DIGITAL B A N K I N G

Prepared by : hothaifa Abu Saleem .

 WHAT IS A DIGITAL BANK?

• Digital bank is a bank that operates online and provides its customers the services that were previously available only at a bank
branch.

WHAT IS DIGITAL BANKING?

• Digital banking involves the digitization of all traditional banking products, processes and activities to serve customers through
online channels.
WHAT ARE DIGITAL BANKING SERVICES
EXACTLY?
 Most frequently, the include the following operations and activities (all the traditional banking services that are
available 24/7 on mobile phones, computers and compatible smart devices, without the need for a customer’s
presence in the bank branch):
 Obtaining bank statements
 Cash withdrawals
 Funds transfers
 Checking/savings account management
 Opening deposit accounts
 Loan management
 Bill payments
 Check management
 Transaction records monitoring
Obviously, digital banking software makes all traditional services
easier to access, understand and manage.
This approach allows banks to test lower risk concepts before
moving parts of the old legacy business to the new system.
Notable examples include Goldman Sachs’ Marcus, RBS’ Bó, and
State Bank of India’s YONO, which gained more than 26 million
customers and reached profitability within 18 months.
 Although the two terms may seem interchangeable, there are actually
fundamental differences between digital and online banking.

 Online banking includes only some transactional functions of the underlying core banking system.
Online banking is typically accessed via the Internet and provides basic banking functions such as account
management and statement access. The capabilities of an online banking system are limited and cannot be quickly
expanded to provide additional banking services to consumers.

 Digital banking systems are much more flexible and allow banks to add and expand features much
faster than traditional systems. Digital banking relies on high-level process automation, web-based services and
APIs to provide banks and their customers with high levels of cost efficiency, security and flexibility. Modern
banking solutions enable a fully digital customer journey, generating real-time data streams and accelerating key
analytics.
There is one more term frequently confused with online and
digital banking mobile banking . It can be defined as a service
provided by an existing bank to its customer enabling them to
perform transactions via their mobile devices , without the
need to visit a bank branch .

So , out of the three notion , digital banking is a much

broader one . It is safe to say than it is made up of the
combination of online and mobile banking .
The benefits of digital banking for consumers

As more and more digital banks enter the market , it is important to

understand how modern digital banking solution enable them to offer
better and cheaper services than traditional competitors .

 Cost savings
- Traditional banks invest a lot of time and resources in checking and accounting. By eliminating redundant back- office
processes, digital banking software significantly reduces operating costs. Digital banking systems remove a lot of work
from banks by automating the processes associated with daily transactions. Digitization reduces the number of steps and
people involved in transactions, reducing the risk of costly financial errors.
 Improved usability
- Integrated KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols enable digital banks and
customers to open accounts within minutes from any internet-enabled device. ID Verification systems and risk assessments
enable banks to serve customers quickly and easily, allowing people who are not bank customers to access financial
services. A major advantage of digital banking is that it is available 24/7. This means that customers can carry out any
transaction from anywhere and access a wide range of services .
 The benefits of digital banking for consumer

 Greater personalization- Digital banking software enables sophisticated personalization strategies powered by
artificial intelligence (AI) and machine learning (ML). Banks can offer customers relevant financial options, interactive
tools, and educational resources at the right time. Automated budgeting, spending analytics, savings reminders, and many
other tools help inform and engage customers.

 Wow-features
- Digital banks already have many features that established banks simply cannot offer, such as buying crypto currencies and
gold or investing in stock markets directly in the banking app. Digital banking customers can instantly change their security
settings, transaction limits, and even specify whether or not they want to enable NFC (Near Field Communication) or
magnetic stripe payments.
• While the terms “neobank” and “challenger bank” are familiar to nearly anyone today, telling one from the other may be difficult, so let’s dot
all the i’s and explore the main types of digital banks.

 Neobank
- Neobank is a digital bank operating online, without any physical presence, which provides its customers remote access to its services via a
mobile app. Many neobanks don’t hold a bank license and partner with an existing bank for bank-licensed operations (which means, their
customers need to create an account at the partner bank). Often, the range of services offered by a neobank is narrower compared to the
licensed banks.

 Challenger bank
- This term originated in the UK and refers to a recently launched bank that “challenges” the traditional banking institutions. Being more
user-friendly and cost effective for an end-user, challenger banks focus on the audience segments that are underserved by the big financial
institutions.
 New bank
- These are fully licensed neobanks that provide a full range of banking services and their only difference from the brick- and-
mortar banks is the mode of operation – which is completely online. The examples of the new banks are Revolut, Monzo, N26,
and Starling Bank.

 Nonbank
- Exactly as the name implies, these are non banking institutions that provide financial services – for example, streamlined
loans or mortgages, but they don’t simultaneously accept deposits or offer checking and savings accounts. Some of the nonbanks
like Monese operate on EMI license.
DIGITAL BANKING IN JORDAN
 • Launch Date: November 2007
• System Participants: Banks
• Key Service: Processing cheque payments
• .
• The Electronic Cheque Clearing Unit was launched in November 2007, building on previously-existing automated
cheque clearing services and further offering enhanced clearing that allows collecting cheques on the same day at the
bank level.
• Launch Date: April 2014
• System Participants: Mobile Payment Service Provider (mPSPs) and Banks
• Key Service: Instant payments through mobile wallets
• JoMoPay Participants
- There are currently eight mobile payment service providers: UWallet, Aya, Dinarak, Zain Cash, National Wallet, Orange Money,
Gadha, and Mared

- JoMoPay Services
- Instant Fund transfer through mobile wallets
- Payment through Point of Sales (POS) devices
- ATM Cash-In/ Cash-Out
- Connecting mPSPs with the Electronic Bill Presentment and Payment System (eFAWATEERcom)
- QR Code Payments
- Cross-border Remittances
• Launch Date: June 2014
• System Participants: Billing entities of all types
• Key Service: Instant payment for bills and services
• eFAWATEERcom is an electronic system for the presentment and payment of bills. The system was launched in 2014 and is
regarded as one of the most advanced systems that drive the expansion of digital payments in Jordan. By enabling the instant
payment for bills and services, eFAWATEERcom has transformed the user experience in payments and exponentially saved users
time, effort, and costs in paying their bills and receiving services. It aims to transform society from a paper-based and cash-based
society to a digital one, reducing expenses and bringing societal and economic benefits.
• Launch Date: October 2016
System Participants: Banks
Key Service: Low-value debit and credit money transfers
• The Automated Clearing House system (ACH) was launched on the 30th of October 2016 as a safe payment system that aims at
providing banks, the Central Bank of Jordan, in addition to their customers with retail payment services that facilitate and accelerate
the execution of numerous, yet, low-value debit and credit money transfers.

 The ACH system processes the following types of operations:

 Credit transfers from one member to another, where transfers include

 Payments of credit card bills
 Regular payments
 Salary payments
 Retirement payments
 IPO membership fees in addition to others
 Debit transfers, which are divided into the following
 Direct mandatory debit transfers
 Direct debit transfers
 Pre-mandated debit transfers
 Cancelling debit and credit transfers by the sending member
 Returning debit and credit transfers
 Reverse transfers

 Non-financial messages, which include

 Query messages about current liquidation balance
 Query messages about the status of a file/payment/transfer
 Messages requesting the change of the limit of debit
 Messages to monitor transfers
 Circular messages issued by the Central Bank of Jordan to the members
• Launch Date: June 2020
System Participants: Banks
Key Service: Instant fund
transfers between financial
accounts in Jordan
•
CliQ is Jordan’s newest
Instant Payment System that
was launched by JoPACC in
June 2020. CliQ enables
sending and
receiving money between
bank accounts across all
participating banks in Jordan
instantly, and to and from
any mobile wallet. CliQ
services, which are available
24/7 and offered at no cost
currently, are integrated into
THANK YOU 