Digital transactions transforming banking landscape
VAIBHAV PARWAT
Chhatrapati Sambhajinagar: The adoption of digital payment methods has revolutionized traditional banking processes, reshaping customer interactions with financial institutions. Digital platforms have gained significant traction, leading to a decline in cash transactions and a surge in digital payments. This surge in digital transactions has even led to a stabilization in the demand for ATM machines, leading to significant cost savings for banks.
The adoption of digital payment options such as the 'BHIM' app and platforms like 'Paytm' and 'PhonePe' has led to a decline in cash transactions through various channels. As a result, the demand for ATM machines has reduced. The daily transaction rate has dropped from an average of 200 to 150 per day, to around 80 to 100, reducing the need to replenish the ATMs with cash. However, the number of ATMs has remained stable to around 400-odd in the district.
Digital evolution redefines banking efficiency
Lead bank manager, Mangesh Kedar, highlights the dramatic reduction in transaction costs. In the past, each banking transaction incurred an average cost of Rs 40 to Rs 50, considering factors like infrastructure and manpower. However, with the integration of digital technologies, this cost has now decreased to as low as Rs 4 to Rs 5, a fraction of its previous amount. This cost reduction has led to increased operational efficiency and financial benefits for the banks.
Shift towards digital transactions
Comparing the landscape of June 2022 to that of June 2023, a significant shift towards digital transactions becomes evident. Debit card transfers in the district saw a drop from 2.71 crores to 2.28 crore transactions. On the other hand, transactions based on mobile phones surged from 16.31 crores to 22.43 crores, further indicating the trend towards digital interactions.
Reduced foot traffic in banks
The diminished need for physical interactions has consequently contributed to a drop in transaction costs for banks. According to bank officials, the customer inflow for cash withdrawal has also reduced from 100 transactions per day to around 70 transactions per day, resulting in a gradual decrease in employee-related expenses.