Digital Banking Instruments For Financial Control

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Digital Banking Instruments For Financial Control
Digital Banking Instruments For Financial Control

As the name implies, digital banking is a virtual banking model that customers can use to manage their financial products and access both traditional services (such as customer support, requesting certificates of ownership, or simply checking the balance of their current account) and more innovative services (such as taking out a virtual card or granting consent through an electronic signature). Digital banking has grown in popularity in recent years.

 

According to a recent Statista study, the number of online banking users in the European Union has been steadily increasing. In countries such as Denmark and Finland, more than 90% of the population was already using this model in 2020, far exceeding the EU average of 58%. Other countries, such as Spain, have already surpassed 60% penetration, with smartphones being the most popular device for accessing this service.

 

As previously stated, the primary reasons for this shift are simplicity, as banks go to great lengths to ensure that both apps and websites are simple and intuitive, in order to improve browsing and user experience; convenience, in the sense that users can carry out all types of transactions via their smart device from the comfort of their own home, requiring only an Internet connection and without having to wait in line; and, finally, security, in this case cybersecurity.

Although the most recent tools provide all of these advantages, utility is likely to be the feature that most consumers will highlight when discussing them. If you want to learn more about the advantages of digital banking, check out this Openbank article.

What functions and features does my digital banking app or website provide?

As previously stated, these virtual spaces are constantly evolving in order to meet the needs of customers. More and more people are looking for tools that will help them manage their personal finances in a simple and secure manner.

Here are some of the most common features that your bank may or may not provide:

Making budgets: A budget is the essential tool for learning how to manage our finances. It is a necessary component of any good virtual app or service. A budget helps us see what we earn and, more importantly, what we spend it on. All we have to do now is enter the data. It is also a highly visual tool, with graphs and the like to help us understand our financial situation.

Breakdown of expenditure by category: Related to our previous point, knowing how much money we spend and on what is important because it allows us to identify any spending that may be detrimental to our financial health. An example of this would be what are known as “ant expenses,” such as eating out for breakfast rather than having it at home, which we might include under the category of “eating out.” Fashion, home, beauty, and other similar categories are also available.

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Spending alerts: This is a very common feature in smart phones and watches that sends us an alert when we make a payment. However, this feature has evolved, and many banks now notify users before they are about to be charged for something, which is often the case with recurring charges such as electricity and internet bills, rent, or mortgage payments. We can also choose to receive notifications when income, such as transfers or wages, is deposited into our accounts. It is a highly adaptable tool that users can personalize to their tastes and preferences.

Card limits: the goal here is to limit the amount of our transactions, such as cash withdrawals or purchases. It is a very useful feature for controlling our spending and avoiding debt.

Setting up automatic saving rules: With this feature, we can set up automatic saving rules. For example, we can round up purchases, make regular contributions to savings products, or instruct our bank to automatically transfer a set percentage of our earnings to a savings account.

Setting financial goals: some people save to have a cushion against unforeseen events or unpleasant surprises, while others save to achieve a specific goal, such as saving for a family vacation or a new car. Using these tools, we can set our goal, enter the cost, and specify when we want the money. These money-saving tips are excellent, but there are others.

Promotions and discounts: Some banks use their virtual spaces to provide customers with a variety of perks or benefits, such as promotions and discounts on their purchases, which is yet another way to save. We should, however, only use them for purchases that we would have made anyway. Purchasing goods or services simply because they are on sale is not a good idea.

 

Bank registration is one of the most recent tools, allowing you to access all of your accounts and banks through a single digital banking app. It enables you to view all of your accounts in one location and perform certain transactions such as transfers.