be mechanism for digital literacy programs in coordination with local levels in large scale, nationwide, where main focus should be on illustrating the steps while using the digital banking in such a way that even low educated person can use it. The font available for digital banking especially in mobile banking should be of national language besides English.
QR code based touchless payment options should be targeted to every sector of businesses like taxi services, bus services, vegetable stalls, small Kirana shops by banks in such a way that the economy should slowly move to cashless economy.
Bank can also initiate for cash back offer/gift offers/schemes for transactions so that people can be habitual to digital banking.
Banks should make heavy investment on IT and its banking software for enhancing the quality of digital banking along with assurance of the security features so that people get hassle free service with ease. Prompt response team should also be maintained by bank to deal with digital issues through call centers.
Banks can also initiate digital transaction based on thumb print only for less educated and illiterate person at least on ATM and mobile banking making option for national font so that they can also transact in simpler way.
In addition to this, government should also play vital role in increasing the access of internet nationwide so that every population should get access of internet which is basic requirement of digital economy.
Thus, digital economy is an emerging concept. For less developed countries like Nepal, it is new concept with various challenges compared to developed countries. However, collaborative effort of government regarding policy making and infrastructure, and bank being integral part of economy regarding providing literacy and digital banking facilities, will help in developing of digital economy.