Technologies in Digital Bank M

Technologies in Digital Bank M

Abstract — This paper consideres, proposes and describes possibilities and methods for using digital electronic technologies for transformation of classical banks into modern digital banks. Digital electronic technologies are widely used, including banking, bank operations and services as one of important sectors. Application of different types of digital technologies, including computers, computer networks, digital communication, Internet and information and communication technologies, with appropriate software, enables increasing speed, security and efficiency of all banking operations and services. It gives many benefits and advantages to the banks and to users of banking services. Way to use modern digital technologies to effectively transform classical financial data bank into digital data bank on the example of typical commercial/retail bank is proposed and described. It is also proposed organizational model of the digital bank. Know More Advantages of using digital technologies and digital banks compared with classical banks are given. Keywords — Digital electronic technologies, Information technologies, Bank transformation, Classical bank, Digital bank.


Modernization of banks, banking sector, financial institutions and financial sector necessarily involves introduction and application of modern digital electronic technologies based on using different kinds of computer systems, computer system networks, digital communication, Internet, mobile phones and similarly. It also needs appropriate data bases and software applications (APP) for different needed bank services. All it increases speed, security and efficiency of all banking and financial operations and services. It also brings many benefits and advantages to the banks and to users/clients of bank services. All this processes lead to transformation of banks from classical financial retail data banks into modern digital data banks [1-5]. Possibility and way to apply modern digital electronic technologies for efective transformation of classical financial data bank into digital data bank are considered, proposed and described in the paper. The process of transformation was ilustrated via proposed transformation phases on example of a commercial bank. Organizational model of the digital bank and organization of the bank information system were also proposed and given.


It is proposed here that the process of bank transformation from classical retail to digital bank be performed using two phases or periods. The first phase should be one hybrid period. The second phase should be period of creating digital bank. A.Hybrid period of bank It is proposed that in the hybrid period of the bank transformation be implemented next activities:

1.Replace classical tellers in the bank branches with multifunctional ATM devices that with money delivery can also receive money, make payments and gradually increase the number of banking services. At the start, it would be desirable to ATM devices to be equipped with microphone handsets, as well as to have the ability to play video clips that are essentially the help reproductions. Such equipped ATM devices would be able, at a later stage, when no more be employees at places of posting ATM devices, to connect to the Call Center, for purpose of providing help and consultations to clients.

2.Bank workers should be more and more trained to be consultants, product sellers and to be less irreplaceable elements in performing of particular banking services [2].

3.In places where by using multifunctional ATM devices would be created more free employees it should to organize work in several shifts in order to provide as much as possible high quality service on basis 24hours/7days.

4.ATM devices, located in separate locations, outside the branches, banks should try to transfer to ownership of specialized firms that will necessarily appear on the market. Their primary business will be working with ATM devices and taking care about ATM devices. It is already known that ATM devices are becoming more cost and less profitable for banks. Reason for this is increase in the cost of leasing,  insurance and transportation of the money. But if it takes a specialized firm costs will be the same or lower than for the bank. The reason is that one same ATM device can be used from more banks, with one same cost for each bank. Bank will, on the other hand, expand its network of ATM services and at same time reduce the costs.

5.Convert branches and agencies into places for providing consultations for the purpose of selling products and raising the level of bank services.

6.Selling places that appear insufficiently visited (not profitable in terms of contribution to the overall image and business of the bank) try to sell or rent.

7.Introduction and continuous upgrading of customer relationship management (CRM) solutions in the information system of the bank in order to better and faster segment clients connected in groups according to some common characteristics. Accordingly to that, create successful campaigns for the purpose of selling and popularization banking products and services. Good CRM solutions allow more efficient use of information about client financial habits and achievement principle of know your client (KYC) in the full sense.

8.Introduction and continuous upgrading of document management system (DMS) of the bank in order to more efficiently archive bank documents, to achieve their faster search and saving in physical space, paper and everything else that involves archiving in physical sense. DMS is also very useful for automation of jobs.

9.Permanent work on the automation of banking operations in all parts of the banking business.

B.Creating digital bank period It is proposed that in the period of creating digital bank in the bank transformation be implemented next activities:

1.Synchronously with the hybrid phase strengthen the centralization of the bank with the core in the Call Center. The reason for it is because the Call Center will provide advisory and help services to clients. It could be performed either through educational video clips or by telephone or via live video or by chatting or email correspondence. By contacting the Call Center clients will be able to get answers to their questions and consultation from the best experts in bank staff related to the particular product. In classical bank system client received information from the Account Manager, i.e. Personal banker, who was trained by mentioned experts. Whatever Personal bankers are capable they are still less qualified staff. Therefore, quality of the presentation of the particular product is lost.

2.Electronic banking (eBanking) and mobile banking (mBanking) applications will be merged into one, at least as far as users are concerned. The goal is that user when uses an eBanking or mBanking application does not notice the difference at all. User can start at one and to end on other application, training is the same for both, and so on.

3.How the tempo of adoption of legal regulations will allow, it should change banking products and services in a way that they can be executed and used remotely and transferred to mobile applications.

4.Create a flexible information system (through the API functions, on the Lego dice principle) that is easy to fit with other applications, especially those already offered by so called Fintech (Financial technology) firms, because such firms are leading in innovative services [4]. Few of banks have own development teams that can parry to such firms. If they have it, it is only in certain areas of banking business. It is more profitable to have ability to provide some service on time than to develop it itself for any price. The upcoming PSD2 EU directive supports this opinion.

5.Reorganize the bank on that way to have much less vertical and much more horizontal elements. Fig. 1 shows the lack of cooperation between sectors in the classical bank, since all cooperation goes through central parts. In that way too much energy, time and skills are lost on the synchronization of work of individual organizational units, because they are not organized by product while whole business is turning around the products. So, it is necessary to reorganize current banking sectors (Retail, Corporate, IT, etc.) into more efficient teams, concentrated around bank products or product groups. Only minimal staff whose job is to common serve these teams and very small number of commanding posts that serve to effectively integrate these teams into organizational unit should be left in the vertical part of organization. Programmers, development teams, marketing, sales teams should be grouped in the product teams. This will ensure high specialization of professional staff, their greater efficiency and better teamwork.

6.Introduction of the Big Data concept into information system of bank. It should be performed in a way to enable better collection of both financial and other data about clients of the bank, on the way of doing of world famous search engines firms, online shops, social networks, etc. [4]. Already it is clear that in order to provide adequate services to clients it is not enough to have only knowledge about financial characteristics of client, but also other knowledge about client behavior especially related to its purchasing habits. So, it is necessary and desirable to begin to prepare, as soon as possible, transformation of banks from banks of client financial data to banks of client all data [5]. This will also cause employment of some of up to now unused bank worker profiles.

In addition to Data Science experts who will be experts for Big Data, it will be needed that the data be classified and statistically processed. So, there are places for worker profiles as mathematicians and statisticians type and psychologist (or similar) type who will provide correct interpretations of statistically processed data. Fig. 2 shows proposed model of modern digital bank organization in teams according to groups of bank products. All the activities in the bank transformation should be performed by using modern digital electronic technologies. It is needed to appropriate apply and integrate digital and mobile electronic technologies and systems, using modern computers, computer systems, computer networks, Internet, wired and wireless communication technologies and protocols, big and fast data storages, mobile devices, data bases, cloud technologies, big data and data mining concepts, application software for banking services, etc.