Digital Banking Ali Alherbwi

DIGITA
L
BANKIN
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.
 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 .
 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
THANK YOU 

Digital Banking Ali Alherbwi

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DIGITA

WHAT IS DIGITAL BANKING?

 The ACH system processes the following types of operations:

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

 Non-financial messages, which include

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