Technology and Banking
The world is witnessing a transition from traditional way of living to technology-based lives all around the world. As technology is becoming more and more widespread, people use it in every aspectof their lives. One of these aspects is online banking which has significantly become prevalent since the advent of the technology. When banking is considered, we encounter with several massive steps banking got through during its evolution. The history of banking system dates back to 600 BC when the earliest coins were put into circulation. Since then, banking revolved into what we know today. The biggest steps in banking- just as in the other areas of life- are the results of the advance in technology. We are face to face with one of those steps today: online banking. Both in the world and in Turkey online banking has become an indispensable part of banking systems.
Online banking, or in other words internet banking or e-banking, is a way of conducting financial transactions via the web-site of that particular financial institution. The web-site of the institution makes transactions possible for the customers of financial institutions. The features available online differ from one institution to another, however, in general, customers may perform non-transactional tasks like viewing account balances or perform transactional tasks like payments or transfers.
More and more firms today are trying to keep up with new trends. In our changing world, nothing seems to stay the same as it was a couple of decades ago. Apparently, technology shows its impacts in each sector, including banking. Therefore, banking sector needs to catch new trends in order to continue attracting its customers.
What banks need to do, however, is not only to transform their businesses to online platforms but also to invest in new business models. For the time being, banks seem to embrace only the transformation option. Yet, leading consultants warn that reinvestment option should also be followed in order to continue surviving in the changing sector.
As a result of the need to catch up with the changing needs, banks are investing in technology more than ever before. According to the reports, in 2014, major banks invested 100 million dollars in technology. The amount shows that banks are beginning to give importance to today’s reality of technology. World’s leading consultancy companies underline that most banks today tend to work in traditional patterns. They add that, however, if the banking sector keeps doing business in traditional terms and if banks do not combine their traditional proceedings with technology, there is no chance for such banks to survive.
It is obvious that the change in the sector did not result from the change in the needs of customers, but from the change in channels through which customers demand to perform their needs. Customers’ basic needs are still to withdraw or save money or to make financial transactions, yet, now they demand these needs to be fulfilled in the comfort of their houses.
Online Banking in Turkey
The situation in Turkey is not different from any other country. Nearly all major banks embrace online tools to serve their customers. More and more effort is made in an attempt to have the best online interface among Turkish banks.
According to 2014 report of The Banks Association of Turkey, the volume of online and mobile banking is rapidly increasing. The report states that active users of online banking are currently 13 million people which account for 39 per cent of total bank account holders.
As well as online banking, mobile banking is another escalating trend in the modern world. According to the same research conducted by The Banks Association of Turkey, there are 6.7 million active users of mobile banking in Turkey. Mobile users consist of 62 per cent of the overall number of users. It is also stated in the report that the total number of people using internet and mobile banking increased by 300% between the years 2009 and 2014.
These figures demonstrate that both in Turkey and in the whole world the banking sector has altered its direction from traditional patterns to online patterns. People no longer visit banks to do their financial transactions. Instead, they use digital tools that allow them to perform almost all the transactions without the need to go to a bank branch which also helps banks to cut down on their costs.
This change in the attitude has brought a change in the areas that banks invest in. Major banks are aware of the altered trend and they invested millions of dollars to promote themselves in the digital arena. Experts warn that the banks which do not invest in digital platforms are obliged to fade away from the sector in the upcoming years.