Why digital transactions are becoming the disruptive factor in the new cashless economy

As our world becomes less and less reliant on cash, and more reliant on digital technologies, money circulates through more advanced systems than ever before. Traditional banking methods are becoming obsolete as we evolve into new areas with financial potential. Digital transactions, such as peer-to-peer (P2P) payments and mobile wallets, have made money movements faster, simpler and safer than before. The digitization of financial transactions is driving a rapid expansion into the cashless economy, allowing customers to conduct financial transactions with confidence without needing physical money or conventional banking products.

Transactions are becoming the disruptive factor of modern banking, and all industry trends are transforming to adapt to this changing ecosystem. Banks and financial institutions are increasingly offering digital options as consumers demand a more convenient, secure and accessible digital banking experience. They are also partnering with fintech companies to take advantage of the most advanced technologies to improve customer service through cutting-edge products in digital transactions and reduce the costs associated with traditional banking products.

By decoupling transactions from core banking systems, banks are able to create more efficient experiences for customers. In addition, it allows them to offer more personalized services and products through application programming interfaces (APIs), making it easier to integrate with third-party services that can streamline digital transactions. Today, banks can offer their customers new, more personalized payment options, such as contactless payments, digital wallets, blockchain technology, and even biometric authentication. This means that decoupling from core banking is turning financial institutions into more agile, resilient entities capable of meeting the changing needs of their customers.

This new model not only creates an efficient operating structure for companies in the banking sector, but also opens up a world of possibilities to reduce costs and increase revenue opportunities. By fully digitizing transactions, banks can improve their data analytics and gain valuable insights into customer behavior to improve their products and services. They can then use this information to offer more targeted offers, such as personalized discounts and rewards.

New digital transaction technology also helps banks reduce costs related to moving money between accounts, allowing them to offer lower transfer fees or even free transfers in some cases. This could help banks attract new customers who had not previously considered using their services. As a result, digital transactions are also facilitating bank access to new markets. In Latin America alone, almost 60% of the population made digital payments in 2021. This means an increase of 23% compared to the figures observed in 2017. In addition, it is estimated that currently almost a quarter of global fintech companies are based in the region.

Undoubtedly, decoupling transactions from core banking is a fundamental step towards building a comprehensive digital ecosystem that generates positive results for all stakeholders involved. Financial institutions are increasingly aware that the key to surviving in a cashless economy is their ability to adapt and grow in the new digital space, offering customers secure options that meet their needs while laying the foundations for a scalable banking model. Therefore, banks must be willing to invest in technological advances and digital infrastructure. They must take an agile approach in their business models, leveraging the latest technologies and platforms available. This will enable them to create seamless experiences for their customers while increasing operational efficiency and simplifying processes that facilitate scalable growth.

That is why more and more organizations are opting for digital transaction processing platforms such as Frame Banking™. As a cloud-native SaaS platform, Frame Banking™ offers risk-free and future-proof capabilities that enable financial service providers to accelerate their digital transformation. It is an opportunity to do things in a different way, to become pioneers of a modern banking experience that
guarantees agility, scalability, security and profitability. In general, it gives banks the possibility to access new innovative services either because they need faster payment processing times, increased data security, enhanced transparency and compliance, more information about their own accounts, more personalized experiences tailored to their preferences, or improved payment options.

To learn more about the importance of digital transactions in today’s economy and SaaS platforms like Frame Banking™, visit www.2innovateit.com.

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